The higher price tag for coveted H-1B visas might drive up employers’ costs, but not necessarily their appetite for US workers.
That’s one possible result of the Trump administration’s recent decision to raise the cost of these special visas, meant for skilled workers that employers can’t find in the US, to $100,000, researchers who study the issue told Business Insider.
Faced with higher costs to bring in foreign workers, some US firms could look overseas for remote workers before they turn to domestic ones. That wouldn’t be great news for the US job market…
Changing the program
Not all observers see risks from the new H1-B setup. Ronil Hira, an associate professor in the political science department at Howard University, said other recent changes enacted by Trump, including an effort to ensure employers are complying with rules for H-1B visas, will improve the skill sets, wages, and working conditions of people in the H-1B program. That would ultimately be a win for the US economy and its workers, he said.
Hal Salzman, a Rutgers University professor of planning and public policy, said that the H-1B program often brings in workers who will accept below-market wages.
He told Business Insider that salaries have been generally flat for about two decades in areas where guest workers are concentrated. Salzman doesn’t expect that H-1B restrictions will result in companies shifting IT jobs offshore, for example, even if doing so could reduce employers’ labor costs.
“If they could have done it, they would have done it 20 years ago,” he said, referring to large US companies. Instead, Salzman said, some IT offshore companies have expanded their workforces in the US.
One reason it’s not easy to offshore, Salzman said, is that in order to make operations work, employers often need roughly one-third of their workers in the US. That means it places a practical limit on the share of workers that a company could send elsewhere.