The debate over highly skilled migrant workers is intensifying.
A controversial exchange over immigration that began over Christmas between conservative activist Laura Loomer and Elon Musk has spread to X, now with the intervention of a prominent Democrat. However, attention has shifted away from undocumented workers, a central issue in Donald Trump’s presidential campaign. campaign last year, to those who are here legally on H-1B visas.
Critics of the immigration program worry that these workers are displacing Americans by providing cheaper labor, especially in the technology industry, which is the largest sponsor of these visas. Supporters say there are simply not enough American workers to meet the demand needed in these growing industries and that the program’s rules prevent wage suppression.
“This program should not and was not intended to replace American talent. It was designed to complement it and, by and large, it has been working,” Jeanne Batalova, senior policy analyst at the Migration Policy Institute, told Yahoo Finance.
But he noted that some companies have used the program in a way that is “not within the spirit of the law,” which is part of what is fueling the current debate. This is what you should know.
Elon Musk speaks after President-elect Donald Trump spoke during an America First Policy Institute gala at his Mar-a-Lago estate on Nov. 14, 2024, in Palm Beach, Fla. (AP Photo/Alex Brandon, file ) ·ASSOCIATED PRESS
Created in 1990 by the Immigration Act, the H-1B is a temporary nonimmigrant visa program that allows businesses to apply for permission to hire highly skilled foreign workers with at least a bachelor’s degree or equivalent. (Fashion models “of distinguished merit and ability” also fall into this visa category, but without the educational requirements, according to the U.S. Department of Labor.)
If granted the visa, a foreign worker can initially remain in the US under the H-1B visa for three years, with a possible extension to six years. But some workers stay on H-1B visas longer if they have an approved petition for a green card.
“We limit the number of people from a given country who can obtain a green card in a given year, so that you can remain in H-1B status while waiting to meet the country’s quota,” said Mark Regets, senior researcher at the Foundation. National for American Politics.
Since H-1B status was created, Congress has limited the number of new H-1B visas available each year. Currently, the annual limit is 65,000 new H-1B visas and an additional 20,000 for foreign professionals who graduate with a master’s degree or higher from a US university. That hasn’t changed since 2006.
The largest industry using H1-B visas is those classified as professional, scientific and technical services, which accounted for almost half of all initial visas approved in fiscal year 2024. Educational services followed with 11.9 % of all approvals, manufacturing 9.3%, and health and social care 6.5%.
The largest H-1B employers are subsequently concentrated in the technology sector, starting with Amazon, which had 3,871 H1-B applications approved for new jobs in fiscal 2024, followed by Cognizant (2,873), Infosys (2,504), TCS (1,452) and IBM (1,348). Other tech giants like Google, Microsoft, Meta and Apple are included in the top 25. Notably, Musk’s Tesla ranked 16th among major employers in initial H1-B visa approvals with 742.
Non-tech companies such as Ernst & Young, Walmart, Goldman Sachs, JPMorgan Chase and Citibank also appear in the top 25, according to the National Foundation for American Policy using data from the USCIS H-1B Employer Data Hub.
Overall, more than 30,000 employers across the United States had at least one H-1B visa petition approved in 2024, and more than half of those new petitions went to employers that submitted 20 or fewer applications. Employers in California, Texas, New York, New Jersey and Virginia had the most H-1B applications approved for initial employment last year.
The H-1B visa program has rules that employers must follow to ensure that hiring a foreign worker does not harm Americans. Before an employer can file a visa petition, it must first attest in a request certified by the Department of Labor that employing an H-1B worker will not affect the wages or working conditions of similar American workers. An employer must also notify its employees that it plans to hire an H-1B worker.
In the technology field, several experts said growth in those industries has occurred so quickly that there are too many jobs available and not enough qualified American workers to fill them. That’s why tech companies are now turning to foreign labor to meet demand.
“If you’re looking to grow an industry quickly, you don’t necessarily have time for an entire workforce to take 10 years to earn their PhD in semiconductor nanorobotics,” said Courtney Shupert, an economist at MacroPolicy Perspectives. “You want all those PhDs now.”
Still, researchers at the Economic Policy Institute noted that the imbalance between supply and demand for workers in the technology industry has been exaggerated. Other EPI research shows that technology companies continue to hire large numbers of H-1B workers while reducing their US workforce. They conclude that some technology companies are turning to cheaper foreign workers instead of hiring American workers. Other employers have brought in foreign tech workers and leased them to other American companies, which lay off their IT departments made up of more expensive, local workers, according to EPI.
Why are H1-B workers cheaper? They’re not supposed to be. To ensure that wages remain competitive, an employer must pay the H-1B worker the same wage it pays other employees with similar experience and qualifications for a given job or the prevailing wage for that position in the area where it is located, whoever is older.
Regets said studies have found that most people on a temporary work visa in the U.S. with a college degree or higher actually earn slightly more than a comparable U.S.-born worker. Another study showed that native IT professionals earn more than other US-born professionals, indicating that there is no wage suppression due to H-1B workers in the industry.
But EPI found that some companies, also often in the tech field, are taking advantage of how the program sets wages to pay H-1B workers less than a U.S. worker in the same position would earn.
Batalova noted that some companies, often in the technology sector, have taken advantage of loopholes in the H-1B program rules. (Even Musk acknowledged that the program “needs major reform” around setting minimum wages.) Some of these issues are being addressed, with new rules requiring that a petition be for a specific worker rather than a position, Batalova said.
These types of efforts should deter fraud, but “not be so stifling that [the program] “It doesn’t work in practice,” he said, noting that there are very real needs that H-1B workers are filling. Not only is our workforce shrinking as Baby Boomers retire, but the pandemic also exacerbated shortages in certain industries, such as teachers in K-12 Education.
Senator Bernie Sanders, in a statement this week raising concerns about the visa program, asked: “Can we really not find English teachers in the United States?” The answer appears to be no in some school districts.
The city of Dallas has been turning to international educators due to a shortage of bilingual teachers in the United States. In 2022, the Camden City School District in New Jersey turned to foreign labor to help fill 28 vacant positions for which it could not find employees after months of searching. And in 2023, Milwaukee Public Schools added 140 teachers from other countries, including Nigeria, Mexico and the Philippines, amid a teacher shortage.
H-1B visas also allow international students who graduate from U.S. medical schools to remain in the country and work in hospitals or clinics in underserved and often remote or rural areas, Batalova said, places “where American workers will not go.”
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Janna Herron is a senior columnist for Yahoo Finance. Follow her on X @JannaHerron.
