COMMENTARY:
H-1B visas are visas that allow educated foreign professionals to work in what are referred to as specialty occupations in the U.S. H-1B visa holders typically are recruited to the U.S. as software developers, engineers, and scientists. Each year, 65,000 H-1B visas are issued, with another 20,000 issued to foreigners who graduate from a U.S. institute of higher education with a master’s or doctorate degree. As of recently, approximately 65 percent of H1-B visa holders were in computer fields. The program requires a sponsoring employer.
U.S. companies use this type of visa to recruit talent from all over the world. Depending on the size of the employer, H-1B visas have typically had a one-time cost of $2,000 to $5,000. The initial visa period is three years, but can be extended to six. The H-1B program has been in existence since 1990.
On September 21, the Trump Administration raised the one-time H-1B visa fee to $100,000. Trump has previously disparaged this visa program as a way companies use to hire cheap foreign labor that takes jobs away from Americans. His viewpoint has been echoed not only by members of his Republican party, but also by people such as Senator Bernie Sanders. In truth, a company applying for an H1-B visa, must take steps such as advertising the position to make sure that qualified American citizens can apply for the job, and that jobs are not purposely taken away from Americans.
The rise in the fees for H-1B visas is being met with a backlash, especially by smaller companies that don’t have the economic resources like larger companies. The H-1B visa program has been a way for companies to utilize foreign talent to remain competitive in the world economy. Here in the U.S.-border region, companies operating in the global supply chain have utilized H-1B visas to hire employees from places such as Europe, China, Taiwan, and Latin America.
The hike in fees comes almost at the same time that China launched its K visa program on October 1, which allows foreigners from European and Asian countries to work there in engineering, science, technology, and mathematic fields. The K visa allows foreigners to enter China without a sponsoring employer in order to seek employment and eventual residency. China unveiled its K visa program without concrete financial details, a path to residency, and specific educational requirements. However, more details are expected soon.
China also has stepped up efforts to lure back Chinese talent working in foreign countries by offering signing bonuses of more than US$700,000, and even assistance in purchasing a home if a worker returns to China. It is attempting to attract as much foreign and national talent as it can, while the U.S. is taking measures to push talent away.
As of 2024, 71 percent of H-1B visa holders were from India. The rise in cost to obtain an H-1B visa may cause much of this Indian talent to stay home. Depending on the source, India is now the fourth or fifth largest economy in the world. It is home to 1,700 Global Capacity Centers (GCCs), which accounts for more than half that exist in the world. These are hubs that bring together talent from all over the world to focus on R&D, finance, IT, AI, and various business services. Global companies use GCCs to bring talent together to innovate and remain competitive in their markets. They allow companies to move quickly and react to market forces.
If fewer American employers are willing to spend $100,000 on H-1B visas, it is highly likely that more Indian talent will stay home and help move their home country away from a world customer service hub to the GCC capital of the world. This will happen in the largest populated country in the world, that has plenty of labor and talent to be mined. It is also likely that companies will follow the talent to India by establishing operations that take advantage of existing GCCs or establishing new ones. This will further push India to become a technological giant.
And where does this leave the U.S.? If they need a particular talent set that they cannot readily find in the U.S., larger, more capitalized companies will bite the bullet and pay the new $100,000 H-1B fee. For other companies, this will simply be too much to bear. Talent that would have come to the U.S. will now seek opportunities elsewhere or domestically, as will be the case in India and China. If the U.S. can’t produce enough talent to cover the foreign employees who would have come to this country on an H-1B visa, we can expect to be less competitive.
Jerry Pacheco is the president of the Border Industrial Association. Jerry Pacheco's opinions are his own and do not necessarily reflect the views of KRWG Public Media or NMSU.