On the horizon, the Trump administration has signaled large-scale reforms to the H-1B visa program. This program allows U.S. companies to bring foreign workers with advanced degrees to specialized knowledge fields including information technology, engineering, mathematics, and medicine. Under the new plan, businesses will pay at least $100,000 in penalties. This fee is limited when they use foreign labor through the visa system. The administration has said that widespread misuse of the H-1B program is a top concern. They point to the displacement of American workers as a key driver for the changes.
The program has 65,000 new visas annually available for workers in specialty occupations. Further, an additional 20,000 are set aside for foreign graduates with advanced degrees from U.S. universities. Visas are currently awarded based on a lottery system. They are typically valid for three years, though beneficiaries can extend their stay or apply for permanent residency with green cards. Critics maintain that the program’s employer-employee requirement creates an additional challenge, rendering it almost impossible for founders to directly obtain H-1B visas.
Add in Elon Musk and Mike Krieger, cofounder of Instagram, and you’ve got a trifecta of tech industry heavyweights. Yet they have both benefited greatly from the H-1B program. As it happens, Musk came to the U.S. originally as a student. Subsequently, he was able to get an H-1B visa, which he has credited for allowing him to create thriving companies such as SpaceX and Tesla. Musk has been vocal about the importance of the program, stating:
“The reason I’m in America along with so many critical people who built SpaceX, Tesla and hundreds of other companies that made America strong is because of H-1B. Take a big step back and F*** YOURSELF in the face. I will go to war on this issue the likes of which you cannot possibly comprehend.” – Elon Musk
Krieger’s experience sheds light on some of the hurdles that come with the H-1B program. Just like in 2010 when he wanted to help start Instagram. The long process of transferring his visa stretched out for months, almost making him give up on the venture before it even opened.
The Trump administration’s recent actions have sparked concern among tech leaders who warn that increasing costs associated with H-1B visas may drive talent to more welcoming countries. The National Venture Capital Association (NVCA) is all for increasing the annual cap on H-1B visas. Getting this change right will trigger much more innovation and entrepreneurship across the United States. The NVCA stated:
“Raising the annual cap of H-1B visas issued each year to educated and highly skilled immigrants who work in jobs that require a substantial amount of technical and specialized training is fundamental to generating more successful immigrant-founded companies.” – National Venture Capital Association
As Silicon Valley reacts to these proposed reforms, industry insiders express doubts about the potential repercussions on innovation and economic growth. They worry that by raising the barriers to hiring foreign talent, they will limit U.S. companies’ ability to compete on a global stage.
These changes go beyond an improved hiring practice. They drive big issues such as the immigration debate and how it shapes the American economy. Most experts agree that a more diverse workforce makes companies more creative and better at solving complex problems. Proponents of the reforms make the credible case that putting American workers first is long overdue. They argue it increases job security in an increasingly insecure labor market.
