The impact of H-1B visas on the tech industry in U.S. Premium

The impact of H-1B visa program on U.S. wages and productivity, sparking debates on skilled foreign workers in 2024.

The last week of 2024 didn’t exude the holiday spirit for several folks in the tech world. A section of billionaires, politicians, and tech workers were piqued by a specific U.S. immigration policy that allows skilled foreign workers to work in the country.

A verbal mudslinging began after President-elect Donald Trump appointed Sriram Krishnan as his senior policy advisor on Artificial Intelligence (AI). Within days after the announcement, Laura Loomer, a prominent MAGA supporter, wrote rancorous social media posts against the decision, calling Indian immigrants “third world invaders.” The right-wing influencer then doxxed Mr. Krishnan, sharing his domicile details scoured from the U.S. Federal Election Commission (FEC). While Ms. Loomer apologised for doxxing Mr. Krishnan, she remains rooted in the idea that the number of skilled foreign workers must be reduced in the U.S. as the programme is negatively impacting native workers.

Mr. Krishnan, an Indian immigrant who came through the ranks of top tech firms in the Silicon Valley, supports simplifying the legal process for tech workers to enter the U.S. His stance has been echoed by several tech billionaires. His to-be-peer in the Trump administration, former PayPal executive David Sacks, came in support of the a16z’s general partner and clarified that Mr. Krishnan did not advocate for the removal of restrictions for a green card but was only seeking the removal of country-specific caps.

Elon Musk and Vivek Ramaswamy, both immigrants and Mr. Trump’s picks to overhaul the U.S. government, are supportive of the skilled foreign worker visa programme. The world’s richest man even said he would “go to war” to defend the programme. In an X post, he wrote: “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 H1B.” The H1-B issue has not just split MAGA supporters; it has also turned some prominent Democrats, who were pro-immigration during the election season, into H-1B programme bashers. For instance, Vermont Senator Bernie Sanders said the main function of the H1-B visa “is not to hire ‘the best and the brightest’ but rather to replace good-paying American jobs with low-wage indentured servants from abroad.”

Heated debates on the H-1B visa programme are not a new phenomenon. It helps to know the programme’s brief history — at least from the time it went through a major revision in the 90s — and its net impact on wages and productivity in the U.S.

In the early 90s, the U.S. enacted the Immigration Act of 1990 to increase the number and diversity of immigrants coming into the country and to adapt to the changing economic and social needs of a globalising world. The legislation significantly revised and expanded the H-1B visa programme.

Apart from mandating employers to file an application with the labour department that hiring H-1B workers will not adversely affect wages and working conditions of U.S. workers, the law established an annual cap of 65,000 new H-1B visas for each fiscal year.