H-1B Suspension: Such a Deal for Tech CEOs

Pres. Trump issued an executive order today suspending entry into the US for several visa categories, including H-1B, until January. Contrary to what some of you may have thought, this is a big win for the tech industry CEOs:

  • Note the language: suspension of entry into the US under the various visas. Those already in the US are exempt from the order. This means international students, who by definition are already here, are not affected. (And even future foreign students won’t be affected, should the ban be extended, as they too will be in the US when they apply for an H-1B visa.)
  • The employers who are affected are the “Infosyses,” the rent-a-programmer firms that import foreign workers from abroad, typically to work in business applications. By refusing them visas, this frees a large number of visas for the tech firms (the “Intels”).

The carve-out for the foreign students was no surprise to me. As I’ve pointed out in this blog many times, Trump has consistently stated since back in 2015 that he considers the H-1Bs recruited from US university campuses to be the “good” H-1Bs. Indeed, he has indicated that he supports special green cards for this group.

Also note that there is a little-known precedent: After the 2008 financial crash and the government bailout, Sens. Sanders and Grassley introduced a bill barring TARP recipients from hiring H-1Bs — with the exception of people already in the country under a different visa, read foreign students. At the time I assumed that the senators had been duped by the industry lobbyists; now I suspect otherwise.

As noted, the ban is temporary, through December. Not clear what will happen then, post-election, but let’s consider the impact both in the short term and longer term were the suspension to be extended.

  • The Infosyses will still hire low-cost foreign labor, as I have explained before. OPT is one route, for instance. They won’t hire computer science majors from MIT, but they’ll find lots of students from business and other majors that offer computer-related tracks.
  • With the (in effect) expansion of the H-1B program, the current oversubscription of the EB-1, EB-2 and EB-3 employer-sponsored green card problems will get even worse. Pressure will increase on Congress to enact a “Staple a Green Card” law (automatic green cards to foreign students in STEM). If the current logjam in DC is resolved — Congress and the White House all Democrat or all Republican — look for such a bill to come up again, and be enacted and signed into law. Depending on the details (e.g. requiring a PhD vs. a Master’s), the impact on US tech workers could be huge.

(Note by the way that I have always supported fast-track green cards for the “best and brightest” foreign students, e.g. those with degrees from top academic programs.)

Those who’ve followed this blog over the years know that I’ve been stating all along that an eventual “resolution” of the H-1B and green card problems would come in the form of a restriction on the Infosyses but a reward for the Intels, just as we are seeing here now. Unfortunately, we’ve already seen the first praise of the policy by immigration reform organizations (CIS and FAIR). This is highly misguided, in my opinion.

The first shoe has dropped. Waiting for the other.

 

18 thoughts on “H-1B Suspension: Such a Deal for Tech CEOs

  1. Dear Norm: Sadly, I have to agree with your analysis. There are so many loopholes. The result will be very few new job openings for American citizen technical professionals. As I’ve noted previously, the F-1 Visa OPT leading to the H-1B Visa is a “government – sanctioned foreign hiring preference program.” Milton Friedman’s 2002 quote that the H-1B Visa program is a “government subsidy” remains accurate. What will it take to reverse the harms to the U.S. from these work visa programs?

    Liked by 1 person

    • IMO the only scheme that will help American citizens, is for American citizens in tech fields to form their own tech employment machine. Recruitment, placement, training, etc., of, by, and for U.S. citizens. Stop waiting for government, the media, etc. to fix a problem they don’t want fixed. If there are really pro-citizen wealthy conservatives out there, it’s time for them to stop trusting the politicians, and invest their money in building employment agencies that work for Americans, and support tech companies that hire and promote Americans.

      Liked by 1 person

      • Sadly, the only millionaire that I’m aware of that invested his wealth in protecting Americans from the harms of “open borders” was Dr. John Tanton. Sadly, Dr. Tanton died last year. His advocacy organization, US Inc. ceased operations.

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  2. The fact that OPT was left alone is a dead giveaway to those of us who have been following this issue for a while that this is just IGIB.

    If the rulemaking Cuccinelli was talking about (descending order of wages instead of lottery and minimum wage set to the median instead of the bottom 1/6th) happens, that will make a real difference. The rulemaking is also supposed to require companies to demonstrate non-displacement of US workers, but as we know well, that will be some silly system designed for industry to game it.

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  3. This does affect the Googles, Microsofts etc.Their h1b employees cannot leave the US because no new visas are being issued at consulates abroad at least till the end of the year. There are people who traveled abroad to get visas stamped but are now stuck because of travel bans.These people will not be able to return to their jobs, family etc. in the US. Even spouses on dependent visas stuck abroad due to covid related consulate closures cannot return to the US!

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  4. agreed.

    There has never really been a good way of looking at:

    The Infosys’s: http://dolh1bjobhuntinglicenses.com/NumberAppsEmployerCount.php
    The Intel’s: http://dolh1bjobhuntinglicenses.com/secondaryNameCount.php

    I’ve been building a system which shows how many jobs we gained or lost as compared to the previous years from 2010 to 2018 AND a way to show how many H-1B applications were filed for that particular job.

    http://dolh1bjobhuntinglicenses.com/jobgrowth.php

    I think you might find this rather interesting as it shows all of the BLS OES occupational groups AND their sub-groups.

    I’ve also developed a system where you can quickly search the most recent H-1B applications by employer and secondary business entity name or work city or job title.

    I’ve also added a system that allows you to view the Trade Adjustment Assistance data where they log how many jobs were sent to other countries.

    https://dolinw.com/

    still lots to do on that last part as time and money will allow.

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  5. Norm –

    When it comes to H-1b (or any other legislation) never forget these words of wisdom:

    “Nothing is so permanent as a temporary government program.”
    – Milton Friedman

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  6. Of course this is a godsend for universities. Perhaps the Higher Education Lobby played a role in getting this legislation passed especially with the expected decline of international students due to the pandemic.

    What happens if the suspension extends to next year’s lottery? Will only international students participate in the lottery? Could this be a missing shoe?

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    • “godsend for universities”
      By design. Or as my favorite economist recently put it, universities are hedgefunds with campus overlays.
      re: OPT to H1, yes. But if the employers follow their stereotypical behavior, they will first exhaust the OPT status, then two stints of H1, and then queue them for an EB GC – to get the max indenture from the hire.

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