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.