Behind the uproar over the H-1B visa is a simple fact: America’s tech industry is hooked on imported labor.
The program was at the center of a fight that broke out between President-elect Donald Trump’s supporters over the holidays. Elon Musk and other tech executives defended H-1B visas as crucial to the success of U.S. businesses. Other stalwarts in the MAGA movement said tech companies should be forced to hire American workers.
Amazon.com, Google and Tesla are among the biggest users of the visas, which let companies bring foreign workers to the U.S. on a temporary basis. The workers overwhelmingly come from India and fill jobs in such fields as software development, computer science and engineering.
Created by Congress in 1990, the H-1B program is the main pathway to the U.S. for highly skilled foreign workers. Visa holders can eventually become eligible to apply for green cards, which would let them stay in the country indefinitely.
The program is vastly oversubscribed, with new visas capped at 85,000 a year. Companies file hundreds of thousands of petitions for the visas a year. A lottery system helps decide who gets in. Employees of universities and other nonprofits are generally exempt from the cap.
Data from the Labor Department helps explain why demand is so high. In October, there were twice as many job openings as unemployed workers in the “professional and business services” sector, which includes most tech fields.
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The H-1B program requires employers to pay “prevailing wages” for their job postings. But 60% of the positions certified by the government are assigned wage levels well below the local median wage for the occupation, according to a 2020 paper from the Economic Policy Institute.
The Trump administration in 2020 tried to revamp the program, including by raising wages employers are required to pay. The changes never went into effect under the Biden administration, said Ron Hira, an associate professor at Howard University who co-wrote the H-1B paper from the Economic Policy Institute.
Over the holiday break, Trump weighed in on the latest spat and told the New York Post he had “always liked” the visas. Musk later posted on X that the program “absolutely needs reform.”
Also among the biggest corporate users of H-1B visas in 2024 were Cognizant Technology Solutions, Tata Consultancy Services and HCL America, which provide IT services. Such companies often petition for visas to fill less-senior and lower-paying roles than do tech companies, according to economists.
“The only companies that can get a lot of visas are companies that are very well organized, which have a lot of lawyers, that send the application in time, all in perfect shape,” said Giovanni Peri, a labor economist at the University of California, Davis.
HCL America said in a statement that it has one of the lowest percentages of employees on H-1B visas among its peers. It is a subsidiary of HCLTech, a multinational Indian tech consulting company.
A recent paper from the IZA Institute of Labor Economics found that companies that win the H-1B lottery tend to see bigger increases in revenue and head count, and are more likely to remain in business.
More H-1B visas lead to more U.S. patents, and higher incomes for the average worker in both the U.S. and India, said Gaurav Khanna, a labor economist at the University of California, San Diego.
American companies have long faced a skills gap, particularly in the so-called STEM fields of science, technology engineering and math. Demand for expertise in such areas has surged.
Between 1990 and 2023, the number of software developers in the U.S. quadrupled to 2.85 million, according to census data. The number of computer scientists increased more than sevenfold to 3.5 million over that time.
Most of those jobs are filled by U.S.-born workers, but the share of foreign-born workers in that time has more than doubled to 26%.
Douglas Belkin contributed to this article.
Write to Paul Kiernan at paul.kiernan@wsj.com and Angel Au-Yeung at angel.au-yeung@wsj.com
