The debate over highly skilled immigrant workers is heating up.
A contentious exchange over immigration that began during Christmas between conservative activist Laura Loomer and Elon Musk has spilled over from X, now with a prominent Democrat weighing in. The focus, though, has turned away from undocumented workers, a central theme in Donald Trump’s presidential campaign last year, to those here legally on H-1B visas.
Critics of the immigration program worry that these workers are displacing Americans by providing cheaper labor, especially in the tech industry, which is the largest sponsor of these visas. Supporters say there are simply not enough US workers to fill the demand needed in these growing industries and the program’s rules prevent wage suppression.
“This program should not and was not intended to substitute the American talent. It was designed to supplement it and, by and large, it has been working,” Jeanne Batalova, a senior policy analyst at the Migration Policy Institute, told Yahoo Finance.
But she noted that some companies have used the program in a way that’s “not within the spirit of the law,” which is part of what is fueling the current debate. Here’s what to know.
Elon Musk speaks after President-elect Donald Trump spoke during an America First Policy Institute gala at his Mar-a-Lago estate, Nov. 14, 2024, in Palm Beach, Fla. (AP Photo/Alex Brandon, File) ·ASSOCIATED PRESS
Created in 1990 by the Immigration Act, the H-1B is a temporary, nonimmigrant visa program that allows companies to request permission to hire very skilled foreign workers with at least a bachelor’s degree or equivalent. (Fashion models “of distinguished merit and ability” also fall under this visa category but without the education requirements, according to the US Department of Labor.)
If granted the visa, a foreign worker can initially stay in the US under the H-1B for three years, with a possible extension to six years. But some workers stay on H-1B visas for longer than that if they have an approved petition for a green card.
“We limit the number of people from any given country that can get a green card in a given year, so you can stay in H-1B status while you’re waiting to make the country’s quota,” Mark Regets, a senior fellow at the National Foundation for American Policy, said.
Since the H-1B status was created, Congress has limited the number of new H-1B visas available each year. Currently, the annual cap is 65,000 new H-1B visas and an additional 20,000 for foreign professionals who graduate with a master’s degree or higher from a US university. That hasn’t changed since 2006.
The biggest industry by far using H1-B visas is what’s categorized as professional, scientific, and technical services, which made up almost half of all approved initial visas in fiscal year 2024. Following that were educational services at 11.9% of all approvals, manufacturing at 9.3%, and healthcare and social assistance at 6.5%.
The largest employers of H-1B visas are subsequently concentrated in the tech sector, starting with Amazon, which had 3,871 approved H1-B petitions for new employment in fiscal year 2024, followed by Cognizant (2,873), Infosys (2,504), TCS (1,452), and IBM (1,348). Other tech behemoths like Google, Microsoft, Meta and Apple are included in the top 25. Of special note, Musk’s Tesla came in No. 16 on the top employers for initial H1-B visa approvals at 742.
Non-tech companies like Ernst & Young, Walmart, Goldman Sachs, JPMorgan Chase, and Citibank all appear in the top 25 as well, according to the National Foundation for American Policy using data from the USCIS H-1B Employer Data Hub.
Overall, more than 30,000 employers across the US had at least one H-1B visa petition approved in 2024, and over half of those new petitions went to employers that filed 20 or fewer applications. Employers in California, Texas, New York, New Jersey, and Virginia had the most approved H-1B petitions for initial employment last year.
The H-1B visa program has rules employers must follow to make sure hiring a foreign worker doesn’t harm US ones. Before an employer can file a petition for a visa, it must first attest on an application certified by the Department of Labor that employing an H-1B worker won’t hurt the wages or working conditions of similar US workers. An employer is also required to notify its employees that it plans to hire an H-1B worker.
In the tech field, several experts said that the growth in those industries has occurred so quickly that there are too many positions available and not enough qualified US workers to fill them. That’s why tech companies turn to foreign labor to meet the demand now.
“If you’re looking to grow an industry quickly, you don’t necessarily have time for a whole workforce to take 10 years to get their PhD in semiconductor nano robotics,” said Courtney Shupert, an economist at MacroPolicy Perspectives. “You want all of those PhDs now.”
Still, researchers at the Economic Policy Institute noted that the supply-demand imbalance for workers in the tech industry has been overstated. Other EPI research shows tech companies continue to hire H-1B workers in large numbers while shrinking their US workforces. They conclude that some tech companies are turning to cheaper foreign workers rather than hiring US workers. Other employers have brought over foreign tech workers and leased them out to other US companies, which lay off their IT departments made up of local, and more expensive workers, according to EPI.
Why are H1-B workers cheaper? They aren’t supposed to be. To ensure wages remain competitive, an employer must pay the H-1B worker either the same wage it gives to other employees with similar experience and qualifications for a given job or the prevailing wage for that position in the area it’s located, whichever is higher.
Regets said studies have found that most people with a temporary work visa in the US with a college degree or higher actually earn a bit more than a comparable US-born worker. Another study showed that native-born IT professionals earn more than other US-born professionals, indicating there’s no suppression of wages due to H-1B workers in the industry.
But the EPI found that some companies, again often in the tech field, are taking advantage of how the program level-sets wages to pay H-1B workers less than what a US worker in the same position would make.
Batalova noted that some companies, often in the tech sector, have exploited loopholes in the rules in the H-1B program. (Even Musk acknowledged the program “needs major reform” around setting minimum salaries.) Some of these issues are getting addressed, with new rules requiring that a petition is for a specific worker rather than a position, Batalova said.
These kinds of efforts should deter fraud, but “not be so stifling that [the program] doesn’t work in practice,” she said, noting there are very real needs H-1B workers are filling. Not only is our workforce shrinking as the Baby Boomers retire, but the pandemic also exacerbated shortages in certain industries, such as teachers in K-12 education.
Sen. Bernie Sanders, in a release this week raising concerns about the visa program, asked: “Can we really not find English teachers in America?” The answer appears to be no in some school districts.
The city of Dallas has been leaning on international educators due to a shortage of bilingual teachers in the US. In 2022, the Camden City School District in New Jersey turned to foreign labor to help fill 28 open positions it couldn’t find hires for after months of searching. And Milwaukee Public Schools in 2023 brought in 140 teachers from other countries, including Nigeria, Mexico and the Philippines, amid the teacher shortage.
H-1B visas also allow international students graduating from US medical schools to stay in the country and work in hospitals or clinics in underserved and often remote or rural areas, Batalova said, places incidentally “where American workers will not go.”
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Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on X @JannaHerron.
