Politics of H1-B and its impact on Indian workforce
Trump latest policy is expected to hit Indian professionals hardest, as they make up a large proportion of H-1B visa holders. These visas are valid for three years and can be renewed for another three, with extensions available until Green Card approval if a company sponsors an employee.
However, Indians on work visas often face decades-long waits for Green Cards. The new $100,000 annual fee may force companies to decide whether it is worth paying to retain employees.
H-1B visas require at least a bachelor's degree and are intended for high-skilled jobs that tech companies often struggle to fill. Critics argue the programme has been used to hire overseas workers willing to work for as little as $60,000 a year, well below US tech salaries. Many visas go to entry-level roles rather than senior positions with unique skill requirements. Companies can reduce costs by classifying jobs at lower skill levels, even if the workers hired are highly experienced.
Historically, H-1B visas have been awarded via lottery. In 2024, Amazon was the top recipient with over 10,000 visas, followed by Tata Consultancy Services (TCS), Microsoft, Apple, and Google. California has the highest number of H-1B workers.
Many US firms contract work to consulting companies such as Wipro, Infosys, HCL Technologies, Tata, IBM, and Cognizant, which hire foreign workers -- often from India -- and then provide them to US employers seeking to save costs.
In 2024, lottery applications fell nearly 40% after measures were introduced to prevent applicants from "gaming the system" by submitting multiple entries. USCIS limited each employee to a single lottery entry, regardless of the number of job offers. Critics welcomed the reform but argued that more changes were needed. The AFL-CIO has called for visas to be awarded to companies paying the highest wages rather than by lottery -- a change Trump advocated during his first term.
The proclamation signed by Trump on Friday highlighted the broader impact of foreign STEM labour on the US workforce. Between 2000 and 2019, the number of foreign STEM (science, technology, engineering, and mathematics) workers more than doubled from 1.2 million to nearly 2.5 million, while overall STEM employment increased by just 44.5 percent. Among computer and math occupations, the foreign share of the workforce grew from 17.7 percent in 2000 to 26.1 percent in 2019.
The administration cited abuse of the H-1B visa as a key driver of this influx. Information technology firms have "prominently manipulated" the H-1B system, significantly harming American workers in computer-related fields. The share of IT workers in the H-1B programme rose from 32 percent in fiscal year 2003 to an average of over 65 percent in the past five fiscal years. Some of the most prolific H-1B employers are now consistently IT outsourcing companies.
A study cited in the proclamation showed that using H-1B-reliant IT outsourcing firms provides significant savings for employers, with entry-level H-1B positions costing 36 percent less than full-time traditional workers. To exploit these artificially low labour costs, companies often close their IT divisions, lay off American staff, and outsource jobs to lower-paid foreign workers. Data indicated that many American tech companies have simultaneously laid off qualified American employees while hiring thousands of H-1B workers.