H1B Visa: Why Trump banning H1B Visa is bad news for Americans (and Indians)?

Over 1.4 lakh people go to the US every year. And now the US President Donald Trump expects to sign an Executive Order to restrict H1B Visa, L1 Visa, and other temporary work permits. So, this is bound to have some negative implications. This decision is likely to affect Indians the most. But as Trump put it, the move is part of the US government's efforts to curb immigration and help boost local employment in the country.

What did Trump say on the H1B visa restriction?

When the pandemic started and American started losing jobs, Trump announced to stop the immigration process. Now, in a new interaction, US President Trump has confirmed that it’s finally happening. He said that he will be announcing something tomorrow or the next day on visas. "And I think it’s going to make a lot of people happy. And it’s common sense, to be honest with you," he told Fox News.

So, we expect that he will sign the executive order anytime today. And the main reason is "American Jobs". While we understand the sentiment, there are issues for people living there. Further, there are questions about people coming back to their own countries and the economic effects it will have.

Trump said, “We have plenty of people looking for jobs. But there can be some exceptions to “protect the flow of workers for big businesses” and the immigration visas will be suspended to “ensure that unemployed Americans of all backgrounds will be first in line for jobs as our economy reopens”.

US issues 85,000 H1B visas to foreigners, and Indians account for 70% of those H1B visas. In case US suspended H1B visa till 2020 end, then it will be a huge blow to the Indian IT sector.

So, what will be the implications for American companies?

But, even if this affects Indians, this would be a major blow to the US tech firms. Indian companies in the US are hiring more locally over the last few years. So, the laid-off people are from the "local".

On the other hand, US firms like Google, Amazon, Facebook and Microsoft have been more dependent on H1B Visa holders. In 2019, seven of the top ten recipients of H-1B visas were US companies. While the share of Indian companies among the top ten visa recipients has dropped from 51% to 24% from 2016-2019.

Recent data from the US Bureau of Labor Statistics showed that the unemployment rate for computer-related occupations had declined from 3% in January 2020 to 2.5% in May, even as the unemployment rate for other occupations grew from 4.1% to 13.5%.

Also, Bloomberg reported that this executive action might also suspend H-2B visas and J-1 Visas. The former is for seasonal workers such as hotel and construction staff while the latter is meant for research scholars and professors, and other cultural and work-exchange programs. So, companies that rely on cheap employees, will have to hire locals.

Several tech companies and industry bodies have already cautioned the government against any such restrictions. They stated that this would be counter-productive for the US economy.

How are Indians in the US affected by this H1B Visa change?

Well, people with permanent residence status or green cards who are outside the US should be able to come back in. Because it would be unconstitutional to block their entry into the US. But there ate Green cardholders who have yet to receive either a non-immigrant visa or an immigrant visa at the US consulates and embassy in India. They will be the most affected by this problem.

Further, this blocks almost 0.014% Indian population to enter the US legally every year. This is not insignificant but compared to the people that the US will be losing out. And Chad Wolf said his agency will soon recommend a move to limit temporary work visas as well. So software engineers and other talent from India are waiting for the other shoe to drop. Chad F. Wolf is the acting SHS and Under Secretary of HSPP.