the big story

Donald Trump ‘cancels’ H1-B workers

The TLDR: After months of waffling and issuing threats, the US President finally did what Indians in the US dreaded most. He suspended an array of work visas, including the most-treasured H1-B. This is just the latest blow to Indian H1-B workers who are already reeling from pandemic-triggered layoffs. We explain what this new order means, and who will suffer the most.

What does this new order say?

The proclamation suspends a variety of non-immigrant visas until the end of this year:

H-1B: is issued to foreign citizens who have special skills required by a US company—which has to prove that it cannot hire an American for the same position. The application process has become increasingly difficult and expensive ($10,000). These can be transferred from one company to another if the person finds a new job. The United States grants 85,000 such visas—and 70% go to Indians who either have graduated from US colleges, or are brought into the country by US companies. 

L-1: is given to employees of a company who are transferred to the US from another part of the world. These visas are given to either senior executives (L-1A) or those who have specialised knowledge of a company’s processes (L-1B). Indian firms account for 23% of such visas—which is utilised by companies like TCS, Infosys and Tech Mahindra.

H-2B: is meant for seasonal workers in construction and hospitality, and is mostly utilised by workers from Mexico. 

J-1: is issued to professors, scholars and others who enter the country on an exchange programme.

Point to note: Trump has already suspended all processing of green card applications for sixty days. The latest order extends that ban until the end of this year. And thanks to stricter H-1B rules, 30% of the applications were rejected in the first quarter of this year. So much of this is just more tightening of the screw.

Ok, so people with H-1Bs are out?

No, anyone who already has one of these visas and is employed in the US is safe. The decision greatly jeopardises four categories of people. 

• Those who have been issued an H-1B already, but are outside the country—and not yet got their visa from the local US consulate. 
• People who have been laid off in recent months, and haven’t been able to secure an H-1B extension as yet. US immigration had extended the grace period within which to get a new job. But the new rule means they will have to leave the country asap. According to a recent estimate, 20% to 25% of H-1B employees could lose their jobs in the coming months.
• Those whose H-1B visa is expiring soon will not be able to renew it until next year.
• Finally: recent graduates on the Optional Practical Training program (OPT), hoping to extend their US stay by applying for an H-1B. OPT allows international students to work in the US for up to three years after they graduate—and is typically a stepping stone to getting a work visa.

And most of these are techies, right?

Yes, while the visas are issued to a variety of companies ranging from Disney to Google, the powerful tech industry accounts for the largest slice of the pie. And it is why they are also the most unhappy with the order. 

TechNet—which represents the likes of Apple, Google, Facebook, Cisco, HP, Oracle, Uber and Zoom—warned:

“This will slow innovation and undermine the work the technology industry is doing to help our country recover from unprecedented events… The technology industry is working overtime to keep Americans connected during a global pandemic by providing food delivery services, tele-healthcare, collaborative business solutions, and ways for families and friends to stay connected. Technology will continue to be crucial to the rebuilding of our economy.”

The gist of their argument: the US can’t recover without its tech companies—and they can’t do their work without foreign workers.

Point to note: one in four highly-skilled tech workers in the US are immigrants. And as one Silicon Valley leader pointed out: “58 of every 100 engineers working in Silicon Valley’s innovation economy ‘weren’t blessed to be born in the United States.’”

Worth your attention: This Reuters infographic that shows which companies got the giant’s share of H-1B approvals in 2019. Comfortably at  #1: Amazon, followed by Google.

So why is Trump doing this?

The pandemic has triggered soaring unemployment. More than 20.5 million US jobs have been lost in April alone. Also: 26 million unemployment claims have been filed since March. The order says that it will “help ensure that the millions of Americans who are unemployed due to the coronavirus are first in line to fill job openings.” The claim: this move will open up at least 525,000 jobs for US workers—though the White House didn’t explain how it reached that figure.

The bottomline: Trump is running for reelection in November. Indians in the US will just have to wait, hope… and find a way to stay.

Reading list

• Reuters offers the best overview. 
• This recent Vox piece offers the best background and context to the long-simmering H-1B debate. 
• Mercury News sums up the response from Silicon Valley. 
• CNBCTV18 explains why Indian IT companies are not quite as upset.
• News18 reports on the precarious situation of L-1 workers who get less attention. 
• Economic Times has a recent study that shows H-1B workers are paid far more than their American peers—contrary to the stereotype of them being exploited by companies.