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"Next Year's News This Week" visa-vis: Kneecapping the H-1B in exchange for what? By Evan Anderson ______ Why Read: Proposed $100k fees for H-1B visa applicants will change the nature of US innovation and medical ecosystems, among other ramifications. This week, we discuss the implications of the new fee policy, including the winners, losers, and ripple effects. ______ Elon Musk, the world's richest man, is digging in his heels in his defense of H-1B visas, saying some Trump supporters are "contemptible fools" who "must be removed from the Republican Party, root and stem." - Fortune (12/30/24) I've always liked the visas, I have always been in favor of the visas. That's why we have them. - US President Donald Trump, speaking to the New York Post (12/28/24) The rich countries also contribute to the brain drain from developing countries by more willingly accepting people with higher skills. These are people who could have contributed more to the development of their own countries than unskilled immigrants, had they remained in their home countries. - South Korean Economist Ha-Joon Kim The "brain drain." Throughout most of its modern history, the United States has attracted some of the world's best and brightest. Since the post-WWII era, this has been achieved by offering visas for specific job postings to highly educated immigrant workers. One of the most obvious ways for such aspiring workers to legally enter the American labor market has long been the H-1B visa. These visas, exempted from caps in certain categories but otherwise limited to 85,000 per year, allow US companies to temporarily hire foreigners in specialty occupations, most often in sectors like technology, medicine, finance, and consulting. The Trump administration's announcement of a new $100,000 H-1B fee, which went into effect on September 21, shocked many in the tech world, upending a system that a good number of companies have come to rely on. The administration's chaotic descriptions of the changes didn't help, with, for example, Commerce Secretary Howard Lutnick first stating that the fees would be annual. (Given that an H-1B holder can work up to two three-year stints, this would have represented a $600,000 total fee per employee - a high number, compared with the compensation that same employee would be receiving during that time.) White House Press Secretary Karen Leavitt later issued a statement clarifying that the fee is a one-time expense. Amid all the chaos, coverage in the mainstream media has ranged from breathless descriptions of immediate confusion to the concept that this will destroy the US tech economy, as well as reports that American workers will benefit greatly and that companies have long used the system to cheat them out of higher salaries. What's missing in most (if not all) of these reports is detail. Just what the H-1B program's effect is on the US economy is largely left out of conversations about how, and whether, the program works in general, and for whom. To properly understand the ripple effects of big changes to the program, we have to first examine its upsides and downsides.
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