Trump's $100,000 H-1B Visa Fee Sparks Immigration and Innovation Fears

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00:00What do Elon Musk, Satya Nadella, Indra Nooyi, and Sundar Pichai all have in common?

00:06They all, at some point, were in the United States on an H-1B visa.

00:11This is a story about putting a price on opportunity, like a $100,000 price.

00:17Last month, President Trump responded to years of complaints about how the much-sought-after

00:22H-1B visa for admission to the U.S. gets awarded.

00:25The country would rather not have to pay $100,000.

00:30How do you do that?

00:31You hire an American.

00:33$100,000 fee is a huge, huge increase on that.

00:37This is very significant for these organizations.

00:40And just to sort of highlight how big this change is, the fees for an H-1B visa, they've

00:46never been cheap, right?

00:48So they have ranged from $3,000 to $10,000, which is not minor.

00:54That $100,000 price tag is sure to hit the highly skilled people coming to the U.S. each

01:00year, people like Vijay Ravi.

01:02I actually did my bachelor's in India.

01:06Then after that, I decided that, you know, I really wanted to do more in life and have

01:11more opportunities.

01:12So that's when I decided, OK, let me go to the United States.

01:16Ravi lived in the U.S. for six years on an H-1B visa.

01:20He came from India, the country that uses the visa more than any other, and earned his

01:25master's degree in data science at the University of Texas at Dallas.

01:29I got my first job in Miami.

01:32It was a great achievement for me.

01:34It was my first real job.

01:37And I was really lucky because my H-1B got picked in the first attempt itself.

01:42I was so excited that, you know, my stay in the U.S. was actually solid.

01:48It's like settled.

01:49Then I got another job in New York City.

01:53It was for an advertising company.

01:55And the H-1B transfer process also was very smooth.

02:00But then things changed.

02:02I did around like three years at that company.

02:04And I was laid off, unfortunately.

02:07I must have applied for around 1,000 to 2,000 jobs in like three months.

02:14I actually got a lot of interviews, actually.

02:16But in the end, in the final round or the second round, they're like, oh, we cannot sponsor

02:21the H-1B.

02:23After two months, I understood this is just going to get worse.

02:26Ravi's H-1B visa was part of a program that began in 1990, designed to let highly skilled

02:32workers into the country from abroad.

02:34They've been around since the Immigration Act of 1990.

02:37And actually, you know, there's been almost no change to them since then.

02:43Britta Glennon is an assistant professor at Penn's Wharton School of Business, who has

02:47studied the effects of the H-1B visa program on business and the economy.

02:52They're a skilled immigrant visa.

02:55So they're primarily used for those who have at least a bachelor's degree, if not, you know,

03:00master's or PhD.

03:02They're really the primary skilled employment visa for immigrants.

03:08They are tied to a firm, right?

03:11So something that's sort of important to recognize is that you actually cannot get an H-1B visa without

03:16an employer sponsoring you.

03:19And the employer, actually, they're the ones who submit the application, not the individual.

03:23The U.S. limits H-1B visas to 65,000 each year, with 20,000 additional visas for those getting

03:31graduate degrees from U.S. institutions.

03:33But several times that number apply, which has led the U.S. to create a lottery to pick visa

03:39winners and to criticism about the overall approach.

03:43It's pretty clear that we need more than 85,000, and just the fact that demand is so much higher

03:50than supply every single year, I think exemplifies that.

03:53I mean, when it was first formed, demand was below the cap.

03:57They ended up raising the cap in the late 90s because demand started growing as you had kind

04:02of the Internet boom, right, and Silicon Valley became much more significant.

04:08And then that expired in 2004.

04:11And basically since then, supply and demand have been on completely different trajectories.

04:18The big mismatch between supply and demand has created large business opportunities for companies

04:23not looking for skilled employees themselves, but to getting visas for workers they can provide

04:29to the companies needing them.

04:30In 2023, nearly half of the H-1Bs went to outsourcing or staffing companies.

04:37Todd Schulte is the president of FWD.US, a company that focuses on reforming the U.S.

04:43immigration and criminal justice systems.

04:46So there's been over the years efforts by companies, and I would say a lot of bad actors,

04:51to basically kind of game any particular system here.

04:53Really, it's a function of Congress has failed to update our immigration system in a lot of ways here.

04:57Uri Leskovic is a computer science professor at Stanford, but he's also the founder of AI tech startup

05:04Kumo.ai, the sort of company that the H-1B visa was supposed to help.

05:10Lottery, I think, doesn't make sense, right? Lottery may be large organizations who are able to sponsor many visas

05:16and kind of play the numbers game. They can deal with that. But if you think of a small garage startup

05:21with three employees who want to sponsor one or two visas, and the probability of them getting that visa

05:27is maybe 10, 20 percent, it puts a huge risk at this startup being able to grow, being able to hire

05:34and being able to move fast.

05:36As many problems as there may be with the old H-1B system, it's far from clear that imposing a $100,000 fee

05:44will make things better.

05:46The problem with this is that it may have unintended consequences because small organizations, small startups

05:52won't be able to afford that large of a price. And this is going to, maybe in the short term, we won't see the negative

05:59effect of this. But in the long term, you know, the most innovative companies of the drivers of today's economy

06:05started as small garage startups. And if we are killing this most innovative companies that are kind of just being

06:14able to be born and kind of slowing their progress, that is going to have tremendous effect on our economy.

06:21How do you set up a recruitment process where you're picking and choosing on the front of who you think is worthy of an

06:26additional $100,000? How do you scale that? The answer is you can't. So there may be ways that they may be able to try to

06:33find ways to get some of these people to come here. But there's no consistency to that. It's not about getting for big companies

06:39one or two companies, one or two people. It's about how do you get the right number of people each year. What about small

06:45companies? I mean, if you're a six person startup and two people need $100,000 H-1B visa fee, well, okay. Like what if you only

06:53have $100,000? Are you picking and choosing? And the answer is we're going to hurt small companies. We're going to hurt big

06:58companies. And then for research universities, there's no university in the United States, no matter how wealthy, who can sit around

07:06and say, we're going to pick and choose on the front end each year, who's worthy of an additional $100,000 fee. So that means

07:13scientific innovation is going to happen, but it's going to happen in other countries. We're going to have less

07:16innovation. We're going to be a sicker country. And the things that we've talked about doing, bringing

07:21manufacturing back, creating jobs for everybody here, just isn't going to happen.

07:26It appears that the Trump administration's new $100,000 visa fee may already be having a chilling effect.

07:33Walmart, the largest H-1B retail user, has announced that it will no longer sponsor applicants.

07:40On the other hand, NVIDIA CEO Jensen Wang praised the announcement. And just last week, the DHS

07:47clarified that college graduates on student visas and certain foreign workers already living in the U.S.

07:53will not have to pay the hefty fee. There's been some confusion, I think. So when it was first

08:00announced, it sounded like all H-1B visas would have to have a $100,000 fee, maybe annually. It's still not clear whether

08:12it's annual, whether it's one time, whether it applies to new, whether it applies to continuing, whether it applies to for

08:18profits as well as nonprofits and universities.

08:21An arbitrary lottery or charging $100,000 aren't the only two ways of allowing highly skilled workers

08:27into the United States. Several countries limit those admitted not by the numbers, but by the skills they

08:33bring with them. Countries like Canada, Australia, New Zealand, to some degree the U.K., all use a

08:40points-based system where they basically say, we're going to allocate points for different qualifications.

08:45So we're going to say, you know, if you have a PhD, you get a certain number of points. If you speak

08:50English, you get a certain number of points. If you're in a high demand field, you get a certain

08:57number of points. So their view is clearly that, you know, you just allow in sort of as many high

09:04skilled immigrants as possible. Having employers bid in an auction for highly skilled workers is

09:10another possibility. A market-driven mechanism would be something like an auction where firms could

09:15actually bid on H-1B visas. And then it would really be, you know, the firms and the market

09:20determining the right price. $100,000, that's arbitrarily chosen by the government. This is

09:24absolutely not a market mechanism. There may be no perfect way to put a price on opportunity for

09:30highly skilled workers wanting to come to the United States. But getting it wrong could lead the

09:35workers we need to look for opportunity elsewhere. One way to think about it is if you make this like

09:41so expensive here. One, it's going to stop people from getting this way. But two, it's going to push

09:46back here. And now U.S. universities aren't nearly as attractive, right? So if these coming out are going

09:53to cost you an extra $100,000, trying really hard to make it so that, you know, the University of Texas

10:01in Austin is a top U.S. university, it's just a lot less appealing if you can't stay in the United States.

10:06So we're like pushing backwards in harmful ways, and we're pushing forward in harmful ways here.

10:11Are you limited in your growth at your startup company by an insufficient supply of highly skilled

10:18people coming from abroad? Definitely. You know, just a few years ago, about 60% of AI talent was

10:25based in the United States. Now that number has dropped to 40%. And I think having access to the

10:32to the top talent, being able to hire quickly and being able to grow and scale is the only way how

10:38U.S. is going to remain competitive in this environment. Which takes us back to the H-1B

10:44recipient Vijay Ravi, who came to the U.S. to get his graduate degree and become a part of the

10:50American workforce, but ran into stiff resistance and is now pursuing his opportunity in his native India.

10:56You can live a really, really good life in the United States. But with the current administration,

11:03I don't recommend them to come to the United States right now. And I myself wouldn't think of

11:09coming to the United States because right now I feel like I have a very good lifestyle. I have

11:15a good work-life balance. I get to travel and I get to work at the same time. And trading that for

11:22the immigration stress I get in the United States, I can't even think about it. It's too much for me to handle.

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