Newscasts - US worker-visa havoc

Tecsys

25/09/2025 07:53

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Description: A new $100,000 fee for hiring skilled foreign-born workers surprised Big Tech and other companies. In this Viewsroom debate, Breakingviews columnists weigh the merits of the H-1B plan that pits parts of Trump’s coalition against each other.

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Video Transcript:

The views expressed on this podcast are those of the participants, not of Reuters News.

The country would rather not have to pay $100,000, but they'd rather- how do you do that? You hire Americans, so there's an incentive to hire an American. But there may be instances where it's better off doing it, through expertise or whatever it may be. But they're both unbelievable, whether it's a gold card or anything else that we talked about today.

What do Tesla's Elon Musk, Google's Sundar Pichai, and Microsoft's Satya Nadella have in common? They're all titans of technology. They all employ hundreds of thousands of people and enjoy eye-watering salaries. But they have also benefited from a document known as the H-1B visa. But at the weekend, US President Donald Trump imposed a $100,000 fee on these applications, which will make it harder and certainly more expensive for these tech giants to hire the best and brightest minds in the world. But more importantly, the tightening of this immigration is rubbing up against the agenda of the tech bros in Silicon Valley. They have a completely conflicting agenda. How will this fight play out? What will tech giants do if they can't hire the best minds? And can other countries benefit from a US clampdown? All of this and more in this week's Viewsroom.

It's Amy.

And it's Jonathan. And it's the Viewsroom, the weekly podcast that delves into the naughtiest issues in corporate finance, business, and economics with a crack team of Breakingviews columnists. So, we had a pretty chaotic weekend at first. When the news came out, there was total confusion as to whether this was a $100,000 upfront fee for H-1B visas, whether this was an annual fee, whether folks would need to apply just to continue their kind of immigration status here in the United States. We had stories of folks like cramming onto planes last minute to get back into the country before this thing went into effect. And now we have like a few more of these details ironed out. But this seems like we're still kind of in the shock and awe period following what is basically like you kind of put it, this weird like interfactional squabble within the Republican coalition, right?

It's true. And I have to say, I was- when I watched it at the weekend, I wondered to myself, why on earth would you not say, you know, in six months' time, we're going to introduce this reform to allow companies to kind of gather themselves and allow the workers to understand exactly what's expected of them. And as you said, I think one of the most interesting things is that there is this sort of like anti-immigrant faction of the Trump White House, right? So, the faction of his White House that really just want, you know, massive crackdowns on immigration of all kinds, whether it's the top tech minds or whether it's people illegally coming over the border. But I wonder, Jonathan, is there like a counter to this? Is this- is there like a case to be made that these H-1B visas were being overused, that they were undercutting local workers? And that, you know, that basically- also the companies were sort of using them to keep these very like bright-minded people in situ, that they couldn't move to their competitors because they were like tied to a visa to their company.

Yes. I mean, let's be clear, there is a very large immigration crackdown happening in the United States. And this piece of it just happens to affect, like you say, the best and brightest and the largest companies in the world. And that's why there's such a firestorm over it. There are right now, you know, law enforcement agencies that are doing kind of street sweeps in major cities that are unlike anything we've ever really seen in the United States before. That is, frankly, very much outside the norm of how immigration policing usually works. And that is something that continues to pace and, frankly, has raised very little of this kind of agitator among the Republican coalition. All of a sudden, everybody cares when it's something that affects the tech giants. Like you say, there has been a long running argument about, you know, there is a composition of H-1B visas. They are largely towards kind of IT industries that these tend to get used. There are a few large contractors that show up in government data risk, like by far the largest users of these things. And that tends to breed this distrust over what is happening and what has become the kind of standard path for bright young minds looking for a lucrative career. You know, that used to be- I mean, it still is but, you know, banking, private equity, et cetera. Coding now is kind of one of those things that, like, again, bright young people decide they're going to go into. And as that job market weakens, I think you see a lot of really, really high tensions flaming around that. Of course, that also creates a lot of challenges for Trump's backers. But fortunately, we can draw on the global expertise of Breakingviews for this week's episode. We're straddling three time zones this week. Una Galani is coming to us from Hong Kong and has been looking at what the change will mean for the many Indian workers who rely on these visas. And Rob Cyran, in New York, can talk to us about what it means for the technology giants in the United States. Rob, Una, you are very welcome to the Viewsroom.

Nice to be here.

Great to be here. Thank you.

Una, you wrote a really interesting view on the change to these visas. But before we get into that, can we just talk our listeners through the history of the H-1B? Who uses them? And, you know, kind of like whether this executive order just effectively came out of the dark and was totally unexpected.

Okay, Jonathan, I'm going to start with that last point because I find it so controversial. It's like this is not a jolt out of the blue and anybody who says it is, is lying or it's completely misleading. Actually, Jamie Dimon gave an interview to the Indian media, I think it was just this week, and he's the CEO of JPMorgan. And he said the visa is- the visa fee is a jolt out of the blue. And his bank is one of the top 10 users of these visas. But I completely disagree with him because successive US Administrations have constantly sort of stirred the pot on this issue. And this is exactly why India's largest IT firm, Tata Consultancy Services, is the second largest user of these visas, that's exactly why they've heavily trimmed their dependency on these since the pandemic. I mean, after Amazon, TCS is the second biggest user so that shows you something. I mean, to answer your question on where these visas came from, how they came about. I mean, the US has for decades and decades and decades been thinking about how what is the right way to bring highly skilled foreign workers into the country. But these specific visas were introduced in the 1990s under President George Bush. And as you said, quite rightly, they were designed to be of a temporary nature to bring highly skilled, talented workers into the country. But today, when we think of H-1B visas, we think of techies and we primarily think of Indians because Indians are 71% of the beneficiaries of these visas, I think, followed by the Chinese. But actually, like- and I actually learned this really this week because I wasn't familiar with this either. This visa program has actually been used for other things as well, for doctors, for scientists, for patrons of the art. So, you know, it had a kind of broader context to it. But the other thing that people need to understand about this visa is that the caps and the fees have moved around over the years. But there has always been this tension, right, this tension that you and Amy were talking about the beginning, like the tension between the need to bring talent into the US so the US can create the companies that make the US exceptional, and the need to protect the domestic workforce. And it is absolutely no secret that a number of US companies, and global companies, have used these visas to hire talent at lower salaries than they would need to pay Americans. And that is also just well understood. You know, every good thing can have its flaws. And I think that's kind of where we are with this. So, I think this tension is getting fiercer and it's come to a head under Trump because of his America First agenda and the Make America Great Again sort of factions. But I think there's also a lesser appreciated point here that was laid out in the executive order. And, you know, some people never read the executive orders, right? But actually, it makes quite a good argument, which is that unemployment among STEM graduates in the US - STEM is this science, technology, engineering, mathematics graduates that the kind of people are like perfect at building your next AI cloud, something, something. Unemployment among this cohort is actually higher or has been at points this year, higher than the overall unemployment rate in the US. And that is something that the Administration is also perhaps trying to address.

So, Rob, if I could bring you in here, because I think Una has made some really interesting points, but I'm sort of curious. I mean, none of these companies that Una has mentioned are short of money. So, can they just recruit domestically? Can they pay these visas? Like what would you imagine they're going to do in this situation?

I mean, it's short-term disruptive, but I mean, the companies made it through the pandemic, and everything worked out pretty well. I mean, they actually grew substantially during the pandemic. So, if you think about it more broadly, I mean, do these workers have to be in the United States? Probably not, especially over the near term. So, it's more a matter of, okay, maybe they will use other visas. Maybe they'll hire domestic workers, maybe they'll have workers working in Toronto or maybe they'll have workers working in India. They'll just adjust their employment patterns. I think the more harmful effects are on company formation in the United States, because if you think about all the companies that have been founded by immigrants, it's like 20% of the S&P. And if you look at what's happening now, among the AI companies, OpenAI, Perplexity, Anthropic, they all have immigrant co-founders. And Silicon Valley is definitely a place where people who are young and ambitious come to work. And one of the ways they come here is through H-1B visas, as we started off the conversation. And founding a company online, sure, it can work, but it doesn't work quite as well as if you're in the office with someone all the time. And I think that will have an effect over it. So, will it affect Microsoft? Sure, it'll be disruptive. Will it affect Tata? Of course. But it's more the new companies. And the other area is, I think as Eunice said, that it's not just people in tech companies. A lot of doctors come here on H-1Bs, and other forms of student visa. So, in North Dakota, for example, 5% of the GPs are here on H-1Bs. So, in rural areas, it'll be harder to find a doctor. So, it's more of those types of effects, and it's more lingering effects, rather than the short, sudden shot to the technology.

I want to lean on one point there, because I think, Rob, you and I share a similar reflection of maybe being a little too online and following kind of what the discourse has been among like this right-wing political coalition leading up to this. And I think in that interregnum period after the election, before the inauguration, you saw a really big break between Elon Musk and various other tech titans who had kind of really thrown that a lot in with Donald Trump, and this kind of grassroots, really hardline anti-immigration part of the base. And like you say, there are all these kinds of little, weird niche areas around doctors in North Dakota, or what have you. But the balance of the program, right, goes towards workers in the IT industry. As Una was saying, there is higher unemployment, or has been higher unemployment, among STEM grads. And it feels like the oldest political story there is, you know, a political group that assumes it will be upwardly mobile, is well-educated, sees their ambitions, frustrated, and kind of picks on a thing to kind of latch their frustration to. And just kind of wondering, like, because the executive order is structured in such a way that it feels like it can be kind of pushed around to essentially just like work for that political end, right, to really target the tech industry, as opposed to, you know, this is going to be a blanket thing, and they're not going to be able to suddenly backpedal and go, like, oh, my God, there are no doctors in rural hospitals anymore, or am I maybe being a bit naive there?

I think that what's really interesting about this executive order is it kind of lacks conviction in a way that some of other Trump's executive orders haven't, in the sense that there's like a lot of an off-ramp, and there's a lot of exemptions, and there's a lot of- like, so for example, this policy- the US is not going to run out of doctors because of this program, right? So firstly, you can apply for an exemption, and the Secretary of the Homeland Security can grant you an exemption. The program only lasts for 12 months, and it can basically- it will only extend if it is deliberately extended. And you know, this only applies to net new additions, right? So, I think- I mean, I think that that says something about Trump's own views on this program, on this visa program, which have basically flip-flopped it around, right? So, at some points, he sides with his tech advisors who are very, like, pro H-1B visas. And then at other times, he sides with his MAGA base. And so that's all kind of- that hesitancy and that uncertainty is all wrapped up in this policy, which I think provides plenty of wiggle room for both companies and doctors and hospitals to get what they need in the short term. The real danger is exactly as Rob said earlier, is that what would happen to company formation? The bigger question is, what will happen if you curb talent migration to the US? Not just over one year or two years, but over three years, four years, five years, right? The US has been great because it thrives on a mixture of local and foreign talent. And if you don't have that, then where are you?

I mean, there's also a bit of a New York Times article bias here, in that this affects all the rich, educated people. So rich, educated people like to read about rich, educated people. But you know, there are lots of different forms of ways that people come to the United States, student visas, you know, green cards, other forms of things, and those are all being cut back. And so, it's a matter of dynamism, if you want to call it that, in the United States. And this is just the one that everyone's latched onto, because it affects these companies and it affects people that they probably know. But you have to put it in the broader context, and that's a more, all of these forces are affecting the United States economy.

So, Una, I'm sort of curious, right, if you are one of these Indian workers, or any of these, like, top minds that use these types of visas, and it looks like the US is just not really an option anymore, or at least a very difficult, a difficult option for you. Where else would these types of people go to? Is there even a comparison? Because I know that like, most countries - I had a quick look at this this week - most countries have some version of the H-1B visa where they try and get- even though they might have a limit on other immigration, they say, "Well, actually, if you are this type of person, you can get a visa here." So, Germany, UK, Netherlands, I would imagine, I mean, China's the second largest economy in the world, that could also be an option to go work in those companies. But what I sort of thought was that if you are one of these people, you want to work in the biggest company, because you want to be the future CEO of Microsoft, you want, that's your ambition, and that, and there's very few places that could even- what's your thoughts on that?

Yes, look, nothing replaces the American dream, right? But the American dream and perceptions of the American dream are also souring. Just because you- you don't have to work in America to work for an American company. I mean, overall, I think professional Indians or Chinese who really want to live and work overseas will find a way to get to a rich country if they want to. Canada, Australia, Dubai, Singapore, there are many places. You know, a lot of people in India, actually, this is sort of quiet on the down low, will be cheering too at the moment. They are cheering because, you know, a lot of people are tired of seeing the best and brightest Indians go overseas to run these American tech firms. Now, that's obviously their prerogative, and they've done very well. But India as well needs to create tech companies, they don't have their own large language model in AI, you know, that India's behind, despite being a big country. So, you know, I think there'll be some hope that there'll be a kind of reverse brain drain as well. But, you know, ultimately, like, these companies will need to staff these roles. And if they can't do it in the US, then they may have to do that elsewhere. And people will follow the opportunities.

Yes. And I mean, to that point, Rob, I know you and I have discussed a lot, there's a sort of chain of policy decisions that is affecting US international competitiveness, right? Whether that's funding for leading edge biotechnology startups, whether that's the immigration issue, whether that's a bunch of different things. Does that strike you as a sort of coalitional deal breaker between tech and the Trump presidency? Or is like H-1B sort of a marginal thing on top of everything?

It's not a deal breaker. I mean, if you look at the actual where the leaders of Silicon Valley are, they still a lot of them are big Trump supporters, and among the VCs. It's different if you look at more science based as opposed to engineering, if you look at the medical space, they tend to be a bit more skeptical. And that's because, again, if you broaden the conversation out, besides just immigration, you know, or looking at H-1B visas, if you look at science and tech funding, for example, basic research, the United States is a huge, huge chunk of the world's spending on basic research, which, you know, eventually leads to medicines and even further down the line leads to computing advances. And Silicon Valley is built on that, but it won't affect that immediately. But if you cut these programs back, like the Trump Administration is, it's very hard to replace them. You couldn't just not every- if you took every American scientist and had them go overseas, there simply aren't spaces for them. You know, even if you doubled and tripled everything overseas, there's just not space for them. So, you can't just- you can't just destroy this and say, "Okay, well, they'll find some place overseas." It just won't happen. So, this, again, if you take a look at the whole of what everything the Administration is doing, it's very harmful, both for United States engineering and science, and it's going to slow down the world's advances in engineering and science. It might be advantageous to India or other places. I mean, America's benefited from taking the cream of the crop from everywhere in the world. But if the United States wants to start an own goal, everyone's going to hurt, but we'll hurt most of all, probably.

So, there's another kind of element to this. And actually, Una, when listening to you, I kind of thought this seemed like a test, right? As in like an experiment, if you will, that you do it for 12 months, you see what happens, you see what the backlash is. But at the same time, this is a revenue generator, right? The hope, in some ways, is that these companies will pay for these visas, right? They'll pay the US government $100,000 per person they want to hire, and maybe they can't find them domestically, initially, anyway, but I'm just sort of curious, what's your thoughts on it being a revenue generator?

Look, I think that it's- this- $100,000 over an employee's three to five to six-year term, it's not a lot of money. Three years, that's like, you know, five years, $20,000 a year. That's kind of the cost of doing business for these companies. It's not a huge- it's not going to move the needle. Even if JPMorgan paid $100,000 for all the H-1B visa holders they have today, it would be less than 0.4% of their net profit, the equivalent of that, right? So, I mean, this is affordable. I mean, to the extent it's a revenue generator for the US, I don't think that's why you do this. I mean, there have been certain initiatives that have been rolled out, and I haven't seen really what the US has said they'll put these proceeds into, but other types of policies coming out of the US, particularly ones that might attack India's services exports, IT services exports to the US, have floated ideas such as putting the proceeds of taxes into a fund that will then train the next generation of scientists or whatever. I mean, yes, I don't think this is enough money to move the needle.

Yes, no, and famously, such training funds always work and always achieve their objectives. But yes- no, that seems like as good a place as any to wrap it. Una, Rob, thank you so much for joining us on The Viewsroom.

Great to be here.

Great. Thanks so much.

Thanks for tuning in. This podcast was produced by Cheryl Pena in New York and Gregory Garner in Toronto. You can listen to a new episode of The Viewsroom every Thursday on the Reuters app or your favorite platform. And don't forget to tune in to our sister podcast, The Big View, every Tuesday, as well as the other great podcasts from the Reuters team. If you like what you heard, please follow The Viewsroom and let us know what you thought. We have a new email address where you can send us feedback, which is Breakingviews-podcasts@tr.com and check out our views on the biggest stories in business and finance every day on Breakingviews.com and Reuters.com.