The American Nightmare: Trump suspends visas for foreign workers

July 5, 2020

3 min read

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What's going on here?

US President Donald Trump is suspending the entry of certain foreign workers to the US until 2021 to create more jobs for Americans. The sweeping immigration restrictions have been made despite strong opposition from major tech companies.

What does this mean?

In April 2020, Trump imposed a 60-day ban on the issuance of green cards (permanent residency visas). Citing the high US unemployment rate (13.3%), Trump announced a new order on Monday 22 June 2020. It extends the ban on green cards until at least 31 December 2020 and suspends the issuance of four types of temporary work visas:

  1. H-1B visas, which are widely used by tech specialists;
  2. H-2B visas for non-agricultural seasonal workers;
  3. J visas for cultural exchanges, such as au pairs;
  4. L visas, which are used by companies to transfer executives from an overseas office.

However, there are exemptions for food processing workers and healthcare workers assisting in the coronavirus battle. Existing visa holders or people already in the US are also unaffected. The Trump administration has framed the decision as an attempt to protect the employment prospects of American workers crippled by the pandemic. It estimates that the restrictions will create 525,000 jobs.

What's the big picture effect?

The visa restrictions will likely exacerbate the damage done to US companies by COVID-19. As the US economy attempts to claw its way out of a recession, the last thing US companies need is a labour shortage. Though Trump blames unprecedented unemployment for the harsh visa ban, the H-1B, H-2B and J sectors are not ones where unemployment is particularly high. For example, the unemployment rate in computer occupations (held by most H-1B visa holders) declined from 3% in January to 2.5% in May 2020, according to the Bureau of Labor Statistics. During that time, the overall unemployment rate soared to double digits.

The statistics reflect the continued demand in the US labour market for professionals with specialist knowledge and technical skills. The supply of qualified American professionals is too small to meet this demand. Most businesses would not incur the significant costs of importing workers if a domestic alternative was available. Foreign workers ensure American companies remain globally competitive, which in turn boosts the US economy – creating jobs for millions of Americans. In this light, Trump’s draconian visa ban is more likely to harm than help Americans in the long run.

The US economy’s recovery from the virus has been largely driven by Big Tech’s robustness (to see our article on that, click here). Most tech companies heavily rely on highly-skilled workers with H-1B visas. Amazon, for example, received more than 3,000 H-1B visas in 2019. By making it harder to fill these positions, the Trump administration risks jeopardising the bedrock of America’s economic success. The lockdown has made tech companies realise that they no longer need to hire staff locally. Instead, they can search for employees anywhere in the world and operate them remotely (to see our article on that, click here). In response to Trump’s executive order, the tech industry may decide to move these jobs out of the US for good. While cracking down on immigration is key to Trump’s re-election campaign, it seems unwise to antagonise Big Tech precisely when the US economy needs it most.

Report written by Deniyi Coker

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