Five Charts Illustrating the Effects of Trump’s H-1B Visa Policies

Understanding the Impact of the "Buy American, Hire American" Executive Order

In April 2017, President Donald Trump signed the "Buy American, Hire American" executive order, an initiative that aimed to reshape the landscape for foreign workers in the U.S. One of the key components of this order was a directive to the Department of Homeland Security (DHS) to prioritize the awarding of H-1B visas—used predominantly by employers to hire foreign professionals—to the most skilled or highest-paid candidates. As industries, employees, and students navigate these new regulations, the ripple effects of this policy are increasingly evident.

Rise in Denial Rates for H-1B Visas

Since the executive order, the hurdles for acquiring skilled worker visas have intensified. Reports indicate a troubling increase in the denial and delay of H-1B visa petitions, reaching a peak that hasn’t been recorded since at least 2015. According to Department of Homeland Security data, the denial rate for H-1B petitions surged from 4% in FY 2015 to 15% in FY 2018. As investigations suggest, fewer applications are now submitted due to increased scrutiny, leading to a self-reinforcing cycle where only applicants deemed highly likely for approval are pursued.

Declining Applications from International Students

One notable consequence of these stricter visa regulations is a decline in international students applying to U.S. colleges. The Institute of International Education (IIE) reported a 6.6% drop in new enrollments during the 2017-2018 academic year, marking a continuing trend first noted in the 2015-2016 academic year. This decline poses challenges not only for universities dependent on higher-paying international students but also for the broader economy, as international students contributed a staggering $42.4 billion to the U.S. economy in 2017.

Job Market Shrinkage for International Graduates

Compounding the challenges faced by international students, the job market has also contracted for foreign workers in the U.S. In 2018, a mere 23.4% of U.S. employers expressed intentions to hire international students, the lowest level since 2011. This sentiment has seen fluctuation; a resurgence was noted in 2019 as 28% of employers planned to hire these individuals again, primarily in the information and retail sectors. Nevertheless, the overall trend points to diminished opportunities.

Canada: An Attractive Alternative for Skilled Workers

Amid tightened U.S. immigration policies, Canada has become increasingly appealing for tech professionals. Companies like Microsoft have expanded operations in Canada, driven largely by the need to attract talent amidst U.S. immigration uncertainties. The Canadian government’s Express Entry Program has seen a spike in invitations sent to skilled workers, notably from India, reflecting a strategic shift among skilled professionals seeking more favorable immigration pathways.

Changing Dynamics for Outsourcing Firms

The tightened visa policies have also shifted the landscape for outsourcing firms traditionally reliant on H-1B visas. Major players like Tata Consultancy Services and Infosys have faced declining visa approvals. As these firms pivot toward digital services that demand fewer workers, they are concurrently exploring strategies to enhance domestic hiring. Meanwhile, U.S.-based tech giants are witnessing an increase in visa grants, contrasting sharply with the dwindling numbers given to outsourcing firms.

The Future of the H-1B Visa Landscape

With the stimulus of the "Buy American, Hire American" executive order, the landscape for H-1B visas has undeniably transformed. The measures intended to protect American jobs have had broader implications, affecting student enrollments, international job markets, and the attractiveness of the U.S. as a destination for skilled workers. The drive to prioritize American talent continues to shape the policies and realities that both job seekers and employers must navigate.