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It looks like the Trump administration may further restrict work visas for technology workers by making changes to the H1B program. If it does, that will send the cost of such tech workers skyrocketing, since they are already in high demand. That might be a good thing for my company, 10x, a technology employment agency. And while it may also increase the pay for technologists in the US, it is ultimately bad for innovation, growth and the health of the overall economy.
H1B Visas were created when it became apparent we needed to import specialized technological and scientific talent that we don’t have sufficiently available in the U.S. The concept of this is reasonable. When you need something and don’t have it, you find a way to get it. So far so good. But there are several inherent problems with the current H1B system, and even more with the Trump Administration proposal being discussed that would reduce the number of such visas issued.
First of all, the impact of reducing the amount of H1Bs issued will go far beyond just the tech sector. Virtually every company in our economy is steeped in technology, and it will be harder and harder for all companies (especially non-tech companies) to get the tech talent they need. The Trump administration and some media outlets talk about H1Bs as a problem unique to the technology industry, but that could not be further from the truth.
If this program is diminished or dismantled, companies will be likely to move their tech and innovation projects to offices and divisions in other countries. This will ultimately defeat the supposed goal of the current proposal– to put more Americans in these jobs. It also poses an additional problem, which is that startup founders will have to start their companies in places where there is an abundant supply of technology talent–in other words, anywhere but here.
We have already observed startup scenes popping up everywhere and anywhere tech talent can be found. One former Microsoft employee who was denied an H1B went home to India and started his own company. It’s now valued at $7 billion. That is a lot of lost tax revenue and jobs for the U.S.
One of the biggest problems with the current system is that the $60,000 minimum salary threshold for H1B visa holders is too low. Paying low wages allows companies to bring in specialized help as a cost-savings measure rather than because there are no options here.
By far the biggest issue is that the H1B program only addresses the symptoms of the disease but does nothing to cure the root cause. If we want to reduce the number of foreign workers brought in, we need to train more people here for these jobs. Clearly, our education system is failing to provide enough people with the needed specialized skills.
The job market has room for them, which is why many of these tech jobs are going outside the United States and to people brought in on these visas. If we don’t address the cause, the problem will grow massively. According to the New York Times, the U.S. has a shortage of about 110,000 computer science jobs annually. The fact that no one speaks of our education failings in connection to the visa/immigration problem is emblematic of a national problem of short-term thinking.
While clearly the current conversation around immigration reform is polarizing, there are several solutions which relate to H1Bs that might be agreeable to the majority of people and companies concerned with the law. But that assumes that everyone agrees we need to frame the solution as long term and broad reaching.
Here are some solutions that are strategic as well as tactical:
- Increase the minimum salary for H1Bs to $120,000 from its current level of $60,000. This, combined with the other costs of bringing in foreign workers, will cause employers only to seek to use H1Bs when they truly can’t find someone here, instead of just trying to find someone less expensive they can import.
- Taking a page from carbon credits, for each H1B granted the employer should either:
- Train an American worker to be able to take over the position/skill upon the completion of the visa term, or
- Contribute money to workforce development programs.
There is no question that massive employment change is coming. The workforce is moving toward temporary and short-term work at an unprecedented pace. As we see that machines can perform many functions better than humans, automation and partial automation are going to wreak havoc on employment, sector after sector. If we don’t rethink all aspects of our educational system and relationship to work, we are going to be woefully unprepared for the coming changes. At the very least, maintaining pathways for the talent we need now to keep coming from other places while we do all we can to protect American jobs should be the short term tactic. The long term strategy should be making much more investment in education and workforce training.
Educating people for technical and skilled roles must be taken seriously, and incorporated into all conversations that relate to employment.
Michael Solomon is an entrepreneur and the founder of 10x Management, a tech talent agency.