America can't do without H-1B visa workers: This report explains why

Foreign workers play a critical role in the United States labour market, particularly in fields like science, technology, engineering, and mathematics (STEM), according to a study by the American Immigration Council. The report highlights how these workers complement the domestic workforce, create job opportunities, and contribute to economic growth.

 

The findings come as debates intensify around the H-1B visa programme, a key route for bringing skilled foreign professionals, particularly from India, into the US. The programme is under scrutiny for its political and economic implications. 

 

 

What is the H-1B visa?

 

The H-1B visa is a temporary (nonimmigrant) programme that allows US employers to hire highly skilled foreign professionals for “specialty occupations.” These roles typically require a bachelor’s degree or its equivalent, with common fields including technology, engineering, mathematics, and medical sciences.

 

Initial duration: Three years, extendable up to six years.

Annual cap: 65,000 visas, with an additional 20,000 reserved for those holding advanced degrees from US institutions.

FY 2025: The cap for applications was reached on 2 December 2024.

 

Employers seeking to hire H-1B workers must first meet certain conditions. They must certify through a labour condition application (LCA), approved by the Department of Labour (DOL), that hiring the foreign worker will not negatively affect the wages or working conditions of similarly employed US workers. Additionally, they must notify their current employees about the intention to hire an H-1B worker.

 

H-1B visa’s role in addressing skilled labour shortages

 

“The US economy relies on H-1B visas to address skilled labour shortages, particularly in technology, engineering, and healthcare, where domestic supply is insufficient,” Jidesh Kumar, Managing Partner at King Stubb & Kasiva told Business Standard. “Tech giants and startups alike depend on H-1B professionals for cutting-edge research and product development. Many also go on to become entrepreneurs, creating jobs and boosting the economy,” he added.

 

Kumar also cautioned that restricting the programme could force top global talent to seek opportunities in countries like Canada or the UK, potentially undermining the US’s position as a leader in innovation and economic growth.

 

How immigrant workers impact the US economy

 

The American Immigration Council report outlines five key ways in which immigrant workers support the domestic economy:

 

1. They often possess distinct skills that complement those of US workers, filling different types of jobs instead of directly competing.

2. Their spending and investments increase consumer demand and lead to job creation.

3. Businesses expand operations within the US in response to the availability of skilled immigrant workers and consumers.

4. Immigrants frequently establish new businesses, further expanding the US labour market.

5. New ideas and innovations from immigrants help drive economic growth.

 

The economic benefits of H-1B visas are evident in cities across the country. For instance, during the Covid-19 pandemic, H-1B workers played a key role in addressing national emergencies. Between FY 2010 and FY 2019, eight companies involved in developing Covid-19 vaccines—such as Moderna Therapeutics, Johnson & Johnson, and Gilead Sciences—hired over 3,300 H-1B scientists, chemists, and biophysicists. Medical professionals on the front lines during the pandemic also included H-1B visa holders.

 

From FY 2017 to FY 2022, New York City led with 372,100 H-1B petition approvals (15.2% of the national total), followed by San Jose with 215,700, San Francisco with 165,000, and Dallas with 150,200.

 

Wages and innovation

 

The report challenges the notion that H-1B workers earn lower wages than their US counterparts or negatively affect wage growth.  

 

< In 2021, the median wage for H-1B workers was $108,000, compared to $45,760 for the general US workforce.

< Between 2003 and 2021, the median wage for H-1B workers rose by 52%, while wages for all US workers grew by 39%.

< In FY 2019, 78% of H-1B employers offered wages above the DOL’s prevailing wage standards for comparable jobs.

 

The programme has also boosted innovation. A cited study from 2019 found that higher H-1B visa approval rates were linked to an increase in patents filed and patent citations. Startups with H-1B workers were more likely to attract venture capital and achieve success through IPOs or acquisitions.

 

Risks of restricting the H-1B programme

 

The report warns that restrictions on H-1B visas, such as rising denial rates, could have long-term negative consequences.  

 

“Another recent study found that restrictions on H-1B visas motivate US-based multinational corporations to decrease the number of jobs they offer in this country,” the report noted. Instead, these companies increase hiring at foreign affiliates or establish new operations in countries like India, China, and Canada.