What Will Trump’s Executive Order Do to H-1B Visas?

The president ordered a review of the controversial program as part of his "Hire American" agenda, opening the way for reforms that could fix the program, or doom it.

Susan Walsh / AP

On Tuesday at the tool company Snap-on’s headquarters in Kenosha, Wisconsin, Donald Trump gave a speech and signed an executive order rolling out his “Buy American, Hire American” agenda. The most actionable thing he laid out on the “Hire American” side of the plan was about reforming the H-1B visa program, through which 85,000 applicants are selected annually out of a pool of hundreds of thousands to gain the right to live and work in the U.S. for up to six years. Twenty thousand of these visas are reserved for applicants with a master’s degree or higher.

“Right now, widespread abuse in our immigration system is allowing American workers from all backgrounds to be replaced by workers brought in from other countries to fill the same job, for, sometimes, less pay,” Trump said, adding that for several decades American workers have faced an unlevel playing field when put in competition with foreign workers. His executive order represents a first step toward making the system less reliant on a lottery—a mechanism he called “totally random” and “wrong,” since it didn’t simply award visas to the highest-skilled workers.

Depending on what Trump means by “widespread abuse”—he did not elaborate—he may find that H-1B reforms actually have fairly broad political appeal. The program is supposed to provide American employers with workers they can’t find domestically, but because certain labor laws (including minimum wages) don’t apply to H-1B holders in the same way they do to American citizens, companies can sometimes have an incentive to try to swap U.S. employees for foreign workers willing to work for less. There are regulations in place that are designed to prevent this, for example by disallowing firms from paying H-1B holders below-market wages, or by watching to make sure foreign hirees are net additions to a company’s workforce rather replacements. But critics, including some on the left, allow that these aren't always properly enforced, which can depress Americans’ wages and even cost their jobs.

And there are loopholes in the visa program that have drawn further criticism. In one high-profile 2015 case of abusing the program with a practice critics call “insourcing,” Disney laid off 200 IT workers and then hired immigrants on H-1Bs to perform much the same functions. The company said the new hires were not replacements, and that they couldn’t fill the positions from within the American workforce. But the claim was flimsy, and it kicked off a scandal that became fodder for Trump’s speeches.

The industry that’s most reliant on the H-1B program, and the one most likely to be affected by any coming changes, is tech. According to The New York Times, Facebook and Qualcomm alone employ 15 percent of the allotment of H-1B holders. Some 40 percent of the visas go to entry-level workers across the economy, a number Trump indicated he hopes to lower to make room for more highly-paid visa-holders.

It’s not clear exactly what Trump’s reforms will look like, if they happen at all. In practice, all the order he signed in Kenosha does on the H-1B issue is direct the heads of four federal departments—those of State, Homeland Security, Labor, and Justice—to review the policy by November and recommend changes. So there is hope that, for Trump’s fans and even his detractors, the “Hire American” agenda could yield some positive change to a system that has at times been criticized by both parties. But it seems hard to believe that the smartest and fairest possible immigration reforms will be the ones selected by a president whose path to office was so defined by vilifying foreigners.

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