There’s a “new $100,000 penalty on high-skill immigrant workers,” says economics professor Michael Clemens, referring to the recent $100,000 fee imposed by the Trump administration for issuing H1-B visas. “The next, separate bomb the White House is dropping on high skill immigration” will “be officially published” on September 24: A regulation making “most H-1B” visas “inaccessible for entry-level jobs, e.g., new grads from US universities.”
That restriction will cut college enrollment. Foreign students will be less likely to come to the U.S. to study if they think they can’t get a job when they graduate, and to get an entry-level job when they graduate, they will typically need an H1-B visa. Foreign students are cash cows for many colleges, paying full tuition while other students get financial aid or pay reduced in-state tuition. If the number of foreign students falls a lot, the number of colleges that go bankrupt will increase a lot. Some colleges consist of more than a third foreign students.
In the 2023-24 academic year, at least 1.1 million foreign students were enrolled in U.S. colleges and universities, representing about 6% of the total U.S. student population. The population of native-born college students is expected to fall due to a declining U.S. birth rate and some young people souring on college. As a result of dwindling enrollment, about one college already closes every week. That number will rise when colleges lose many of their foreign students. Bondholders and lenders will lose money as colleges go broke and close their doors.
Restrictions on H1-B visas also prevent colleges from hiring foreigners to carry out vital research. As the American Council on Education explains, “Tens of thousands of H-1B visa holders are employed by colleges and universities, contributing to groundbreaking research, offering specialized training programs, providing medical services, and supporting the infrastructure necessary for these institutions’ operations.”
As noted earlier, restrictions on H1-B visas can “cause economic harm. A doctor says, ‘This will be absolutely devastating in the medical field. 30% of residents are international medical graduates and 10,000 of 43,000 residency spots are filled by doctors with H1-B visas. Previously the H-1B fee was below $5,000. No hospital will pay a $100,000 fee for a $55,000 resident salary.’”
Restrictions on H1-B visas can drive jobs overseas:
An immigration lawyer says, “the administration appears to want a company to pay $100,000 per year to the government for each H-1B worker it employs. The theory: firms will hire U.S. workers instead. The reality: firms will just move jobs overseas where talent is available.”
Having productive immigrant employees in the U.S. can enable a company to make more money, and thus expand here and hire more U.S. workers as well…. A study found that “firms respond to restrictions on H1-B immigration by increasing foreign affiliate employment…particularly in China, India, and Canada.”
Another study says that skilled immigrants are usually “linked to increased wages and stable or expanding employment for native-born U.S. workers. In one very recent study, skilled immigrants were found to have raised the wages of less-educated native workers.”
