by Prateek Khandelwal and Falguni Sharma 19 July 2020
US VISA Ban: Trump’s “master plan” to combat unemployment or just another anti-immigration rhetoric?
United States President Donald Trump signed an executive order on Monday, 22nd June to suspend several categories of working visas until 31st December 2020 with the “Proclamation Suspending Entry of Aliens Who Present a Risk to the US Labor Market Following the Coronavirus Outbreak.” This includes suspension of various working visas namely, H-1B, which is most favoured by Indian I.T. professionals, H-2B, J, and L visas along with F-1 and M-1 visas, till the end of the year and the order will be in force from 24th June. This would mean that it will bar the entry of 219,000 people into the US, including 61,000 H-1B visas and L1 visa holders and their dependants on H4 and L2 visas.
Apart from these working visas, the executive order also proposed changes in the working system of H-1B visas whereby workers with the highest salaries will be preferred so as to ensure the movement of highly skilled officials in the country.
Although President Trump has made these decisions citing the global pandemic and increased unemployment that it has resulted in, he carefully managed to seize this opportunity as a way to seek a second term at his Oval Office. Even in January 2017, when Trump came to power, he hinted that the low-cost workers were hampering the nation’s economy and in 2018, talked about reforming the broken H-1B visa system. In his latest executive order extending the ban, Trump said that while under normal circumstances, “properly administered temporary worker programs can provide benefits to the economy,”, “Under the extraordinary circumstances of the economic contraction resulting from the Covid-19 outbreak, certain nonimmigrant visa programs authorizing such employment to pose an unusual threat to the employment of American workers.” According to him, these reforms were essential to protect domestic workers who had been impacted due to a contraction in the economy in the wake of the Covid-19 pandemic. On 7th July, the new Department of Homeland Security issued another rule, prohibiting international students from returning to or remaining in the United States if their colleges adopt an online-only instruction model for the fall.
In April too, Trump passed a temporary order preventing new immigrants for a period of 60 days and has now extended the ban till 31st December. The new 2020 Spring Agenda further suggests the upcoming changes in visa norms of the US, and it does not bode well for India.
RECENT IMMIGRATION POLICY REFORMS
- The visa lottery system is scrapped, and it will be granted to only those employees with the highest salaries to ensure entry of best talent into the U.S.
- The H4 EAD (Employee Authorisation Document) which allowed spouses of H-1B visa holders to be employed in the US has been removed.
- The body also proposed to amend and revise the Optional Practical Training (OPT) option with enhanced supervision and compliance to prevent the student visa holders from abusing the OPT program.
- L visas through which multinational companies could move their employees to U.S. offices are now suspended.
- Additionally, J-1 visas encouraging educational and cultural exchanges and H-2B visas permitting temporary workers in non-agricultural industries to work in the U.S. also stand suspended till December.
- The U.S. Immigration and Customs Enforcement (ICE) stipulated that there shall be a fixed period of time for admission and extension of stay for students, there was no such obligation for F-1 visa holders prior to the visa policy changes. But, now the revocation of F-1 visa policy change has come as a relief to Indian students.
THE VISA SAGA: IMPACT ON INDIA
The biggest beneficiaries of the US H-1B visa regime are the Indian I.T. companies as India has always grabbed the lion’s share of the total number of visas issued every year. As of 1st April 2020, the US Citizenship and Immigration Services (USCIS) had received about 2.5 lakh H-1B work visa applications, according to official data. Indians had applied for as many as 1.84 lakh or 67 percents of the total H-1B work visas for the current financial year ending March 2021. In these situations where three out of every four H-1B visa holders are Indian, this ban will have a horrifying effect on H-1B visa applicants from top Indian IT services firms including TCS, Wipro, Infosys, Cognizant. Nearly 3-4 lakh H-1B visa holders are currently being employed by top tech firms in India and more than 60% of engineers in the Bay area are H-1B visa holders. The proclamation of a work visa will cost Indian IT firms Rs. 1,200 crore and have a marginal 0.25-0.30 percent impact on their profitability. Moreover, analysts of the Indian IT industry fear that a long-term ban on such visas will hurt the project deliverability of Indian IT services firms because of a shortage in the talent.
- For those who do not have valid non-immigrant visas as of 23rd June 2020 and are not in the US will be disallowed to enter the country before 31st December 2020.
- Workers engaged in essential services in the food sector have been given some reprieve, and the consular officer of immigration services shall decide their entry.
- All the visa holders mentioned above, and their children or spouses already present in the US will not be impacted by this order.
- Also, the H-1B visa applicants who do not yet hold a valid visa will have to wait till the end of the fall or till the ban expires.
IMMIGRANTS: HOLDERS OF THE U.S. ECONOMY
Highly skilled immigrants are the key to a strong economy, and hiring immigrants led the United States to get the lead in STEM-related jobs for which most of these immigrants are recruited. However, the Trump administration counters the facts by arguing H1B and other work immigrants visa holders cost U.S. workers jobs while shrinking the U.S. economy and benefiting from taxes paid by U.S. citizens.
The claims that immigrants cost U.S. workers’ jobs prove to be just opposite when the data of contribution of H-1B visa holders are analysed. The analysis concludes that every 1 additional H-1B visa awarded to a state was associated with the creation of 2 more jobs for U.S.-born workers. Also, with a perusal on the actual impact of these workers on the economy, it can be comprehended that the immigrants are not getting benefited. Apart from this, the contribution they are making to the U.S. economy cannot be neglected.
- The H1B workers contribute more than $27.1 billion per year in the form of the amount charged for Social Security and Medicare benefits (which they may not be able to benefit from)
- H1B visa holders spend $76.7+ billion at U.S. businesses annually
- 74% of spending ($57.1 Billion) by H1B visa holders goes directly to local businesses with their communities
- H1B visa holders invest more than $12 billion into U.S. businesses annually
Moreover, the order primary takes on the I.T. industry, but it can be noted that the unemployment level of skilled talent is over 10 percent in the U.S., while the level for tech folks is less than three percent. Such knee-jerk decisions to overcome the current job problem will in no way prove to be a solution to the rising unemployment level instead can lead to the downfall of the U.S. industries. NASSCOM states that many U.S. companies will face problems in the process of recovery to full economic strength by retrograde moves like this amid pandemic. Besides, the morale of the affected professionals is a point of concern as they will look for opportunities in other growing destinations like Canada and Australia.
CONCLUSION
Such a policy decision though can help swing the election verdict in favour but undercut the ability of a stable destination to create job opportunities and further inhibit its services. Being able to attract the most talented hands through to its immigration policies has made America more resilient. Therefore, it seems that the Trump administration has ignored the long-term repercussions that the ongoing visa policy changes can lead to.
The immigration policies, as well as trade and economic cooperation in technology and innovation sectors, are essential to India – US partnership. Hence, suspension of visas at this critical juncture will not only rupture the “American Dream” of Indians, but the United States which aims to protect livelihood will end up shrinking of its economy due to the political aspirations of Trump.