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The H-1B visa program is about to get another rebootThe incoming Biden administration promises a more open approach toimmigration. That includes the H-1B visa program for highly skilled foreignworkers employed by U.S. companies. The Trump administration has moved torestrict foreign work visas: this summer, an executive order temporarilyhalted new H-1B visas, and last month the Labor Department announced new rulesmaking them more difficult to qualify for.This matters to tech, of course, because the industry employs a huge portionof H-1B visa holders in jobs companies say there aren’t enough skilledAmerican workers to fill. I spoke with Britta Glennon, an assistant professorat the University of Pennsylvania’s Wharton School. The following is an editedtranscript of our conversation.Britta Glennon: Denial rates for new H-1B petitions under the Trumpadministration rose from 6%, prior to Trump coming into office, to 30%. Sothat’s not any policy change. That’s internal memos that have basicallyincreased the number of requests for evidence, slowing processing, justgenerally making it more difficult to get approval. So that’s something thatBiden can change.Amy Scott: What could a more friendly administration, in terms of foreign workvisas, mean for American workers, many of whom supported President Trump andmight be concerned about their jobs?## Immigrants creating U.S. jobsGlennon: Actually, there’s very little evidence showing that immigrants takeAmericans’ jobs. In fact, there’s much more evidence showing that skilledimmigrants create American jobs. I think I would say they shouldn’t be worriedabout this. They’re not taking their jobs. And in fact, the response toreducing immigrants is not giving Americans jobs, it’s actually just takingthose jobs to another country.Scott: Some of these policies were made by executive order and can easily bereversed. But I wonder what the lasting effect might be of the back and forthon immigration?Glennon: I actually think that there’s already been a lot of damage that’sbeen done that’s going to be hard — maybe impossible — to undo. There havebeen impacts on the pool of international students. There’s been research thathas shown that the quality of international students goes down when they knowthere are fewer high-skill visas available. The high quality ones, they’relikely to go somewhere else instead. That then affects the pool of labor thatU.S. firms can hire. I know it’s already had impacts on offshoring. My ownresearch has shown that U.S. multinational companies have already offshoredtens of thousands of jobs and opened new foreign affiliates in response toH-1B visa restrictions. And those were much less severe than those implementedunder the Trump administration. So that effect is likely much larger now.Scott: What are the consequences of that? Does it make the U.S. lesscompetitive in, say, the tech industry?Glennon: I think it almost certainly does. So not only are those jobs going toanother country, but then a multinational firm, but these immigrants —there’slots of research showing that immigrants are more likely to start up newfirms. They actually act more as job creators than job takers. They create 42%more jobs than native founder firms. They’re 80% more likely to start newfirms, and they’re also much more innovative. They produce far more patentsthan Americans do. So that means that innovation, startups, investment are allgoing out of the country. And while maybe future investment may come back tothe U.S., anything that was offshored during the Trump administration, that’snot coming back.Scott: You also have new research on the economic impact of President Trump’sexecutive order from June that temporarily suspended new foreign work visas.What did you find there?## Executive order’s “negative shock”Glennon: We found that in the aftermath of this executive order, the marketvaluation of Fortune 500 companies dropped by about $100 billion. And the waythat we think about this negative shock is that these are firms that rely onhaving high-skilled labor available to them. And suddenly they’re told, “Thatlabor is no longer available to you.” And while they have longer-term optionsavailable to them, like offshoring, so they may respond to it in a number ofways, the immediate consequences is that they’re immediately constrained. Andso this has an immediate, negative impact on these firms.Scott: A judge blocked that executive order last month. Did you see stockprices and market valuation bounced back, or could this be a lasting impact?Glennon: That’s hard to say. It’s still a little bit early. I think it’lldepend, at least in part, on what happens with the Biden administration. Andit also depends on what degree firms have been able to respond to thoseconstraints already. So I think that at least some of that is just gone, andwe’ll be waiting to see whether some of it will come back.During his campaign, President-elect Joe Biden promised to be less restrictivewith H-1B visas. (Photo by Joe Raedle/Getty Images)### Related links: More insight from Amy ScottGlennon talked about how restricting H-1B visas has hurt U.S. colleges anduniversities, many of which rely heavily on international students paying fulltuition. Many of those visas used to go to foreign students graduating fromAmerican universities. And Glennon said fewer of those students are applyingto U.S. schools, partly because they worry about their chances of getting jobshere when they graduate. Though there are lots of reasons for the decline,international student enrollment fell in each of the first three years of theTrump administration. Those policies have also affected recruiting of faculty.According to Inside Higher Ed, many schools use the H-1B program to hireinstructors in fields like engineering and computer science.The Trump administration also recently started requiring companies hiring H-1Bvisa holders to pay them more as a way to encourage domestic hiring instead.And some research has found that the program can push down wages for allworkers. According to a recent study by the union-backed Economic PolicyInstitute, employers underpaid H-1B visa holders. Among the top employersusing the program are Amazon, Microsoft, Walmart, Google, Apple and Facebook.EPI found all of them legally paid many of their H1-B workers below the localmedian wage for the jobs they filled.