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The $100,000 question: Will H-1B visa fee hike suffocate ability of tech start-ups to innovate?
PERSPECTIVE
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California Gov. Gavin Newsom, left, and Texas Gov. Greg Abbott might want talk about ways they can avoid the federal government putting the squeeze on American tech start-ups.

Gavin Newsom may want to give his good friend Greg Abbott a ring.

Abbott is the governor of Texas.

He’s never seen a California job, especially in tech, that he doesn’t want to poach.

Newsom fancies himself the anti-Trump.

This is the same man, however, who is delivering quicker on Trump’s “drill, baby, drill” battle cry than Trump himself by giving the oil companies the green light to drill 2,000 more oil wells annually through 2036 in Kern County.

So why should Gavin give his old “pal” Greg a call?

It’s because Trump’s executive order to charge companies $100,000 a pop to use the H-1B Visa to secure highly skilled foreign tech workers could have a negative long-range impact on both states.

In California’s case, it could easily throttle back its status — despite channeling “The Tax Man” as sung by the Beatles — as “the” tech start-up capital of the world.

And for Texas, it would be the end of their wannabe dreams to emulate California’s status as the tech cradle of the world.

The reason is simple.

Paying $100,000 to Uncle Sam  for the privilege of hiring a highly skilled foreign tech worker is chump change for the likes of Apple, Oracle, Tesla, Nvidia, Amazon, Mets, Alphabet, and Microsoft.

But for start-ups it is a significant added cost.

Paying $100,000 per foreign worker puts start-ups at a severe disadvantage compared to wealthy established tech firms.

That means less start-ups and less innovation in the United States.

And given the wealthy firms have operations all over the globe, if they decided the H-1B visa program was too cumbersome or expensive, they could slowly shift R&D operations overseas.

The $100,000 application fee plays into the myth that foreigners are taking Americans jobs because the tech firms can pay them less.

Fat chance.

Hiring and pay data analyzed by firms such as Glassdoor shows that salaries for “foreign H-1B workers are about 2.8 percent higher than comparable U.S. salaries” on their job-search platform.

Then there is the little detail provided by the National Foundation for American Policy.

In a 20-year period ending in 2024, there were 3 million more U.S. born workers filling STEM-related jobs.

The unemployment rate for engineering in August was at 1.4 percent.

And for math-related jobs it was at 3 percent.

Both jobless rates are down from last year.

There is a clear shortage of tech worked manpower that fits the skill sets needed for startups whether they are in artificial intelligence or enterprises such as Elon Musk’s Neuralink that are  blazing new frontiers in things such in helping people recover from brain injuries.

The claim, of course, is tech firms use the H-1B visa program to suppress both wages and jobs of Americans born workers.

The Glassdoor data aside, federal law requires H-1B Visa workers receive the actual prevailing wage held by American born workers in  the same job or the prevailing wage, whichever is higher.

The is no cost savings.

The problem is the lack of skill sets that Americans students, who apparently prefer protesting or securing knowledge in other areas, have when it comes to taking advantage of lucrative tech  positions.

It might surprise you to know that international students account for 71 percent of full-time graduate students in sciences based in computers and information enrolled in American universities.

The clear lack of United States born students securing knowledge needed for American tech firms to stay on the cutting edge is a national security problem in more ways than one.

Letting China get the upper hand in artificial intelligence and tech breakthroughs jeopardizes not just America’s position in the world, but also the numerous jobs needed to either support or implement the creations flowing from the higher tech skilled jobs.

The President can’t change visa fees without Congress being on board.

It is why the Trump Administration is basically declaring a national security emergency.

Trump’s executive order is built on a provision in the Immigration and Nationality Act.

The act gives the President the power to restrict entry to the United States of foreigners “to protect national security.”

As things stand now, implementation of the $100,000 H-1B visa fee will be the actual threat to national security.

It is clear that foreigners that have learned necessary skills at American universities and then have successfully obtained visa to stay on in the United States and work in the tech field are responsible, to a large degree, for this nation’s success in tech advancements.

The bottom line is that 7 out of 10 graduate students American universities are turning out in the computer and information sciences are foreigners.

Why educate said students and then throw up a monetary roadblock to make it next to impossible for start-ups to hire them and reduce the chances of the overall American economy benefitting from the knowledge they acquired at American universities?

The H-1B application fee before Trump’s executive order was $2,000 to $5,000 per worker depending upon the company’s size.

There is clearly a supply and demand issue.

Congress limits the H-1B visas for 85,000 a year.

Employers filed applications for 442,000 visas in 2024.

The demand has far exceeded the Congressional cap for 20 years running.

Why not use that as a hammer to force change and actually enhance national security, lay a stronger foundation for the American economy, and increase the employability of United States  horn college graduates without risking the economy or putting national security at risk?

The first step would be to push for any university that receives federal funds not to limit access of qualified American students to graduate programs in areas that could impact national security or the economic vitality of the United States.

That may mean fewer international students in such programs.

But if it doesn’t — or to cover the transition period —Uncle Sam could issue 15,000 more visas at $100,000 a pop and leave the first 85,000 at the previous filling rate structure.

It would re-enforce the economy and national security by not cutting off a flow of specific foreign workers — that American institutions likely educated — with skills sets crucial for the tech sector.

And it would create the potential for more of those workers to be home grown assuming they are qualified to enter graduate programs in the computer and informational sciences and can pass muster.

Perhaps Gavin and Greg can find some  common ground to make that happen to the mutual benefit of California, Texas, and the rest of the country instead.

What a thought. Common sense and common good trumping political bickering.

 

 

This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Bulletin or 209 Multimedia. He can be reached at dwyatt@mantecabulletin.com