The story so far: Last June, the administration of former President Donald Trump, a Republican, halted the issuance of non-immigrant work visas of several types, including the skilled worker visa, or H-1B. At the time, the White House had stated that the aim of the policy was to stop foreign workers from cornering American jobs during the economic distress and consequent shortage of economic opportunities brought on by the ongoing COVID-19 pandemic. While the original order was valid until December 31, 2020, it was extended by the Trump administration to be valid until March 31, 2021. Now, the 46th and current U.S. President, Democrat Joe Biden, has allowed the ban on H-1B visa issuance to expire, potentially bringing relief to a large number of Indian nationals, especially IT workers who are prospective applicants for the visa.
What was the context for the Trump administration issuing rules tightening immigration policy?
Immigration reforms in favour of protecting U.S. jobs for Americans and favouring legal over undocumented migration was a major policy thrust for Mr. Trump even during his days campaigning for the 2016 presidential election. In April 2020, the final year of Mr. Trump’s term in office, the White House announced a 60-day halt on legal migration, effectively a ban on “green card” issuance. Then came the proclamation of June 22, which was justified by the White House on the grounds that the COVID-19 pandemic “significantly disrupted Americans’ livelihoods”, to the extent that the overall unemployment rate in the country nearly quadrupled between February and May 2020 to a little over 13%. Later, the Trump administration also announced that it would stop issuing visas for incoming students who had enrolled in programmes that were entirely online. Lawsuits filed by top U.S. universities challenging this policy resulted in the White House partially walking back on the new rules.
Was it economics or politics that prompted the ban?
It is unlikely that any significant economic benefits of the skilled-worker visa ban, in terms of protecting U.S. jobs from foreigners, could have been realised during 2020 and early 2021 given the pressures of the COVID-19 pandemic on the U.S. economy. Firstly, the ban did not apply to visa-holders already within the U.S., or those outside the country for whom a valid visa was already issued. Second, given that the ban remained in force only during the pandemic and that there had been a slowdown in economic activity during this period, U.S. firms relying on skilled foreign nationals may have anyway been unable to make new hires. Given this, it is hard to see the Trump White House’s policy as anything other than a political manoeuvre.
Mr. Biden has sought to nudge the broader immigration ethos of the U.S. back towards one that is consistent with Democratic values. In allowing the H-1B visa ban to expire, he is walking a fine line between restoring the inflow of skilled workers into the U.S., a source of productivity-increase for its labour force, and not being seen as overly aggressive in unwinding Trump-era immigration crackdowns. After all, around 74 million people voted for Mr. Trump in the 2020 presidential election, and they will continue to be vocal advocates for a political system that puts ‘America First’, even if their leader no longer occupies the Oval Office.
What was the economic fallout of the visa ban?
Even more than Mr. Biden, it turned out that America Inc., the employers of perhaps millions of non-immigrant foreign workers, from Wall Street to Silicon Valley, was at the vanguard of the backlash against the skilled worker visa ban. For example, Google CEO Sundar Pichai lashed out at the policy, saying at the time of its announcement, “Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation — we’ll continue to stand with immigrants and work to expand opportunity for all.” SpaceX founder and Tesla CEO Elon Musk and Apple CEO Tim Cook posted similar messages on social media.
Until now, the U.S. issued 85,000 H-1B visas annually, of which 20,000 went to graduate students and 65,000 to private sector applicants, and Indian nationals would garner approximately 70% of these. Analysts predicted that around 2,19,000 workers around the world might have been prevented from taking up work in the U.S. as a result of Mr. Trump’s visa ban.
What will be the impact of the ban’s expiry on Indian corporations?
Given that the order banning H-1B visa issuance expired on Thursday, all H-1B applicants will now be in a position to receive a visa and travel to the U.S. to begin or resume work as full-time employees or independent contractors. In time, that will lead to a steady increase in the size of the talent pool available to IT companies with U.S. operations. This would also benefit Indian IT companies with U.S. operations. The opening up of H-1B visa availability is also premised on U.S. diplomatic missions worldwide resuming new visa issuance to appropriately qualified skilled workers.
