Boosted H-1B Fees Could Pay for American STEM Training

Fees for H-1B visas could jump in coming years, according to the Trump Administration’s fiscal year 2020 budget.

“In FY 2020, the Department’s budget includes $160 million to continue our expansion of apprenticeship programs, along with a proposal to increase H-1B fee revenues to fund additional apprenticeship activities,” R. Alexander Acosta, the U.S. Secretary of Labor, said in prepared remarks (PDF)to a Senate committee on May 2. 

Last year, the Labor Department launched a sector-based apprenticeship grant program, aimed at expanding apprenticeships in “those in-demand industry sectors most often filled by individuals on H-1B visas,” Acosta added, “such as information technology, health care, and advanced manufacturing.” The program has a private-sector match requirement; companies have contributed $57.7 million out of $202.5 million.

In other words, the federal government could use the increased money from H-1B applications to fund more STEM-based apprenticeships for American citizens. However, budget proposals are always subject to negotiation and change, and it remains to be seen whether this one will survive its inevitable trip through Congress. 

An increase in H-1B fees would align with President Trump’s “Buy American and Hire American” executive order, which he signed two years ago. Intended to “protect the economic interests of U.S. workers and prevent fraud and abuse in employment-based visa programs,” in the words of U.S. Citizenship and Immigration Services (USCIS), the executive order has resulted in tightening of H-1B policies (and the potential elimination of the H-4 EAS, which allows spouses of H-1B visa holders to obtain work).  

Critics of the H-1B program would dearly like Trump to eliminate the program entirely, but such a move would invite massive pushback from the tech firms and staffing agencies that claim they need the visa in order to effectively operate. Indeed, thecap for H-1B visas for fiscal year 2020 was hit within days of opening, following the trend of previous years; it seems unlikely that companies would balk at paying higher fees for H-1B processing and approvals. 

Nonetheless, the lottery system that doles out H-1B visas could change within the next few years, provided USCIS gets its way. Under the latest proposal, all applicants (including those with advanced degrees) would enter the 65,000-visa “general pool”; any highly-degreed applicants who failed to make the cut during that first round would get a second opportunity as part of the “master’s cap” pool of 20,000 visas.

That proposal is an inversion of the current system, which puts those applicants with advanced degrees into the smaller “master’s cap” pool before sending them into the “general pool.” Such a shift might be good for tech firms that truly need employees with advanced degrees and highly specialized skills, but it likely won’t cool any controversy over the overall H-1B program. 

40 Responses to “Boosted H-1B Fees Could Pay for American STEM Training”

  1. Fees are already high and don’t matter too much, the big spending here is related to lawyers and relocation, which can cost more than 20k per employee.

    Even with short trainings for non-IT people, they will still be behind foreign college-educated professionals.

    2.4% of IT unemployment and 3.6% of national unemployment reported this month is the proof that H1B does not affect the employment of americans.

  2. I will first admit that I did not read this post, only the headline. This probably invalidates my comment in the eyes of some, but I’ll make it anyway.

    I completely reject the premise/implication that a deficiency in American STEM training is the cause of the use of the H-1B visa. Data from the Census Bureau confirmed that a stunning 3 in 4 Americans with a STEM degree do not hold a job in a STEM field—that’s a pool of more than 11 million Americans with STEM qualifications who lack STEM employment[1]. This is a constantly growing number: Rutgers Professor Hal Salzman, a top national expert on STEM labor markets, estimates that “U.S. colleges produce twice the number of STEM graduates annually as find jobs in those fields”[2]. There is, in fact, a glut of American STEM-trained workers.

    [1] “Census Bureau Reports Majority of STEM College Graduates Do Not Work in STEM Occupations”, Release Number: CB14-130, July 10, 2014, US Census Bureau

    [2] “STEM Grads Are at a Loss”, September 15, 2014, U.S. News

    • Stuart

      2014 Data, but i do not disagree, if tech firms needed foreign workers so much, wouldn’t they be paid the same as Americans??
      and no one speaks of the 6 year post college automatic visas that foreigners have and when speaking to them, they don’t seem concerned about getting it renewed after the 6 years for 4 yrs then 4 more. So that’s 14 years… Let’s state the obvious, this is all about American Companies using cheap labor and keeping Americans pay low or non-existent, The same as any immigration issue, whether laborers or 6 figure engineers.

        • Stuart

          Funny..HR doesn’t say a thing to the nice, polite indians, that would be politically incorrect becuase they have darker skin. No, HR spends its time harrassing white employees for being 5 minutes late even though they stayed until 8PM the night before. all of this while Indians spend 2 hrs a a day taking walks around the building. which sounds lovely, but unfortunately, i’m busy …WORKING!

        • AR Libertarian

          I know the H1-Bs contracted at my company worked long hours, and never got a raise from their hiring firms even after years on the contract, and were afraid to complain. It’s an uneven playing field for Americans AND H1-Bs.

      • Michael, you don’t seem to know anything about how high tech corporate CEOs and CFOs think and act. They have been lobbying our politicians for 3 decades to get more foreign workers here. Most of the workers come from countries with much lower standards of living such as India and Pakistan, not from developed countries like Germany or the U.K. Do you think that Germany doesn’t have highly skilled engineers?? It’s because the corporations can pay them less than American workers who expect a good middle class lifestyle, while Indians are just glad to get out of India. A lousy apartment in Milpitas is better than the average dwelling in India! And the HB1 visa workers cannot change companies like a legal citizen; they are indentured workers. As far as skills go, many, maybe most of the imported workers actually have lower level capabilities than their American competition. This is part of why we see big problems in IT at large companies who use them for their daily operations. Some of us can’t believe the stupid implementations they create, full of bugs and shortcomings.

      • Ashley Rose Hasan

        please tell me how could be a just a fresh college gradute fall into the highly skilled category. Just because they just earned a BSC degree or MS Degree does not make make them highly skilled. I been in the industry fro a while, and I came across all these so called highly skilled folks. Come on give me a break. anybody can teach oneself to be a computer programmer and you do not even have to have a computer science degree. This is just a hoax!

    • JudyC

      Marcus is SO right! I have so many talented IT friends that are out of work, and really deserve to work. Our company has more H1s than employees who are loyal and have the company’s best interests at heart. H1s have no loyalty to America or American companies, other than to take our money back to their country. Buy American, Work American!

  3. h5mind

    We are forgetting the elephant in the room- cost of higher education. When a US college graduate is carrying tens (or hundreds) of thousands in school debt, and his foreign competitors have no debt, which candidate will be willing to work for peanuts? I have 20 years’ experience in IT and I am regularly contacted by headhunters with positions which pay $25-35 and hour, no benefits, and no relocation compensation. If I balk, there are dozens of Indian or Pakistani recent grads who will jump at the opportunity. Hence the cry from industry for more H1-B visas. Current US college debt recently surpassed $1.2 trillion- throwing $200 million for STEM training is spitting on a forest fire. Want to make the US competitive in the global economy? Subsidize education, not war.

    • An important percentage of H1B already hold US degrees and masters, they are paying a ton of money. Others are studying more and paying full costs with no scholarships.

      We have now 3.6% of unemployment, so, where are you getting the IT people you need to grow the economy?.

    • Exactly. the H1B program is nothing more than de-facto slavery. Everyone knows but is afraid to publicly say it. The Indians are brought over as cheap slaves. They might as well be picking cotton.

  4. IT Guy

    Fixing H-1B is simple: Increase the minimum pay from $60,000 to $120,000. That way companies can still get the high-end talent they claim they can’t find, while losing the ability to use it as a cost-savings program.

    • Agree 100%, it boils to controlling cost. Most of the technological Creativity have come out of US for the past 20yrs. Now these companies want to sustain the technology with lower cost talent. Eventually these companies will need more creativity and they will hv to pay for it.

    • AnthITGuy

      Have to agree with IT Guy. Companies are claiming the need for H-1B visas as a way to cut cost and benefit the stock holders. Bump up the min pay to $120K and watch the need for H-1B visa drop dramatically…I’m sure most companies are probably thinking about this and have Plan B (offshore those jobs) ready and waiting. As long as politicians are in the pocket of Corporate America employees will always be paying the price with low employment or low wage growth or both.

  5. fmtaylor

    There is not now, or was there ever a need for the H1B visa program. It is now, and has always been an excuse to displace experienced American workers with cheap foreign labor. This pretty much created the STEM problem as it now exists.

  6. D Mart

    The problem will not be fixed by apprentice program. In NYS an agency called HBITS (Hourly Based Information Technology Services) was created in 2012 to regulate IT Contractors. They get $55-60/hour. Recent local Computer Science graduates can’t even get an interview. The HBITS Contractors prefer H1B Visa holders who can be locked into the typical 3 year Project contract unless they find another Visa sponsorship. Management likes having the Visa holders because they don’t have to train staff in new technology. They just replace them with the skills in demand. Also less I.T. management has an I.T. background. They depend on the technical expertise of Visa holders who will never be a threat to their position since they are not Employees looking to move up.

    • Milly

      And the reason they are not training the foreign worker is because the foreign worker lies about experience and then passes work to their friends. Things that Americans do at a much lower rate.
      I had to work with one guy on H1b visa who did basically nothing once I cancelled his buddys’ access – it turns out his buddy was basically handling two jobs.

  7. Stuart

    Its kind of funny, in an ironic, stupid political way…Lets’ use money from foreign worker programs to pay for American training programs – which are probably simple basic, “this is a computer, this is a mouse” training. Then we’ll have more AMerican STEM (stupid acronym) workers with no jobs because of foreign workers…its a self sustaining idiocy.

  8. Joe B

    Don’t be fooled by low unemployment numbers. All we’ve added is low wage burger flipping jobs. Too many high paying positions still wasted on the H1-B applicants. If the economy is doing so well, why are we seeing a slowing of sales in housing and auto sales? No extra disposable income like we had in the 80’s when the H1-B program barely existed. Wages are barely growing due to these programs. Raise the application fees and lower the quotas.

  9. I.C.E. needs to deport the 1,000,000+ job stealing H1-Bs with expired visas (these are not affected by this new proposal).

    H1-Bs are not needed to fill mainframe jobs/contracts!!!!!!! We, who invented Data Processing (Information Technology (I.T.)) are merely pushed aside for the cheaper foreigner. They have taken over I.T. mainframe consulting in the U.S., 95-99% of the consulting job offers that I receive are from the foreigners. In 2018, I worked for one of these on a 1099 basis. I requested, but have yet to receive my 1099 tax form!!!!!!!!!!!

    I now have to work at very depressed rates (30 year ago rates), which have been in decline since 2000.

    Our corrupt government favors foreigners, because of the corrupt under the table money that is associated with the flood of Trojan Horses that has arrived on our shores. Jesus, needs to return soon to straighten out this mess!!!!!!!!!

  10. I agree, increase the minimum wage for the H1B worker same as an American. The amount is too low to train an American for STEM, especially as STEM jobs need a 4year degree+ 2 years Masters in many cases ( high paying jobs) cannot be replaced by a $1.5k worth training!!

  11. Bill Bearnson

    White (Non-descript race) Male. STEM 4 year trained. Don’t need visa support. Non veteran. All but one is a strike against getting a STEM job for someone with ancestors who colonized this country and fought to defend it. Is there something I’m missing?
    Oh and come layoff time, this type of person is the first to go because the H1B employee is being sponsored by the company. I don’t know fix it. Colleges stop courting the rich foreigners. You fill the pipeline.

  12. Milly

    This would NOT be as effective as:
    1 – removing H1b visa overstays
    2 – Stopping the 2-for-1 H1 EAD
    3 – Dropping the OPT visas back to what they were before Obama tripled or quadrupled it
    4 – Stop the H1b renewals that do not require re-entry into the annual H1b lottery.

  13. As someone heavily involved in working with H1-Bs (the majority of couterparts at my company) I applaud this idea. They have a current unfair advantage over MS/ME/Phd graduates form US companies because of their boosted GPAs from foreign schools, will accept lower pay, and then end up being very discriminatory towards American workers once in the field. We are ALREADY paying for their Phds in STEM studies here in the US – foreign nationals are accepted widely at US universities above our own students, at our cost (most engineering graduate degrees are paid for by the school – and hence our own government), then given jobs. Plus, they don’t have to pay full US taxes for the first 5 years working here. Who loses? Americans in the STEM field. We are at a distinct disadvantage to mostly East Asian workers. Raise the rates, make the playing field more even, and do something about overstays! They overstay constantly, knowingly, and bring their families over with them. I could point to hundreds that have come out of my company alone, that I have seen personally abuse the system. It’s a disaster, and I’m ready to get out of tech entirely due to the fraud in the system. Oh, get a STEM degree they said, it’ll be great they said. Masters and a Phd later? I’m competing against people that work less, only advance their buddies, and overstay their visas.

  14. Tech companies hire law firms to screen out American applicants for high tech jobs. It is well documented. See the video below. The general public is not paying attention. The current administration is trying to reverse this but “liberal Americans” hate him so much they refuse to wake up to the truth.

    Here it is folks:

    • That is both eye opening and disgusting. I’m sure they wouldn’t be so snippy about the whole thing if these were HR or Lawyer jobs being taken away from them.

  15. Veronica

    Not only have American students and workers been displaced by H1-B personnel who are often not as qualified (they are not “cheap”…they manage to get overpaid by claiming over 40 hours; I’ve seen 80 hrs/week, without doing these hours), I have experienced reverse discrimination several times right here in the United States. It won’t be a moment too soon when the US government stops supporting this. Problem is, American managers love having their butts kissed by inept foreign workers, more than quality.

  16. Veronica

    Not only have American graduates and workers been displaced by H1-B personnel who are often not as qualified, HI-B they are not “cheap”…they manage to get overpaid by claiming over 40 hours; I’ve seen 80 hrs/week, without people having done these hours. I have experienced reverse discrimination several times right here in the United States. It won’t be a moment too soon when the US government stops supporting this in the name of recruiting companies and schools. Problem is, American managers love having their butts kissed by inept foreign workers, more than quality.

  17. Bob Johnson

    H-1B Visas is how prime federal contractors and staffing agencies make their money.
    Multi-million dollar corporations obtain SB or small business designation declare themselves as LLC, bringing thousands of people from other countries, charge federal government $100-200 or more per hour yet only paying 60-100k per year to those employees. Also, their visas are conditional, which means it solely depends on their employment with the particular contractor, if they decide to leave or change jobs outside of their current contract they will have to go back to their country of origin due to the way contractor structure their contracts with those individuals, which also include noncompete clauses. That’s how businesses is being conducted at the federal government right now.

    • I agree with all above comments; I am IT professional over 25 years’ experience. After Y2K most of middle IT workers was removed and replace by Indians and know they became fulltime employee. If you go for interview the manager is Indians including lower level. Right at gate you are disqualified, and they push to hire Indians or outsource to India. Chines and Indians are great, but they are not Americans.
      Note: Think for a minute, for some reason if Indians decided to disconnect all the servers or cut wires It will destroy our economy and country same as Nuke bomb.