Trump's executive order aims to reform H-1B visa program

President Donald Trump signed a “Buy American, Hire American” executive order that puts limitations on the H-1B visa and pushes employers to prioritize U.S. workers. The executive order was signed on April 18.

The H-1B visa allows employers to hire skilled workers from outside of the United States. During his campaign, Trump said that he would reform the visa system to stop employers from turning to cheaper labor sources outside of the United States.

“This executive order will call for the strict enforcement of all laws governing entry into the United States of labor from abroad for the stated purpose of creating higher wages and higher employment rates for workers in the United States,” a senior administration official said during a background briefing on the executive order.

The transcript of the briefing further states that the Departments of Homeland Security, Justice, Labor and State will be tasked with limiting fraud and abuse in the immigration system to ensure that visa reforms achieve their goal to “protect workers in the United States and their economic conditions.”

The executive order, as the name suggests, consists of two parts. According to the transcript, the “Buy American” portion concerns the laws that regulate the process in which goods are obtained and used by the government. The “Hire American” portion concerns laws that regulate immigration to ensure that U.S. workers are protected. The senior administrative official also acknowledged that although laws regulating both have been passed in the past, the government’s oversight became increasingly lax over the years.

“The waivers and exemptions process in Buy American have been abused greatly, resulting in many lost job opportunities for American workers,” a senior administration official said. “Similarly, the Hire American rules that govern many of our visa and guest worker policies have gone unenforced or have been abused to the point of rendered, in some cases, even inoperative.”

The H-1B visa system is widely criticized for how it awards the visas. Currently, the H-1B is awarded through a lottery system, which awards the visa at random without looking at each candidate’s qualifications.

According to the U.S. Citizenship and Immigration Services, 65,000 H-1B visas are awarded through the lottery each fiscal year. This excludes the first 20,000 applications “filed on behalf of beneficiaries with a U.S. master’s degree or higher.” Applicants who are petitioned for or work in higher education institutions, government research organizations and nonprofit research organizations are also excluded from the quota.

According to USCIS, the number of petitions received in 2015 increased by 9 percent to 348,669. Of the approved applicants, 66 percent worked in computer-related fields with a median salary of $79,000.

Although the senior administration official cites the argument that H-1B visa employees receive lower salaries than U.S. workers, the Bureau of Labor Statistics states that in 2016, workers hired in computer and information technologies jobs received a median salary of $82,860.

As for the qualifications breakdown, 45 percent of approved applicants held a bachelor’s degree, 44 percent held a master’s degree, 7 percent held a doctorate and 3 percent had a professional degree.

“Right now the lottery system disadvantages master’s degree holders,” the senior administration official said. “There’s ways that you could adjust the lottery system to give master’s degree holders a better chance of getting H1Bs relative to bachelor’s degree holders.”

In order to encourage employers to hire U.S. workers, the administration wants to increase the minimum salary required for H-1B applicants. This, the administration reasons, would deter employers who look for workers overseas to save money.

However, for the start-up companies who want to hire experts overseas, the executive order may make it harder for those companies to expand.

One way to improve the system would be to switch from a lottery-based system to a merit-based system, where government employees would award the H-1B to applicants with highest qualifications. However, this solution would require additional manpower and significant investment.

The executive order and the media briefing suggest that more changes are to come for the H-1B visa. In this case, it is difficult to speculate how skilled foreign workers will be affected in the long run.