Elon Musk didn’t start the H-1B visa debate

The H-1B visa program, which countless tech companies and other large employers rely on to recruit highly skilled talent from abroad, has recently sparked a debate between various factions of the Trump administration.

On one side are the likes of Elon Musk, Vivek Ramaswamy, and other tech industry figures who Trump has brought into the fold, who have been vocal about their support for welcoming more highly skilled workers into the U.S., in keeping with the industry’s pro-immigration stance. Both Musk and Ramaswamy have argued there is a shortage of engineers and workers who can fill specialized jobs, though the latter recently went a step further to proclaim “American culture has venerated mediocrity over excellence.”

On the other end, however, are the Trump loyalists and right-wing supporters who believe in cracking down on immigration and hiring more U.S. workers. Former Trump strategist Steve Bannon, for example, has called the H-1B program a “total and complete scam.”

As for Trump himself: Immigration policy has been a key part of his platform for nearly 10 years, across three presidential campaigns. Over the last year, he has promised to deport millions of undocumented immigrants—and during his first term, Trump put forth several policy changes and proposals that sought to limit legal immigration, as well. But lately, his position seems to be shifting, perhaps due to pressure from his allies in tech. In a recent interview with the New York Post, Trump suggested that he was actually “in favor of the visas,” in contrast to his previous criticism of the H-1B program.

While Trump’s ascent to the White House—and new alliances with conservatives in tech—has sparked this particular clash, the debate over the merits of immigration visas like the H-1B dates back decades, with calls for reform over the years from both sides of the aisle.

In fact, that was illustrated by Senator Bernie Sanders’s response to Musk’s support for the program. Sanders argued Musk was wrong about the H-1B visa being a crucial element of the U.S. economy. “The main function of the H-1B visa program,” he said in a statement, “is not to hire ‘the best and the brightest,’ but rather to replace good-paying American jobs with low-wage indentured servants from abroad.”

The history of the H-1B program

Following its inception in 1990, the H-1B visa program quickly grew more popular, as the U.S. sought out highly skilled engineering talent from countries like India and China. But it didn’t take long for the visa to be used for a somewhat different purpose. “One of the things that happened very quickly after this new H-1B category was created—when its creators thought it would be for professional, highly skilled people—was it became a mechanism for this new business model of IT outsourcing, [which] continues,” says Theresa Cardinal Brown, who is a senior advisor of immigration and border policy at the Bipartisan Policy Center.

This was a departure from how the H-1B program was envisioned, Brown says, as a visa for highly skilled workers that was tied to a single employer. “You started to see strains in the way the immigration system set up this category, and the way it was being used,” she says. “And that generated backlash and controversy.”

Now, the leading H-1B employers are not just tech companies but also consulting firms, which use the visa program in part to enable outsourcing. According to the Economic Policy Institute (EPI), nearly half of the top 30 employers that were awarded H-1B visas in 2022 used outsourcing, and they accounted for 21% of the overall pool of H-1B visas (which is currently capped at 85,000).

Beyond the nature of H-1B jobs, there are also critiques of the lottery system that was implemented in the 2000s, which many argue put big tech companies and consulting firms at a particular advantage. A large employer can afford to file thousands of H-1B petitions, which increase their chances in a lottery system, unlike smaller companies that might be looking to hire just one H-1B worker for a specific role. “If you are a startup that has one person who’s a key engineer on a project [that] you need to grow your company, and you only file one application, you’re at a disadvantage,” Brown says. “So now the government is picking winners and losers—not based on need, not based on skill level, but literally based on a lottery.”

How this impacts H-1B workers

The H-1B visa is often viewed as a tech visa that can source the kinds of workers who are harder to find stateside, especially in the face of evolving technologies like AI. But the critique lobbed by Sanders echoes arguments that the H-1B program is not just used to recruit highly skilled talent, but also to undercut wages by bringing over foreign workers.

While the H-1B program requires that employers meet a prevailing wage requirement, the Department of Labor offers four different wage levels—which means H-1B workers can be paid below the median salary for a particular job. An EPI report from 2020 found that a majority of workers were being paid at the two lowest levels, which are intended for entry-level positions or roles that are one step above.

“What that says to me is that either these are the most skilled and talented workers, as employers say, but they’re being vastly underpaid—or [the H-1B] is mostly being used for entry-level workers,” says Daniel Costa, EPI’s director of immigration law and policy research and one of the authors of the report. “I think the program should be focused on—or at least prioritize—the most skilled and talented workers, rather than the entry-level jobs.” (Other experts, however, have concluded that most H-1B employers pay above market rate.) Costa also points out that there is no requirement for employers to look for local workers who might be a fit before hiring someone who needs an H-1B visa.

With many work visa programs, there’s limited mobility to move between jobs. The H-1B is better than most, Costa notes, in that it now allows workers to retain their status—but it still requires them to find a new employer who will sponsor them, along with a new petition. “Employers still have a lot of power over those workers because they have to go to an employer that is willing to sponsor them,” he says. “And that takes money and time and bureaucracy. So it’s not as simple as just finding a job.”

These workers are also especially vulnerable if they get laid off and are forced to find new employment on short notice. When tech companies conducted mass layoffs in 2022 and 2023, many H-1B workers were impacted and had just 60 days to find a job if they wanted to stay in the country.

But one of the greatest challenges for H-1B workers is the backlog of green card applications, which had crossed seven million as of 2023. That can leave many workers in limbo for years, if not decades, even as they start families and build a life in the U.S.—all without the guarantee of permanent residency.

Even the prospect of a green card depends on an employer’s willingness to file on your behalf, and once you do file, it can further restrict job mobility. “I wish the program was more about green cards,” Costa says. “Maybe after they’re here for 18 months on H-1B status they can petition for themselves. That would give the employer and the worker a trial period and take away the power from the employer, or at least reduce the power that the employer would have.”

H-1B workers who are holding out for a green card are also unable to take the risks that they might if they had the security of permanent residency. “There’s another unintended consequence that is taking a huge toll on our economy, but it’s this unmeasurable thing,” says Sophie Alcorn, an immigration lawyer who works with tech startups and founders. “There’s a ton of brilliant people in the U.S. who would love to innovate and create startups and are not able to do so. And so we don’t know what we’re missing out on, because those companies can’t be started.”

What might happen under Trump

There have been several attempts to reform the H-1B program over the years, some of which have stalled in Congress or faced strong opposition from the tech industry. In 2023, senators Dick Durbin and Chuck Grassley reintroduced a bill that would secure greater protections for workers by changing wage requirements and requiring more transparency from employers. In fact, Musk himself claimed recently—not long after arguing that the H-1B had enabled “critical people” like him to come to the U.S.—that the program was “broken and needs major reform.” (The Biden administration did recently publish a final rule that will make certain changes to the H-1B program, including greater oversight and workplace site visit to prevent potential abuses of the visa.)

It’s not clear whether Trump will move to expand or curtail the program, given the disagreement within his camp. He has previously endorsed legal immigration but on other occasions has also said the H-1B takes jobs away from American workers. Before his first term, Trump had called the H-1B program “very bad” and “unfair” for U.S. workers and had argued the program should be more selective. While in office, he increased scrutiny of H-1B applications—and last fall, there were reports that Trump had already drafted new plans to limit legal immigration, by pausing new applications for employment-based green cards.

In a recent interview with the New York Post, however, Trump seemed to have changed his stance. “I have many H-1B visas on my properties,” he said. “I’ve been a believer in H-1B. I have used it many times. It’s a great program.” Still, he stopped short of disclosing any chances he plans to make once he takes office—so it likely depends on which faction of Trump’s world ends up winning out.