Ever since Donald John Trump got elected to the White House in 2016, he has been quite harsh on the issue of immigration. From pressuring immigration department to go slow on H1B visa processing; asking US corporations to hire ‘Americans only’; putting toddlers in cages, to building a wall across the 3,000 km border between the US and the Mexico, the only thing consistent about Trump has been his Xenophobic attitude towards non-Americans.
With presidential election round the corner, Trump is desperately looking for issues to check his ever declining approval rate among US voters. His disastrous handling of Covid-19 pandemic has already claimed more than 1, 20,000 American lives. With unemployment and individual bankruptcies figures nearing those seen during ‘The Great Depression’, Trump did what he had been doing for last 4 years i.e. latching on to the low hanging fruit called Immigration.
From June 23rd onwards, the Trump Administration has ordered the suspension of the process of issuing new visas, including H1B, H2B, H4, L1 and L2 visa to foreign nationals. This has led to a lot of anxiety among both IT industry and student community in India over its short and long term consequences.
In this blog, Student Cover tries to explain the impact of US H1B visa ban on different stakeholders and how, in the long run it would affect visa holders.
H1B VISA SUSPENSION
H1B Visa that comes under the immigration and Nationality Act in the United States is a non-immigrant visa. For long, this visa allowed US firms to bring foreign workers to US and employ them at a fraction of the cost incurred in hiring an American with similar skill and expertise. These visas are issued for employment in speciality occupations such as the IT industry that require people with skills and technical expertise.
As per observers, H1B visa has been a bone of contention in the US for quite some time it is seen by many Americans feel that foreigners who from countries like India are stealing service sector jobs from locals as they agree to take up those jobs at a lower pay.
IMPACT OF H1B VISA SUSPENSION
H1B Visa suspension is going to have a negative economic impact on stakeholders including US Corporations and Indian IT professionals.
Impact on US Companies: H1B visa allows US companies to seek talented individuals to work for their company. This allows for both diversity at workplace and cost saving for them. This ban would severely affect the competitiveness of US corporations in comparison to their rivals in other developed countries such as the UK, Australia, France, Germany and Canada.
Impact on Indian IT Professionals: The suspension of issuance of H1B visa puts the future of most IT professionals who are currently working in the US with H1B visa in jeopardy. These visas have to be renewed periodically (between 3 to 6 years) for them to continue working in the US. So, those IT professionals whose H1B visas are about to expire can no longer get it renewed. With regular flights between India and the US currently being suspended due to Covid-19 pandemic, they face the risk of being deported on account of overstaying.
H2B Visas are similar to H1B visa which allow US companies to employ foreign workers in the US. However, the main difference between the two is that, H1B Visas are given to skilled professional with expertise and specialised knowledge in a particular domain whereas H2B visas are given to non-skilled individuals to perform temporary non-agricultural services or labour. However it requires the employment to be temporary and seasonal in nature. These visas are given for a period of 1 year with renewal for two years.
The suspension would deprive many hard-working persons the opportunity to work in the US. It would also lead to shortage in labour supply as most H2B visa holders did labour intensive work which the Americans are either unwilling to do or, seek higher pay to do the same. Those engaged in hospitality sector, old age care and day care services will be severely impacted by this ban.
IMPACT OF H4 VISA SUSPENSION
H4 visa allows immediate family members of H1B visa holders to stay in the US. Those family members include spouse and children (under the age of 21 years). With the suspension of H4 visa, it would become difficult for them to stay in the US post June 23 if their H4 visa’s validity expires. Each year, over 100 thousand individuals are issued this visa. Things are likely to get even more difficult for children who are currently studying in the US. Non-availability of H4 visa may force many of them to relocate to India.
L1 Visa: The L1 visa is used by overseas companies operating in the US to transfer their existing employees from their native countries to the US for short durations. Under L1-A visa, companies could send executives and managers including proprietors to the US for a period of 7 years. Under L1-B visa, they could send employees with specialized knowledge to work for up to 5 years in a newly opened or existing office in the US.
This suspension would discourage overseas companies to invest in the US as it would deprive them the opportunity to bring talented individuals to the US to carry out the work. It would also deprive the individuals working in such companies the opportunity to gain experience of working in the US.
L2 Visa: Just as H4 visa allows spouse and children of H1B visa holders to stay in the US, L2 visa allows spouse and children of L1 visa to stay and study in the US. These visas are valid for 2 years. So if the validity of L2 visa gets expired, the spouse and children of L1 visa holders may have to return back to India.
In contrast to other stakeholders, the visa ban might actually turn out to be beneficial in the long run for the Indian students who are planning to go to the US for higher studies. This visa ban has been announced to discourage foreigners to come directly to the US for job. The massive dependence of higher education institution in the US on fees from foreign students means that the country cannot afford to stop such students from coming to the US. That is the reason why the issuance of F1 and F2 have not been suspended. Those students are pursuing or have completed higher education in the US may witness a rise in job and career opportunities because of this work visa ban due to following reasons:
– H1B and other such work visa bans will prevent companies from hiring workers from India for cheap and hence, they will be compelled to hire those among Indian students who have graduated from a college or university in the US.
– Since F1 and F2 visa holders (Indian students who go to US for degree or diploma course) who are already in the US can apply for H1B visa after OPT from US itself, they are more likely to secure better paying jobs in US companies.
– Having invested a lot of money on higher education (Rs. 25-50 Lakhs) in the US, they would also not be willing to take up the job at a lower pay as they have the obligation to repay the loans. Therefore, they cannot be accused of being a source of cheap labour.
However, at the end, it is just optimistic outlook towards the future. Presently, one cannot say for sure whether the Trump Administration would extend the visa ban to F1 and F2 visa holders. Considering that Universities and Colleges in United States earn over $ 40 billion each year from foreign students as fees and living expenses, banning F1 and F2 visas could be the worst decision by Trump Administration. But then, you never know what is going on in Trump’s head.
Several empirical research conducted over time indicate that skilled immigrants have a positive impact on the economy of the country that they move to. This ban would deprive US companies from acquiring skilled and specialist workers from abroad, thereby affecting their competitiveness. However, the unexpected positive side effect of this ban is that it could lead to increase in job and career opportunities for Indian students who go to the US for higher studies on F1 and F2 visas.
Disclaimer: The content of this blog is based on personal research of the writer. Reader’s discretion is advised. Neither Student Cover nor the writer will be held responsible for any wrongful interpretation of the content of this blog.