So, it seems like there’s a new policy making headlines in the US every other day. The latest change comes after legal overseas workers in the US. Namely, it completely transforms the landscape of the sought-after H-1B Visa.
So, what the hell is going on with the H-1B visa, and how is it going to affect the US economy? Let’s dive in and find out.
What is the H-1B US Visa?
The H-1B visa in the US is the highly skilled visa in every other country. Officially, the eligibility criteria require you to have “a theoretical and practical application of a body of highly specialized knowledge.”
You also need a Bachelor’s degree or higher in your specialized subject that’s equivalent in value to the US system.
As with pretty much all skilled work visas, the H-1B visa in the US has a minimum salary cap of $60,000.
The idea was that this wage was high enough that the skilled workers coming to the US would have an incentive to come, and excess to spend in the local economy, bolstering the workforce and the economy of the area.
On an H-1B visa, you can stay for up to three years and then apply to extend by a further three years. As you can apply for citizenship after five years of being a Green Card holder, this is a viable path to citizenship and long-term residency.
What Changes to the H-1B US Visa Are on the Table?
So, the H-1B visa seems pretty similar to every other highly skilled visa in the world, right? However, that’s about to change due to a proclamation from Donald Trump and the White House earlier this week.
The main changes are:
- An increase in the minimum wage requirement from $60,000 to $150,000
- Increasing the application fee from c. $1,000 per year, per applicant, to a blanket one-off fee of $100,000 per person.
Of course, in terms of percentage increases, these upturns are ridiculously high. If these continue, it’s going to massively alter the workforce of the US.
How Is This Going to Affect US Businesses?
These changes are going to be catastrophic to US businesses. Industries like technology, engineering, and healthcare rely heavily on the H-1B visa to get specialized talent from overseas.
Simply put, the US doesn’t have enough qualified people in these categories to support the ongoing growth and support of these industries.
By increasing the cost of the application fee, which is paid by US businesses, it’s essentially preventing them from hiring the talent that they need.
The $100,000 application fee applies only to new applicants, so existing talent going through renewal should still only have to pay $1,000, but this hasn’t been outright confirmed.
Also, by almost tripling the minimum wage requirements, most businesses cannot afford to pay that across the board. For example, the average US wage for a registered nurse is $94,480. That is a highly specialized job where many workers utilize the H-1B visa to come from overseas.
The idea is that it’ll encourage businesses to hire US talent. However, a lot of US workers aren’t qualified for these roles; that’s why businesses pay $1,000 every three years to get qualified workers over to the States.
Much like the tariffs being used as an incentive for more US manufacturing, the theory is there, but practically, you won’t have people with the skills for at least four years, and that’s if people went back to school right now to get the qualifications.
In the meantime, businesses are left in the lurch without the workers and skills needed to improve US businesses.
How Is This Going to Affect Overseas Workers in the US?
According to the White House, these changes won’t affect people who are already in the US on an H-1B visa.
However, there have already been videos online of planes being delayed on the tarmac entering the US because potential H-1B visa applicants have been told to get off the plane, due to a lack of $100,000 by their new employer. This rule has come in very quickly, and the effects are already being felt.
For highly skilled overseas workers, it means that you need to look to other nations instead. Singapore, the UK, and much of Europe all have highly-skilled worker programs, as do Australia and New Zealand.
There are plenty of nations to choose from with more reasonable application fees and wage requirements.
Vanessa Wachtmeister is a travel tech professional and the creator of the wealth & wanderlust platform, Wander Onwards. Vanessa is originally from Los Angeles, California, she is a proud Chicana, and she has been living abroad for the last 9 years. Today, she helps people pursue financial and location independence through her ‘Move Abroad’ Master Class, financial literacy digital products, and career workshops.