These are the reasons why Trump’s $100,000 H-1B visa fee won’t protect American workers and will harm the economy

President Donald Trump signed an executive order on Friday that will jack the fee for H-1B visas to $100,000, a significant increase from the typically $1,750 to $4,500 current fee. The announcement sent shockwaves through not only Silicon Valley, which relies heavily on these visas for high-skilled foreign workers, but also universities and medical institutions.

The new fee, which would take effect in the next year, has sparked dire warnings that it could hurt US economic growth, stifle scientific research, and technological progress. Furthermore, there are concerns that instead of creating moe American jobs, it could have the opposite effect with companies turning to AI or offshoring jobs.

The reason behind Trump increasing H-1B visa fees

The H-1B visa program has long been controversial because of companies abusing it to bring in foreign workers who will work for less. The outsized fee Trump wants to charge is intended to end this practice.

However, “by making it very expensive for companies to attract foreign talent, and by forcing some international students to leave the country after graduation, the brain drain will weigh heavily on productivity,” said Atakan Bakiskan, an economist at the investment bank Berenberg, speaking to The Guardian. He said that this is just another example of “anti-growth policymaking” by the Trump administration.

How the $100,000 H-1B visa fee could hurt the US economy and US workers

A recent article Vox lays out how bringing in more high-skilled foreign workers is a boon to the US economy despite the current “” H-1B visa program. The high-skilled immigrants help increase rates of innovation, which has the knock-on effect of raising company profits and enables them to hire more workers. Additionally, winners of the H-1B lottery bring more new products to market and end up hiring more native-born workers.

Vox pointed to a 2015 study that found that there was a correlation between wage increases for native-born workers with and without a college degree and a higher number of H-1B holders in a community.

In turn, by discouraging bringing these rare exceptional talents into the country, the US could lose competitivity resulting in reduced economic growth and lower wages in the long run.

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