The Impact of Trump's H-1B Visa Crackdown in 5 Charts

Trump signed the “Buy American, Hire American” executive order in April 2017, and we’ve seen companies, employees and students adjust to a new climate. The order directs the Department of Homeland Security to help ensure H-1B visas used by employers to hire foreign citizens are awarded to the most-skilled or highest-paid beneficiaries.

The National Foundation for American Policy (NFAP) recently looked at immigration data and found that H-1B denials and challenges or “requests for evidence” (RFEs) increased significantly in the fourth quarter of the 2017 fiscal year, which started July 1, 2017.

Similarly, Reuters reported that between January 1 and August 31 last year there was a 45% increase in RFEs to H-1B petitions compared with the same period last year.

“Due to the time and expense, employers and attorneys only apply for individuals they believe have a good chance of gaining approval, which means an increase in denial rates and Requests for Evidence reflect changes in government policies and practices,” said the NFAP press release. “Interviews with attorneys and companies, as well as other data, indicate high rates of denials and Requests for Evidence in skilled visa categories have continued into FY 2018.” 

Microsoft Corp. (MSFT) president and chief legal officer Brad Smith recently told CNBC the company may even be forced to move some jobs abroad due to immigration policies it’s expecting to come out of the White House. (See also: The H-1B Visa Issue Explained)

H-1B visa petitions during a single filing period fell significantly this year when 190,098 applications were received for the 2019 fiscal year, down from 199,000 applications for 2018 FY and 236,000 for 2017 FY. Here are some of the other ripples the administration’s mission to curb H-1B visa abuse has caused.

Fewer students applying to American colleges

According to the National Science Board, while the number of international undergraduate and graduate students enrolling in U.S. colleges increased consistently between fall 2012 and fall 2016, undergraduate enrollment fell 2% between fall 2016 and fall 2017, and graduate enrollment declined by 6% in science and engineering fields and by 5% in the remaining fields during the same period.

This is not great news for universities since international students tend to pay higher fees than their American counterparts. This is the main reason some colleges have been reclassifying their economics majors as STEM degrees. (See also: Why Colleges Want Economics to Be a STEM Major)

Jobs for international students declining

The National Association of Colleges and Employers found that the percentage of employers that will hire international students hit a new low in 2018. According to the non-profit’s annual Job Outlook report, 23.4% of employer respondents indicated they will hire international students, down from 27.5% last year and a high of 34.2% in 2015. 

Canada receiving more tech workers

The number of skilled workers in computer-related fields that received invitations from the Canadian government to apply for permanent residence under its Express Entry Program surged in 2017 from the years before. Indians received 42% of the 86,022 invitations sent out last year, followed by China (9%), Nigeria (6%) and Pakistan (4%). Admissions for Indian citizens rose from 9,584 in 2016 to 26,340 in 2017.

Last year, the country said it will grant permanent resident status to 177,500 economic migrants in 2018, 191,600 in 2019 and 195,800 in 2020.

Outsourcing Firms Receive Fewer Visas, Big Tech Sees Increase

Outsourcing firms accused of flooding the visa lottery system every year, like Cognizant Technology Solutions Corp. (CTSH), Tata Consultancy Services Ltd., Tech Mahindra Ltd., Infosys Ltd. (INFY) and Wipro Ltd. (WIT), remained some of the biggest new H-1B visa recipients in the 2017 fiscal year, but they’ve been seeing a marked decline in the number they are granted, NFAP analysis of immigration data shows. The think tank attributes this to “industry trends toward digital services such as cloud computing and artificial intelligence, which require fewer workers, and a choice by companies to rely less on visas and to build up their domestic workforces in America.” In 2017, TCS, Infosys, Cognizant and Tech Mahindra all promised to ramp up hiring in the U.S.

On the other hand, American high-profile tech giants like Inc. (AMZN), Microsoft, Intel Corp. (INTC), Alphabet Inc.’s (GOOG) Google, Facebook Inc. (FB) and Apple Inc. (AAPL) jumped higher on the list of top sponsors in 2017.

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