H-1B visas mostly benefit Asians. Is that why Trump opposes them?
President Trump uses executive orders the same way he uses Twitter: a way to vaguely state broad policy intentions without actually changing policy. His “Buy American, Hire American” executive order, which he unveiled on Tuesday at a tool manufacturing plant in Kenosha, Wisconsin, does effectively nothing except send a signal to his nationalist base, which is precisely what it is designed to do.
What the “hire American” part is supposed to do is order federal agencies to review and propose reforms to the H-1B visa system, under which 85,000 high-skill foreign workers annually can obtain three-year permits to work for companies in the US. No one knows what these potential reforms might look like, but they could involve anything from lowering the yearly cap to raising the targeted salary to adjusting the process for awarding the visas. Or nothing at all. Or as Trump explained, “It’s America first, you better believe it. It’s time. It’s time, right?”
It’s easy go after the H-1B program, which in its current form no one likes but no one can agree on how to improve. Business groups say it’s too restrictive. Labor groups say it displaces US workers and lowers their wages. It’s a lot like Obamacare, in that it makes a ripe target for Trump’s harangues before he passes on to someone else the impossible task of crafting something everyone will like.
There are, in fact, many valid critiques of the current H-1B program. It ties workers to a single employer, who applies and pays for their work visa. If they lose their job, they can be removed from the US, giving employers enormous power over workers and little incentive to pay them the market rate. And given the high fees those companies do pay (up to $10k per worker), it gives large firms who can afford it a competitive advantage over smaller firms.
As demand by employers for these visas far outstrips supply – there were 199,000 applications for 85,000 available slots for next year – visas are allocated by lottery, which large firms reportedly game by filing multiple applications for the same worker through subsidiaries.
Trump would know, being a direct beneficiary of this and other temporary guestworker programs. His wife, first lady Melania Trump, was the lucky recipient of an H-1B in 1996 (H-1Bs are normally reserved for those with advanced degrees, with a special exception for fashion models, who must be “of distinguished merit and ability”). And since 2013, Trump-owned properties including Mar-a-Lago and Trump Vineyards have applied for more than 500 guestworker visas under the H-2A program for temporary foreign farmworkers.
But the rural working-class voters Trump went after during the election are not the ones impacted by H-1Bs. Those are mostly techies in Silicon Valley, a region far from Kenosha, Wisconsin, that went overwhelmingly – 73% to 85% – for Clinton.
Over half of H-1B recipients hold a master’s, professional, or doctorate degree, and over half are employed in the IT industry. Most are under 35. Curtailing the H-1B program may raise wages or employment for US tech workers, or it may spur companies to offshore more work to other countries, as they often threaten to do. But it won’t bring factory jobs back to Wisconsin.
And it’s unclear what the impact would even be for Silicon Valley as a whole. Most companies that benefit from the H-1B program are not, as Howard University’s Ron Hira has found, traditional US-based IT companies, but rather foreign-owned outsourcing companies, primarily from India, trying to gain a foothold in US markets and hiring Indian nationals as temps. A full 71% of all H-1B applicants in 2015 were from India, with China in second at 10%.
It’s this demographic fact that explains a little more about the political calculation behind an executive order that does nothing now and will do nothing for those tool manufacturing workers in Kenosha.
Before the two of them teamed up for Trump’s campaign, Steve Bannon interviewed Trump on his radio show, where the two of them discussed the issue of foreign labor in Silicon Valley. Trump, taking a more dovish position, argued against sending skilled foreign workers back home after receiving education in the US, saying “we have to keep our talented people in this country”. Bannon objected, complaining that “two-thirds or three-quarters of CEOs in Silicon Valley are from south Asia or from Asia,” and declaring that “A country is more than an economy. We’re a civic society.”
This is the real purpose of Trump’s executive order: a dog-whistle to those among Trump’s supporters who agree with Bannon that there are too many Asians in Silicon Valley, and maybe the country as a whole. It’s a constituency that he knows he needs to cater to, more so now with his demotion of Bannon and the subsequent vitriol Bannon’s white nationalist allies have been directing at his rival Jared Kushner, and threaten to eventually direct at Trump himself.
Of course, if Trump’s concern were really about the protection of American workers, he could pair a curtailing of guestworker programs with an expansion of green cards: to take those exploitable foreign workers out from under the thumb of their employers and make them American.
But we know that’s not what this is about. However much hypothetical H-1B reforms may or may not help American workers, the order cannot be taken in isolation from Trump’s broader policy agenda, which includes a Muslim ban, a border wall, and mass deportations already taking place.
The common element here is not worker protection, it’s xenophobia. And if Trump can fan those flames without improving the conditions of American workers and keeping them looking for scapegoats, all the better for him.