The Trump Administration is reportedly working on an executive order to ban the issuance of new H‑1B visas. His order is expected to be issued before the end of this month. His order would be quite a negative blow to the U.S. economy and hit American economic innovation the hardest. The H‑1B visa system has problems: It’s unreasonably costly to change firms, workers are restrained from starting their own firms, and the wait times to adjust their status to a green card are absurdly long. Complete H‑1B worker portability between firms, allowing workers to sponsor themselves if they start a firm, and reducing the backlog, as well as other reforms, need to be implemented. But ending the H‑1B visa is not the way forward and will hurt American innovation especially.
H‑1B visas are for highly skilled workers in specialty occupations. They have to make a minimum of $60,000 a year. Annually, 85,000 are available to U.S. firms with an additional uncapped number available for non-profit research institutions, universities, and governments. Many workers who get an H‑1B visa start as students in an American university, adjust to an H‑1B visa, and eventually earn an employment-based green card – but often with obscenely long waits. H‑1B workers primarily labor in STEM and computer occupations.
H‑1B workers have an especially big impact on American innovation. New technology and knowledge allow for more efficient machines and production processes that increase nationwide productivity. Highly skilled migrants on H‑1B visa, as well as those on other visas and green cards, directly increase the production of knowledge through patents, innovation, and entrepreneurship. These effects are localized and diffuse throughout the country.
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