If the cost benefit analysis for employers still shows that H1-Bs are cheaper, how will this offset H1-B exploitation? My guess is that this will suppress STEM wages artificially to account for paying a one-time fee for an H1-B, but hiring someone for 1+ years at that suppressed rate will be cheaper. Employers will blame AI for decrease in STEM wages, of course. A complementary solution is to add the $100k fee, and to restrict H1-B per employer per year, or something like that.
In 2025, the decision isn't hiring someone on an H1B versus a citizen - the cost is mostly a wash.
The decision is hiring in the US (visa or citizen) versus hiring abroad.
Given that a large number of EMs, PMs, Directors, and even VPs are on some sort of immigration or work visa, this makes it easier to incentivize you as an employer to move some of them back to India or Czechia to open a GCC. This is what has been happening for the past 5 years now.
On top of that, vast swathes of STEM academia are dependent on H1B. You simply aren't going to find enough American citizens with a background in (say) battery chemistry to become a tenure track professor versus from Korea, Japan, or China.
Now you basically created an incentive for large swathes of junior faculty in STEM subfields to return to Asia, leading to a massive reverse brain drain.
> The decision is hiring in the US (visa or citizen) versus hiring abroad.
True, but there’s a balance that employers have to maintain to get some in-state advantages from local or state governments for job creation.
That said, it makes more sense for America to get trainers or professors for niche subfields than actual workers so you can create homegrown talent, not sure why that isn’t done more.
> but there’s a balance that employers have to maintain to get some in-state advantages from local or state governments for job creation
True! The issue is local, state, and federal governments gives limited benefits compared to CEE countries, Israel, India, and others who roll the red carpet with multi-year tax holidays, subsidizes, and targeted hiring pipelines.
> makes more sense for America to get trainers or professors for niche subfields than actual workers so you can create homegrown talent
How? They overwhelmingly came on H1Bs as well, not O-1s.
This is why this is such a stupid approach, and is absolutely showing the hallmarks of a Stephen Miller policy. Interestingly, this seems to have overshadowed the Trump Gold Card and Platinum Card announcements (which part of me thinks was part of the reason this announcement happened).
Don't make H1-B employer-specific. That way, they automatically have to pay market rates to the guy since otherwise you would sponsor his entry and he'd switch to a market rate employer immediately. This removes the "unfair" aspect of h1bs being cheaper to hire.
> Don't make H1-B employer-specific. That way, they automatically have to pay market rates to the guy since otherwise you would sponsor his entry and he'd switch to a market rate employer immediately
Exactly.
That solves the problem of consultancies and firms trying to abuse the H1B program as indentured servitude, and makes it easier for those in that kind of a situation to demand a higher salary.
In product companies, someone on a work visa is paid comparable to an American, and bringing a foreign nation on site is already a bit of a wash savings wise.
That said, with this announcement the ship has sailed, because having to spend $100k per year per H1B filing on top of the salary premium of hiring in the US just made opening a GCC/offshoring even more cost effective. For the top 20% of talent in CEE and India, you're already seeing TC break that $100k mark. The issue is there just aren't enough people in the US in certain subdomains with the right skills.
I blame CS programs over the last 10 years for that by trying to overleverage "Leetcode" and "Fullstack" style courses and increasingly reducing specialized courses.
A CSE major at a decent program in India or the CEE will have studied algorithms, digital signals processing, OS internals, and computer architecture along with the option to take further electives in a specialization of their choice (ML, Security, Systems, HCI, etc). They are much more "well-rounded" for technical roles because they will have dipped their toes in 2-3 technical subfields and did their "data structures" equivalent.
In my subfield (cybersecurity) it's been almost impossible to find the right talent at scale of OS internals, systems programming, CompArch, and CUDA+Infiniband experience in the US for the past 5-7 years. As such, there is a generational skill gap, because there is a gap of people who should be mid-career now but don't exist domestically.
And it's not something a "bootcamp" can solve either. The reality is, if we need to spend 2-3 years retraining people domestically with table stake skills like algos, OS internals, and other courses that are expected in a CS major, we should also dramatically reduce salaries for those employees, becuase I can't justify paying $150k for a bootcamp grad. At $50k-80k the math works out to only hire domestically with that level of skill while also offering training like the ASU BSCS program.
I'm seeing a mismatch between what was said in news articles and by the govt officials as well as trump in the video, and what is written in the official order[1]
Considering your background, what is your take on this? Many folks I know who are on H1-B don't know what to believe
We are only talking about Software - other industries like nursing and academia are way more severely impacted.
If you're on an H1B doing basics terraform scripting or maintenance work, your job is already in the process of being automated using a CodeGen tool being monitored by a senior engineer (be they located domestically or abroad).
If you a new H1B employee working at GCP's Sunnyvale office, you will most eventually be transferred to an office in India, Canada, and maybe the UK.
In neither case is new grad and early career hiring within the US going to pick up. And if you have been unemployed for an extended period (more than 6 months), well I'd recommend reading PG's article about building "Ramen Profitable" startups.
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The H1B market in software is bimodal with mass consultancies like WITCH (India), EPAM (Eastern Europe), and Globant (LatAm) who are overwhelmingly screwed because their business model is messed up, and you have people on an H1B who are basically working at a FAANG or FAANG equivalent and who are earning the same salary as citizens - these companies already began the process of offshoring 3-5 years ago when remote work kicked in because much of the CEE and India began giving massive federal and state industrial subsidizes to open offshore offices in IT Parks (and had been doing so for decades).
Short term it's a headache for companies with a large OPT-to-H1B pipeline and they will most likely do mass layoffs or push people to work at GCCs abroad - just like during COVID's early days. Long term, this only continues to incentivize offshoring because now you have a tangible upfront cost you can project and model on ($300k per employee minimum) and compare against the Section 174 impact.
My bigger question would be - if you are an H1B who was born (not necessarily a national) in China or India, why would you even make a large investment like a house or a condo in the US? Best case you are already looking at a 15-20 year backlog just to get a Green Card, and the cost to keep someone on an H1B in the US is a wash compared to hiring abroad if your salary is breaking the 6 figure mark.
Agreed, last paragraph especially. Even if it's OK now, I would not undertake 20year debt when the d2/dt^2 of all immigrant high salary labour related numbers is negative.
However, being more exact with the question I originally had, the white house youtube video, which had trump + friends speaking and signing the order, painted the picture as "100k per H1B per year for the first 6 years".
But the order as written has something completely different.
It says the companies have to pay 100k at time of getting the visa. Doesn't mention per year or 6 years.
And this whole order expires in 12 months, unless it's extended.
And they can exempt industries or whole companies if it's important to national interest.
This difference made me think that this is just optics for what was a concern for a majority of his voter base, and that in practice, they will not extend it beyond 1 year, and also exempt big industries like tech and what not. Maybe have apple do a performative hire of few americans, similar to the performative factory investments the government gloats about [1].
Was curious what you thought about that?
Of course, the media houses have their own alternate reality going on, and the less said about twitter the better.
[1] I don't at all intend to say that all american hires and all factory investments are performative
> A CSE major at a decent program in India or the CEE will have studied algorithms, digital signals processing, OS internals, and computer architecture along with the option to take further electives in a specialization of their choice (ML, Security, Systems, HCI, etc). They are much more "well-rounded" for technical roles because they will have dipped their toes in 2-3 technical subfields and did their "data structures" equivalent.
I am sorry but this seems to lack complete awareness of the standards of many U.S. CS and computer engineering programs.
I'm American. I literally did an AB in CS with a secondary in Government back when Obama was still in office. It was an Ivy and we were not required to take OS or CompArch classes (the OS class is now a requirement recently from what I've heard).
Outside of 10 universities (Stanford, MIT, CMU, Cal, UIUC, GT, UMich, UCLA, UW, UT Austin), there isn't much of a point to run campus hiring events or building a pipeline unless alumni help build that pipeline (B10s not mentioned are a great example of that) or it's a local school (SJSU for the Bay, NCSU for RTP).
For cybersecurity and DevSecOps at least, it's legitimately difficult to justify campus hiring in the US when you can hire or fund an IDF, PMO, or Police cybersecurity alum who went to TAU or BGU for around 70-100% of what you would pay an American new grad.
An experienced hire in the US ends up becoming much more expensive and still has a skill gap compared to an equally mid-career hire in Israel.
And if I want to cut costs, it's easy to poach from the various OS development teams in CEE and India, because much of the IBM-Red Hat, IBM AIX, Oracle Linux, and MS Windows Kernel orgs were offshored decades ago.
If I can hire a new grad from IITB (India) or TAU (Israel) for a base salary between $30,000 (India) to $90,000 (Israel) it's much cheaper than hiring the handful of new grads in the US with a similar skillset for $120k-140k base, especially when HFTs like Citadel or HRT are targeting the same candidates at the same unis for their SWE roles.
> and computer engineering programs
CE/ECE programs do require those classes, but the total number of grads from these programs is around 19k [0] for all degree levels (from BS to PhD), and most of the Masters and Doctorate candidates are themselves in the OPT-to-H1B pipeline.
