How Will the New Presidential Proclamation Impact Different Foreign Worker Programs?

Topic Page: Covid-19 and Immigration

The new proclamation from the White House on foreign worker programs, in effect through December 31, while welcome, would appear to have a very different impact on specific programs — from a total-wipe out in a couple of cases, to no change at all in others. And with lots of symbolism and unanswered questions in between.

A rough sketch of these impacts would suggest the following hierarchy:

• Wipe-Outs: Summer Work Travel and camp counselors, at least for this year;
• Substantial Reduction: H-2B, non-ag, unskilled workers;
• Delays and Perhaps Follow-On Reductions: Au pairs and some other J-1 schemes;
• Internal Changes and Perhaps Greater Costs to Employers: H-1B; and
• No Change: H-2A farmworkers; H-4 spouses of H-1Bs; and the OPT alumni.

This analysis does not cover the useful postponement of visas for many permanent immigrants, which is a totally different subject. Nor does it cover some of the smaller foreign worker programs.

Although the new ruling seems to be sweeping in its reductions, it should be borne in mind that it seems to apply only to aliens who are not currently in this country and does not appear to reduce the visa extensions that keep much of the foreign workforce in place. As the days go by, we will probably get a better picture of the significance of the new ruling, but for the moment these are the apparent impacts of it.

The thrust of the White House announcement does not primarily seem to be a change in order to reduce the number of jobs available to aliens; rather it seems to be an effort to keep some aliens from entering the nation, and thus the differential impact on different programs. There is a certain irony in that one of the rationales for the order is to keep aliens out of this country because they may be carriers of the virus when we have the largest caseload in the world.

It is safe to say that the political power of various employer groups varies inversely with the expected impact of these expected developments — think of relatively powerless folks who run summer camps and carnivals at one end of the spectrum and Big Agriculture, Big Education, and Big Tech at the other.

Wipe-Outs. The biggest impact of the new ruling will fall on the seasonal operations run by the U.S. State Department through its J-1 international exchange programs. Generally these programs are supposed to give people from other nations a taste of life in America; many of them have been twisted by U.S. middlemen into cheap labor schemes, such as Summer Work Travel, which my colleague Jerry Kammer described at length in a detailed report several years ago. SWT usually involves 100,000 or so alien college students, often recruited from Eastern Europe, who do summer grunt work at resorts, factories, and some carnivals.

There is a smaller program, for roughly similar aliens, run by the State Department for the employers of camp counselors. The most recent data shows about 23,000 alien workers in it.

With very limited visa-issuance interviews during this spring because of the virus crisis, and none expected in the remaining six months of the years, it is safe to say that these programs have just about been eliminated for the year. This will open up jobs, right away, that up to a few years ago were filled by U.S. high school and college students and might, just might, decrease the size of this program in future years.

Substantial Reduction. The H-2B program for non-skilled, non-ag workers, many in landscaping and others in hospitality and other industries, apparently will be seriously reduced in size this year, as a result of the president's order. This will be the second blow of the year, as earlier this year the Department of Homeland Security ordered the upper limit on H-2B workers to rise from 66,000 to 101,000 this year, and then on April 5 — given massive unemployment because of the virus crisis — reversed itself.

The program will not be wiped out, however, for two reasons, one not mentioned in the White House order, and the other touched on only slightly. The first reason is that many H-2B workers were granted H-2B visas for this year before the order went into effect, visas that appear to be valid ones. Routinely in H-2B, most of the visas (at least in Mexico, which provides the largest single group of these workers) are granted in the first five months of the year (55 percent) as the following table shows. Put another way, only 45 percent of the 2019 visas were issued after June 1.

This year, as we reported earlier, the State Department kept issuing H-2B visas in Mexico at almost the rates of the prior year until May, when it slowed down.

In the first five months of this year, there were 29,325 issuances of these visas in Mexico, about three-quarters of those issued in the first five months of last year. (In contrast, the State Department, during this period, sharply reduced the number of J-1 visas, which fuel the SWT and camp counselor programs.) The month-by-month issuances of the H-2B visas in Mexico is shown in the following table.

The table shows that 29,325 visas were issued by May 30. This is about 40 percent of the visa production of the prior year, suggesting, at the very outside, a reduction of 60 percent, but there is a key question since June is the biggest month of the year in terms of these visas in Mexico, with more than 17,000 going out in June of last year. How many did State issue in the first 20-some days of this June? It is a major question, as the answer could range from the 1,977 visas issued the prior month to two-thirds of the 17,774 issued the year before.

The second reason that the H-2B program is not being reduced as much as one might hope is touched upon in the White House order, which notes that it does not apply to alien workers already in this country. That means that someone who received an H-2B visa in recent prior years, and was still in good standing (though that was not mentioned) could continue to work as an H-2B. There are a lot of them, but it is an unknown number to me. They could make up for many of the 60 percent who might otherwise be missing.

Delays and Perhaps Follow-On Reductions. The rest of the foreign worker programs being reduced are year-round, continuing activities, with the reductions consisting solely of newly arrived aliens from abroad. While the non-immediate presence of the workers in these programs is mildly helpful in the overall employment situation, at the moment, one wonders about the positive impact over the long run.

It is, of course, useful symbolically that many of the J-1 programs will not add to their worker populations during the next few months, but will they bounce right back to their old admissions levels when the suspension ends?

We should not understate the power of the symbols, however. It is meaningful that a program such as that of the au pairs (college-trained child-minders), a program beloved by many in the upper- and the upper-middle classes, has actually been suspended out of a stated concern for unemployed U.S. workers — and this was done by a Republican administration, as my colleague Mark Krikorian has noted earlier.

The other J-1 programs, for scholars, students, and other specialists are routinely run by universities and non-profits; many of these will suspend the arrival of newcomers for the next six months. Perhaps some of these programs will be shaved a bit in the future, perhaps not.

Internal Changes and Perhaps Greater Costs to Employers. We now come to the hoped-for reductions in the H-1B program, by far the largest (and most complex) of the foreign-worker programs and, in my eyes, the one in which the White House order has produced more nuances than in any of the others.

The H-1B program brings foreign college graduates to U.S. jobs, mainly in the tech fields, but also in academia. It is heavily used by the IT industry, and is routinely dominated by males from southern India. I suspect there are somewhere between 600,000 to 800,000 people in it, but the number usually encountered is the 85,000 annual ceiling on new private-sector worker admissions.

What the White House order does to the program is to bar (with perhaps some exceptions) all H-1B visa holders from abroad for six months. How significant is this? (Note that this relates only to the admissions bar; the presidential proclamation also referred to expected reforms to the H-1B program that would affect all foreign workers using that visa.)

Unlike, say, the SWT program, where all of the potential workers are out of the country as that program begins each year, in H-1B those admitted stay a long time, on until recently rubber-stamped visa renewals and much of the recruiting for the program is among recent alien grads of U.S. colleges, people already in this country. So barring — or postponing — the arrival of would-be H-1B workers for the next six months will have only a limited impact on the total number of H-1B workers (most holding jobs that could easily be filled by Americans).

I am assuming that if the order does not address a subject, the status quo will remain. The White House rule says nothing about the renewal of H-1B visas for those here who want to stay, and whose employers want them to stay. So I assume that only new hires from abroad are covered by the new ruling.

So the rule applies to some 100,000 newcomers to the program, not the balance of another 600,000 to 800,000 workers already in the program. (The 100,000 is the sum of the 85,000 or so newcomers to private sector jobs and my estimate of at least 15,000 H-1B newcomers working for universities and non-profits, who are admitted outside the ceiling.)

How many of the 100,000 or so are recruited abroad — thus needing visas — and how many are already here and can be hired despite the new ruling?

In fiscal year 2019, the State Department issued 188,123 H-1B visas. Since we know from other sources that about two-thirds of these are renewals, this means that State issued about 63,000 new H-1B visas that year; since we are dealing with a White House ruling that covers a little more than the next six months, that would suggest a short-term reduction of something like 32,000 new H-1B visas over a period of six months, or about 5 percent of the H-1B population.

But a major question remains about the 32,000 number. What happens when an employer files for an H-1B worker and wins the lottery for that alien, only to find that the alien is out of the country and will be barred for six months from getting a visa? Can that employer keep his H-1B lottery winning and apply it to some alien now living in the United States, such as a recent grad of an American college, already on his payroll as an Optional Practical Training worker? We have questions pending with DHS on this matter, but no answer.

What is clear, however, is that there will be — over these six months at least — a higher percentage of alien grads of U.S. colleges, rather than of foreign schools — joining the program than in the past. At least some of them may take advantage of the situation to demand higher wages, an interesting possibility.

All-in-all the prospects for a lot of good jobs for Americans, as result of these actions, looks pretty slim. Bear in mind that the proposed reduction in new H-1Bs (from abroad) comes at a time when corporations are shedding, or thinking about shedding, large numbers of workers because of the Covid-19-caused reductions in economic activity.

No Change. While there are minimal to massive impacts on the programs just described, there will be no change at all in at least three programs.

First and foremost, there are to be no changes to the H-2A program, for foreign farm workers; that is explicitly stated in the new order.

There is a mention of no admissions of new people who are relatives of other H workers. They have H-4 visas. This, however, has no impact on the some 100,000 or so H-4 workers (usually spouses of H-1Bs) now employed, as they only get to work if their spouse is on the waiting list for an immigrant visa.

And then there is the program for 200,000 or so recent alien grads of American schools, Optional Practical Training, which not only offers legal employment, but also provides subsidies to both the alien workers and their employers, a subsidy which is denied to citizen and green card college grads.

I used the search tool on the White House document, seeking either "OPT" or "Optional" and there were no hits.