Updated President Trump today signed an executive order that may lead to an overhaul of the H-1B visa system used by US technology giants to draft in cheap foreigner workers.
The exact text of the order has yet to be published on the White House website. So far, all we have are comments from administration officials and the commander in chief himself – and so far, we're told the order calls for investigations into changes to government rules on issuing visas.
“This does nothing,” thundered Charles Schumer (D-NY), the Senate minority leader. “Like all the other executive orders, it’s just words — he’s calling for new studies. It’s not going to fix the problem. It’s not going to create a single job.”
While visiting a factory in Wisconsin a few hours ago, Trump signed the order, and slammed abusers of the visa system, accusing them of cheating Americans out of jobs. He also had a pop at Canadian dairy farmers (Wisconsin is a big dairy state), threatened to pull out of the North American Free Trade Agreement, and promised to take "a sledgehammer" to regulations – as well as criticizing NATO for not allegedly "paying its bills."
"We are going to take bold new steps on our pledge to buy American and hire American," he said. "We don't have a level playing field for our workers, but you're going to have one very soon. We're going to make sure more products are stamped with those wonderful words 'Made in the USA'."
(Many of Donald's products are not made in the USA.)
Trump complained that today's H-1B visa system is a mess, with visas being awarded at random in a lottery. He pledged that from now on they will only be granted to the most skilled and highly paid workers, and won't be used to oust American citizens from their jobs so they can be replaced with cheap and less-able foreign labor.
If those promises come through, it's going to be bad news for consultancy giants like Tata, Infosys, and Cognizant, which were named by senior administration officials as top targets for today's order. These organizations are massive users of the H-1B system: they grab bundles of visas and jet in cheap techies to bang out projects for clients. They'll now find it a lot tougher to bring in the kind of entry-level IT staff they've been snatching visas for.
Which is no bad thing, since the abuse of the H-1B visa program by some companies has been rampant. IT staff are brought in, typically from India, paid lower wages than other staff, and "encouraged" to work long hours because they know that if they displease their masters and their company withdraws their visa, they will have to leave the country quickly.
Silicon Valley loves the H-1B visa system because it helps depress wages and allows rich corps to bring in obedient talent from overseas. But the vast majority of visa holders are no more skilled than US workers and are being hired solely because they will work harder for less.
America's immigration officials issue 85,000 H-1B visas a year – and those numbers aren't going to change. The executive order, however, could end up raising the costs of applying for a visa as well as the barrier for entry.
Interestingly, the reforms are not targeting the H-2B visa program, which allows US organizations, including Trump's swanky bolthole at Mar-a-Lago in Florida, to bring in overseas workers for menial jobs to meet seasonal demands.
The other part of Trump's executive order will force federal agencies to buy from American companies when spending tax dollars. Existing rules for federal contractors on buying American have been weakly enforced, Trump said, and that was going to change.
"With this action we are sending a powerful message to the rest of the world," he said. "This historic action declares we will aggressively promote and use American-made goods and ensure American labor is hired to do the job. It's time." ®
Updated to add
The text of the order is now online for you to read.