H-1B clash exposes a tough choice for Trump: MAGA or Musk

By Patricia Lopez

The skilled worker visa program known as H-1B is heavily flawed — and has only grown more so since its inception in 1990. It has also cracked open a major schism in the MAGA movement, which has long been defined by President-elect Donald Trump’s opposition to immigration.

The split has revealed the fragility of Trump’s coalition, which now straddles anti-immigrant MAGA faithful and Silicon Valley tech globalists. Navigating this terrain will require a deftness seldom seen in his first term.

Trump’s uber-rich, tech-bro bestie, Elon Musk, is a huge proponent of the program, which imports foreign programmers, engineers, accountants and other professionals at lower wages than Americans would expect.

Musk had profane words over the holidays, threatening to “go to war” with opponents of the visa program. (Tesla ranks 16th in the country for H-1B visas.) Vivek Ramaswamy, his partner at the Department of Government Efficiency, went even further, with a sweeping indictment of Middle America culture, posting that industries needed foreign engineers and the like because American culture “venerated mediocrity over excellence.” That prompted a backlash from MAGA supporters so furious that Ramaswamy has not posted on the subject since.

The resulting rift is not sustainable. For more than a decade, Trump has built his brand on limiting immigration, cultivating a nativist base. But he owes much of his return to the White House to wealthy technologists. Musk alone spent $260 million on Trump’s win and has become one of his closest advisers.

The risk is that Trump will be persuaded by his deep-pocketed new friends in tech — who continue to donate millions to him, although he cannot run again — and fail to reform the program’s many flaws.

There are elements of the current program that make little sense. The lottery system is too easily manipulated by mega-recruiters and employers, as Bloomberg News reporters found earlier this year. Why should the US rely on a random lottery rather than choosing specifically who to admit?

Employers ostensibly are supposed to pay a prevailing wage and ensure that US-citizen workers won’t suffer, but enforcement can be weak and there is little data on the number of penalties imposed.

The program allows for-profit employers to sponsor 85,000 jobs a year for foreign workers, and there are now more than 500,000 such H-1B visa holders employed in the US. (Married visa holders can also obtain work permits for their spouses.) Typically, these jobs pay six figures with benefits, but the minimum goes as low as $60,000. The program covers everyone from cardiothoracic surgeons to thousands of mid-level accountants, software developers and — at the low end — even warehouse assistants and management trainees.

That cap has remained unchanged for years, with little thought to whether it’s too high, as critics contend, or too low, as Musk says.

And there is no cap for nonprofit employers, which include colleges and universities, research institutes, government research agencies and many medical facilities. The number of H-1B visa holders employed by nonprofits is hard to obtain, but an estimated 22% of all faculty members at US colleges and universities are foreign-born, here on visas.

Let’s be clear. Foreign professors can bring a wealth of ideas and experience from other cultures. They are a valuable addition to higher education. But more than a fifth of all faculty?

And in the private sector, despite Ramaswamy and Musk’s comments, the H-1B program does not always seek out the brightest and most qualified. Many of the hires are mid-level and tend to be younger, in their 30s. In some instances, they have been used to displace older, more experienced — and costlier — workers. For example, in a particularly infamous case, DisneyCorp. in 2014 fired 250 tech workers with 90 days’ notice. Those who stayed to train their H-1B visa holder replacements got a small “bonus.”

Because employers control the visas, H-1B workers can be treated essentially like indentured servants. Lose your job and you lose your visa. That is unfair both to the foreign workers and Americans who might compete with them.

So Trump had a point when he said in 2016 that H-1Bs existed “for the explicit purpose of substituting for American workers at lower pay.” He said he was “totally committed to eliminating rampant, widespread H-1B abuse and ending outrageous practices” such as what occurred at Disney and vowed to “end forever the use of H-1B as a cheap labor program.”

As president, he issued a 2017 executive order to “Buy American, Hire American.” The rejection rate for the program more than tripled (to 15%) compared with the Obama administration. Later, Trump cracked down harder.

But now, as he attempts to mollify his biggest donors, Trump says he “always liked” the H-1B visa, proclaiming it a “great program.”

Trump should not capitulate so completely. The program badly needs an overhaul, as even Musk, confronted by the full MAGA backlash, eventually conceded.

But before the program can be reformed, we need to clarify its purpose. Kevin Shih, a labor economist and immigration expert who is an associate professor at University of California, Riverside, said there are serious questions to contemplate. Should employers be free to roam the globe in search of workers, putting Americans in brutal competition for good jobs? Should universities and research organizations be given carte blanche when it comes to hiring skilled foreign workers who might work for less?

When I talked with Shih, he told me that ultimately, a balance must be struck among competing needs.

“Most people would agree with me that there is a place for foreign workers who provide skills that complement our existing workforce while doing as little harm as possible to American workers,” Shih said.

Musk recently acknowledged that the program needs major reform, and has higher salaries and increasing expenses to hire foreign workers. Both are worth considering to protect American jobs and prevent the exploitation of foreign workers.

Because there is at least some evidence that as it exists today, the H-1B program can have a similar effect as illegal immigration: an easily controlled workforce and depressed wages for American workers.

Immigrants — particularly skilled immigrants — bring so much to this country. And many visa holders, who hold positions of trust and responsibility, have been shocked at the vicious backlash. But that is the danger when people perceive their self-interests under threat, as some Americans now do.

All this proves there is far more to immigration reform than border control. It’s been 35 years since the last comprehensive overhaul. Trump ran on immigration, and he won. It now falls to him to right-size the program and enact needed reforms — even if his new donors in the tech sector would prefer he didn’t.