President Donald Trump signed the "Buy American, Hire American" executive order in April 2017, and we've seen companies, employees and students adjust to a new climate. The order directs the Department of Homeland Security to help ensure H-1B visas used by employers to hire foreign citizens are awarded to the most-skilled or highest-paid beneficiaries.
Since then, it has become much harder on average to be approved for one of the skilled worker visas. Reuters reported in February that the government is denying and delaying more H-1B visa petitions than at any time since at least 2015. Department of Homeland Security data tells us that the denial rate for H-1B petitions rose to 15% in FY 2018 from 7% in FY 2017, 6% in FY 2017 and 4% in FY 2015.
"Due to the time and expense, employers and attorneys only apply for individuals they believe have a good chance of gaining approval, which means an increase in denial rates and Requests for Evidence reflect changes in government policies and practices," said The National Foundation for American Policy (NFAP) in a press release.
New cap-subject H-1B visa petitions submitted during a single filing period rose for FY 2020 to 201,011 after falling significantly the last few years. A new policy that is expected to increase the number of visa recipients with advanced degrees from U.S. colleges by 16% came into effect this year. According to government data, 190,098 applications were received for FY 2019, down from 199,000 applications for FY 2018 and 236,000 for FY 2017.
Here are some of the other ripples the administration's mission to curb H-1B visa abuse has caused.
Fewer students applying to American colleges
According to the State Department-backed Institute of International Education (IIE), new international student enrollments in the U.S. fell by 6.6% in 2017/18, "continuing a slowing or downward trend first observed in the 2015/16 academic year."
This is not great news for universities or the economy since international students tend to pay higher fees than their American counterparts. In 2017, they contributed $42.4 billion to the U.S. economy through tuition, room and board, and other expenses.This is the main reason some colleges have been reclassifying their economics majors as STEM degrees.
Jobs for international students declined since 2015
The National Association of Colleges and Employers found that the percentage of U.S. employers that plan to hire international students in 2018 dropped to 23.4%, the lowest level since 2011. It began to decrease in 2016 after years of steady growth that culminated in a high of 34.2% in 2015.
In 2019, this number climbed to 28%, largely due to renewed interest from employers in the information and retail industries. In 2018, only 36.4% of respondents in information said they plan to hire foreign citizens, and in 2019 that figure rose to 66.7%.
Canada receiving more tech workers
Microsoft Corp. (MSFT) president and chief legal officer Brad Smith told CNBC in July last year that the company may be forced to move some jobs abroad due to immigration policies it's expecting to come out of the White House. By September, Microsoft had announced a massive expansion in Canada with plans to hire 500 more people and build a new 132,000 square feet headquarters in downtown Toronto.
The number of skilled workers in computer-related fields that received invitations from the Canadian government to apply for permanent residence under its Express Entry Program surged in 2017 from the years before. Indians received 42% of the 86,022 invitations sent out, followed by China (9%), Nigeria (6%) and Pakistan (4%). Admissions for Indian citizens rose from 9,584 in 2016 to a whopping 26,340 in 2017.
The country has said it will grant permanent resident status to 177,500 economic migrants in 2018, 191,600 in 2019 and 195,800 in 2020.
Outsourcing Firms Receive Fewer Visas, Big Tech Sees Increase
Outsourcing firms accused of flooding the visa lottery system every year, like Cognizant Technology Solutions Corp. (CTSH), Tata Consultancy Services Ltd., Tech Mahindra Ltd., Infosys Ltd. (INFY) and Wipro Ltd. (WIT), have remained some of the biggest new H-1B visa recipients, but they've been seeing a marked decline in the numbers they are granted. In an April 2018 report, NFAP attributed this trend to India-based companies "moving toward digital services such as cloud computing and artificial intelligence, which require fewer workers, and a choice by companies to rely less on visas and to build up their domestic workforces in America." In 2017, TCS, Infosys, Cognizant and Tech Mahindra all promised to ramp up hiring in the U.S. In FY 2018,
On the other hand, American high-profile tech giants like Amazon.com Inc. (AMZN), Microsoft, Alphabet Inc.'s (GOOG) Google, Facebook Inc. (FB) and Apple Inc. (AAPL) have jumped higher on the ranking of top sponsors and seen increases in the number of visas they are granted.
We see this when we compare FY 2018 "initial approvals" to earlier years.