Impact of Curtailing H1B on the US’s Economy
Donald Trump’s administration has recently imposed restrictions on the students and the working professionals who want to work in the United States. Proclamation from April 22, 2020 (Suspension of Entry of Immigrants Who Present a Risk to the United States Labor Market During the Economic Recovery Following the Coronavirus Outbreak) says that entry of the immigrants will be subjected to certain restrictions, limitations, and exceptions.
That was effective for 60 days and they might continue or modify this proclamation. Officials have favored other restrictions on international students, including a proposal to eliminate the “duration of status”, where the universities are arguing for the new approvals. The new policy would raise costs higher for students and be much more restrictions.
The proclamation from June 22, 2020, includes Suspension and restrictions on H-1B, H-2B, J, L visa holders. This does not apply to students with F1, F1 CPT, or F1 OPT. And people who are currently in the United States with H-1B, H-2B, J1, L1. Most affected by this proclamation is the ones staying outside the United States waiting for the stampings. They are restricted to enter the US. This shall expire on December 31, 2020.
These actions will directly or indirectly affect the economy of the United States. effect on the gross domestic product, labor market, entrepreneurship, and the population rate will lead to affect the economy on a larger scale. Modifications like this will make less attractive for international students. Education contributes more to the economy and international students tend to pay higher fees than their American counterparts. this could cause economic harm.
Effects on the Gross domestic product (GDP)
The decline in student enrollment and the OPT participation would slow the GDP growth in the US over the next decade. A study shows that the GDP will dip around $5 billion annually and after a decade, GDP would cumulatively reduce to $52 billion. The less student participation would also affect the education, health care, housing industries.
Effect on the Labor market
Initially, the native-born workers would be replaced for the lost foreign-born workers. the outcomes will be reversed after a few years. The reduction will get worse and worse in subsequent years. Fewer opportunities are available due to the reduction in economic activities. Study shows that a total of 443,000 jobs would be lost in the economy by 2028, resulting in 255,000 fewer positions for native-born workers. foreign-born workers start companies as twice the rate of native-born workers.
Effects on entrepreneurship
The business creation is reduced, the international students face the challenges to work in the US. entrepreneurship among foreign-born workers is comparatively high than the native-born workers. A study shows that Immigration founders had employed 560,000 workers and generated $63 billion in sales. Immigrants help businesses acquire the skills and talent they need, which allows businesses to expand and hire additional workers.
Effects on population rate
Adults born after 1965, are the main ones to expand the nation’s workforce. As this large generation is in the retirement stage, potential skilled labor is essential for economic growth. Native-born workers are projected to decline in a decade. US-born with immigrant parents is increasing in the decade. the graphs show a clear picture of the immigrant population. restricting immigrants would result in decrease in the population.
Retaining the visa restrictions and the suspensions will be attracted by many international students. Immigrants with the right skillsets, talent can contribute a lot to the nation. Availing the privileges would encourage people to expand the workforce in the US. The foreign-born worker shall be an asset of the future nation.
Reference
Population growth study: https://www.pewresearch.org/fact-tank/2017/03/08/immigration-projected-to-drive-growth-in-u-s-working-age-population-through-at-least-2035/
Entrepreneurship study: https://www.kauffman.org/resources/entrepreneurship-policy-digest/the-economic-case-for-welcoming-immigrant-entrepreneurs/
