October 2, 2020
Dear Valued Clients:
In June, President Trump signed a proclamation suspending H-1B, H-2B, J and L visas effective until December 31, 2020, under the guise of curbing the rising unemployment rate amid the COVID-19 pandemic.
A California federal judge in San Francisco has blocked the ban—but not its entirety. The block does not apply nationwide, pertaining only to the business associations that challenged the proclamation. Specifically, the companies represented by the Plaintiffs: the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Retail Federation and TechNet. These four organizations represent thousands of companies, including Silicon Valley employers, and significant names in manufacturing and pharmaceuticals.1 This will present some issues in enforcement as immigration officials will have to discern who, among, millions of applicants, are represented under this litigation.2
In his opinion, U.S. District Judge Jeffrey White wrote: “The proclamation, by its explicit terms, rewrites the carefully delineated balance between protecting American workers and the need of American businesses to staff their operations with skilled, specialized, and temporary workers,”
The ruling is undoubtedly a major victory for affected work visa holders and may set the tone for other federal judges to follow suit and possibly block the ban nationwide.
The thought process behind restricting guest worker visas to help boost unemployment is flawed. Numerous studies have shown that a healthy U.S. economy depends on immigrants and guest worker visas. Immigration promotes a strong gross domestic product, improves labor market conditions for both Native U.S workers and foreign-born workers, and promotes innovation and business creation.3 Studies further show that immigrants tend to be more entrepreneurial, more likely to start new businesses and develop new technologies.4 Immigration stimulates growth and productivity of capital. A one percent increase in immigrant population in the United States correlates to a 1.15 percent gain in GDP as compared to a 1:1 ratio by native-born Americans.5
Contrary to popular, erroneous belief, immigration boosts employment by increasing the pool of available labor, reducing labor shortages and filling critical skills gaps.6 This allows business to create new job opportunities for U.S. citizen workers.7 Take for instance, Elon Musk, founder of Tesla, and a citizen of South Africa and Canada before immigrating to the U.S., or the co-founder of Instagram, Mike Krieger, a Brazilian citizen who took advantage of the H-1B visa to work in the U.S. These immigrant entrepreneurs, among so many others, brought their innovation and entrepreneurial spirit to the United States. Their businesses have propelled the United States to the top in technological advancement. Immigration has undoubtedly helped the United States maintain its competitive edge in technology and innovation while also creating tech jobs for U.S. citizens.
That is why it is so important to preserve guest worker programs such as H-1B and OPT.
3 See, Furchtgott-Roth, D. (2014). Does Immigration Increase Economic Growth?; Hanson, G. (2012). Immigration and Economic Growth; Peri, G., & Sparber, C. (2010). Highly-Educated Immigrants and Native Occupational Choice; and Hunt, J. (2012). The Impact of Immigration on the Educational Attainment of Natives.
5 Groeger, L. (2017). The Immigration Effect. ProPublica. Underlying Analysis Performed by A. Ozimek and M. Zandi at Moody’s Analytics.
6 Wall Street Journal. (2018). U.S. Job Openings Topped 7 Million for First Time.