Elon Musk sparked fierce online debate recently when the billionaire said on social media that the U.S. lacks enough top engineers, pointing to immigration as the solution to what he characterized as a dearth of technical expertise.
“There is a dire shortage of extremely talented and motivated engineers in America,” Musk posted on his social media platform, X, comparing tech companies to a pro sports team scouting players. “If you force the world’s best talent to play for the other side, America will LOSE.”
The claims are at the center of a divide between supporters of President-elect Donald Trump, who tend to take a hard line against immigration, and technology entrepreneurs like Musk, who along with X runs exploration company SpaceX and electric vehicle maker Tesla, both of which employ many foreign workers hired with H-1B visas.
Yet labor market data suggests that American tech workers aren’t in short supply, and critics of the H-1B program say it displaces Americans in favor of foreign-born employees hired at lower salaries. Proponents of recruiting skilled workers from abroad say tech jobs aren’t zero-sum, while hiring foreigners with specialized skills can spur innovation and ultimately create more jobs for U.S.-born workers.
Data from the National Center for Education Statistics shows that the number of bachelor’s, master’s and doctoral degrees in computer science and in engineering conferred in the U.S. reached their highest levels in the 2020-21 and 2021-22 academic years since 1970-71.
Meanwhile, tech and engineering jobs in the U.S. are expected to grow by 7% by 2033, according to the Bureau of Labor Statistics. The share of the science and engineering workforce that is foreign-born has grown over the past three decades, according to the National Science Foundation, while STEM workers have experienced some of the highest employment rates of any occupation over the past five years.
Companies with the most H-1B workers
Tech companies are some of the biggest beneficiaries of the H-1B program, which is intended to allow highly skilled foreigners to work in the U.S. Amazon received the most H1-B visas of any company in 2024, Department of Labor data shows. Microsoft, Google and Meta were also in the top 10, while Tesla now ranks No. 16, according to the National Foundation for American Policy, a nonpartisan think tank focused on trade and immigration issues.
More H-1Bs visas were granted to software developers last year than for any other position.
“The H-1B visa is like the Swiss Army knife of visas. It’s used for a lot of different purposes,” said John Skrentny, a sociology professor at U.C. San Diego who wrote a book on why STEM graduates choose careers outside of the fields they studied. “If you hear people say that the H-1B visa is very important for attracting the best and brightest to the United States, they are correct. At the same time, the H-1B visa is used for cheap labor.”
Investigations including by 60 Minutes and The New York Times have found that some companies have laid off American workers and then replaced them with H-1B hires, sometimes even requiring displaced employees to train their replacements in order to receive their severance packages.
Some of the roles H-1B workers are hired to fill also involve less complicated jobs, like product testing, said Ronil Hira, an associate political science professor at Howard University and a research associate with the left-leaning Economic Policy Institute. These roles don’t necessarily meet the visa program’s intended goal of outsourcing roles that require unique skills.
In addition to Big Tech companies, consulting firms like Cognizant, Tata and Infosys are also among the largest recipients of H-1B visas, providing tech companies with a steady pipeline of highly educated, well-trained employees willing to work on contract.
These companies are incentivized to find employees that will accept lower pay, Hira said.
“Their business model is to resell labor. If you’re reselling labor, the way you become competitive is by having lower labor costs.”
A boost to innovation?
Still, evidence of the H-1B program’s broader impact on employment in the U.S. is mixed. One study from the IZA Institute of Labor Economics found that the average employer that receives H-1B visas isn’t displacing American workers. The research firm found that while companies that received the visas initially did hire more foreign-born workers in response, they also typically experienced growing revenue and were eventually able to hire additional workers.
The effects were greater for smaller employers that only applied for a few visas, the study showed.
“Most of our results are driven by smaller firms because they’re the ones for whom the lottery really matters,” said Parag Mahajan, one of the study’s authors and an assistant economics professor at the University of Delaware. For those companies, he said, “There is a lot of value to looking elsewhere for talent.”
Mahajan’s study also found that for some companies, hiring a foreign worker on an H-1B visa eventually created jobs for American-born workers because the person’s skills can help the company grow.
But some economists, including Hira, take issue with the claim that foreign workers are needed to fill a nationwide shortage in talented engineers.
When there’s a shortage of workers for a particular role, wages in that sector rise, Hira said, the same way gas prices go up when oil supplies drop. But labor market data shows that wages in the tech industry have remained relatively stable.
Median weekly earnings in computer and mathematics roles have grown by 0.27% from 2019 to 2023, after being adjusted for inflation, data from the Bureau of Labor Statistics shows. In engineering and architecture roles, wages have declined by 3.53% over the same timeframe.
More firing than hiring
Tech companies have also laid off hundreds of employees in recent years while continuing to sponsor new H-1B visas. An analysis by the Economic Policy Institute found that the top 30 companies hiring the most H-1B workers hired 34,000 new H-1B employees in 2022 but laid off at least 85,000 workers that year and in early 2023.
The layoffs mirror a decline in available jobs in the industry. Job postings in software development on Indeed.com are 67% of what they were in February 2020, according to the job board platform.
How the debate around H-1Bs will translate to policy after Trump takes office is unclear. In his first term, he issued an executive order, dubbed “Buy American and Hire American,” aimed at supporting U.S. manufacturing. The order also directed Cabinet members to suggest changes to the H-1B program to restrict it only to the highest-paid or most-skilled applicants.
But in an interview with The New York Post last month, Trump called H-1B visas a “great program.” Musk, who has become a close adviser to the president-elect, said he would “go to war on this issue” in one X post.
“I’ve always liked the visas, I have always been in favor of the visas,” Trump said. “That’s why we have them.”
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