American economist Peter St Onge’s video explaining the H-1B system and what changes the Donald Trump administration is trying to bring is has gone viral as he summarized that the H-1B overhaul that Trump is planning will restore the visa program to what it was meant for and not brain-draining India’s Bangalore to run IT sweatshop in the US, depriving American workers. “Will Americans who did learn to code get jobs?” the economist asked as the administration is planning to switch to a wage-based H-1B hiring which means companies will be allowed to hire only high-wage top talents from foreign countries. “JD Vance blasted companies that laid off Americans and then replaced them at half the price with H-1Bs. The administration now plans to return the program to its original purpose of bringing in top talent rather than running coding sweatshops that replace Americans,” the economist said. “The background is H-1B was introduced in 1990 to bring top talent in engineering technology and medicine. The original salary cut-off was $60,000 which in 1990 was about twice the salary of an entry-level programmer. In other words, top talent.”“The problem is it was never adjusted for inflation and $60K is now below an entry-level programmer. If it were adjusted for inflation, the minimum H-1B today would be $139,000. So what was originally supposed to be the best and brightest in the world is now a giant sweatshop. And giant it is. The initial H-1B cap was just 65,000 workers a year that grew to 85, then they added an unlimited exemption for universities, non-profits and government. Given each H-1B is a six-year visa and extendable, not 65,000, it’s not 85,000, it’s 730,000 H-1Bs, which is about one in 8 tech jobs,” Onge broke it down. “It gets worse because after a few years as H-1Bs can be converted into green cards, who get to stay permanently. By one estimate, that’s another 1.5 to 2 million H-1Bs, plus in dependents educated with your tax dollars, and we are talking roughly 3 million people on the H-1b gravy train, including roughly a million and a half tech workers, which is about one quarter of all tech jobs.”“Now it’s one thing if the workers were making $139 or $190, that’s top talent who build companies and create jobs but at 60,000 is a different story. At that level, they are replacing entry-level American tech workers who never got the chance to upskill, build companies and create jobs.”Onge said the cleanest fix would be simply to adjust for inflation, so instead of 60 it’s 139,000, as what Elon and Vivek were proposing earlier this year, along with an annual fee to ensure H-1Bs are only used for top talent. “Now Trump is planning something more aggressive, converting the program to a kind of reverse auction where the highest wages get the slots. So if you are hiring a rockstar German AI programmer for half a million, it’s automatic as it should be. If you’re trying to brain drain Bangalore, it is a no,” the economist said.
