Talks on immigration reform have resurfaced as the United States gets closer to the 2024 presidential election, with Project 2025 at the forefront of the discourse. With an emphasis on legal immigration programs including employment-based immigration and the H-1B visa system, this policy blueprint, created by conservative think tanks, aims to change the immigration landscape in the United States.

Although Project 2025 supports strengthening the employment-based visa system and giving preference to American workers, its suggested modifications to the H-1B program might have far-reaching effects, many of which could be detrimental to various industries, innovation, and the overall economy. This article critically examines Project 2025’s suggested changes to the H-1B visa program and any unforeseen repercussions, with a focus on the financial implications, labor shortages, and damage to the United States’ ability to compete internationally.

The H-1B Visa and Employment-Based Immigration: An Essential Foundation for Innovation

An important aspect of the American economy is the H-1B visa program, which enables companies to fill highly specialized positions requiring advanced knowledge, especially in the STEM sectors (science, technology, engineering, and mathematics). Historically, it has made it possible for businesses to hire the best talent available from throughout the globe, fostering creativity and maintaining American leadership in technical growth. Up to 85,000 visas are granted annually under the present system, which supports industries like IT, healthcare, engineering, and finance that frequently have severe labor shortages.

Project 2025, on the other hand, suggests a significant overhaul of the program that would include sharply decreasing the amount of visas granted, raising salary floors, and tightening oversight of firms. Although these changes are presented as measures to safeguard American workers, they also carry a great deal of danger and could jeopardize the basic basis upon which the United States has been able to sustain its economic advantage.

Project 2025’s Main Proposed Reforms and Their Adverse Effects

1. Cutting Back on H-1B Visas: Diminishing the Talent Stream

The suggestion made by Project 2025 to lower the annual amount of H-1B visas granted is among its most contentious features. Project 2025 proposes lowering the ceiling, which is now set at 85,000, supposedly in order to preserve American jobs and lessen dependency on foreign labor. On the other hand, this might be harmful to sectors of the economy that already struggle with a lack of qualified labor.

The adverse effects:

Expanding Skill Gaps: Reducing the amount of H-1B visas will restrict access to highly skilled foreign workers who take on positions for which many American workers are ill-suited or reluctant to accept. This might make the labor shortage worse, especially in sectors where specialized talents are highly sought after, including technology and healthcare.

Stifling invention: The United States has long been a leader in the field of invention, partly because of its capacity to draw highly skilled individuals from all over the world. Lowering the number of H-1B recipients runs the risk of lessening the range of ideas, inventiveness, and experience that has fueled innovations in fields like biotechnology, renewable energy, and artificial intelligence.

2. Raising the Wage Floor: Impeding Startups and Small Enterprises

An increase in the minimum wage that firms are required to pay H-1B workers is part of Project 2025. Advocates contend that this would shield American workers from wage suppression by discouraging employers from employing foreign labor at lower pay. Even while on the surface this seems advantageous, it ignores the possible drawbacks for startups and smaller companies that depend on foreign expertise but are unable to match the pay packages given by larger organizations.

The adverse effects:

Entry Barriers for Startups: Due to their frequent low budgets, startups and small businesses may find it difficult to pay the increased wage criteria, which will make it more difficult for them to hire the competent people they need to expand. Given that many of the biggest internet companies today, including Google and Facebook, were formerly startups that benefited from the H-1B program, this might hinder innovation.

Increasing Corporate Monopolization: Project 2025 may unintentionally reinforce the dominance of big IT companies that can afford to provide greater salaries by raising the salary floor. There would be less startup rivalry for these businesses, which could increase industry monopolization and decrease innovation.

3. Giving Highly Skilled Workers Priority: Merit-Based Selection’s flaws

In addition, Project 2025 promotes changing the H-1B lottery to a merit-based hiring procedure that gives preference to candidates with more training, more experience, and higher pay. Although the goal of this strategy is to draw in the “best and brightest,” it also presents important obstacles that could compromise the program’s efficacy.

The adverse effects:

Disadvantageous New Graduates: Younger applicants, particularly international students who graduate from U.S. universities, may be at a disadvantage under a merit-based system that strongly prioritizes work experience and better earnings. It may be more difficult for these young graduates—many of whom are highly skilled but lack years of experience—to obtain H-1B visas, which might cause a brain drain as they look for opportunities elsewhere.

Ignoring Industry Needs: The merit-based system operates under the premise that workers with the highest levels of education and expertise are always in the highest demand. But a lot of sectors need workers with specific talents, which aren’t always associated with high pay or fancy degrees. If Project 2025 narrows its focus to merit alone, it may miss industries with serious labor shortages but that aren’t always the highest paying.

4. Stricter Employer Inspections: Administrative Roadblocks

Project 2025 calls for more stringent oversight of businesses that employ H-1B employees, as well as improved vetting procedures and sanctions for rule breakers. Although monitoring is necessary to stop misuse, these extra bureaucratic obstacles may have unexpected effects on both companies and workers.

The adverse effects:

Hiring Procedures Are Being Slowed Down: Employers looking to hire foreign labor must deal with increased scrutiny, which translates into more paperwork, longer processing delays, and more uncertainty. This would discourage businesses from using the H-1B program at all, which would further limit their access to talent from around the world and stifle innovation.

Unintentional fines for firms: Excessive regulation may also result in inadvertent fines for firms who behave honorably but are bogged down in bureaucratic red tape. This would deter companies from recruiting foreign labor, even in cases when they have a valid need, which would result in a labor shortage in important sectors of the economy.

5. OPT Program Changes: How They Affect International Students

Project 2025 also aims to modify the Optional Practical Training (OPT) program, which permits foreign students to work in the United States after graduation. Limiting OPT term and limiting eligibility to STEM grads are two of the proposed modifications. Despite the fact that these modifications are presented as measures to safeguard American workers, they may undermine the country’s appeal to foreign talent.

The adverse effects

Diminished Allure of American Education: The United States has traditionally drawn foreign students because of its top-notch universities and the possibility of employment through OPT after graduation. Restricting the OPT program would discourage gifted students from enrolling in American universities, which would result in a drop in foreign enrollment and the loss of talent.

Brain Drain to Other Countries: Foreign students enrolled in the OPT program who are unable to obtain employment in the United States may look for possibilities in nations like Canada or the United Kingdom that have more lenient immigration laws. The United States’ advantage over other nations in domains like research and technology may be further eroded by this brain drain.

Extended Economic and Strategic Hazards

The suggested changes for Project 2025 are framed as steps to safeguard American workers and boost the country’s economy, but in the long run, they might have the opposite impact. The United States runs the danger of impeding innovation, delaying economic growth, and lowering its level of global competitiveness by restricting access to foreign talent, raising bureaucratic barriers, and tightening restrictions on the H-1B and OPT programs.

1. A Decline in Innovation

In the past, the United States has pioneered technological innovation globally, partly due to the input of highly qualified immigrants. The panorama of innovation in America has been greatly influenced by foreign workers, from the tech giants of Silicon Valley to ground-breaking biotechnology research. Tighter H-1B regulations that restrict admission could cause a halt in creativity as businesses find it difficult to recruit the talent necessary to spearhead new discoveries and technological advancements.

2. The Danger to Global Competitiveness

Being able to draw in top people is essential for keeping a competitive edge in a globalized economy. In recent times, nations such as Canada, Australia, and the United Kingdom have widened their immigration policies, realizing the financial advantages of drawing in highly qualified labor. The United States faces the risk of lagging behind these countries in the competition for global talent, especially in STEM sectors, if it proceeds with the restrictive policies proposed in Project 2025.

3. Manpower Shortages in Vital Industries

There is currently a severe labor shortage in many areas, most notably in the fields of engineering, computer technology, and healthcare. Project 2025 may make these shortages worse by lowering the amount of H-1B visas and raising barriers to employing foreign labor, which would lower productivity and cause economic stagnation. This is especially troubling for the healthcare industry, as an aging population and rising healthcare costs are pushing up demand for more qualified workers.

In summary

Though the intended changes to the H-1B visa program and employment-based immigration under Project 2025 are intended to give preference to American workers and lessen dependency on foreign labor, there are considerable risks associated with them. Reduced global competitiveness, inhibited innovation, and labor shortages could result from the elimination of H-1B visas, higher pay requirements, and more monitoring of firms.

In a global economy that is changing quickly, the United States cannot afford to isolate itself from the sharpest minds on the planet. The suggested adjustments to Project 2025 may work against the country’s interests in maintaining its position as a leader in innovation, economic expansion, and technological advancement by weakening the very foundations of prosperity that the revisions are meant to safeguard.

By: Karim Jiavani

Karim Jivani is an Associate Attorney at Reddy Neumann Brown PC who focuses on employment-based non-immigrant visas. Karim’s practice covers all phases of the EB-1A and EB-2 NIW visa process including filing petitions, responding to Requests for Evidence (RFE), and drafting motions and appeals. Karim has also worked on all aspects of H-1B, L-1, I-140, and VAWA petitions.