US President Donald Trump’s decision last week to raise the H-1B visa fee from $10,000 to $100,000 has triggered widespread concern among economists, industry experts, and policymakers. Analysts warn that the steep hike could have a significant impact on immigrant jobs and the US labour market, particularly in sectors that rely heavily on foreign talent.
According to JP Morgan Chase & Co, the drastic increase could cut immigrant work authorisations by as many as 5,500 every month, reported Bloomberg.
Economists Warn of Impact on Indian Workers and Tech Firms
Economists Abiel Reinhart and Michael Feroli observed that while the figure may appear “fairly small” relative to the overall US labour market, the brunt of the impact will be felt by technology companies and Indian professionals.
A Bloomberg report highlighted that of the 141,000 H-1B petitions approved for new employment last year, nearly 65,000 were processed abroad, making them particularly vulnerable to the revised fee structure.
The economists noted that if these applications were to be halted altogether, it would slash authorisations for foreign workers by more than 5,000 every month. However, they added that immigrants might still explore alternative visa categories to seek employment in the US.
Loujaina Abdelwahed, senior economist at Revelio Labs, was more forthright in her assessment. She described the policy change as “effectively equivalent to dismantling the H-1B system,” cautioning that it could eliminate almost 140,000 new jobs annually in US companies reliant on skilled foreign workers.
Labour Market Already Under Strain
The policy shift comes at a time when the US labour market is showing signs of weakness. Over the past three months, payroll growth has slowed sharply, with an average of only 29,000 jobs being added monthly.
Federal Reserve Chair Jerome Powell also flagged what he called a “marked slowing” in both worker supply and demand, attributing part of the downturn to reduced immigration.
According to the report, the higher fee is expected to drive visas towards higher-paying roles in technology, finance, and healthcare, while limiting opportunities in lower-paid sectors such as education.
Criticism From Within the US
The move has not only rattled businesses but has also drawn criticism from political leaders. California Attorney General Rob Bonta was among those voicing opposition. He argued that the fee hike adds “uncertainty and unpredictability” for firms that depend on foreign skilled labour, warning that the decision could have an “adverse impact” on California’s tech-driven economy.
Bonta said his office is currently assessing whether the rule could be challenged legally. “So the short answer is, we are looking at it. We will assess whether there’s a legal violation. If it’s a policy that we don’t agree with but it’s legally sound, we won’t challenge it. If it’s unlawful, we will,” he stated.
Possible Legal Challenge Ahead
Bonta further indicated that his office is examining whether the visa fee hike contravenes the Administrative Procedure Act, which mandates a reasoned justification and public notice before implementing new regulations.
“You need to have a reasoned justification,” he said. “It can’t be arbitrary, it can’t be capricious… it might be appropriate here, but we’re still looking.” The H-1B programme has long served as a critical pathway for US technology firms, finance companies, and consulting organisations to recruit highly skilled foreign professionals. With the fee hike now in effect, both the future of the programme and its legal validity remain in sharp focus.
