JPMorgan economists Michael Feroli and Abiel Reinhart have raised concerns over the potential impact of President Donald Trump’s executive order introducing a $100,000 fee on new H-1B visa applications. Their report predicts that the policy could reduce the number of work authorisations in the US by up to 5,500 per month. This estimate is based on roughly 65,000 new H-1B petitions processed at consulates abroad, which are most likely to be affected by the fee. Feroli and Reinhart warn that the move could deter foreign students from studying in the United States and limit post-graduation employment opportunities, while companies—particularly in tech and consulting—may reconsider hiring foreign talent due to the prohibitive cost.
H-1B visa impact according to JPMorgan economists
The executive order, signed last Friday, aims to prioritise American workers by significantly increasing the cost of obtaining new H-1B visas. The fee applies only to new applications and is not levied on renewals. JPMorgan’s economists predict that the high cost could discourage many companies from applying for new H-1B visas, potentially reducing overall work authorisations by 5,500 per month.About 70% of H-1B visas are awarded to Indian workers, with roughly two-thirds in computer-related roles. The report highlights that the fee hike could disproportionately affect this group, limiting career opportunities in the United States, particularly for early-career professionals and recent graduates from American universities.
Effect of H-1B visa hike on US businesses
Many leading companies, including consulting firms and technology giants, rely heavily on H-1B visas. Last year, nearly half of the top 50 beneficiaries of H-1B visas were consulting firms. The report suggests that the high fee could prompt companies to reduce applications or seek talent from alternative countries, potentially slowing innovation and delaying project timelines.While the executive order is intended to protect domestic employment, economists warn that the $100,000 fee could have unintended consequences, including a significant drop in work authorisations, reduced foreign student enrolment, and added strain on US businesses dependent on global talent. The coming months will reveal how companies and prospective H-1B applicants adapt to this new policy landscape.
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