In quintessential Howard Lutnick fashion, the commerce secretary forced the White House to spend 24 hours performing cleanup after his comments about changes to the H-1B visa program for skilled foreign workers. Lutnick had insisted that President Donald Trump’s new $100,000 fee for H-1B visas was not just an annual charge, but one that would apply to both new and existing visa holders.
Lutnick’s Sept. 19 announcement resulted in tech giants such as Google and Amazon demanding that their H-1B visa employees jet home before the weekend was over. At San Francisco‘s airport, Indian workers, who were supposed to fly home through Dubai, deplaned in a panic from an Emirates flight. More than 125 workers flying from Mumbai raced back with an hour to spare before the fee was supposed to go into effect.
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Alas, the panic turned out all for naught.
“This is NOT an annual fee,” White House press secretary Karoline Leavitt wrote on X. “It’s a one-time fee that applies only to the petition.”
More than a week later, the White House still hasn’t gotten the message completely straight. While the 700,000 or so workers here with H-1B visas are apparently fine for now, Lutnick maintains that the annual fee is a worthy enough idea that the administration is still considering it.
The politics of the anti-H-1B visa posture may be popular enough that the bipartisan leadership of the Senate Judiciary Committee united to dunk on Big Tech companies. But as a matter of policy, the brigade to crack down on H-1B visas will leave Americans worse off.
For starters, Lutnick’s entire intention of imposing massive visa fees is to bolster income into the United States government, something that H-1B visas already accomplish. While the influx of illegal aliens dependent on state and federal welfare during former President Joe Biden’s tenure was an unambiguous fiscal net-negative for the country, the Manhattan Institute estimates that the net present value of the fiscal benefit of each H-1B visa worker is a minimum of $800,000, reduced from the federal deficit. In fact, doubling the number of H-1B visa recipients from its current 85,000 cap would reduce the deficit by $70 billion each year.
The Department of Homeland Security took Lutnick’s lunacy a step further, proposing that we overhaul the imperfect lottery system. Not with one that prioritizes the highest-skilled and rarest workers. But with a weighted system that focuses solely on the highest earners within “Wage Levels,” as defined by the Labor Department.
The abundance-aligned Institute for Progress estimates that the new Trump rule’s focus on wage levels rather than real wages would actually benefit companies that outsource workers with 8% more H-1B visas, while international students educated at American universities would receive 7% fewer visas. The DHS concedes that the rule change will double the odds of winning a visa for Level IV wage workers while penalizing entry-level workers with technical expertise.
Beyond the macroeconomic cost of imposing yet another tax on American inputs, there is the reality that high-skilled immigrants are simply not stealing our jobs.
Consider that the prime-age labor force participation rate of the last year has remained at the highest level in recorded history after the peak of 2000, while the labor force participation rate of those aged 55 through 64 is at its highest level ever. The overall unemployment rate of 4.3% is lower than at any point of the Reagan Revolution or during the heyday between the dot-com bubble and the Great Recession. And real wages in the first seven months of the Trump administration are up a modest 0.8%.
Furthermore, the specific sectors that most benefit from H-1B labor maintain the tightest labor markets.
The professional and technical services sector, which sees nearly two-thirds of H-1B visas granted in a given year, has an unemployment rate of 3.3%, a full point below the economy’s broad-based unemployment rate. The next highest recipient of H-1B visas is the architecture, engineering, and surveying sector, which has a 1.4% unemployment rate. Two of the next highest recipients of H-1B visas, the education and health industries, have an unemployment rate of 3.7%. (Hospitals and the financial services industries, two sectors in which H-1B labor comprises a disproportionate share of total employment, both have an unemployment rate of 1.6%.)
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Furthermore, a record 30% of U.S. household wealth is invested in equities, which in turn are disproportionately bolstered by the very Big Tech companies Congress loves to hate. Consider that half of our economic growth in the first half of 2025 was a product of tech investment, in no small part due to companies like Amazon being able to import the best and the brightest to work alongside American ingenuity.
The current H-1B visa system isn’t perfect, and Lord knows the Trump administration’s crackdown on the deluge of tens of millions of illegal immigrants is broadly welcome. But the solution to an illegal immigration crisis isn’t to break a functional legal immigration system. Rather, to improve it to the benefit of American taxpayers and the businesses that create the wealth the rest of us depend on.