Trump’s attacks on H-1B visas will hurt Arizona chip manufacturing, advocates say

With record investment in the semiconductor industry centered in Arizona in recent years, in some ways, Arizona’s tech sector is booming.

But now, the industry is sounding the alarm about a new move by the Trump administration aimed at H-1B visas. Those are the ones given to high-skilled, often tech workers who come from foreign countries.

Trump has said employers are abusing the program and taking away American jobs, so now he’s slapping a new $100,000 annual fee to all new applications.

But, Steve Zylstra says these are jobs that there aren’t enough Americans to fill. Zylstra is president and CEO of the Arizona Technology Council.

Full conversation

STEVE ZYLSTRA: Well, it’s not good. Obviously, when you have growth, you’re hiring talent, and the semiconductor industry is booming. We’ve had $210 billion invested just in that sector in the last five years. And for 15 years, there’s been a dearth of talent to fill all the open positions in the technology industry. So, this just exacerbates that problem. The Arizona Technology Council and our national organization, called the Tech Councils of North America, are definitely opposed to this fee.

LAUREN GILGER: So, what kind of impact do you anticipate seeing locally right off the bat? This is just for new applications, but it seems like most of those visa workers, H-1B visa workers, are employed by Intel here in the Valley. What’s the reaction look like there?

ZYLSTRA: Well, first of all, these are very high-skilled positions that are being filled by H-1B applicants. And, you know, especially in the tech industry, those are critical. I would say that it’s going to affect our universities, and it’s going to affect our hospitals as well. Because H-1B visas, by the way, are used to bring physicians here from around the world, researchers, scientists, new faculty. So in addition to the tech industry, I think our academic institutions and health and bioscience institutions will be equally affected.

A lot of tech companies actually use H-1B visas. Intel is certainly one of them, but ASML, ASM, Microchip, TSMC companies like, that in the semiconductor industry are also using H-1B visas. It used to be $2,000 to $8,000 fee to get an H-1B, and that was really based on a cost-recovery method. What the administration is doing is essentially attaching a toll. This $100,000 is a toll. So, I think there’s going to be a lawsuit. I think this is probably unlawful. Certainly vulnerable in court. So I don’t think we’ve heard the end of it yet.

GILGER: Let me ask you, I mean, like H-1B visas are mostly given out to kind of the biggest of the big when it comes to tech companies in the country. It’s not like they can’t afford this fee. Is it more of like the message it’s sending to you?

ZYLSTRA: Well, I think, this essentially takes smaller entities, small businesses, entrepreneurial businesses out of the game. Because as I said, it used to be, or currently is $2,000 to $8,000 to get an H-1B and a small company could afford that, but they’re not gonna be able to afford a $100,000 toll. So, I think there’s inequity in the way this is going to be applied.

GILGER: Interesting. OK. What do you make, Steve, then of the kind of broader debate that’s underlying this fee and the debate over bringing high-skilled workers in from other countries? Like you’re going to hear the Trump administration and many people argue that, you know, we’re just letting companies pay less for international talent than they would pay for a worker educated here in the U.S. Is that the way you see it?

ZYLSTRA: No, by the way, there’s been decades of research that actually link high-skilled immigration in the U.S. to higher patenting, greater productivity and more growth. So, this is having already the kinds of positive impacts on the U.S. that are critical to the growth of the sector nationally and here in Arizona. So, yeah, I don’t agree with that.

GILGER: I wonder what you make of the other side’s argument … that this will drive those highly skilled workers —- which it sounds like tech companies are often competing over — to just go to another country and kind of help a company there.

ZYLSTRA: I think that’s exactly what’s going to happen. I think first of all, it’s going to push some jobs offshore, and in some cases to our competitors from sort of Canada to China. So I think that’s one of the deleterious impacts that this fee will have.

GILGER: What are you hearing from some of the bigger or even smaller tech companies in the state right now? Are they concerned like you?

ZYLSTRA: Well, as you suggested, you know, this is used — the preponderance of H-1Bs go to the large tech companies and universities and large hospital systems. So, it’s not gonna have, I would say, a significant impact on small businesses and startups. But for those that use them, of course, it will have a dramatic impact.

GILGER: There seems to be some agreement on both sides, at least, Steve, that the program as it stood, needed some kind of reform. Because the lottery system as it’s designed is dominated by those big corporations that get most of these applicants to them. What kind of reform do you think might be helpful if it’s not this fee?

ZYLSTRA: Well, there are bad actors like there are in every aspect of our society, right? And I think the rules, the laws, the regulations that are already in place can prevent that. It’s just that there hasn’t been sufficient enforcement and wage standards and so on to prevent, you know, the bad actors.

So, I think you know, maybe we focus on true wage floors, sort of raise and enforce the wage floors and crack down on outsourcing abuses, and speed employment-based green cards, and modernize the system.

GILGER: Interesting. Let me ask you lastly, Steve about … the potential long-term impact here. I mean, you said, as you suggested that you anticipate this will end up in court. But if it does go into effect and you’ve got companies dealing with this kind of fee or talent not wanting to come here, what do you think the long-term impact could be specifically here in Arizona on the tech sector, which is growing a lot right now, as we said?

ZYLSTRA: Yeah, well, I think it’ll just make the job of finding top talent more difficult. That’s a lot of people. That’s a lot of jobs. Without that talent, companies aren’t gonna be able to accomplish the things that they need to accomplish to continue to grow.

GILGER: Do you think they won’t just turn to the equivalent in terms of U.S. workers with the same kind of skills? Do those not exist?

ZYLSTRA: Yeah, there’s no proof of that. All the research that’s been done basically says that’s not true. And what I think will happen is, as I suggested earlier, is they’ll outsource some of these jobs. … We’re just not producing enough talent here in the United States. We’re not producing enough students at the K-12 level that are focused on STEM education. And, you know, our post-secondary institutions are producing lots of great talent, but the funnel is not as wide and deep as it should be. So that’s one of the reasons we have to search outside of the United States to find the kind of talent to fill the demand.