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Twelve thousand international workers uphold Massachusetts’s booming technology and biotech industries — including more than 1,000 workers in Cambridge. But new fees on H-1B visas could soon cripple everything from start-ups to big pharma companies in Kendall Square.
The H-1B visa is a temporary, non-immigrant visa which allows U.S. companies to employ skilled foreign workers with a bachelor’s degree or higher qualification. On Friday, the Trump administration announced it is increasing the fee for companies from $1,000 per applicant to $100,000.
Experts across universities and industries said that the change directly threatens Cambridge’s economy, which houses 78 percent of the state’s biotech companies.
“Cambridge’s strength as a global life sciences hub depends on its ability to attract top talent from around the world, especially for the startups we support at LabCentral,” Maggie O’Toole, Chief Executive Officer at LabCentral, wrote in a statement.
Currently, the largest H-1B visa employers in Cambridge constitute a mix of big technology and biotech companies, as well as academic institutions like Harvard and the Massachusetts Institute of Technology.
“A policy that makes it harder to bring people in is just going to, in the long run, I think, decimate R&D activity in the United States,” said Harvard lecturer Anne Le Brun, an immigration and labor economist. “In the short run, I don’t really know how this is going to play out.”
The new fee will not just affect workers hoping to come to the U.S. for work, experts said. The loss of highly skilled workers eliminates their expertise, innovation, but also impacts the productivity that emerges from the highly collaborative biotech ecosystem.
“The effect of H-1B workers on innovation is very large, and it’s been very well-documented, and it is a crucial thing for any observer or policy makers to understand that it goes way beyond immigrants’ inventiveness,” Michael A. Clemens, a professor of economics at George Mason University studying international migration, said.
“Patenting and innovation, more broadly, are things that emerge from collaborative organizations of people specializing in different stuff,” he added, noting that the presence of additional workers generates demand for other services, which he called the “multiplier effect of the innovation that immigrants are catalyzing.”
Clemens said he believes the higher fee will “obliterate use of the visa,” a system that some experts say is itself not perfect.
Le Brun said that the current program has a not-so-secret “loophole” that allows American companies to hire international entry-level workers at a lower cost than domestic workers, especially in IT. But even so, she said the new fee will not solve the problem.
“If we’re not enforcing the rules that are in place, maybe we should start by trying to enforce the rules that are in place,” Le Brun said. “Close the loophole with the outsourcing companies before charging an exorbitant fee.”
Hanson said the new fee only provides more opportunity for unfair administrative practices.
“The $100,000 fee is a very crude way of doing this,” Hanson said. “If our experience with import tariffs is any indication, then what the administration may do is grant reprieves here and there, use political favoritism to make sure that the fee is damaging to certain preferred corporate counterparts.”
The new fee is not the only update to the H-1B program. Just yesterday, the administration filed a proposal to initiate the overhaul of the visa lottery to prioritize the most highly skilled and highly paid workers.
But even so, experts still warn that the new policies will slow hiring and impede critical innovation.
“This slows hiring, delays critical research, and limits the diverse perspectives that fuel our innovation ecosystem,” O’Toole wrote. “More importantly, it threatens the advancement of groundbreaking discoveries.”
—Staff writer Stephanie Dragoi can be reached at stephanie.dragoi@thecrimson.com.
—Staff writer Thamini Vijeyasingam can be reached at thamini.vijeyasingam@thecrimson.com. Follow her on X @vijeyasingam.
