Cheap Migrant Labour or Structural Malaise? Rethinking U.S. Policy on Work Visas and Sustainable Employment

 

Pic from my Refrigerator Magnet

In recent years, the US administration has voiced increasing concern that foreign workers are undercutting American employees, particularly in high-skilled sectors such as information technology. Policymakers argue that this influx of international talent not only threatens job security for American graduates but also constitutes a broader economic and national security risk. The statistics appear to support these anxieties, for example H-1B visa allocations in the IT sector rose from 32% in 2003 to over 65% by 2024, while unemployment among U.S. IT graduates has climbed to 7.5%, a rate higher than most other fields of study. Between 2000 and 2019, the number of foreign STEM workers in the United States more than doubled, even though overall STEM employment only grew by 44.5% during that period.

These figures, coupled with reports of American IT workers being compelled to train their foreign replacements under nondisclosure agreements, suggest to many observers a systemic effort by U.S. companies to replace domestic employees with cheaper foreign labour. Critics warn that such practices may discourage young Americans from pursuing careers in STEM fields, thereby creating vulnerabilities in national security, as critical data and digital infrastructure could increasingly come under the management of non US nationals.

Yet while the fear is understandable, focusing exclusively on “cheap migrant labour” misidentifies the root of the problem. What is framed as a labour market distortion caused by immigration is, in reality, a symptom of deeper structural choices within American capitalism. The more fundamental challenge is the reluctance of employers to internalize the true costs of production, whether through paying wages that reflect U.S. living standards or through consumers, especially the affluent, accepting higher prices for domestically produced goods and services. So long as this underlying dynamic persists, reliance on foreign labour will remain attractive to firms, regardless of how restrictive immigration policy becomes.

Symptom versus Disease

The rhetoric around “cheap migrant labour” is politically potent because it offers a visible, tangible culprit. But the displacement of US workers is not driven solely by immigration policy. It is driven by the structural incentive of capital to minimize costs in pursuit of shareholder value. Employers resist paying wages that align with the dignity of American living standards, while consumers, particularly in higher income brackets, refuse to absorb the higher prices that would make domestically produced goods and services viable. The result is a systemic reliance on cheaper labour, whether sourced abroad or imported through visa programs.

To confuse this symptom with the disease is to risk designing policies that address appearances rather than causes. Attempts to restrict visas or penalize companies for hiring foreign workers may yield short-term political wins, but they fail to alter the structural drivers that make outsourcing or migrant labour economically rational in the first place.

The Risks of Protectionist Policy

This blind spot is evident in the recent policy statement under the Trump administration to impose a $100,000 fee on each work visa issued to foreign employees. The intent is clear, to create financial disincentives for companies reliant on international labour and to redirect opportunities toward American workers. But the likely outcomes are more ambiguous.

In the immediate term, such fees will significantly increase operating costs for firms, particularly in high skilled industries such as technology, healthcare, and engineering. Companies will respond by reconfiguring their hiring practices, accelerating automation, or shifting investment abroad. Over the medium term, some businesses may adjust and rebalance their labour strategies, but it remains uncertain whether the policy will meaningfully reduce unemployment among US graduates. Structural challenges such as skill mismatches, global competition for talent, and the rise of automation complicate the assumption that jobs freed from foreign workers will seamlessly flow to American citizens.

Ironically, by making the US less attractive to global talent, protectionist measures risk pushing innovative firms to relocate overseas, hastening the very decline they were designed to prevent. In the pursuit of an “America for Americans,” the administration may inadvertently create an America less competitive on the world stage.

The Need for a Paradigm Shift

If the aim is truly to revitalize opportunities for American workers, the solution cannot rest on piecemeal fixes or punitive immigration policies. Instead, it demands a broader reorientation of the socioeconomic system. At its core, the problem lies in how labour is valued within US capitalism. So long as labour is treated as an expendable input to be minimized, any attempt to patch the system will only deepen systemic instability.

A paradigm shift would involve rebalancing the relationship between capital, labour, and consumers. Employers must be willing to pay wages that reflect not only market demand but also the cost of sustaining dignified living standards in the United States. Consumers, particularly those who have benefited most from globalization, must accept the discipline of paying more for goods and services produced under fair conditions. And policymakers must move beyond symbolic gestures to design structural reforms that address wage stagnation, invest in education, and reduce the skill mismatches that make US workers less competitive.

Without this deeper reorientation, policies will continue to treat symptoms rather than causes. Visa restrictions may temporarily slow the inflow of foreign workers, but companies will still seek cost arbitrage, either through outsourcing or automation. Workers will continue to feel displaced, and national security concerns about reliance on foreign expertise will persist.

Navigating a Post Pandemic Economy

The urgency of structural reform has become even clearer in the wake of the COVID-19 pandemic. Global disruptions revealed that economic shocks are no longer exceptional, they are a constant feature of the modern economy. Businesses worldwide have had to strengthen risk management, diversify supply chains, and build resilience into operations, all of which have raised the baseline cost of doing business.

Within this context, measures such as the $100,000 visa fee risk compounding existing pressures on firms. While intended to prioritize American workers, such policies may instead accelerate the search for cheaper alternatives abroad or through automation. Over time, they may even undermine the resilience of the U.S. economy by restricting access to the global talent pool essential for innovation and growth.

Conclusion-Beyond Tinkering at the Edges

The American debate over foreign workers has been framed in terms of unfair competition and national security threats. But to frame the problem as “cheap migrant labour” is to confuse the symptom with the disease. The deeper crisis lies in the refusal of American capital to internalize the true costs of production and in the reluctance of consumers to support a sustainable domestic economy through higher prices.

Policies that focus narrowly on restricting visas or penalizing companies may offer short-term relief, but they risk long term damage, such as, demoralizing future generations of STEM workers, pushing firms abroad, and weakening U.S. competitiveness. A sustainable solution requires more than tinkering at the edges. It requires a systemic reorientation of values, where labour is no longer treated as expendable but recognized as central to national prosperity and security. Only through such a paradigm shift can the United States address the root of the problem and chart a path toward an equitable and resilient economic future.

Cheers.

ravivarmman@160022092025 3.0567° N, 101.5851° E