Scott Sumner  

Will Trump reverse Obama's H-4 program?

Speech at Webber International... I LOVE the Olympics...

We dodged one bullet. The Trump administration's proposal for a dramatic increase in regulation of the energy industry, support by Energy Secretary Rick Perry, has been rejected by the Federal Energy Regulatory Commission. Now there is danger of another bad regulation being enacted. But first a bit of background:

She came to the country legally with a spousal visa, or H-4, granted to the wives and husbands of those who have H-1B, or high-tech, visas. But H-4 visas didn't allow a person to work in the U.S. -- until 2015, when the Obama administration enacted a rule that opened the way for people with spousal visas to obtain permits known as employment authorization documents (EAD). . . .

Since it took effect, about 104,750 H-4 spouses have been approved for work authorizations, according to the latest data through June 2017 from U.S. Citizenship and Immigration Services.

But now this program is in danger:

The relief of H-4 visa holders hasn't lasted long, however. Bishen and spouses who received the work authorizations are now in limbo since the Trump administration indicated it plans to end the program this year. If that happens before they can get new work permits, spouses of H-1B holders in the Seattle area will have to decide whether to stop working in the United States or leave the country.
Ending this program would create a negative supply shock, reducing GDP growth. Let's hope the proposal suffers the same fate as the ill-fated attempt to re-regulate energy.

Interestingly, this data from the Seattle Times suggests that the H-4 immigration program played a small role in the acceleration in economic growth during 2017:

Screen Shot 2018-02-18 at 1.24.50 PM.png
Yes, that's a very small fraction of the total labor force, but positive policy changes can make a difference in many individual people's lives.

PS. We also need to keep an eye on trade policy, where a proposed steel tariff is like a dagger aimed at the heart of American manufacturing. Imagine the plight of US automakers if steel prices here rise far above Canadian and Mexican levels. And then there is foreign investment, where new regulations are making it increasing difficult for foreign firms to invest in the US. Sometimes I feel like I'm playing whack-a-mole.

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COMMENTS (11 to date)
Mark writes:

I’m afraid news today on trade policy is not auspicious : the specter of bipartisanship looms:

‘Sen. Chuck Schumer said in a statement Monday that he hopes the Commerce Department's recommendations "are the beginning of efforts by this administration to finally get tough on China and help level the playing field for American steel and aluminum producers and workers."

Schumer is urging the president to "quickly follow through with his promise to stand up for these workers and American manufacturing by adopting the full extent of these recommendations."’

Ed Hanson writes:

To quote certain politician' "What difference does it make, anyway."

H-1B program worked for years without spouses allowed to work. It would be so still.

Please, a negative supply shock? Sure, but one so small that is completely unmeasurable.

I would prefer an honest open border argument rather than this type of story.


Hans writes:

Is it a small wonder to anyone
that America's corporate and state
secrets are being stolen ??

Hans writes:

"We dodged one bullet. The Trump administration's proposal for a dramatic increase in regulation of the energy industry, support by Energy Secretary Rick Perry, has been rejected by the Federal Energy Regulatory Commission."

An enormous exaggeration by the author. If one read the link, Trump and Perry, simply wished to provide ongoing subsidies to firms damaged by bias and bad Obama energy policies.

I would call this an act of public policy reparations. It is apparent that the OP does not
care about the damage and bankruptcies caused by Oboma's anti-carbon, pro-eviros, pro-nonprofits schemes.

This is from Mr Sumner's link:

"The Federal Energy Regulatory Commission dismissed Energy Secretary Rick Perry's call to subsidize power plants like coal and nuclear that maintain a 90-day supply of fuel on site. Perry cited a need to improve the resilience of the nation's power grid, especially from severe weather.

The proposal, which was supported by coal mining companies like Murray Energy, was widely seen as an attempt to help the coal and nuclear industry. Coal, in particular, has been crushed in recent years by the rise of cleaner energy like natural gas and solar and by tougher environmental regulation."

Perhaps the author supports the argument from,
Justin Gundlach, a staff attorney at Columbia University's Sabin Center for Climate Change Law.

"Gundlach slammed the Energy Department proposal as a "gambit that sought to funnel money to uneconomic coal-fired power plants in a way that would have ignored the law."

Please tell me, anyone, since when have coal fired power plants become uneconomical??

And no one has mentioned any cost related to this plan. Makes me wonder about peoples' sincerity.

I firmly disavow any form of public subsidies, however, there was an eight year war on carbon firms, many now in bankruptcy, so it is time to right the ship and make the "victs" whole again.

This is a moral issue and not an economic one.

Hans writes:

Here is the real truth of the matter.

"The H-1B program has many critics.

Labor groups and elected officials across the political spectrum have advocated for reform of the program, as well as the similar H-2A agricultural worker visa, to balance protecting the rights of workers who hold the visa and keeping the system from being used to displace American employees.

Critics say loopholes allow companies to replace American workers with cheaper visa holders. A frequent target of that ire is the group of Indian information technology firms, including Infosys, Tata and Wipro, that have come to dominate the annual lottery for such visas.

Those firms, staffed with workers who generally are paid less than other more highly skilled H1-B workers, essentially offer on-demand technology talent that they rent to other companies. U.S. companies hire them for special projects or use them to staff their own technology teams.

In some cases, U.S. workers slated to be fired have been asked to train their visa-holding replacements before departing.

“Companies are abusing the H-1B visa program,” said Chester West, a 56-year-old software engineer from Kirkland.

West echoed a common critique that the deficit of technology workers in the U.S. is overstated. Part of the problem, he says, is companies tend to favor younger employees, and are loath to retrain workers.

“It’s just how the game is played,” West said.

Legislation introduced last month by Sens. Chuck Grassley, R-Iowa, and Dick Durbin, D- Ill., would scrap the H-1B lottery and replace it with a system that favors applicants who went to U.S. universities and hold more advanced skills."

Draw your own conclusions but I firmly believe
this is nothing more than cost cutting, at the expense of the American worker.

Trevor H writes:

In one year Trump's agenda has been to:
- Vastly increase an already troublesome national debt
- Reduce the workforce
- Reduce trade
- Try to provoke a destructive war with North Korea

These are the things he's doing on purpose to harm the country. He may not be a literal Russian agent but he sure seems to be playing one on TV.

Mark writes:


"Draw your own conclusions but I firmly believe
this is nothing more than cost cutting, at the expense of the American worker."

Sounds like great news for those of us who consume goods and services.

Why is mercantilism supposed to be any less destructive in net when applied to labor markets than when applied to any other good or service?

Scott Sumner writes:

Hans, If you want to compensate all victims of bad government policies, I have a very long list for you . . . .

Hans writes:

This article appears to support Mr Sumner's
position on H1-B visas. I suspect this is a
muddled issue and there are pros and cons on
both sides of the issue.

Mr Sumner, the list would indeed the exceed our capacity of time. It would be a mentos moment.

Mark, what net gain is there if your neighbor is on the dole or has his income reduced by governmental policies? Rather that increasing compensation, we allow for central planners to find solutions. This is very dangerous, as it leads to influence peddling and all to often corruption. And people wonder why there is so much graft!

Mark, just wait for your next robo call from your investment advisor. Yes, they have lowered the cost to the end user but at the same time they
have managed to degrade the level of service.
Trevor, oldbean, are you in Leningrad?

Hans writes:

Another perspective about the H-1B program;
from the Economic Policy Institute.

Hans writes:

Welcome to the


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