More than 600,000 foreign workers are in the United States on H-1B status (as of the most recent USCIS estimate), and another 230,000 are working under the Optional Practical Training (OPT) program. Together, the two pipelines deliver roughly 600,000 to 800,000 new work authorizations to U.S. employers every year - all of them in professional occupations, all of them outside the wage-bidding constraints that would apply if the same jobs were filled through the domestic labor market.[2][3]
The H-1B specialty-occupation visa was created by the Immigration Act of 1990, signed November 29, 1990. The Act did not arrive in a vacuum: the 1980 Refugee Act had codified large refugee admissions and the 1986 Immigration Reform and Control Act (IRCA) had regularised 2.7 million illegal immigrants, so annual admissions were already trending upward when the 1990 Act more than doubled the statutory caps and created H-1B. The statute set an initial annual cap of 65,000, later expanded to 85,000 with a 20,000-visa carve-out for holders of U.S. advanced degrees, and defined "specialty occupation" as any role requiring a bachelor's degree.[1] U.S. Citizenship and Immigration Services received 470,300 H-1B registrations for the 2024 cycle against the 85,000 cap; cap-exempt sponsors (universities, nonprofit research institutions, federal research laboratories) push effective annual issuance higher.
This article documents the structural case for full Congressional repeal of the H-1B program, elimination of OPT, and revocation of current H-1B status for any holder with less than five years of U.S. residence.
The Program's Past and Its Present
Supporters of the H-1B program have argued that it served useful recruitment functions during its first decade. The case rests on the late-1990s technology expansion, the retention of foreign doctoral graduates from U.S. universities in engineering and computer science, and the early staffing of defense and semiconductor research programs. The historical evidence on this is mixed rather than settled, and it is a position this paper neither endorses nor refutes. Whether the program produced net benefits between 1990 and 2005 is debatable.
The relevant policy question is the program's current function. A statute is not entitled to continue operating into a fourth decade on the basis of conditions that may have applied in 1995. The 2024 wage-certification distribution, the displaced-worker case record, and the metro housing-cost data describe the program as it operates now. If labor-market and demographic conditions later change such that a genuine recruitment function returns, a successor visa with appropriate caps and wage floors can be enacted at that point. Continuation in the absence of a current function imposes the documented present-day costs on American workers, American students, and American households without offsetting present-day benefit.
What the Program Actually Does
The public defense of the H-1B program is that it allows U.S. employers to hire foreign workers with rare specialized skills that no American can fill. The Department of Labor's wage-determination data is dispositive on this claim.
The Economic Policy Institute's 2020 analysis of certified H-1B postings found that 60% of approved positions are certified at Level 1 or Level 2 prevailing-wage tiers.[4] The Department of Labor defines Level 1 as the wage paid to entry-level workers with limited experience, and Level 2 as the wage paid to workers with moderate experience. Both tiers sit below the local median wage for the certified occupation. A position certified at Level 1 in San Jose for a software developer pays approximately $95,000 against a local median of $140,000.
A program that systematically clears at sub-median wages is not recruiting irreplaceable talent. It is substituting cheaper foreign labor for available domestic labor. The Department of Labor's own certification data confirms the substitution pattern.
The composition of top H-1B sponsors confirms the wage-replacement function. The top ten sponsors in 2024 were:
| Rank | Sponsor | Type |
|---|---|---|
| 1 | Amazon | U.S. tech |
| 2 | Infosys | Indian outsourcing firm |
| 3 | Tata Consultancy Services | Indian outsourcing firm |
| 4 | Cognizant | Indian outsourcing firm |
| 5 | U.S. tech | |
| 6 | Microsoft | U.S. tech |
| 7 | Meta | U.S. tech |
| 8 | Apple | U.S. tech |
| 9 | Wipro | Indian outsourcing firm |
| 10 | Deloitte | Consulting |
Source: USCIS H-1B Employer Data Hub, 2024.[5]
Four of the top ten are Indian-headquartered IT outsourcing firms. Their business model is staff augmentation: import workers on H-1B, contract them to U.S. corporate clients at rates below domestic-hire equivalents, retain a margin. The U.S. tech firms in the top ten use the program for the same reason: H-1B holders cannot easily change employers (the visa is tied to the sponsoring employer with a 60-day grace period if the job ends), which produces a workforce that is functionally captive and accepts compensation below the domestic-hire level required to clear the same labor market.
73% of approved H-1B petitions in 2024 went to Indian nationals; 11% went to Chinese nationals.[5] Two countries account for 84% of all approved H-1B beneficiaries.
What It Costs American Workers
The wage-suppression effect is documented industry by industry. In computer and information technology occupations, where H-1B concentration is highest, real median wages have grown more slowly than in occupations structurally protected from H-1B competition by licensing barriers (medicine, law, dentistry). Bureau of Labor Statistics OES data shows median wages in software development, computer programming, and electrical engineering rising at less than half the rate of physician, attorney, and dental practitioner wages over the 1990-2024 period.[6]
Documented case studies confirm the pattern at the firm level. Disney terminated 250 American IT workers at its Orlando headquarters in October 2014 after contracting with HCL Technologies and Cognizant for replacement labor; severance terms required the displaced workers to train their H-1B replacements. The replacements earned approximately $40,000 less per year for the same job functions.[7] Florida Power & Light terminated 100 IT workers under similar conditions in 2014. Southern California Edison terminated 500. Toys "R" Us, the University of California, Northeast Utilities, and AbbVie ran comparable programs.[8]
The aggregate wage transfer is large. The 2017 National Academy of Sciences report on the economic and fiscal consequences of immigration estimated that immigration as a whole reduces wages of competing American workers by approximately $493.9 billion annually; businesses gain approximately $548.1 billion.[9] The H-1B and OPT programs are the principal mechanisms for the professional-occupation share of that transfer.
What It Costs the Domestic STEM Pipeline
The standard secondary defense of the H-1B program is that American students do not study technical fields in sufficient numbers, so the program fills a domestic supply gap. The data is dispositive on this claim too.
U.S. bachelor's degrees in computer and information sciences rose from 2,388 in academic year 1970-71 to 108,500 in 2021-22, a 45-fold increase.[10] This is the largest growth multiplier of any major field of study in the U.S. higher-education data. Engineering grew 2.7-fold over the same period; total bachelor's degrees grew 2.5-fold. Computer science grew faster than every soft-skill field commonly cited in critiques of higher-education priorities (communications grew 8.3-fold; psychology 3.4-fold; visual arts 3.0-fold).
Americans responded strongly to the technology-sector demand signal. The supply pipeline expanded faster than any other academic field in the country. The supply nevertheless lagged demand because the H-1B and OPT pipelines absorbed the demand growth that would otherwise have transmitted as wage signals to the domestic supply pipeline. In a domestic-only labor market, technical wages would have risen substantially more, more American students would have chosen technical fields, and colleges would have invested more aggressively in expanding STEM capacity.
The structural feature of the current system is that the wage signal is suppressed at the source. Students see lower technical-wage growth than they would in the counterfactual; parents and counselors advise accordingly; colleges allocate accordingly. The 45-fold supply expansion that occurred despite this suppression establishes that the supply response is real and elastic. A larger response is structurally available if the suppression mechanism is removed.
American universities carry a structural responsibility within this pipeline. The core mission of a U.S.-chartered college or university - whether public, land-grant, or non-profit private - is to educate the American population in fields where domestic labor demand is high. Computer-science enrollment data shows the supply pipeline is real and elastic: U.S. students respond strongly to demand signals when those signals reach them. Universities that allocate computer-science seats, graduate-program admissions, and faculty research slots disproportionately to international applicants pursuing post-degree work authorization through OPT and H-1B are functioning as a labor-supply intermediary for U.S. corporate employers rather than as an educator of the domestic population they were chartered to serve. A reform of the H-1B and OPT framework would restore the labor-market signal to those institutions and align their admissions priorities with their stated public mission.
What It Costs Housing Markets
The H-1B and OPT pipelines concentrate foreign professional workers in the same 20 metropolitan areas where U.S. technology employers operate: San Francisco, San Jose, Seattle, Boston, New York, Washington D.C., Austin, Atlanta. These are the same 20 metros where home prices and rents have decoupled from wage growth over the 1990-2025 period.
The mechanism is direct supply and demand. The H-1B and OPT pipelines authorize approximately 600,000 new workers per year, with roughly 80% concentrated in the same 20 metropolitan areas. Each authorized worker occupies a housing unit - a rented studio, a shared apartment, eventually a starter home. Housing supply in coastal and West Coast metros adjusts on a 10-to-15-year lag due to zoning constraints, permitting delays, and construction-cost levels. Demand rises immediately, supply rises slowly, and rents and home prices close the gap.
The effect on rents is documented at the metro level. Median asking rents in the H-1B-concentration metros rose 200% to 600% in nominal terms between 1990 and 2024, several multiples above the rate of nominal wage growth for the renter population. New York median rent rose from $486 to $3,500 (a 620% increase) while the city added one million foreign-born residents over the same period. San Jose, San Francisco, Seattle, Boston, and Washington D.C. all show similar patterns.[11] Median home prices in the same metros rose 261% to 633% over the period. San Jose, where 41% of residents are foreign-born and the foreign-born share of the technical workforce exceeds 60%, has a price-to-income ratio above 18x on a starting professional salary.
The national price-to-income ratio rose from 3.7x to 5.6x between 1990 and 2024. That national average is itself pulled upward by these same H-1B-concentration metros, which together contain a disproportionate share of total U.S. housing-market value and carry corresponding weight in the JCHS, Federal Reserve, and Case-Shiller price aggregates. The national figure understates the local effect and the local effect overstates the national one; both are real, and both trace in part to the same set of demand-side policy choices.
The H-1B program is not the sole driver of metro housing-cost growth. Illegal immigration into the same metros, domestic in-migration to coastal employment centers, monetary-policy effects on mortgage rates, and binding zoning constraints all matter. The program is, however, a measurable component of the demand-side pressure on the most price-distorted U.S. housing markets, and it is the component that Congress can adjust directly through legislation.
The Recommended Reform
The Center for Assimilation's policy position on the H-1B and OPT programs:
1. Full repeal of the H-1B visa category. The H-1B section of the Immigration and Nationality Act (8 U.S.C. § 1101(a)(15)(H)(i)(b)) should be struck. No new H-1B visas should be issued after the effective date of the repeal statute.
2. A narrowly drawn exceptional-talent replacement visa. A successor visa category should be created with a numerical cap below 10,000 annual admissions and a salary floor above the 95th percentile of the relevant U.S. occupation as measured by the Bureau of Labor Statistics OES survey. The salary floor restores the wage-bidding constraint that the current Level 1 / Level 2 prevailing-wage rules suppress. The numerical cap restores the pre-1990 condition under which foreign professional inflow could not substitute for domestic labor at scale.
3. Elimination of the Optional Practical Training program. International students completing U.S. degrees should be required to depart the United States and apply through standard immigration channels if they seek long-term U.S. employment. The current OPT framework converts international student admissions into a parallel labor-market entry pipeline that operates outside any cap or wage standard.
4. Revocation of H-1B status for current holders with less than five years of U.S. residence. Approximately 60-70% of the current 600,000 in-status H-1B population has been in the country less than five years. Their visa status should be revoked under the same statutory authority that issued it. The five-year threshold preserves existing equity for long-term residents who have built lives in the United States while removing the recent inflow that has the largest current wage-suppression and metro-housing-cost effect. Holders past the five-year threshold who have begun the EB-2 green-card process should be permitted to complete that process under the existing framework.
5. No expansion of cap-exempt sponsorship. The current cap-exempt categories (universities, nonprofit research institutions, federal research laboratories) should be capped at 2024 issuance levels and not allowed to expand.
The economic case against the program is documented across the Department of Labor wage-certification data, the Economic Policy Institute analysis, the National Academy of Sciences report, the Bureau of Labor Statistics occupational wage time series, and the Joint Center for Housing Studies metro-level housing-cost data. The program produces concentrated benefits to a small number of corporate sponsors and federal income-tax receipts, and concentrated costs to American workers, American students choosing fields of study, and American households living in the metros where H-1B holders concentrate. Repeal through an act of Congress is the only intervention that addresses the structural mechanism rather than its downstream symptoms.
Sources
- Library of Congress, "Immigration Act of 1990 (P.L. 101-649)"
- USCIS, "Number of H-1B Specialty Occupation Workers (Estimate as of September 30, 2019)"
- Government Accountability Office, GAO-25-107532, "Foreign Students: Improvements Needed to Strengthen Oversight of OPT Program"
- Economic Policy Institute, Daniel Costa and Ron Hira, "H-1B Visas and Prevailing Wage Levels," 2020
- USCIS, H-1B Employer Data Hub, 2024
- Bureau of Labor Statistics, Occupational Employment and Wage Statistics, Computer and Mathematical Occupations, 1990-2024
- The New York Times, "Pink Slips at Disney. But First, Training Foreign Replacements," June 3, 2015
- Computerworld, "American Workers Replaced by H-1B Visa Holders Were Required to Train Their Replacements," 2015-2018
- National Academies of Sciences, Engineering, and Medicine, "The Economic and Fiscal Consequences of Immigration," 2017
- U.S. Department of Education, NCES, Digest of Education Statistics, Table 322.10: Bachelor's degrees conferred by postsecondary institutions, by field of study
- Joint Center for Housing Studies, Harvard University, "Home Price-to-Income Ratio Reaches Record High" - National and metro price-to-income data
- Joint Center for Housing Studies, Harvard University, "America's Rental Housing 2024" - Metro rent levels and rent-to-income data
- U.S. Census Bureau, American Community Survey, 2023 - Metro foreign-born share and median rent data
- Department of Homeland Security, Office of Foreign Labor Certification, H-1B Disclosure Data, 2022-2024