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 legal caps and created H-1B. The Act 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;[5] cap-exempt sponsors (universities, nonprofit research institutions, federal research laboratories) push effective annual issuance higher.
H-1B approvals per year, thousands
From a 65,000 cap to 400,000 a year
Before 1990, the old H-1 visa admitted only a few tens of thousands of skilled workers a year across every profession. The 1990 Act created H-1B with a 65,000 cap. Counting renewals, approvals now run near 400,000 a year. The Center's reform would return the inflow to a fraction of the original cap.
Source: Pew Research Center, "What we know about the U.S. H-1B visa program" (2025), from USCIS data. Approvals include new petitions and renewals.
The case for shutting the program down rests on what it does now, not on what it might have done in 1995. It holds professional wages down, it crowds the same metros where housing is least affordable, and the shortage it was built to fix has been closing for thirty years.
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. Whether the program produced net benefits between 1990 and 2005 remains contested.
The relevant policy question is the program's current function. A program written into law 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.
Homeland Security, rewriting the H-1B lottery in December 2025, counted the cap-subject petitions filed from 2020 through 2024: 28% at Level 1, 55% at Level 2, 12% at Level 3, and 5% at Level 4.[16] 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 substitutes 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.
70% of approved H-1B petitions in 2025 went to workers born in India; 12% went to workers born in China.[17] Two countries account for 82% 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.
AI Is Shrinking the Demand
The last argument for the program is shrinking in real time. The biggest technology employers - the same firms that sponsor the most H-1B workers - now have AI writing a large share of their code. In 2025, Microsoft's CEO said AI generates 20% to 30% of the company's code, and Google's CEO put its figure above 30%.[15]
When a single tool raises each engineer's output that fast, the case for importing hundreds of thousands of additional engineers a year weakens. The degree data already showed the domestic supply was there. AI is now shrinking the demand the program was supposed to meet. The engineering shortage the program was built for has been closing for years, and the program keeps expanding anyway.
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 pressure on housing runs through simple 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 still a measurable component of the demand-side pressure on the most price-distorted U.S. housing markets, and it is the one component Congress can adjust directly through legislation.
Recommendations
Repeal the program through an act of Congress:
- Strike the H-1B section of the Immigration and Nationality Act and issue no new H-1B visas after the repeal takes effect.
- Create a successor exceptional-talent visa capped below 10,000 annual admissions, with a salary floor above the 95th percentile of the relevant U.S. occupation in the Bureau of Labor Statistics OES survey.
- Eliminate the Optional Practical Training program and require international students who finish U.S. degrees to depart and apply through standard channels for long-term employment.
- Revoke H-1B status for the roughly 85,000-a-year recent inflow with less than five years of U.S. residence, while letting longer-term holders already in the EB-2 green-card process complete it.[2]
- Cap the cap-exempt categories - universities, nonprofit research institutions, federal research laboratories - at 2024 issuance levels and bar expansion.
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
- Entrepreneur, "AI Is Taking Over Coding at Microsoft, Google, and Meta," 2025 - Satya Nadella (Microsoft): AI writes 20-30% of code; Sundar Pichai (Google): 30%+ of new code
- Department of Homeland Security, Weighted Selection Process for Cap-Subject H-1B Petitions, final rule, 90 Fed. Reg. 60864 (Dec. 29, 2025) - Table 12, wage-level distribution of cap-subject petition receipts, 2020-2024
- USCIS, "Characteristics of H-1B Specialty Occupation Workers," 2025 report to Congress - Country of birth, approvals, median compensation