Business
Commentary: H-1B visas have always been a scam. Trump's changes won't fix the problem
Among the government programs that produce more confusion than benefits, H-1B visas are right up there.
If you’ve been hearing about H-1B visas, it’s probably because President Trump abruptly changed its rules with a proclamation on Sept. 19.
As is typical of Trump’s shoot-from-the-hip policy-making, the proclamation produced an outbreak of fear and chaos, in this case among holders of the visas. That’s because it seemed at first that the administration was imposing a $100,000 fee not only on applicants for the visas, but on current holders reentering the U.S. from abroad, say from home leave or a business trip.
This is a de facto ban, as few organizations will be able to afford it.
— Robert D. Atkinson, Information Technology and Innovation Foundation
Until the White House clarified that the charge would be a one-time fee for new H-1B applications, not charged annually or for renewals or reentry, holders were advised by some employers not to leave the U.S. for the present; those who were caught off-guard overseas scurried to get home by Sunday, when the fee began.
A Sept. 19 Emirates flight from San Francisco to Dubai had to abort its departure to allow several panicky passengers to debark, according to Bloomberg.
The administration’s subsequent assurances have quelled the panic. But the proclamation has created new befuddlements, including over whether it opens the door to illicit dealings between Trump and companies bidding for the visas, and whether it’s even legal.
As my colleagues Queenie Wong and Nilesh Christopher reported, there are concerns that “a selective application of the fee could be a way the White House can reward its friends and punish its detractors.”
Importantly, there’s room to question whether the proclamation will solve long-standing problems with H-1B visas. So let’s take a look at the program’s malodorous history.
H-1B visas were created in 1990, under President George H.W. Bush, to relieve what high-tech companies asserted was a chronic shortage of U.S.-born workers in the STEM fields (science, technology, engineering and math).
The idea was to give highly-skilled foreign workers in “specialty occupations” the right to three years of U.S. residence renewable for a further three years — an opportunity to obtain permanent residency or even citizenship.
After a few rounds of tweaking, the annual cap on new applications was set at 85,000, including 20,000 holders of advanced degrees from U.S. universities. Higher education and nonprofit research institutions are exempt from the cap.
Things didn’t work out as anticipated. U.S. employers came to see the H-1B visas as tools to replace native-born technicians with cheaper foreign workers. Scandalously, some of the American workers were required as conditions of their severance to train the newcomers to do their jobs.
I documented that practice at Southern California Edison in 2015. The giant utility acknowledged that the outsourcing of workers would cost the jobs of 500 technicians who did the work of installing, maintaining and managing Edison’s computer hardware and software for payroll and billing, dispatching and electrical load management.
Essentially, Edison was replacing domestic IT specialists earning $80,000 to $160,000 with workers provided by two India-based outsourcing firms, Tata Consultancy Services and Infosys, which were paying their recruits $65,000 to $71,000. By the time the outsourcing process was complete, Edison said, its IT expenses would fall by about 20%.
“They told us they could replace one of us with three, four, or five Indian personnel and still save money,” one laid-off Edison worker told me at the time, recounting a group meeting with supervisors. “They said, ‘We can get four Indian guys for cheaper than the price of you.’ You could hear a pin drop in the room.”
Then there’s the University of California, which announced in 2016 that it would lay off 49 career IT staffers and eliminate 48 other IT jobs that were vacant or filled by contract employees. The American workers were ordered to train their own replacements, who were employees of the Indian outsourcing firm HCL Technologies.
Although the visa law specified that hiring foreign workers would not harm American workers, “the H-1B program is most definitely harming American workers, harming them badly, and on a large scale,” Ronil Hira of Howard University, an expert in the visa program, told the Senate Judiciary Committee in 2015. “Most of the H-1B program is now being used to import cheaper foreign guestworkers, replacing American workers, and undercutting their wages.”
The high-tech industry’s dirty little secret, I reported, was that the STEM shortage was a myth. The same companies wringing their hands over the supposed dearth of STEM-qualified workers were simultaneously laying them off by the tens of thousands. Indeed, experts in technology employment consistently found that “the supply of graduates is substantially larger than the demand for them in industry,” one told me. Anyway, a significant portion of H-1B recruits weren’t in jobs demanding unique skills, but workaday technicians.
Since 2020, the top employer of H-1B visa holders has been Amazon, with a total of 43,375 workers over that period — followed closely by the Indian outsource companies Infosys and Tata. In the current fiscal year, Amazon reigns, with more than 14,000 H-1B holders, followed by Tata, Microsoft, Meta Platforms, Apple and Google. I asked Amazon why it needs so many foreign workers and what work they do, but didn’t receive a reply.
The Indian outsourcing firms have dominated the H-1B system since at least 2009. For years their role has stoked controversy, in part because their employment practices have come under question.
In court, government prosecutors and civil plaintiffs have alleged that Infosys and Tata were exploiting the guest workers they brought to the U.S. Infosys settled federal fraud charges with a $34-million payment in 2013, the largest penalty in an immigration case at that time. The company denied the allegations.
That same year, Tata settled a class action lawsuit with a $29.8-million payment. The plaintiffs alleged that workers imported by Tata were forced to sign over their federal and state tax refunds to Tata, among other claims. The company didn’t admit wrongdoing.
Over the years, the H-1B program has made for political controversy, though Congress hasn’t taken a firm hand in correcting its issues. Conservatives and progressives alike have found reason to complain that it undermines domestic employment. Near the end of his first term, Trump shut down H-1B issuance entirely, along with some other specialty visa programs, but his initiative was blocked in federal court.
But the program remains enormously popular in the high-tech world, which has long agitated for an expansion. Its fans include Elon Musk, who tweeted in December that “the reason I’m in America along with so many critical people who built SpaceX, Tesla and hundreds of other companies that made America strong is because of H-1B.” He underscored his position with a burst of profanity, but he did promise to “go to war on this issue,” although he acknowledged that some fixing is in order.
That brings us to the issues with Trump’s proclamation. Its shortcomings resemble those that prompted federal Judge Jeffrey S. White of Oakland to overturn Trump’s ban in 2020 in a case brought by the National Assn. of Manufacturers and the U.S. Chamber of Commerce, among others.
White ruled that the authority to change the terms of the visas belonged to Congress, not the president, and that the administration hadn’t evaluated the effect of the ban on the domestic economy, as federal law required. The case was rendered moot when Trump’s ban was reversed by President Biden. I asked the White House if it was concerned that this proclamation could also be blocked in court, but got no reply.
A bigger question concerns the ramifications of the $100,000 fee. “H-1B visa fees of this magnitude will strongly discourage the hiring of the most talented members of the global labor force,” says University of Chicago economist Steven Durlauf. Instead, the policy will create incentives to move high-tech and scientific activity to other countries, effectively offshoring economic activity that should occur in the U.S., he says.
The fee is so high that only the biggest and richest employers will be able to pay it, locking out small start-ups that have tried to use H-1B visas to build their professional teams. The proclamation doesn’t make clear whether universities and research institutions will be exempt from the fee. Even financially well-endowed universities would find it hard to justify paying $100,000 to import a faculty member from abroad.
“This is a de facto ban, as few organizations will be able to afford it,” says Robert Atkinson, president of the Information Technology and Innovation Foundation, a high-tech think tank.
The White House says it intends to replace the current system, a random lottery apportioning available H-1B slots among all applicants, with one favoring applications to fill the highest-paid slots.
The proclamation states that H-1B abuses “present a national security threat by discouraging Americans from pursuing careers in science and technology, risking American leadership in these fields.” Never mind that students considering careers in scientific and technical fields are being profoundly discouraged by Trump’s freezes on research funding across the scientific landscape.
So the bottom line is that, as is usual, Trump’s H-1B policy works at cross-purposes with his other initiatives. For decades, the H-1B program has been ripe for fixing. If only the Trump White House took the time to craft a sensible repair.
Tech scion David Ellison marked his 96th day running Paramount by disclosing an upbeat financial outlook for next year and a plan to reduce an additional 1,600 workers.
Monday’s conference call with analysts was the first time Ellison, Paramount’s chairman and chief executive, directly addressed Wall Street after merging his production company, Skydance Media, with Paramount in August — an $8-billion deal that ushered the Redstone family from the entertainment stage.
One of Ellison’s top priorities will be to reverse decades of under-investment in programming. Paramount plans to increase content spending by $1.5 billion next year, including nearly doubling the number of movies that it releases. The Melrose Avenue studio intends to boost output from eight releases to 15 that are planned for next year.
Investing in technology is another priority, which Ellison referred to as one of its “north stars.” Executives want to build streaming service Paramount+ as the economics crumble for Paramount’s once profitable cable television division, which includes Nickelodeon, MTV and Comedy Central. Paramount also owns CBS stations and the CBS broadcast network.
Paramount announced it will be hiking streaming subscription fees — Paramount+ plans now are offered at $7.99 a month and $12.99 a month — although executives declined to say how much. The goal is to turn its streaming operations profitable this year.
Paramount said the workforce reduction of 1,600 people stemmed from the company’s divestiture late last month of television stations in Chile and Argentina. This comes on top of 1,000 job cuts last month, primarily in the U.S. The company said one of its goals was to operate more efficiently.
More than 800 people — or about 3.5% of the company’s workforce — were laid off in June, prior to the Ellison family takeover.
Ellison and his team have been looking to reduce the company’s workforce by 15%.
On Monday, Paramount executives said they should be able to realize about $3 billion in cost cuts — $1 billion more than initially advertised. The company’s goal is to complete its cost reductions within two years.
The earnings report comes as Paramount has been pursuing Warner Bros. Discovery, a proposed merger that would unite two of Hollywood’s original film studios and bulk up Paramount by adding the HBO Max streaming service, a larger portfolio of cable channels, pioneering cable news service CNN and the historic Warner Bros. studio lot in Burbank.
Paramount executives declined to discuss its dealings for Warner Bros. Discovery, which has rejected three offers, including a $58-billion bid for the entire company. Ellison’s father, billionaire Larry Ellison, has agreed to back Paramount’s bid.
However, his son spoke broadly about its motivations for any acquisition during the conference call.
“First and foremost, we’re focused on what we’re building at Paramount and transforming the company,” David Ellison said. “There’s no must-haves for us. …. It’s always going to be, how do we accelerate and improve our north-star principles?”
Total revenue for Paramount’s third quarter was $6.7 billion, flat compared with the year-earlier period. Paramount reported a net loss of $257 million for the quarter.
Paramount+ and other streaming services grew by 1.4 million subscribers to 79 million, although 1.2 million of those consumers benefit from free trials. Quarterly Revenue for the streaming operations, including Pluto TV, was up 17%.
The cost-cutting comes as Ellison, 42, has accelerated spending in other areas, including agreeing to pay $7.7 billion for the rights to UFC fights and $1.25 billion over five years to Matt Stone and Trey Parker to continue creating their “South Park” cartoon.
His team, including former Netflix programming chief Cindy Holland, also lured Matt and Ross Duffer, the duo behind “Stranger Things,” away from Netflix. Paramount also paid $150 million to buy the Free Press and bring its co-founder, Bari Weiss, to the company as CBS News editor in chief.
The company also signed a 10-year lease on a film and television production facility under construction in New Jersey, a move that will give the entertainment company access to that state’s tax incentive program.
In a blow, however, Taylor Sheridan, the prolific creator behind the “Yellowstone” franchise, will be packing his bags. Sheridan, who is under contract with Paramount through 2028, made a deal to develop movies and future shows for NBCUniversal after executives he worked with at Paramount departed the company when Ellison took over.
For 2026, the company expects to generate total revenue of $30 billion and adjusted operating income before depreciation and amortization of $3.5 billion.
Shares closed at $15.25, up 1%, before the earnings were announced.
WASHINGTON — Republican lawmakers and the Trump administration are increasingly anxious that an ongoing standoff with Democrats over reopening the government may drag into Thanksgiving week, one of the country’s busiest travel periods.
Already, hundreds of flights have been canceled since the Federal Aviation Administration issued an unprecedented directive limiting flight operations at the nation’s biggest airports, including in Los Angeles, New York, Miami and Washington, D.C.
Sean Duffy, the secretary of transportation, told Fox News on Thursday that the administration is prepared to mitigate safety concerns if the shutdown continues into the holiday week, leaving air traffic controllers without compensation over multiple payroll cycles. But “will you fly on time? Will your flight actually go? That is yet to be seen,” the secretary said.
While under 3% of flights have been grounded, that number could rise to 20% by the holiday week, he added.
“It’s really hard — really hard — to navigate a full month of no pay, missing two pay periods. So I think you’re going to have more significant disruptions in the airspace,” Duffy said. “And as we come into Thanksgiving, if we’re still in a shutdown posture, it’s gonna be rough out there. Really rough.”
Senate Republicans said they are willing to work through the weekend, up through Veterans Day, to come up with an agreement with Democrats that could end the government shutdown, which is already the longest in history.
But congressional Democrats believe their leverage has only grown to extract more concessions from the Trump administration as the shutdown goes on.
A strong showing in races across the country in Tuesday’s elections buoyed optimism among Democrats that the party finally has some momentum, as it focuses its messaging on affordability and a growing cost-of-living crisis for the middle class.
Democrats have withheld the votes needed to reopen the government over Republican refusals to extend Affordable Care Act tax credits. As a result, Americans who get their healthcare through the ACA marketplace have begun seeing dramatic premium hikes since open enrollment began on Nov. 1 — further fueling Democratic confidence that Republicans will face a political backlash for their shutdown stance.
Now, Democratic demands have expanded, insisting Republicans guarantee that federal workers get paid back for their time furloughed or working without pay — and that those who were fired get their jobs back.
A bill introduced by Republican Sen. Ron Johnson of Wisconsin, called the Shutdown Fairness Act, would ensure that federal workers receive back pay during a government funding lapse. But Democrats have objected to a vote on the measure that’s not tied to their other demands, on ACA tax breaks and the status of fired workers.
Senate Majority Leader John Thune (R-S.D.) has proposed passing a clean continuing resolution already passed by the House followed by separate votes on three bills that would fund the government through the year. But his Democratic counterpart said Friday he wants to attach a vote on extending the ACA tax credits to an extension of government funding.
Democrats, joined by some Republicans, are also demanding protections built in to any government spending bills that would safeguard federal programs against the Trump administration withholding funds appropriated by Congress, a process known as impoundment.
President Trump, for his part, blamed the ongoing shutdown for Tuesday’s election results earlier this week, telling Republican lawmakers that polling shows the continuing crisis is hurting their party. But he also continues to advocate for Thune to do away with the filibuster, a core Senate rule requiring 60 votes for bills that fall outside the budget reconciliation process, and simply reopen the government with a vote down party lines.
“If the filibuster is terminated, we will have the most productive three years in the history of our country,” Trump told reporters on Friday at a White House event. “If the filibuster is not terminated, then we will be in a slog, with the Democrats.”
So far, Thune has rejected that request. But the majority leader said Thursday that “the pain this shutdown has caused is only getting worse,” warning that 40 million Americans risk food insecurity as funding for the Supplemental Nutrition Assistance Program lapses.
The Trump administration lost a court case this week arguing that it could withhold SNAP benefits, a program that was significantly defunded in the president’s “Big Beautiful Bill” act earlier this year.
“Will the far left not be satisfied until federal workers and military families are getting their Thanksgiving dinner from a food bank? Because that’s where we’re headed,” Thune added.
Sony Pictures Television and CBS have struck a compromise in their hard-fought legal battle over distribution rights to the popular “Wheel of Fortune” and “Jeopardy!” syndicated game shows.
“We have reached an amicable resolution,” Sony and CBS said Friday in a joint statement. “We look forward to working together to continue bringing these beloved shows to audiences and stations around the world.”
Financial terms were not disclosed.
As part of the deal, CBS will continue to distribute the shows in the U.S. for an additional 2 ½ years — through the 2027-2028 television season. After that, Sony will control the domestic distribution rights.
Sony owns both shows and produces them on its Culver City lot.
The shows have retained their popularity and solid ratings even in the streaming age, as traditional TV has declined. They remain among the most-watched programs on television.
The dispute began more than a year ago, when Sony terminated its distribution deal with CBS and later filed a breach-of-contract lawsuit that claimed CBS had entered into unauthorized licensing deals for the shows and then paid itself a commission. Sony also maintained that budget cuts within CBS, which is owned by Paramount, had hobbled the network’s efforts to support the two shows.
Earlier this year, Sony attempted to cut CBS out of the picture, escalating the dispute.
CBS has long maintained that it had the legal rights to distribute the shows to television stations around the country. The broadcaster previously alleged that Sony’s claims were “rooted in the fact they simply don’t like the deal the parties agreed to decades ago.”
For years, CBS has raked in up to 40% of the fees that TV stations pay to carry the shows. The network took over the distribution of the programs when it acquired syndication company King World Productions in 1999.
King World struck deals with the show’s original producer, Merv Griffin Enterprises, in the early 1980s to distribute “Jeopardy!” and “Wheel of Fortune.” Sony later acquired Griffin’s company, but those early agreements remained in effect.
As part of this week’s resolution, CBS will manage all advertising sales through the 2029-2030 television season.
However, Sony will take over all marketing, promotions and affiliate relations for the shows after the current television season, which ends in mid-2026. Sony will also handle the lucrative brand integration campaigns.
In another element that was important to Sony, the studio will claim international distribution rights beginning this December.
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