Pricey H-1B Visas Are the Least of the Problems. How Trump’s Policies Hit Labor Markets.

President Donald Trump speaks after signing an executive order in the Oval Office at the White House on September 19, 2025 in Washington, DC. (Andrew Harnik/Getty Images)

New price hikes for H-1B visas will create problems for U.S. technology companies and could strain diplomatic relations, but the Trump administration’s latest bid to curb immigration are expected to only have minimal effects on the U.S. labor market.

President Donald Trump signed a proclamation on Friday that would increase the cost of an H-1B visa—which is designed to allow companies to hire skilled foreign workers—to $100,000. While the new policy is expected to hit tech start-ups particularly hard and could hurt relations with India, it is the administration’s other immigration curbs—deportations, worksite raids and other restrictions on legal migration—that still pose greater risks to U.S. job growth.

“The $100,000 fee is not really going to have a major impact on staffing or hiring for the most part—and the larger the company, obviously the less of a burden that’s going to be,” says Scott Bettridge, an attorney with Cozen O’Connor and chair of the firm’s immigration practice.

The U.S. approved roughly 400,000 H-1B applications in 2024, according to the Pew Research Center. But Trump’s latest policy change would likely only apply to visas for new employment, rather than renewals.

During the fiscal year 2024, the government approved 141,000 petitions for new employment, according to Abiel Reinhart, U.S. economist at J.P. Morgan. Of the H-1B visa petitions submitted in fiscal year 2024, 64% were in computer-related occupations, she noted. In terms of location, 71% were from India, and another 11% from China. But tech workers make up less than 10% of America’s workforce.

Based on current employment trends, if companies hit by new fees completely halted their via sponsorships, it would only reduce work authorization for immigrants by up to 5,500 per month, Reinhart calculated. And the impact could be even less if the Trump administration takes advantage of a carve-out that allows the Department of Homeland Security to provide exemptions for specific workers, companies or industries.

Additionally, the full effect of the visa price hike won’t be felt immediately, Reinhart said. The U.S. Citizenship and Immigration Services announced in July that it already hit the cap on H-1B visas for fiscal year 2026. So USCIS will only begin accepting petitions for FY27 next April 1.

It’s a ‘far from optimal’ way to set immigration policy, says Adam Ozimek, chief economist at the Economic Innovation Group. And in some cases, it could lead to unintended consequences, particularly in the long run, that drive down innovation and U.S. exceptionalism.

Yet the price hike is just one small aspect of the Trump administration’s immigration curbs—and one that’s not likely to dish out much short-term damage to the labor market.

Instead, tighter restrictions and increased enforcement is already limiting labor supply and creating unexpected chilling effects. And it’s falling on industries significantly reliant on unauthorized immigrant labor such as construction, agriculture and food and hospitality—which make up nearly 30% of the U.S. workforce.

There are a lot of different industries that are grappling with labor shortages, project delays, supply chain issues, and increased costs in the wake of increased worksite raids and reduced migration into the U.S., Bettridge says. The crackdown has prompted many employers to spend time and money to run internal audits and beef up their compliance to mitigate any potential liabilities should immigration authorities come knocking.

One unintended consequence is that employees, particularly international students, are increasingly being less upfront about their status and need for sponsorship, Bettridge says. His corporate clients are spending weeks interviewing and vetting candidates for roles, only to discover after they have issued an offer that the applicant will need visa sponsorship. “You’ve gone through weeks of this process to hire one individual, only to find out now that they’re not authorized to work and you kind of got to start over,” Bettridge says.

Companies are also having to deal with fluctuating employment status among employees who have Temporary Protected Status, a program that the Trump administration has made moves to terminate, but has been the subject of several ongoing lawsuits. All of this uncertainty creates more hesitation from employers to attract and retain talent, which does stifle job growth.

In the end, tinkering with H-1B visa rules likely won’t break down employment conditions further, but it also won’t help bolster economic growth, entrepreneurship, innovation either. Immigration reforms need to address the entire system, Ozimek says. “You have to reform the entire pathway. You can’t pick and choose one single part and fix it,” he notes.

Write to Megan Leonhardt at megan.leonhardt@barrons.com