H-1B debate intensifies in US Congress

The H-1B visa programme, a key route for Indian professionals to work in the United States, came under fresh scrutiny in Congress this week as lawmakers debated reforms to support economic growth and address labour shortages in an ageing workforce.

At a US Congress Joint Economic Committee hearing, policymakers and experts questioned whether the current lottery-based system is fit for purpose, with proposals ranging from wage-based selection to greater worker mobility.

Chairman David Schweikert said the US faces a demographic challenge that could weaken long-term economic stability. “We have to deal with the reality of our changing demographics and stagnant population growth,” he said. “Today, the population of retirees is booming while that of prime working-aged adults is flat. This is not sustainable and threatens our economic security.”

The hearing focused on labour inflows as the country grapples with near-zero population growth, declining fertility rates, and a shrinking pool of young workers entering the workforce.

Schweikert raised concerns about whether the current H-1B system suppresses wages due to its employer-sponsored structure and limited worker mobility. He explored whether a more flexible system, combined with a skills-based or points-based model, could better support economic growth.

Dr Luke Pardue said greater portability could improve productivity and wages by allowing workers to move between employers more easily, though he cautioned that designing a points-based system requires care to avoid unintended consequences.

Daniel Di Martino backed reforms to fix inefficiencies, especially delays in obtaining permanent residency. He supported replacing the H-1B lottery with a wage-based ranking system and prioritising younger, high-skilled workers who can contribute longer to the economy.

Dr Douglas Holtz-Eakin stressed the need for a stable, legislatively mandated immigration framework. He supported expanding skill-based immigration, saying reforms could begin with H-1B but should extend more broadly to boost productivity and growth.

Jeremy Neufeld pointed to lessons from other countries, noting that purely points-based systems can struggle without employer involvement. He suggested a hybrid approach in which applicants receive additional points for having job offers, improving employment outcomes, and integration.

Lawmakers also examined the broader economic impact of immigration. Witnesses said high-skilled immigration boosts productivity and long-term wage growth, though it can create short-term fiscal pressures due to increased demand for services.

Di Martino said that high-skilled immigrants tend to be net fiscal contributors, while lower-skilled immigrants pose greater challenges.

Representative Lloyd Smucker said businesses across sectors are struggling to find workers and asked whether expanding immigration could help strengthen economic growth and address the national debt. Holtz-Eakin agreed, saying slow population growth and an ageing workforce are key drivers of weaker long-term growth.

The role of artificial intelligence also featured in the discussion. Pardue said recent economic growth has been driven by higher productivity despite slower job gains, adding that AI will shift demand towards new skills rather than eliminate the need for workers.

Raising concerns about fiscal sustainability, Congresswoman Victoria Spartz said immigration policy should prioritise hardworking and skilled individuals. Witnesses broadly agreed that the system must be more flexible and responsive to labour market needs as technology reshapes the economy.

Schweikert concluded that talent-based immigration reform is central to addressing economic growth and debt challenges, calling it a “cornerstone” of efforts to strengthen productivity, wages, and long-term fiscal stability.

The H-1B visa programme remains a primary pathway for skilled foreign workers, particularly in technology and engineering, to work in the United States. Indian professionals account for a large share of H-1B recipients each year, making any policy change closely watched in India.

The programme has long been debated in Washington, with policymakers balancing the need to attract global talent against concerns over wages, worker protections, and the structure of visa allocation.