June 23, 2020 2:48PM

Trump’s H-1B Ban Based on a Misreading of Economic Statistics

Yesterday, President Trump banned the skilled worker categories including the H-1B for newly hired skilled professionals. My colleagues and I have already laid out numerous issues with this decision (here, here, here, here, and here). But the proclamation text appears to betray a confusion about basic economic statistics. In his proclamation, the president states:

Certain nonimmigrant visa programs authorizing such employment pose an unusual threat to the employment of American workers. For example, between February and April of 2020 … more than 20 million United States workers lost their jobs in key industries where employers are currently requesting H-1B and L workers to fill positions.

There’s no way to figure out how they came up with 20 million because the president doesn’t list the industries that he’s counting as “key.” But the more important point is that employers can’t hire just any worker from an entire industry. They can only hire someone seeking to work in a specific type of job. This confusion between industries and occupations is exceptionally common, but it’s a huge mistake. The Department of Labor, for example, when reviewing an H-1B application sets the wage rate based on the occupation of the worker, not the wages for the entire industry.

What if the administration had looked at key H-1B occupations rather than key industries? As Figure 1 makes clear, nearly all workers in the top H-1B occupations were still employed in May. It turns out that from January 2020 to May 2020, total employment increased by about 185,000 in the top 20 H-1B occupations, which account for 85 percent of all H-1B requests, according to the Current Population Survey. The number of unemployed increased by basically the same amount 194,000—a difference of 9,000. This is substantially different from the 20 million cited by the president. Moreover, unemployment in H-1B occupations was already falling in May from April. June’s number (meaning the actual situation right now) is likely even better. Perhaps these details should have been presented to the president as well.