Economist Paul Krugman is warning that President Donald Trump’s newly instituted $100,000 fee for H-1B visa holders threatens to erode the foundations of U.S. economic and technological leadership.
Fee Rollout Follows A Familiar Pattern
In his newsletter on Monday, Krugman said that the fee rollout by the administration followed a familiar pattern. “First, without warning, the White House announced a drastic policy change that, on its face, looked catastrophic for many workers and businesses,” he said, noting that it set off “panic and chaos” among employees and companies.
Then, the Nobel laureate economist notes, the administration scrambled to limit the fallout only after widespread confusion, saying that it was a “one-time fee that didn’t apply to those holding previously issued visas.”
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Krugman described the policy as “a disastrous move,” one that will “damage American leadership” across several sectors such as tech, education and research, which he notes “has driven our economic success for decades.”
He warned that cutting off the supply of highly skilled foreign workers risks turning a “virtuous circle of self-reinforcing success” in technology into “a vicious circle of decline.”
While acknowledging that the H-1B program has flaws, Krugman concluded that “Trump’s attack on the program is purely destructive, knocking away yet another pillar supporting American greatness.”
Silicon Valley Split Over Trump’s Decision
While most Silicon Valley executives expressed concerns regarding Trump’s decision, Reed Hastings, the co-founder and former CEO of Netflix Inc. NFLX, came out in support of the H1-B overhaul.
On Sunday, in a post on X, he said, “I’ve worked on H1-B politics for 30 years. Trump’s $100k per year tax is a great solution. It will mean H1-B is used just for very high-value jobs, which will mean no lottery needed, and more certainty for those jobs.”
Others in the industry, however, didn’t share the same views, with Andrew Ng, the co-founder of Google Brain, criticizing the move for creating fear among skilled immigrants.
“My heart goes out to all the families and individuals anxious over their futures following the abrupt and chaotic announcement of H-1B visa changes,” Ng said in a post on X. “America should be working to attract more skilled talent, not create uncertainty that turns them away.”
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Trump’s H-1B Visa Plan Stuns Big Tech, White House Says $100,000 Fee Is One-Time Only
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