H4 visa EAD is saved by severe labor shortage in US

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NEW YORK – The Trump Administration has gone about with their intent to decimate immigration numbers in a calculated manner: separate families at the border for those trying to enter without documents; and curb route to jobs, with new restrictions, for those with documents, especially on an H-1B visa and F-1 visa.

A big part of the latter strategy, to bamboozle legal immigrants, in the name of ‘America First’, was also to take away the work permit from spouses of H-1B workers, on an H4 visa.

However, luckily for the hapless 100,000 or so individuals on an H-4 visa with an Employment Authorization Document (EAD) – most of them women, and from India – who have been waiting with bated breath for the guillotine to come down and chop their ambitions, a savior has come in the form of a labor market where shortage of qualified workers is reaching epidemic proportions.

Corporate America is finding it tough, almost impossible, to get workers to fill in a record 6.7 million job openings.

That likely is the reason why the Trump Administration has for the second time this year – first in March, and now the June deadline too has passed – deferred their declaration to rescind the EAD for H4 visa holders.

Bloomberg reported earlier this week that a study by Christopher J. L. Cunningham of the University of Tennessee at Chattanooga and Pooja B. Vijayakumar from the Kemmy Business School at the University of Limerick, in Ireland, deduced that taking away the EAD from H4 visa holders would likely push 100,000 individuals out of jobs and negatively affect the visa holders and their employers.

The study found that revoking the EAD would likely isolate spouses socially, raise domestic tensions and strain the family’s financial resources. It would also probably hurt the visa holder’s satisfaction and increase the risks that they continue in a foreign posting. The cost of failed expatriate assignments ranges from $250,000 to $1 million, in addition to indirect costs, they wrote.

“Policy changes like the one being considered for America are often made in the absence of complete information that might help policy makers better understand the true breadth of likely consequences,” the study said.

The US began allowing spouses of H-1B visa holders to work in 2015, under the Obama Administration, reported Bloomberg. For their research, the authors studied the experiences of H-1B families in 2014. They contacted 1,800 Indian expatriate to participate in the research and the final sample consisted of 416.

The work visa programs, which date back to 1952, were originally designed to allow US companies to hire workers from abroad temporarily when they couldn’t find qualified Americans. But the programs evolved with many allegations that companies, particularly India’s outsourcing giants, had been abusing the visas to get less expensive labor. Trump came into office vowing to overhaul the programs and protect American workers, Bloomberg noted.

H-1B visa holders explained myriad problems when spouses couldn’t work. “Very unfair to her, so going back to India,” one told the researchers. “My wife is frustrated that she is unable to further her career,” said another.

The researchers said that a reinstated ban likely “will be more critical and difficult for expatriate families than what was experienced in 2014, as many of these individuals who were temporarily benefited by the previous presidential administration’s immigration policies may have, in this time, bought a home or started their own businesses.”

However, what has likely saved the EAD for H4 visa holders is the severe labor shortage. CNBC reported the consequences will affect employers, who could end up paying more.

A report Thursday from ADP and Moody’s Analytics cast an even brighter light on what is becoming one of the most important economic stories of 2018: the difficulty employers are having in finding qualified employees to fill 6.7 million job openings, the report said.

Truck drivers are in perilously low supply, Silicon Valley continues to struggle to fill vacancies, and employers across the grid are coping with a skills mismatch as the economy edges ever closer to full employment.

“Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “These labor shortages will only intensify across all industries and company sizes.”

The Bureau of Labor Statistics reported that April closed with 6.7 million job openings. May ended with just over 6 million people the BLS classifies as unemployed, continuing a trend this year that has seen openings eclipse the labor pool for the first time. At some point that gap will have to close. Economists expect that employers are going to have to start doing more to entice workers, likely through pay raises, training and other incentives, reported CNBC.

Companies are reporting record profits, but could find themselves constrained by a double-short of inflation, both from wages and rising costs due to escalating trade tensions and tariffs between the US and its trading partners.

Fox Business had this to say of the ‘ghosting’ in the US labor market: “How hot is the job market? Hot enough that would-be employees are standing up interviewers and not showing up for their first day of work. Not only that, but there has been an uptick of employees walking out of work and never coming back –without giving any notice.”

According to data from the Labor Department, 3.4 million Americans quit their jobs in April, the latest month for which data is available, near a 2001 peak. Voluntary departures were double that of layoffs in the same month, with 1.7 million workers losing their jobs in the same month.

According to the Federal  Reserve Bank of Atlanta, job switchers saw a roughly 30% larger annual pay increase over the past 12 months versus those workers who stayed put.

The severity is such that even Trump himself is forced to seek foreign workers, for Mar-a-Lago, in Florida. The Tampa Bay Times reported that the Palm Beach resort is seeking 40 waiters to start work in October, and will file for H-2B visas.

So, it’s not that the Trump Administration is being kind to H4 visa holders. Their hands are tied because of the market dynamics, at least for now.

(Sujeet Rajan is Executive Editor, Parikh Worldwide Media. Email him: sujeet@newsindiatimes.com Follow him on Twitter @SujeetRajan1)