After a Spike in 2022, Immigration Expected to Slow

Adam Wisniewski — January 31, 2023

On January 29, United States Citizenship and Immigration Services (USCIS) — the agency tasked with administering the immigration process — announced the initial registration period for the fiscal 2024 H-1B cap will begin on March 1.

The Biden Administration lifted the immigrant and nonimmigrant visa ban initiated by the Trump White House in February of 2021. The return to normal and the end of pandemic travel bans sparked a rush for foreign talent throughout 2022.

According to the State Department, the distribution of green cards surpassed 2019 levels by almost 80,000 while more than 230,000 more temporary work visas were issued. This move also raised limits on refugees entering the US and helped to reduce backlogs.

Slamming the Brakes

In a report issued on January 19, Goldman Sachs economist Tim Krupa noted that the foreign-born labor force fell 2.8 million below its long-term trend level in April 2020 and remained 1.2 million below the trend in March 2022.

According to attorney Alejandra Vargas, an associate with Duane Morris, the sudden shutdown had a knock-on effect due to the nature of the visa distribution process. “The total number of visas that can be issued in a calendar year cannot be rolled into future years, so when the USCIS started processing in 2021, almost 67,000 were never awarded.”

For applicants, frustration with delays was compounded by so many visa opportunities going to waste. “And you can imagine for our clients who have been trying to secure a green card,” said Vargas. “Sometimes people wait as long as ten years to receive a green card.”

Vargas’ practice at Duane Morris includes advising US companies in a wide variety of industries regarding employing foreign nationals.

For employers, the sudden restrictions during the pandemic created bottlenecks that were, at times, absurd.

“Applicants had to be extremely specialized, or it needed to be an emergency [for them] to gain entry,” recalled Vargas. “We had denials, even for people coming to work in COVID vaccines. Lawyers had to become extremely creative to secure those emergency visas because it was the only way to bring people here.”

Lack of Political Will

In a speech on January 12, US Chamber of Commerce CEO Suzanne Clarke made a case for immigration reform. Addressing the audience at the annual State of American Business event, Clarke criticized the federal government’s response to illegal immigration along the southern border while making a case for easing access for skilled foreign labor. “And when I talk to businesses who are dealing with critical worker shortages, they tell me how they can’t get visas processed to hire the workers they needed yesterday.”

Despite corporate lobbying, the increase in illegal border crossings has become so divisive in recent years that many elected officials find it impossible politically to advocate increased work visa access. For many lawmakers, the very mention of increased immigration is toxic to voters.

In 2022 the Equal Access to Green Cards for Legal Employment Act (EAGLE), a bipartisan effort, failed to gain traction on Capitol Hill. Introduced by Senators Kevin Cramer, a Nebraska Republican, and John Hickenlooper, a Colorado Democrat, the proposed legislation would not have even increased work visas but instead merely remove some nation-of-origin limitations imposed on employers.

“It is unlikely that the legislative branch will take the initiative in fixing what’s broken anytime soon,” said Daniel Siciliano, Chair of the American Immigration Council (AIC).

The Council, an independent non-profit policy think tank, was spun out of the American Immigration Lawyers Association more than 30 years ago. It was formed to advance unbiased research and policy recommendations to enable a more fair and just immigration system that unleashes the energy and skills immigrants bring to the US economy. In late 2021, it merged with New American Economy, a think tank founded by Michael Bloomberg, creating an advocacy group with significant resources.

According to Siciliano, in the absence of political will for a policy overhaul, the efforts of elected and appointed officials matter but are unlikely to change the overall dynamic. “The statutory allowances for immigration haven’t changed much in recent years,” he said. “While the Trump administration tried to implement certain more restrictive employment immigration policies, those efforts ultimately stalled or were reversed.”

As a result, Siciliano said corporate employers have had to become much more adept at maneuvering within the system to secure visas. “They have become experts in how the Department of State and the USCIS and the Department of Labor operate,” continued Siciliano. “Because employers’ success sometimes hinges on small details like staffing at consulates and USCIS departmental priorities, they and their lawyers have to become on-the-ground experts and work hard to cultivate relationships with government decision-makers to make sure their petitions get a fair shake.”

Siciliano, the co-founder, and CEO of Private Equity firm Nikkl, is a Fellow at Stanford Law School. In 2007, Siciliano testified in front of Congress and was a part of the immigration reform efforts led by Senators John McCain and Ted Kennedy. He is co-author of “Then and Now: America’s New Immigrant Entrepreneurs.”

Taking Down the “Help Wanted” Sign

According to Goldman’s Krupa, 2023 will see the pace of new workers entering the US decrease as growth slows and fewer employers hire. “The immigration deceleration we expect would translate to the total labor force growing roughly 35,000 per month more slowly than the past 18 months.”

This view is increasing consensus among experts.

“I think that you’re going to see a substantial decline in the raw numbers relative to the prior two or three quarters,” said Siciliano.

Siciliano pointed to anecdotal reports that demand for H-1B visas has slowed — particularly in the tech sector, which has seen large layoffs during the first weeks of 2023. “We’ll see how fast the economy catches up with reality. The economy always wins in these situations.”