The United States has quietly recast one of the world’s most influential labour-mobility programmes. By replacing the random H-1B lottery with a wage-weighted selection system, Washington has signalled a decisive shift in how it views skilled immigration. The move, combined with a court-backed proposal to levy a steep $100,000 fee on new applications, marks one of the most consequential immigration policy changes in decades.
Officially, the aim is to protect American wages. In practice, the redesign favours a narrow segment of high-paid workers and the firms best able to afford them. The collateral damage will fall on international students, early-career professionals, startups, and mid-sized companies—reshaping incentives across the global talent pipeline that once fed the US economy.
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From chance to hierarchy
For more than three decades, the H-1B programme operated on a simple premise: scarcity managed by chance. With the statutory cap frozen at 65,000 visas, plus 20,000 for advanced degree holders, oversubscription was resolved through a lottery. The system was blunt, but it offered graduating students and junior professionals at least a theoretical entry point into the US workforce.
That equaliser has now been removed. Under the new framework, selection is ranked by wage levels derived from the US Department of Labor’s Occupational Employment and Wage Statistics. Applicants offered Level-4 wages—the highest bracket—receive multiple entries in the selection pool. Those at Level-1 wages are left with the slimmest odds.
The shift replaces randomness with hierarchy. It does not expand opportunity; it reallocates it within an unchanged quota.
Students and early-career talent lose out
The immediate losers are international students, particularly from India and China, who invested heavily in US education with the expectation of post-study employment. For many, the H-1B visa was not merely a work permit but a waypoint in a longer immigration trajectory.
Early-career roles—research assistants, junior developers, entry-level analysts—rarely command top-tier wages, regardless of ability or future potential. By construction, the new system penalises these positions. Talent that once entered at the base of the pyramid and climbed through experience will now struggle to gain entry at all.
Industry bodies have flagged the disruption. Nasscom has warned that a sudden shift to wage-weighted selection will inject uncertainty into workforce planning, particularly for firms that recruit in sync with academic calendars and long-term project cycles.
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Why India feels the shock most
No country is more exposed to the change than India. Data from the US Citizenship and Immigration Services shows that Indian nationals account for roughly 70–75% of approved H-1B petitions each year—at times, nearly three out of every four visas issued.
That dominance reflected supply, not distortion. Indian engineers and graduates filled genuine skill gaps across the US technology sector. A wage-based filter now threatens to choke the entry point without addressing the underlying demand.
Immigration lawyers point to a perverse incentive. Employers may feel compelled to inflate wage offers merely to improve selection odds. With visa numbers unchanged, the reform risks encouraging cosmetic salary escalation rather than genuine skill matching.
Big Tech adapts, smaller firms struggle
Large technology companies emerge as clear beneficiaries. Firms such as Amazon, Microsoft, Google, and Meta already hire at compensation levels that place them comfortably in the highest wage brackets. For them, the new system formalises an existing advantage. Financial depth allows them to absorb higher wages, compliance costs, and potential fees with minimal disruption.
Startups and mid-sized companies face a different reality. Many rely on specialised global talent willing to accept lower initial pay in exchange for experience, equity, or long-term growth. A proposed $100,000 application fee—upheld in a federal court ruling involving the Trump administration—is not a marginal cost for such firms. It is a barrier.
Innovation thrives on flexibility. The new regime rewards scale.
Indian IT firms: insulated, not unaffected
Indian IT services companies appear less vulnerable at first glance. Over the past decade—and especially during Donald Trump’s first term—firms such as TCS, Infosys, and Wipro have reduced reliance on H-1B visas by expanding onshore hiring and building US delivery centres. Executives have repeatedly said visa dependence is no longer existential.
That insulation, however, should not be mistaken for neutrality. These firms historically drew strength from a blended pipeline of US-educated graduates, early-career professionals, and mid-level specialists. By constricting the entry point, the new regime risks hollowing out that pipeline over time.
The damage will not show up in quarterly hiring numbers. It will surface later, in slower skill accumulation, reduced mobility, and fewer opportunities for young professionals to gain frontline exposure in the world’s largest technology market.
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Legal uncertainty and structural contradictions
One uncertainty the debate glosses over is legal durability. Similar Trump-era H-1B restrictions were repeatedly struck down by US courts for procedural lapses, particularly failure to follow notice-and-comment requirements under administrative law. The proposed wage-ranking system and the sharply higher application fee rest on comparable ground. That matters because firms and students plan years ahead. A policy regime vulnerable to litigation or reversal does not merely deter entry; it creates paralysis.
There is also a quieter spillover to US universities. International students cross-subsidise American higher education, especially in STEM disciplines, through full-fee programmes. Their willingness to pay rests heavily on post-study employment prospects. If the H-1B pathway narrows at the entry level, enrolments will adjust. Research labs, regional innovation clusters, and state university finances will feel the strain. This is rarely framed as an immigration issue, but it sits at the centre of the US research economy.
A narrower America
The reform ignores a structural bottleneck further down the line: permanent residency. Indian professionals already face decades-long waits for employment-based green cards due to per-country caps. A wage-weighted H-1B system worsens this lock-in. High earners remain tied to employers for years, limiting mobility and bargaining power. That undercuts the claim that the reform protects domestic wages. A system that restricts entry while trapping those inside is not a labour-market correction. It is an administrative contradiction.
In the short term, the H-1B reset may satisfy domestic political imperatives and entrench the advantage of large employers. In the longer run, it risks weakening the ecosystem that made the United States the default destination for global talent.
By equating high pay with high value, Washington is betting that excellence arrives fully formed and fully priced. History suggests otherwise. Many of the world’s most productive innovators entered modestly, learned quickly, and scaled over time. A system that closes the door at the entry level may find, too late, that it has narrowed its own future.