Is the U.S. shooting itself in the foot by pushing out STEM talent?

The recently introduced $1,00,000 visa fee for new H-1B workers in the U.S. is particularly detrimental to Indians, as a previous Data Point story showed. But is the U.S. shooting itself in the foot by pushing out the STEM (Science, Technology, Engineering and Mathematics) talent that it has long relied on?

Jobs in the U.S. IT sector, which is officially defined as ‘computer and mathematical occupations’ by the U.S. Bureau of Labor Statistics, have grown by about 40% between 2016 and 2024. This makes the IT sector one of the leading ones in the labour market.

The chart below shows the sector-wise change (%) in the jobs available in the U.S. between 2016 and 2024 (horizontal axis). Sector-wise share of foreign-born workers (vertical axis). The bigger the circle, the higher the number of workers in the sector in 2014. The farther a circle is to the right, the higher the job growth.

Apart from the IT sector, only two others have recorded faster growth in the U.S. — health care support roles, such as nursing, and jobs in the life sciences, physical sciences, and social sciences. The IT and health care support sectors appear in the upper right section of the graph.

That indicates that they are among the fastest-growing sectors, with a slightly above-average share of foreign-born workers — around 25% of the workforce in 2024.

Notably, this share has remained unchanged since 2016, suggesting that the representation of foreign-born workers has stagnated despite strong overall job growth.

Should U.S. President Donald Trump be concerned about the large number of foreign-born workers in the fastest-growing sectors of the U.S. economy — sectors that owe much of their success to foreign talent?

The H-1B visa is no longer mainly used by Indian IT firms to send workers to the U.S. Currently, American tech giants such as Apple, Microsoft, and Meta are also among the largest recruiters of H-1B talent.

Whether the recent policy changes will disrupt this STEM talent flow and, in turn, slow job growth is the question.

According to the Bureau of Labor Statistics, STEM occupations are projected to grow by more than 8% over the next decade, as shown in the chart below, compared to just 2.7% for non-STEM jobs.

Does the U.S. have enough home-grown STEM talent to meet this surge in demand? Data show that it may not.

Interest in STEM courses among U.S. residents has grown at a much slower pace than among non-residents. Between 2011–12 and 2020–21, the number of non-residents earning STEM bachelor’s degrees in the U.S. rose by 148%, compared to just 47% among U.S. residents. The gap is higher at the Master’s level.

The chart below shows STEM degrees conferred by U.S. institutions by level of degree

In 2020-21, only 55% of those who earned STEM Master’s degrees in the U.S. were residents, while 45% were non-residents. The U.S. relies not only on foreign-born talent in its current IT workforce, but also on non-residents who make up a significant part of its future STEM workforce. It is these two groups that are being targeted by Mr Trump’s policies.

The chart below shows STEM degrees/certificates conferred by postsecondary institutions, by race/ethnicity for all degree levels

How other countries have reacted to the H-1B visa fee hike is also telling. China has touted its ‘K visa’ as an alternative to the H-1B. The U.K. is considering a reduction in visa fees for STEM workers, while Germany’s Ambassador to India posted on X an invite welcoming Indian professionals. Reports show that South Korea and Japan too have similar plans. Will the U.S. be able to cope if global STEM talent start choosing other destinations?

The data for the charts were sourced from the Integrated Postsecondary Education Data System (IPEDS), the U.S. Bureau of Labor Statistics’s ‘Foreign-born workers: Labor force characteristics’ report, and the U.S. Citizenship and Immigration Services