Source: EconLog
by Jon Murphy
“Recently, the Trump Administration announced that H-1B applications would face a new $100,000 fee (in addition to the already existing fees, not to mention legal fees). … Will the fee lead to more hiring of American workers? It’s tempting to think so. After all, if the price of foreign workers rises, then fewer foreign workers will be hired. That is just the law of demand at work: as price goes up, quantity demanded goes down. But there is an implicit assumption in the Trump administration’s argument: that domestic workers are the next-best option for firms compared to foreign workers. That is not necessarily the case. … the firm could also opt to change its operations, or even relocate outside the country.” (10/08/25)
https://www.econlib.org/understanding-theory-labor-market-edition