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What H-1B Policy Changes Tell Us About Labor Market Signals

  • Writer: Hive Research Institute
    Hive Research Institute
  • Oct 3
  • 3 min read

The H-1B visa program affects 400,000 skilled workers annually [1], but what does it mean for consumer lenders? What does that actually mean for lenders we work with? Recent policy changes create limited direct impact on typical borrower demographics, yet the geographic concentration of these workers reveals important signals about local labor markets.


The Numbers That Matter


  • 64% of H-1B workers are in computer jobs [2]

  • Median salary: $120,000 vs. $60,000 U.S. average [3]

  • Geographic concentration: Just 5 states get 53% of approvals [4]

  • Limited overlap with our typical service/retail borrower base


Policy Changes Overview


The administration implemented three major shifts: reversed lottery selection to favor advanced degree holders (16% increase in selections), raised prevailing wage requirements by 15-50% across skill levels, and enhanced documentation requirements. What does that mean? Request for Evidence rates jumped from 22% to over 40% [5].


Why Lenders Should Monitor This


  • Geographic concentration risk: Reduced H-1B hiring in tech hubs → less demand for local services → potential borrower income volatility

  • Metro-level indicators: H-1B policy changes can signal broader economic shifts in major markets

  • Underwriting stability: No changes needed to employment verification processes


Labor Market Analysis


Limited Direct OverlapH-1B workers concentrate in specialty occupations requiring advanced degrees. Alternative lending typically serves employed individuals in service and retail sectors—the food service industry alone employs over 12 million workers [6,7]. Direct job competition remains minimal.


Geographic Concentration EffectsCalifornia leads H-1B approvals with 61,814, followed by Texas (27,000+), New York (22,526), Virginia (21,828), and New Jersey [4]. Higher wage requirements and stricter adjudication may reduce H-1B hiring in tech-heavy metros. What does that mean? Less demand for local services in places like San Francisco, Seattle, and Austin—which could affect our borrowers' hours and tips.


Two Scenarios Worth Watching


Scenario 1: Continued EnforcementHigher wage requirements successfully increase compensation for affected occupations while reducing application volumes. Technology consulting firms report significant reductions due to increased costs and scrutiny [8]. Secondary effects concentrate in major metropolitan areas rather than nationwide.


Scenario 2: Legal ChallengesOngoing litigation creates regulatory uncertainty for employers and applicants [9]. Frequent policy changes impact long-term talent acquisition strategies, potentially affecting business investment in affected metros.


Risk Considerations


For Employers

  • Ensure H-1B positions meet new prevailing wage requirements

  • Develop alternative visa strategies (O-1, L-1, TN visas)

For Workers

  • Advanced U.S. degrees significantly improve selection odds

  • Focus on highly specialized skills meeting specialty occupation requirements

For Policymakers

  • Conduct comprehensive economic impact assessments [10]

  • Provide clear, consistent guidance to reduce uncertainty


What It Means for Us


The direct impact on alternative financial services appears minimal due to limited occupational overlap. H-1B specialty workers and our typical borrower demographics operate in different labor market segments. Any secondary effects would hit places like San Francisco, Seattle, and Austin—markets where tech wages drive local service demand rather than affecting the broader service and retail workforce.

For underwriting processes, H-1B policy shifts don't alter employment verification focus on stable income and employer health. The most relevant monitoring involves high-frequency performance signals and bank data rather than specialty occupation wage trends.

Geographic concentration means lenders should watch metro-level service sector indicators in tech-heavy markets. Early signs would appear in hours-worked variability and payment performance rather than wage data.

References


[1] U.S. Citizenship and Immigration Services. (2025). Characteristics of H-1B Specialty Occupation Workers: Fiscal Year 2024. https://www.uscis.gov/sites/default/files/document/reports/ola_signed_h1b_characteristics_congressional_report_FY24.pdf

[2] U.S. Citizenship and Immigration Services. (2025). Characteristics of H-1B Specialty Occupation Workers: Fiscal Year 2024. https://www.uscis.gov/sites/default/files/document/reports/ola_signed_h1b_characteristics_congressional_report_FY24.pdf

[3] Torry, H., Ettenheim, R., & Pipe, A. (2025). Who Uses H-1B Visas the Most, in Charts. The Wall Street Journal. https://www.wsj.com/economy/jobs/h1b-visas-workers-charts-cb81493c

[4] Newsweek. (2024). Map Shows States Where H-1B Visas Are Approved the Most. https://www.newsweek.com/map-states-h-1b-visas-immigration-2113555

[5] USCIS Ombudsman. (2024). Annual Report to Congress: Immigration System Challenges. Department of Homeland Security.

[7] Escoffier. (2024). U.S. Restaurant and Foodservice Industry Statistics. https://www.escoffier.edu/blog/world-food-drink/us-restaurant-foodservice-industry-statistics/

[8] National Foundation for American Policy. (2024). H-1B Visa Use by Technology Companies: Annual Analysis. NFAP Policy Brief.

[9] U.S. Chamber of Commerce v. DHS. (2024). Ongoing litigation regarding H-1B wage requirements. U.S. District Court records.

[10] National Academy of Sciences. (2024). The Economic Impact of Immigration Policy on High-Skilled Workers. Committee on National Statistics Report.

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