The Indicator from Planet Money: “We're about to lose a lot of foreign STEM workers”

Date: September 30, 2025
Hosts: Waylon Wong, Darian Woods
Guest: Michael Clemens (Economist, George Mason University)
Duration (content only): Approx. 10 minutes

Episode Overview

This episode delves into the new, drastic changes to the U.S. H1B visa program, specifically a newly announced $100,000 fee imposed by the Trump administration on new entrants. The hosts discuss what the H1B program has meant for the U.S. economy, how this change affects individuals and companies, and the broader consequences for America’s future competitiveness in STEM fields.

Key Discussion Points & Insights

1. Personal Impact: Darian Woods’ Honeymoon Disrupted

• [00:11 - 01:49]
  • Darian recounts receiving alarming visa-related news while on his honeymoon:
    • His wife (an H1B visa holder) received a message from her boss concerned about the new policy.
    • After panic and a missed flight, it was clarified the policy only applied to new H1B applicants.
  • Quote:
    • “So we take this very panicked, tearful trip to the Barcelona airport... we're reconsidering like, you know, what country do we live in?” – Darian Woods [01:01]

2. The H1B Visa Program: Origins & Purpose

• [03:37 - 04:44]

  • Michael Clemens frames H1B as the main pathway for high-skilled, often STEM, foreign workers into the U.S. since 1990.

  • The annual cap is 85,000 visas, but more are given due to exemptions for non-profits and academia.

  • The program requires employers to try hiring U.S. workers first and sets minimum wage bands.

  • Quotes:

    • "Essentially, it is our largest bridge between the high skilled talent of the world and the US economy." – Michael Clemens [03:54]
    • “This is an extraordinarily highly regulated program.” – Michael Clemens [04:44]

3. H1B’s Economic Impact:

• [04:55 - 06:42]

  • Major increases and decreases in visa caps have allowed economists to study H1B’s effects.

  • Evidence is overwhelming that H1B workers bring major benefits:

    • More patents filed, more startups founded, higher survival of businesses
    • Broad-based increases in U.S. productivity, not just for STEM jobs but supporting industries

  • Quotes:

    • “Economists have shown that H1B workers cause higher productivity for the whole US economy.” – Michael Clemens [05:20]
    • “One study published in 2015...concluded that the program was responsible for 30 to 50% of all the productivity growth that happened in the US during that time.” – Darian Woods [05:56]

  • Clemens notes this is a universal finding in respected research:

    • “We're talking about a highly vetted piece of research that took years. And many, many other studies have corroborated exactly this effect.” – Michael Clemens [06:20]

4. The Wage Debate

• [06:42 - 07:40]
  • There’s consensus that H1B visas boost overall productivity.
  • Less agreement on effect on American wages:
    • Research shows some competing tech workers might see slower wage growth, not wage cuts.
    • “Growing less than other people is not the same as going down.” – Michael Clemens [07:12]
    • The productivity effect can still mean wage growth for all, but to varying degrees.

5. Built-in Limitations of H1B: Worker Flexibility

• [07:40 - 08:40]
  • H1B visas typically tie workers to sponsoring employers, which reduces the worker’s bargaining power and can depress wages.
  • “Anything that ties workers to employers reduces wages because it reduces your outside option.” – Michael Clemens [08:23]

6. Why the New $100,000 Fee Is a Big Problem

• [08:40 - 09:35]

  • The new fee is a sharp jump from previous charges ($2,000–$5,000).

  • Many non-profit and academic employers can’t afford it; even tech firms face uncertainty.

  • The arbitrary, potentially ever-increasing nature of the fee acts as a "risk tax" that deters both workers and companies.

  • Quote:

    • “People aren't going to want to invest their futures in a visa program that could just be shattered at any minute based on the arbitrary whims of politicians.” – Michael Clemens [09:08]

7. Global Competition for STEM Talent

• [09:35 - 10:04]

  • Other countries (Canada, UK, China) are actively courting the high-skill immigrants America is now turning away.

  • Possible long-term consequences for U.S. leadership in fields like artificial intelligence.

  • Quote:

    • “If... you see China racing ahead in artificial intelligence... and you wanted to look back and say, well, is there anything the United States could have done differently? ... this month of 2025 would be a great place to look.” – Michael Clemens [09:48]

Notable Quotes & Memorable Moments

• Wedding Gift from the Trump Administration:
  “Well, this was a lousy wedding gift from the Trump administration.” – Waylon Wong [01:49]
• Economists’ Envy:
  “Is this the kind of study that you as a fellow economist, look on with envy where you're like, oh, I wish I had structured a paper like that?” – Waylon Wong [06:12]
• Long-lasting Personal Impact:
  “I will remember September 2025 very clearly.” – Darian Woods [10:09]

Important Timestamps

• [00:11 – 01:49] — Darian’s honeymoon story and initial confusion/fears about the visa change
• [03:37 – 04:44] — How H1B works and why it exists
• [04:55 – 06:42] — Economic impacts and overwhelming research consensus
• [06:42 – 07:40] — Wages and competing interests
• [07:40 – 08:40] — Worker flexibility and wage suppression
• [08:40 – 09:35] — The new fee’s practical and psychological impact
• [09:35 – 10:04] — Global competition and U.S. risks

Tone & Takeaways

The tone of the episode is urgent but analytical, mixing Darian’s personal anxiety and disruption with the measured, research-driven insights of Michael Clemens. The hosts use both humor and candor:

• They highlight the human cost (Darian’s honeymoon panic) alongside the big-picture policy and economic shifts.
• The key takeaway: Draconian changes to H1B—particularly unpredictable, high costs—threaten America’s long-term innovation ecosystem at a moment when other nations are eagerly recruiting these workers.

For Listeners

This episode is essential context for anyone following immigration policy, STEM workforce trends, or U.S. innovation competitiveness. It’s a sobering, concise look at how a seemingly wonky policy decision can have sweeping effects for individuals and the entire economy.