Key Takeaways:

• Approximately 14.3 million workers - or about 1 in 10 full-time salaried employees in the US workforce - are members of a labor union.
• Union membership as a proportion of the total workforce has decreased by about half over the last 40 years - from about 20% unionized to about 10% unionized - but the total number of union members has only fallen by a little more than 15%.
• Hawaii is the state with the highest union membership rate (26.5%), and Librarian (32.3%) is the occupation with the highest union membership rate. In comparison, North Carolina (2.4%) was the state with the smallest union membership as a percentage of workforce, and farming, fishing, and forestry professionals (1.5%) were least likely to be members of unions.
• Organized labor in general faces political headwinds with the incoming administration despite a Secretary of Labor nominee who has previously sponsored pro-union legislation. 

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State of the Union for US Labor Unions

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As of this writing in the final week of February 2025, the outlook for organized labor over the next several years and beyond is very much up in the air.

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President Trump’s nominee for Secretary of Labor Lori Chavez-DeRemer received scrutiny from both sides of the aisle last week, and her confirmation remains very much in question, with Republicans raising concerns about pro-union legislation she co-sponsored during her single term as a Congressional representative and Democrats criticizing her attempts to distance herself from her previous union support.

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In the same week, however, the Acting General Counsel for the National Labor Relations Board - whose pro-union predecessor was fired as one of President Trump’s first official acts after reclaiming office - began rescinding policy memos issued under the Biden administration that provided guidance on topics ranging from non-compete agreements to the digital surveillance of employees.

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Given these competing visions within the Trump administration and the Republican Party, there is a great deal of uncertainty about the future of labor unions in the US. Those questions come at a time when major, broad sweeping disruptions to the labor market due to technological advancement - especially artificial intelligence - seem more possible than maybe ever before.

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In light of that uncertainty, and coinciding with President Trump’s planned State-of-the-Union-like address to a joint session of Congress next week during which he may very well provide some clarity on the approach his administration will take on labor protections and regulations, we wanted to take a closer look at labor unions as they exist in the US today, both as snapshot of the current environment for organized labor and as a benchmark to measure the success of new policies against as they are enacted and take effect.

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US Labor Union Membership By the Numbers

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According to the Current Population Survey, about 9.9% of all US workers ages 16 and older were members of labor unions, amounting to about 14.3 million, which is down by about 170 thousand workers from 2023 when there were a little over 14.4 million union members in the US accounting for about 10% of the labor force.

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Due to the duty of fair representation, the number of US workers represented by unions is of course even larger than union membership rolls, with a little more than 16 million US workers befitting from union representation in 2024, representing about 11.1% of the workforce, which is down by about 170 thousand workers from almost 16.2 million in 2023, representing about 11.2% of the US workforce then. 

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Union membership in 2024 was split approximately evenly between public and private sector employees at about 7 million and 7.2 million, respectively. Because the private sector is so much larger than the public sector, however, the proportion of public sector employees who belong to a union is much greater than the proportion of private sector employees who do so. 

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The proportion of public sector US employees that were members of unions in 2024 was 32.2%, which essentially held steady year over year from 2023, whereas the proportion of private sector employees with union membership in 2024 was only about 5.9%, down from 6% the year before.

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Almost 4 out of 10 employees on local government payrolls (38.2%) were union members in 2024, which is fairly unsurprising given union strength among police forces, educators, and firefighters, while the industries with the largest unionization rates in the private sector are utilities (18.7% union) and transportation & warehousing (15.8% union).

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The lowest unionization rate among government workers belongs to federal employees, only 25.3% of which are unionized as of 2024, which is up from 25.1% in 2023 even though the number of federal employees that are union members fell by more than 130 thousand between 2023 and 2024, dropping to about 1.1 million. 

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In the private sector, the lowest unionization rates belong to the finance (0.8% union)  and insurance industries (1.2% union), followed by the professional & technical services (1.2%) and agriculture industries (1.4% union). 

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Library and security & protective service workers had the highest proportion of union membership among occupations at 32.3% and 29.6%, respectively, while farm/fishing/forestry workers (1.5% union) and sales professionals (2.7% union) were the occupations with the lowest rates of unionization.

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Union membership is lowest in the South and highest along the Pacific and Mid to North Atlantic coasts, with North Carolina (2.4% union), South Dakota (2.7% union), and South Carolina (2.8% union) claiming the lowest unionization rates.

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Interestingly, 2 of the 3 states in which unionization was highest in 2024 were not connected to the continental US, with Hawaii and Alaska recording 26.5% and 17.7% union membership, respectively. New York (20.6% union), Connecticut (16.5%), and Washington (16.0%) had the highest unionization rates among contiguous states. 

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Almost 3 out of 10 union members (29%) now live in just 2 states - New York and California - which is almost double the percentage that all workers from New York and California - union and non-union alike - represent as a portion of the total US workforce (17%). 

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Mployer’s Take

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Over the last 40 years, the proportion of the US workforce that belongs to a labor union has decreased by half - from a little more than 1 out of 5 full-time salaried US workers with union membership in 1983 to about 1 in 10 as of 2024.

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During that same time, however, the actual number of union workers in the US has been reduced by a considerably smaller margin, with only about 2 million fewer union employees working in the US today than there were in the mid-1980s, accounting for only an approximate 15% decrease in total union membership over the last 4 decades.

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In effect, as the US and the US worker population has grown, union workers as a proportion of the total population has decreased considerably, but union workers and union jobs have remained fairly entrenched nonetheless, even if unable to keep up with population growth and economic expansion.

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If current union membership figures rely on entrenched workers, however, those workers are rapidly aging out of the workforce, and how well-protected those jobs are going forward may be put to the test sooner than later. 

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Just looking at the age breakdown alone paints a fairly grim picture of the future of union membership. For example, workers between the ages of 45 and 54 have the highest rate of unionization at 12.6%, while workers ages 16 to 24 claim the lowest proportional union membership at 4.3%.

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That said, although unionization was much higher among full-time workers (10.7% union) compared to part-time workers (5.7% union) in 2024,  the percentage of unionized full-time workers fell last year (minus 0.2%) while the unionized percentage of part-time workers increased (plus 0.5%), which is a noteworthy development. With growth in part-time employment outpacing full-time growth, unionization may have some tailwinds here.

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Realistically, however, while the future head of the Department of Labor remains unknown for the time being, the current nominee is representing positions that are both more favorable toward organized labor than any potential future nominee from this administration is likely to be, but also less favorable toward organized labor and worker protections than the previous Secretary of Labor, so the trend is apparent even if the ultimate appointee is not. 

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Still, the advantages that unions offer to workers remain significant, perhaps most notably when comparing pay rates, with full-time, salaried union workers bringing in median annual earnings of about $70 thousand in 2024 whereas non-union members earned a little less than $60 thousand under the same conditions, which is more than 15% less.

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The momentum is working against the expansion of unions and enhanced worker protections, however, and if President Trump’s first term and/or Elon Musk’s questioning of the constitutionality of the National Labor Relations Board serve as any indication, the momentum against organized labor is more likely to intensify than to subside over the next few years at least.

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‍Key Takeaways:

• The prospect of significantlong-term healthcare cost savings is enticing an increasing number of employers to cover GLP-1 drugs for weight loss purposes, but the expensive upfront costs that accompany those prescriptions are also leading a substantial number of employers to restrict access to these medications if not forgo their coverage entirely.
• Multiple surveys indicate that between 24% and 44% of US employers with 500 or more employees offer some form of GLP-1 coverage for weight loss.
• In one study, patients with heart failure and another cardiovascular disease (ASCVD) that utilized GLP-1 drugs for weight loss reported between 25% and 36% reduction in average annual medical costs per person, respectively.
• The costs of GLP-1 prescriptions utilized for weight loss purposes accounted for 10% or more of total annual claims filed for nearly half of employers respondents (47%) in one survey.
• Approximately half of all US adults may be eligible for a GLP-1 prescription.

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The Ozempic, Semaglutide, and GLP-1 Problem For Employers

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Since the Food and Drug Administration first approved semaglutide (a type of GLP-1 drug) as an injectable weight loss medication in 2021, the demand for brand name versions like Ozempic and Wegovy has skyrocketed. With skyrocketing demand has come skyrocketing prices, however, and neither the demand for these prescriptions nor their price points appear likely to come down any time soon.

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Much of the demand for these drugs is a direct result of just how effective they have been, at least in the short term. What remains to be seen is how effective these medications will ultimately prove to be in reducing the incidence of tangential, obesity-related conditions in the long term, and what range of associated healthcare cost savings can be expected as a result.

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This represents the central dilemma of semaglutide coverage, which is whether the uncertain future benefits justify the substantial upfront costs.

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Further complicating the issue is the uncertainty surrounding future benefits. These are amplified for employers, which also have to account for turnover risk when weighing long-term investments in the health of employees who may no longer be with the organization by the time those benefits are realized.

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Taken together, these factors are inspiring an increasing number of employers to rethink their approach to semaglutide coverage and how it fits into their larger organizational mission, not just in terms of their health plans but also in terms of talent attraction, retention and workforce management.

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Employer Semaglutide and GLP-1 Coverage By The Numbers

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According to the Kaiser Family Foundation (KFF), only about 18% of all large firms (defined here as those with 200 or more employees) offered semaglutide and/or other similar GLP-1 medications for weight loss purposes in 2024. 

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The proportion of employers offering these medications tends to increase as employer increases in size as well, with KFF’s data indicating that about 16% of employers that have between 200 and 999 employees offering semaglutide and/or other GLP-1 coverage for weight loss, while 24% of employers with between 1,000 and 4,999 employees cover these prescriptions, and 25% of employers that have 5,000 or more employees do so. 

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Data from Mercer, on the other hand, points to much more widespread adoption of GLP-1 medication for weight loss, with 44% of large employers (defined here as those with 500 or more employees) offering semaglutide and/or GLP-1 coverage in 2024 - a 3% increase up from 41% in 2023. An even larger proportion (64%) of the largest employers (defined here as those with 20,000 or more employees) covered these medications in 2024, up from 56% in 2023 representing 8% year-over-year growth. 

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Although these figures do not allow for an apples-to-apples comparison, they clearly represent a fairly wide coverage range, with KFF reporting much lower rates of semaglutide and GLP-1 coverage than Mercer, but this data discrepancy can perhaps be explained in part by the 31% of KFF survey respondents who stated they did not know whether their employers largest health plan covered these medications for weight loss treatment. 

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The International Foundation for Employee Benefit Plans (IFEBP) survey was somewhere in between KFF and Mercer, estimating that about 34% of US employers (no employee count specified) offered GLP-1 drugs for weight loss purposes in 2024, which is up 8% from 26% in 2023.

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Data from the same IFEBP survey indicates that GLP-1 drug costs as a proportion of total annual claims are increasing, with GLP-1 expenses accounting for an average of 8.9% of total annual claims for US employers, up from 6.9% in the 2023 survey. 

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In total, 21% of employers reported that GLP-1 medications were responsible for 2% or less of total claims, while 47% of employers reported that GLP-1 medications amounted to 10% or more of total annual claims.

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Rising GLP-1 Costs Lead To Health Plan Changes

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Demand for these medications has led to substantial financial losses according to data released by a number of entities in the healthcare industry that are all telling very similar stories about how semaglutide and GLP-1 prescriptions for weight loss are affecting their bottom lines.

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Many insurers took a GLP-1-related hit last year, for example, Blue Cross and Blue Shield of Massachusetts recorded losses amounting to nearly $115 million dollars just in the first 3 quarters of 2024, which corresponded with an approximate 250% increase in GLP-1 claims over the same period.

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Hospital systems were comparably affected, for example, UPMC out of Pittsburgh posted an even larger loss of about $370 million over the same term, which it attributed to increased medical utilization and pharmacy costs, while Highmark Health - also of Pittsburgh - despite avoiding operational losses, reported a significant decline in operating gains in 2024 relative to 2023, which administrators blame on high prescription drug costs - most notably GLP-1s.

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According to the Chief Pharmacy Office at UPMC, the “costs are unsustainable” due to the “explosion in demand” and many organizations are implementing additional cost controls in an attempt to suppress some of these quickly ballooning expenditures. 

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For insurers and care providers alike - the path forward of least resistance seems to involve increased prior authorization in the short term while the supply chain becomes better capable of meeting demand over time.

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But for employers who must also take into account the role that their health plans play in terms of talent attraction and retention, controlling costs via adding additional obstacles and further limiting access to an increasingly popular weight loss option can be counterproductive and risk increased turnover.

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How Are Employers Adapting?

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These high cost and high demand dynamics have led to two separate trends among US employers - some employers are dropping GLP-1 coverage for weight loss and others are expanding GLP-1 coverage for weight loss, and the difference is largely driven by how one calculates and weighs the potential long-term health benefits in the cost-benefit analysis.

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Even for employers betting that the potential long-term health benefits associated with GLP-1 utilizations and weight loss -  including reduced risks for cardiovascular and kidney disease - will ultimately outweigh the substantial upfront costs, those rising upfront costs are becoming problematic. 

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In a previous piece covering semaglutide and other GLP-1 medication, we discussed some of the ways that employers are adapting in order to offer these drug treatments to employees without exposing the health plan to out-of-control costs, including implementing lifetime caps, minimum BMI caps, and limiting access to cheaper GLP-1 options:

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• Lifetime Cap: Some employers are limiting their exposure to excessive GLP-1 weight loss expenses by setting a lifetime cap on the amount of funds available to covered employees. The Mayo Clinic, for example, instituted a lifetime cap of $20,000 per person to provide meaningful access to these drugs for weight loss purposes while also putting a ceiling in place on a rapidly growing expense line item. 
• Minimum Body Mass Threshold: Other companies have set a minimum body mass index that must be met to qualify for GLP-1 weight loss drugs, limiting cost exposure by limiting the size of the population with access to these treatments. Fairview Health Services, for example, only offers GLP-1 weight loss coverage to employees with a body mass index of 40 or higher.
• Limit GLP-1 Options Covered: Some employers also restrict the number of GLP-1 weight loss drug options to only those that are the most cost-effective at any given time, which may also reduce demand.

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Just as many private health insurers may come to increasingly rely on prior authorization and reduced access to these prescriptions to rein in costs, many employers may likely implement similarly tightened restrictions over the next few years.

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While reducing the number of potential employees with access to these medications can be an effective safeguard against overrun expenses, it also limits how effective those health plans may be as talent retention and attraction tools.

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Should the popularity of GLP-1 treatment for weight loss maintain its current trajectory, the next evolution of GLP-1 access for self-insuring employers may involve both restricted access for employees based upon qualifying criteria (e.g. BMI threshold exceeded, payment cap not exceeded, etc.) and also expanded access in the form of perks or incentives for employees who do not otherwise qualify for coverage.

What Comes Next?

Access to some GLP-1 drugs is already starting to improve as a result of pharmaceutical and insurance companies exploring new cost-saving approaches and proactively working with legislators to bring down some of these expenses.

Just a few months ago in December 2024, for example, drugmaker Eli Lilly teamed up with a telehealth platform to offer a non-semaglutide GLP-1 alternative for weight loss directly to consumers for less than half the price that Ozempic and Wegovy in many cases.

Drugmakers are also making significant headway in developing and releasing generic versions of GLP-1 medications, with the FDA approving the first 2 generic GLP-1 drugs in November and December 2024, respectively, although neither of those drugs has weight-loss-specific uses.

It will still be a while before generic semaglutide medication becomes available, as it most likely won’t hit the market for another 5 or 6 years in 2030 or 2031.

There is a $4.1 billion facility in the works where significant quantities of Ozempic and Wegovy can be manufactured, which will increase the available supply of these drugs and hopefully bring down the sticker price, but it will be at least 3 or 4 years before these products would be available.

On the public front, the Department of Health and Human Services recently added both Ozempic and Wegovy to the list of drugs covered under Medicare Part D which will be subject to price negotiations in 2025. Although these negotiations won’t directly apply to prescription prices for private buyers, they may still set a benchmark that results in lower prices across the board. Even then, the new Medicare prices and any related private market impacts won’t come to be for another 2 to 3 years in 2027 or 2028.

In short, there are a number of potential changes in the supply chain that are likely to reduce upward pressure on prices for semaglutide and GLP-1 medications in the years ahead, but that supply-side price relief may not come all at once and could even conceivably be outpaced and canceled out by upward price pressure due to growing demand.

Mployer’s Take

The effectiveness of some GLP-1 medications as a weight loss drug has been pretty clear for several years, though the long-term tangential benefits of GLP-1-assisted weight loss will likely take another 5 to 10 years, at least, to be more fully assessed. Additionally, it will likely also take 5-plus years before the GLP-1 weight loss prescription costs normalize and find their equilibrium in the market.

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As a result, there is a potential 5-plus year window of uncertainty before the cost-benefit uncertainty is effectively settled. With employers currently split and trending in diverging directions around their coverage of GLP-1 for weight loss, there is an opening for employers to establish a significant advantage over competitors who approach GLP-1 coverage differently.

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Given that some studies are already showing significant healthcare cost savings associated with tangential GLP weight loss benefits, however, the odds that long-term benefits exceed the short-term costs of covering GLP-1 weight loss medication seem to be going up. 

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For example, one study found that GLP-1 use for weight loss across approximately 2,000 patients with heart failure and/or specific cardiovascular diseases reduced annual healthcare expenditures by $7,500 to around $9,000 dollars per person.

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The opportunity for those kinds of cost savings makes GLP-1 coverage seem like an easy choice for employers.

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At the same time, however, it is easy to see why employers that focus on short-term costs and/or the scope of the potential demand want to severely restrict access to these medications for weight loss purposes if not eliminate coverage entirely.

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That perspective is especially understandable considering that more than half of US adults could be eligible for GLP-1 use either for diabetes, obesity, or heart conditions - the overall population who may want/need access to these drugs is large enough to be cause for concern for any payer - even those as large and well-funded as the US government.

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Demand calculations based on the total number of potentially eligible, qualifying candidates that could benefit from any given medication, however, are not necessarily fair reflections of demand.

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One recent Morning Consult poll, for example, found that 62% of respondents claimed they would rather make a diet change than use an injectable weight loss drug in order to lose weight, and that preference was even stronger among certain demographics, including men, baby boomers, residents of the Northeastern part of the country, post-graduate degree holders, and people earning more than $100,000 annually.

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People can and do change their minds, of course, and there are certainly many people who may come around to the idea of utilizing GLP-1 as the user base grows and the effectiveness of the drugs becomes more apparent.

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However newfound perspectives do not often emerge in mass overnight, and the process of millions of individuals reevaluating a personal position and reversing course takes time, just as increasing the supply of these drugs takes time and just as collecting evidence on long-term cost savings takes time. 

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In light of those potential long-term healthcare savings and the encouraging numbers we’ve seen on that front so far, however, assuming that demand doesn’t spike in line with worst-case scenario forecasts over the next few years, the trend toward covering semaglutide and GLP-1 for weight loss purposes with some restrictions seems likely to pick up momentum barring unforeseen events.

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Key Takeaways

• A Federal District Court Judge in Northern Texas ruled that American Airlines had breached its duty of loyalty to its employees under ERISA because BlackRock, the investment manager American Airlines had enlisted to manage its retirement accounts, had promoted ESG policies that the judge determined went against the financial interests of the employee beneficiaries.
• The repercussions of this ruling could be industry-reshaping if upheld. However, many additional conflicts of interest between American Airlines and BlackRock may not be broadly applicable to most potential cases with a similar fact pattern. This case may be especially egregious even among similar cases given that the judge views ESG policy interests and fossil fuel company financial interests as being in direct opposition.
• While it is recommended that employers eliminate conflicts of interest with retirement fund investment managers wherever possible and optimize communication and oversight reporting with both internal and external auditors, it remains unclear if American Airlines would have been in breach of its duty of loyalty had it maintained better oversight over BlackRock and had BlackRock continued factoring ESG considerations into investment decisions anyway.

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Article - Federal Court Ruling May Put Millions of US Companies In Breach of ERISA Fiduciary Duty

A recent ruling from a Federal judge in Texas has put nearly every company in the US that offers a retirement or pension fund at risk of being sued for failing to uphold their fiduciary duties to their employees.

The core issue of the case is whether an employer can be found in violation of the Employee Retirement Income Security Act (ERISA) as a result of entrusting retirement funds to investment managers that take into account corporate environmental, social, and governance (ESG) considerations when managing those funds.

Based on this latest court ruling, much to the surprise of many legal observers, the answer to that question appears to be ‘yes, companies can be held liable for retaining retirement fund investment managers whose investment practices incorporate ESG principles’ - at least for the time being.

What remains to be seen, however, is the amount of money that the defendant company will have to pay as a result of their adjudicated infraction, which in turn is likely to have a major impact on how widespread the repercussions of this ruling will be given that a string of both appeals and copycat plaintiffs are almost certain to follow any final order front the judge that includes a substantial amount of money changing hands.

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Spence v. American Airlines

The lawsuit in question was filed in the Summer of 2023 when a senior pilot with American Airlines initiated a class action lawsuit against his employer on behalf of more than 100,000 participants in a 401(k) plan offered by American Airlines.

The issue at hand stems back to an incident that occurred 2 years prior in the summer of 2021 when global investment giant Blackrock joined other major investment managers and activist investors to exercise their shareholder voting rights and elect 3 ESG-friendly board members to the 12-member ExxonMobil Board of Directors, which is an outcome ExxonMobil leadership at the time had spent months fighting to prevent.

Spence claimed that Blackrock was engaging in the pursuit of ‘non-financial ESG policy goals’ and that American Airlines was in violation of their fiduciary duty by utilizing Blackrock as investment managers for the management of those 401(k) funds.

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Fiduciary Duty: Prudence & Loyalty

In accordance with ERISA, employers, and their agents - such as plan trustees, plan administrators, and members of plan investment committees - owe a fiduciary duty to act and make decisions that are in the best interests of plan beneficiaries.

This fiduciary duty encompasses many responsibilities under the law, including a responsibility to diversify investments, avoid conflicts of interest, and follow plan guidelines, but in the class action lawsuit Spence brought against his employer American Airlines, however, he alleged only violations of the fiduciary duty of prudence and the fiduciary duty of loyalty.

Interestingly, the standards and regulatory guidance for evaluating prudence and loyalty in the context of fiduciary duty have been in flux in recent years, with the Department of Labor for the then-outgoing Trump administration issuing final rules with amendments regarding the fiduciary duty of prudence and loyalty in mid-November 2020.

According to those amendments, prudence requires plan fiduciaries to make investment decisions based exclusively on “pecuniary” or financial factors. Loyalty requires that plan fiduciaries determine that potential investment alternatives are ‘economically indistinguishable’ from each other before fiduciaries can take into account potential collateral benefits beyond investment returns, in which case those collateral benefits essentially function as a tie-breaker.

In November of 2022, however, the DOL for the Biden administration issued a final rule that interpreted the fiduciary duties of prudence and loyalty in a way much more favorable to ESG considerations.

According to the Biden DOL clarifications, prudence requires decisions to be based on relevant risk and return factors with ESG being among the factors that can be rightly considered, and loyalty does not prevent plan fiduciaries from taking collateral benefits into account so long as plan alternatives equally serve the financial interests of beneficiaries over time.

While the Biden DOL’s final rule overrode the final rule issued by the Trump administration DOL in November 2020, Biden’s final rule did not take effect until January of 2023, so the Trump DOL rules were still applicable when Blackrock was among the investors that won the proxy battle against ExxonMobil in the summer of 2021.

Now that Trump has returned to the White House, it’s also worth noting that the definitions of prudence and loyalty about fiduciary duty under ERISA are likely to revert to the interpretations his previous administration issued shortly before he left office in 2020.

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Where Did American Airlines Go Wrong?

In evaluating Spence’s claims against American Airlines, the judge determined that American Airlines had been prudent, but they had not been loyal.

Although Spence claimed that American Airlines had violated its duty of prudence by not directly monitoring Blackrock’s proxy voting activism and instead depending on a third party to do so, the judge ruled that the employee benefit committee at American Airlines had been prudent and exceeded industry expectations by meeting regularly with both internal and external experts to review and monitor plan performance.

As for Spence’s claim that American Airlines had breached their duty of loyalty, however, the judge determined that American Airlines was in fact in violation of the law because they failed to keep their own “corporate interests separate from their fiduciary responsibilities” which led to “an impermissible cross-pollination of interests and influence on the management of the Plan.”

The judge found that Spence provided sufficient evidence showing American Airlines was incentivized to ignore BlackRock’s shareholder activism in part because BlackRock owns both hundreds of millions of dollars worth of American Airlines stock, as well as hundreds of millions of dollars worth of American Airlines debt, which may have led American Airlines to become lax in its oversight of BlackRock’s retirement fund management practices.

In support of his finding that the duty of loyalty had been breached, the judge also cited an American Airlines employee who served both as corporate liaison to BlackRock and as a member of the American Airlines fiduciary committee and said that billions of dollars of potential loans might have been at risk if American Airlines had not followed ESG reporting protocols.

The judge further noted in support of his conclusion that the American Airlines asset management group had not requested information about BlackRock’s proxy voting, nor had American Airlines expressly asked the third-party consultant to review Blackrock’s proxy activities, nor had American Airlines received mandated reports from BlackRock about their proxy voting intentions.

Although he made clear in his judicial opinion that ESG considerations are not entirely impermissible and can be taken into account purely from a financial perspective as another factor or tool that can be utilized to help maximize long-term financial gain, the judge did not find that to be the case in this instance where BlackRock’s climate change goals seem at odds with the financial interests of ExxonMobil, whose primary area of business involves selling fossil fuels.

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What Happens Next?

Recommendations as to what losses were incurred and what remedies are most available and appropriate were due from both Spence and American Airlines by the end of January, which the judge will review before ultimately deciding on damages.

Although the judge has already found American Airlines to be in breach of its duty of loyalty, the penalties assessed for their infraction will likely be very influential both on a micro and macro level and can significantly impact how widespread the impact of this decision will be.

For one, the amount of damages owed will probably play a significant part in American Airlines’ decision on whether or not to appeal the ruling in this case, which would result in drawing more attention to the lawsuit and either solidifying or overturning the ruling.

Equally if not more importantly, the severity of the remedy that the judge ultimately hands down will directly determine whether the damages awarded are sufficiently large to inspire a wave of lawsuits initiated by employees against their employers on similar grounds now that they have been validated in court.

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Mployer’s Take

The potential size of the seismic quake that could come in the wake of this ruling can hardly be overstated.

That said, at this stage of the game, it is not yet certain at all that the aftershocks of this lawsuit will extend beyond the Northern District of Texas.

If the judge decides to bring his hammer down on American Airlines and requires them to pay a steep penalty, there may well be tens to hundreds of millions of plaintiffs who come out of the woodwork ready to step up and sue their employers on similar grounds.

In fact, in the inciting incident in this case, BlackRock was joined by State Street and Vanguard in electing the 3 dissident members to ExxonMobil’s board. These firms have all been ESG proponents and collectively are responsible for managing over $5 trillion in retirement assets - more than 12% of total retirement funds in the US - which could lead to tens of millions of additional plaintiffs from this one incident alone.

It’s unclear at this point just how broad this decision will ultimately prove to be beyond this particular case and proxy voting incident, however, since the judge pointed to the friction between climate change economics and fossil fuel economics as particularly at odds, and there were several clear conflicts of interest and breakdowns in communication and/or oversight on the part of both American Airlines and BlackRock, as well.

On the other hand, despite the conflicts of interest and insufficient proxy voting oversight, it remains unclear just what American Airlines was supposed to do to avoid this outcome in the first place.

Regarding the conflicts of interest, American Airlines presumably utilized BlackRock as a creditor because they provided the most favorable loan arrangements, and the airline has no control whatsoever about the equity stake in their company that any given investor like BlackRock might control at any given time.

The judge even noted in his decision that BlackRock’s significant ownership stake and outstanding debt with American Airlines “are not enough on their own to constitute disloyalty,” which seems to indicate the crux of the fiduciary duty violation is really the lack of oversight.

Even if American Airlines had been monitoring BlackRock’s ESG advocacy more closely, however, they were in no position to meaningfully influence BlackRock’s investment strategy one way or the other.

Essentially, if American Airlines violated its duty of loyalty by not monitoring BlackRock’s ESG promotion, then American Airlines would also have been in violation of its duty of loyalty just the same if it had been monitoring BlackRock’s proxy voting and had continued utilizing its retirement investment services anyway, so what choice did American Airlines have except to find a different investment manager that did not incorporate ESG into their investment decision-making process?

Regardless of how this case proceeds, one central takeaway from this situation is that employers would be wise to minimize conflicts of interest with retirement fund investment managers wherever possible, in addition to maximizing communication and oversight reporting with internal and external auditors.

The question as to what standards and by what measures employers are expected to hold retirement investment fund managers to account, however, especially about ESG-related issues, may not be adequately addressed, let alone answered, until long after this case reaches its final resolution.

It is still very possible, even after the judge’s finding that American Airlines breached their fiduciary duty to their employees that this case will ultimately conclude relatively quietly. If this ruling is upheld and reinforced in follow-up cases, however, it may simply be the end of ESG investing or we may very well be on the cusp of experiencing a sea-change-like shift in the employee benefits management industry.

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Key Takeaways

• About 1 in 5 large employers (200 plus employees) offering health benefits in the US utilized Centers of Excellence programs in 2024, mirrored the utilization rate among large employers in 2023.
• Although total Centers of Excellence utilization was consistent among all large employers between 2023 and 2024, the utilization rate increased among the smallest subset of large health-benefit-offering employers (those with 200 to 999 employees), while Centers of Excellence utilization fell among employers with 5,000 or more employees.
• Centers of Excellence can lower costs for employers by more than 10%, which is why a substantial number of employers require employees to seek care from designated Centers for Excellence for certain procedures, and why an even greater proportion of employers are willing to cover employee travel expenses to do so.

‍Article: Are Centers of Excellence On the Decline?

‍The proportion of employers offering employee health plans that utilize Centers of Excellence may have hit its high water mark and begun to recede among the nation’s largest employers. 

Centers of Excellence have been an increasingly prominent component of employer-sponsored health plans since they were first introduced in 2014. Still, after 10 years of largely consistent growth, the tide may be turning. 

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‍Centers of Excellence: By The Numbers

‍In the US in 2024, about 19% of all employers that have 200 or more employees and provide health benefits offered access to some form of Center of Excellence program to their employees.

That number has essentially remained unchanged at 19% year-over-year from 2023 for all US employers that provide health benefits and have 200 or more employees, which indicates that the Center of Excellence adoption growth has stalled at the macro level across all large employers within this range.

What’s more interesting, however, is noting how Center of Excellence participation has changed from 2023 to 2024 when breaking down the large employer into smaller demographic subsets, which reveals a less optimistic vision for the future of Center of Excellence program growth.

From 2023 to 2024, among employers that offer health benefits, for example, the smallest subset of large employers - those with between 200 and 999 employees - increased from about 15% that had incorporated Centers of Excellence into their offerings in some way as of 2023, to 16% who have done so as of the 2024 data.

While that change reflects a relatively small increase in proportion, employers with between 200 and 999 employees are also the largest subset of large employers, so even a small increase in participation percentage indicates a significant number of employers incorporating new Centers of Excellence options into their health plan offerings that they did not provide the year before.

That said, the Center of Excellence adoption trendline is moving in the opposite direction for employers with between 1,000 and 4,999 employees, as well as for employers with 5,000 or more employees on their payrolls.

In 2023 among employers that offer health benefits and have between 1,000 and 4,999 employees, about 31% offered Center of Excellence programs for at least some conditions and/or procedures. By 2024, however, that percentage had shrunk to 29%.

The Center of Excellence participation slide was even more pronounced in firms that offer health benefits to their 5,000 or more employees, which decreased from 45% to 39% in a massive 6% year-over-year drop.

In this light, while Center of Excellence programs among health-benefit-offering employers may look stable across large employers with 200 or more employees as a whole, a small percentage gain among the subset of large employers that have the largest number of employers is offsetting more substantial participation loss among employers with 1000 or more employees.

Given that larger employers often have a disproportionate impact in shaping workplace trends and workforce expectations, Center of Excellence supporters and proponents seem to be losing ground in the most influential places, which does not bode well for these trends to turn around in the near future.

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‍Centers of Excellence: Background

‍It’s been 11 years since 8 self-insured employers joined forces to establish the Employer Center of Excellence Network (ECEN), which has served as both a catalyst and model for the proliferation of Centers of Excellence since.

The plan was relatively simple: the group would identify and contract with a few select surgeons and hospitals throughout the country that could provide the highest quality of care at the lowest price for a few select, voluntary medical procedures.

By collaborating with other large healthcare purchasers and collectively funneling to those centers of excellence as many as possible of their employees who were seeking those select procedures, these employers realized they could create a situation that is mutually beneficial for all parties involved.

The doctors and hospitals obtain a pipeline of business that allows greater specialization and potential cost savings on the supply side of the healthcare equation, meanwhile, patients receive top-notch, specialized care at a bulk discount rate.

Employers, in turn, get lower and more consistent front-end costs on the procedure sticker price, as well as additional cost reduction on the back end from more consistent patient outcomes and fewer negative patient outcomes due to care provided by less specialized or skilled medical practitioners. 

When the ECEN first launched in 2014, the group of select procedures was limited to just knee and hip replacement surgeries, but the group has since expanded to include a number of other conditions that can benefit from the model, including spinal procedures, cancer treatments, and organ transplants, for example. 

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‍How Do Centers for Excellence Reduce Costs?

‍The main benefit that Centers of Excellence provide to employers may be consistency, which is advantageous for employers on a few different fronts: 

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• Consistency of Care: Employers can ensure that employees are getting quality care from specialists who have mastered the very procedure/treatment that the employee is seeking, which reduces the risk of negative patient outcomes, lowers long-term costs, and minimizes productivity loss due to medical error and/or reinjury/remission. 
• Consistency of Improvement: Not only are highly qualified and specialized hospitals and medical practitioners selected to be Centers of Excellence in the first place, but those care providers improve on their ability to deliver the ultra-specialized procedure/treatment through consistent repetition, which leads to consistent improvement in both diagnostics and care recommendations as patient outcome evidence refines the medial approach, as well as consistent improvement in process and efficiency of care delivery, like better care coordination and discharge procedures designed to minimize the chance of readmission, all of which works to reduce cost in a feedback loop.
• Consistency of Cost: By sending employees from all over the country to one of a few select Center of Excellence locations for a given specialized treatment or procedure, employers can predict with much greater accuracy the range of costs that will be incurred in each instance. Employers with no Center of Excellence programs in place will have employees seeking the same procedure at thousands of different hospitals and medical practices that have varying degrees of experience with the relevant procedures and treatments as well as varying cost structures for providing them and varying rates of success, which can make forecasting costs significantly more tricky. In effect, reducing the risk and uncertainty of costs actually works to reduce those very costs.

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‍One study from Rand Corporation indicated that the Centers of Excellence they evaluated had reduced total costs for employers associated with the relevant procedures by more than 10% (cost savings per procedure averaged more than $16 thousand).

Patients saw even greater cost savings at almost 30% through reduced or removed copayments, which is an incentive many employers offer to encourage Centers of Excellence utilization.

Both patients and employers benefited from a readmission rate that was about 75% lower than the national average, as well.

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‍Centers of Excellence: Flexibility vs. Rigidity

‍Even though the patient outcomes and reduced costs have served as effective positive incentive tools on their own to encourage employees to seek out Centers of Excellence for covered services, a significant proportion of employers see enough upside in Centers for Excellence programs that they supplement those incentives with additional sticks and/or carrots.

With regard to negative feedback and sticks, nearly 1 in 5 large employers that utilize Centers of Excellence programs require its employees to use those Centers for certain procedures without providing an alternative employer-sponsored option.

The larger the employer, the more likely the employer is to mandate Center of Excellence use, with only 14% of employers with between 200 and 999 employees requiring Center of Excellence utilization for prescribed conditions, while 27% of employers with between 1,000 and 4,999 employees and 31% of employers with 5,000 or more employees did so. 

As for additional positive feedback and carrots to incentivize employees to take advantage of these programs beyond reduced costs, positive patient outcomes, and low readmission rates, a large number of employers also cover travel expenses that employees incur when visiting Centers of Excellence.

In 2024, 24% of employers with between 200 and 999 employees covered travel expenses for employees to seek care at Centers of Excellence, 25% of employers with between 1,000 and 4,999 covered these employee travel expenses, and 46% of employers with 5,000 or more employees covered them.

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‍Mployer’s Take

‍It is entirely possible that the dip in Center of Excellence utilization among the largest employers in the US last year was anomalous and not indicative of these programs falling out of favor at the top of America’s most influential private organizations. 

It’s also possible that covering travel expenses became increasingly expensive for employers as covered procedures evolved from relatively fast procedures with relatively short on-site recovery times, like hip and knee replacements, to more invasive procedures with longer recovery times, like organ transplants, and treatments that themselves are more complex and long-term, like certain cancer treatment regimens. 

Whatever the case may be, it must be somewhat troubling for Centers of Excellence advocates to see the most pronounced reduction in utilization among the largest employers, however, given that Center of Excellence programs seem most aptly suited to the biggest organizations who can negotiate low fees, provide steady streams of patients from many corners of the country, and take advantage of these potential cost savings. 

That said, because Centers for Excellence are such a relatively recent addition to the employer cost-saving repertoire, there is still a process of trial and error that is happening which may result in some fluctuation in participation percentages but will hopefully ultimately lead to greater efficiencies and a more streamlined menu of services that best work in Centers of Excellence models.

In the meantime, as those issues and efficiencies get sorted out, Centers of Excellence are likely to remain a prominent component of health benefits service delivery for the foreseeable future, and we’ll keep an eye on these utilization trend lines as they continue to take shape and organizations figure out how to best optimize these programs. 

Key Takeaways:

• Remote work rose rapidly during the pandemic and remote participation rates among employers remain above pre-pandemic levels in all but 1 industry.

• Some industries, often involving tech and professional services, have seen outsized growth in remote work participation, while other more on-site-oriented industries like construction, retail, and mining have seen less remote participation growth.

• Accounting for a variety of factors, organizations that experienced the largest increases in remote work saw correspondingly large increases in work output without incurring comparable increases in input required.

• On average, by these measures, an increase in remote work participation corresponds with an increase in productivity.  

Article: Is Remote Work More or Less Productive Than On-Site Work?

There is little debate about the significance that the COVID-19 pandemic has had in terms of enabling the rise of remote work and reshaping both the workplace and worker expectations as a result.  

There is considerably more debate, however, about the impacts that remote and hybrid work have on worker productivity.

While attempts over the last few years to quantify change in productivity due to remote work have yielded mixed results, the Bureau of Labor Statistics recently published what appears to be the most comprehensive analysis of productivity as it relates to remote work yet, which yielded some very interesting insights about more than just remote worker productivity.

The Big Question: How Does Remote Work Productivity Compare to On-Site Work Productivity

The simplest answer to the question of whether or not remote work is more, less, or equally as productive as on-site work is that remote work is on average more productive than on-site work.

As is often the case, however, the simplest answer is not necessarily the most helpful or accurate one. There are a number of different factors that can influence whether remote work is more or less productive than on-site work, including industry type and size, as well as less easily generalized factors such as off-site working conditions, which can vary from one employee to the next.

How remote work is defined as well as how productivity is measured are also crucial considerations that can significantly affect whether remote work is more, less, or comparably productive.

The Rise of Remote Work Across Major Industries

Remote work predates the pandemic, of course, and in fact about 6.5% of private sector workers in the US were already working remotely in 2019.

With the implementation of social distancing policies as the Pandemic spread across the US in the spring of 2020, remote work saw a dramatic upswing in many sectors, with some industries seeing more than 30% increases in the proportion of their workforces that are working remotely.  

For the following analysis, the term remote work encompasses both fully remote work and hybrid work arrangements where the majority of work is done off-site.

Remote work rose across all industries in the first years of the pandemic. Although the proportion of employees working remotely fell some as social distancing policies at the workplace expired, remote work still remains above 2019 levels in all industries except the agriculture, forestry, fishing, and hunting industry. This, however, is in part because that industry had one of the top 5 largest remote participation rates among industries even before the pandemic.

Although remote work participation increased across almost all industries into the early post-pandemic years, that increase has not been equally distributed, and some industries have seen much more substantial increases in remote work than others.

In 2019, there were only 5 industries with more than 10% of their workforces working remotely - professional, science, and technical services (16.5%); information (11.4%); finance and insurance (10.5%); real estate rental and leasing (12.4%); and agriculture, forestry, fishing, and hunting (13.6%).  

By the end of 2022, however, more than 75% of major industries had at least 10% of their workforce working remotely.

In fact, as of the most recent data collection, there were only 5 major industries with less than 10% remote participation: retail (9.4%); mining (7.2%); construction (7.8%); food services (4.8%); and transportation and warehousing (8.8%).

At the same time, there are 4 major industries with more than 30% remote work participation, including 1 with more than 40%: information (38.8%); finance and insurance (37.6%); management of companies (33.0%); and professional, scientific, and technical services (41.4%).  

Measuring Remote Work Productivity

While different firms have attempted to use a range of different metrics by which to evaluate remote work productivity, including emails sent, managerial performance reviews, and phone calls logged per hour for example, for the purposes of this analysis, productivity is measured by Total Factor Productivity (TFP).

TFP is calculated by dividing worker output by all the inputs that go into producing that output, which provides a more comprehensive and dynamic understanding of productivity as a function of the varied costs that facilitate production.

For example, TFP takes into account not only the reduced labor costs that can accompany remote work due to remote workers accepting lower wages in exchange for flexibility or because they live somewhere with a lower cost of living, but TFP also takes into account other inputs that can change as a result of remote work, such as reduced office space, utility usage, turnover/recruiting service needs, and on-site/local perks and benefits expenses per employee.

How Industry Type and Size Impact Remote Work Productivity

Industry Type

Each industry has its own set of challenges and opportunities when it comes to implementing remote work, and not all industries have been equally proactive in embracing remote work and/or capturing the maximum productivity/value from remote operational structures.  

In that light, it does not necessarily follow that industries with higher TFP scores are better suited for remote work while industries with lower TFP scores are less well suited because the circumstances involved within each industry and how each has approached remote work can be radically different.

That said, some industries have certainly fared much better than others when it comes to retaining and increasing productivity output relative to input via remote work.  

Some of the industries with the highest TFP ratio, indicating the greatest year-over-year growth in net output over input as remote work quickly escalated during the pandemic, include data processing, internet publishing, and other information services; funds, trusts, and other financial vehicles; publishing; rental and leasing; and chemical products.  

Some of the industries with the lowest (negative) TFP ratios, indicating a loss of productivity correlated with the rise of remote work, include air transportation; oil and gas extraction; metal products; and performing arts, museums, spectator sports, and related activities.  

The industries with the largest productivity gains as remote work rose during the pandemic were funds, trusts, and other financial vehicles; data processing, internet publishing, and other information services; computer system design and related services; and publishing services including software.

The only industries to record decreasing remote work productivity during the pandemic as measured by TFP are securities, commodities contracts, and other financial investments; insurance carriers and related activities; and broadcast and telecommunications.

Industry Size

Productivity gains must also be considered in light of industry size, with relatively smaller industries seeing more extreme productivity swings than relatively larger industries.

Some of the larger industries that recorded remote-work-induced productivity gains include construction; real estate; miscellaneous professional, scientific, and technical services; and federal reserve banks, credit intermediation, and related activities.  

Some of the larger industries that experienced a net decrease in productivity because of remote work’s rapid adoption are retail; wholesale; broadcasting and telecommunications; insurance carriers and related activities; and ambulatory healthcare services.  

In total, across the 61 industries that were analyzed, on average each 1% increase in remote work participation resulted in a 0.08% increase in TFP.

Mployer’s Take

With 7 out of the top 10 industries that recorded the largest increases in remote work during the pandemic all correspondingly increasing their output by a larger margin than their input costs, the correlation between remote work and increased productivity is clear.

That said, remote work is not a one-size-fits-all solution for every given job function or private organization let alone any/every industry.

Certain industries - especially those heavily involving tech, data, publishing, and professional and scientific services - seem to be particularly well-suited for remote working arrangements, while other industries with a disproportionately large number of location-specific jobs like retail, mining, transportation & warehousing, and construction, are less well-suited in general.

That said, within nearly every organization regardless of industry there are jobs that are primed for remote work, even if not every organization in every industry is equally prepared to capture the same value and productivity from remote arrangements where applicable.

Despite the growing evidence of the productivity benefits associated with remote work, however, many organizations may move away from and/or downsize remote programs in the coming years, especially if the job market shifts in favor of employers as it is likely to do.

Larger and older organizations with more established managerial structures may choose to bring employees back to on-site work for a variety of reasons such as fostering collaboration, justifying commercial real estate expenses, and encouraging voluntary turnover in line with planned reductions in the organization’s payroll.

Still, because remote work is most effectively utilized by smaller, more tech-heavy organizations, new market entrants will increasingly rely on remote work to capture the productivity benefits and gain an advantage over the entrenched players in their markets.

As a result, remote work is likely to see an upward trajectory over the long term as successful remote-friendly new entrants grow and absorb an increasing share of the market, but the short-term prospects for remote work growth remain uncertain and may be linked to the greater economy and job market.

As this analysis makes clear, however, on average, remote work is more productive than on-site work, and organizations that are best able to capture that value regardless of industry or organizational size/type can obtain and/or maintain a meaningful advantage over their competition.

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‍Key Takeaways

• The H-1B visa lottery program each year allows US employers to bring in a total of 85 thousand foreign workers with specialized skill sets to work in the US for a period of 3 years, with the possibility of an extension.

• There are currently about 600 to 700 thousand foreign workers operating in the US under an H-1B visa.

• The vast majority of H-1B visa holders work in tech within the accounting/auditing, investment banking, and consulting industries, with between 8 and 9 out of 10 H-1B workers originating in India and to a lesser degree China.

The Employers’ Guide To The H-1B Visa Debate

Despite having Republican’s sweep the November elections and win control of not only the White House, but also both chambers of Congress in Washington DC, a stark divide within the party emerged on the issue of H-1B Visas prior to taking formal control of the federal government.

On one side of the debate, head of the Department of Government Efficiency and advisor to the incoming president Elon Musk has taken a strong stance in favor of the H-1B visa program, which has resulted in considerable pushback from a significant portion of President Trump’s MAGA voter base.

In response to the growing debate, President Trump sided with Musk in support of H-1B visas, which seemed effective at preventing the dispute from escalating further, but it remains to be seen if/how that ideological division between MAGA leadership and the MAGA movement will impact H-1B policy going forward as actual legislation and regulation are put on the table in the coming months.

In light of the uncertainty about the fate of the program in the future, we thought it would be worth taking a look at H-1B visas to get a better understanding of the size of the program, the scope of impact that potential that could result from any proposed changes, and what industries and organizations are likely to bear the brunt of the potential impacts.

H-1B Visa Program Background

The H-1B visa program launched in 1990 as a means for employers to obtain temporary work visas for highly skilled foreign professionals who work in ‘specialty occupations’ - often requiring a college degree or higher and specialized, relevant skills - or as fashion models of distinguished skill.  

While the program has evolved some over the years, for the last 2 decades the number of H-1B visas issued each year has been statutorily capped at 65,000 for standard H-1B visas plus an additional 20,000 for applicants with a master's degree or higher obtained from a US college or university.

H-1B visas are distributed via a lottery system and last for a duration of 3 years, although applicants frequently seek and are granted extensions beyond their initial term for a maximum of 6 years, after which time the applicant will need to reapply and obtain a new H-1B visa or the visa-holder must leave the country.

The H-1B Debate

The central question in the debate over H-1B visas is whether or not the H-1B program provides US companies with the talent necessary to keep ahead of and/or keep up with global competitors, or whether the H-1B visa program effectively suppresses wages for US workers by enabling US companies to access specialized labor at a discounted price.

In defense of the H-1B visa, Musk credited the H-1B program as the reason he’s in America, and he said it is responsible for bringing in so many critical people who helped build companies that made America strong.

Opponents of the H-1B visa program often concede that the program can serve a valid purpose in a relatively small portion of cases where a person with unique or rare skills, abilities, and experience must be recruited from outside the US.

In practice, however, opponents argue that the program is primarily used to recruit foreign workers with qualifications that are readily available among the US workforce but who are willing to accept lower wages in order to obtain a US visa, which works against the interests of similarly skilled US workers.

H-1B Visas By The Numbers

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There are approximately 600 to 700 thousand foreign workers operating in the US under H-1B visas, but the H-1B visa-holding population tends to fluctuate cyclically.

The low point for the H-1B holders population comes at the end of each fiscal year when some foreign workers begin leaving the country to pursue new opportunities outside of the US before their visas expire, meanwhile, the annual H-1B cap has already been hit so no new foreign workers can replace them until the beginning of the next fiscal year, as depicted in the chart below.

Last year, employers submitted more than 850 thousand applications for H-1B visas, which is more than 10 times the 85,000 annual cap for new H-1B visas, so the demand for these specialized foreign workers among US companies significantly outpaces the available supply.

Demand for these visas among foreign workers is strong , with workers from India and to a lesser degree China accounting for the vast majority of H-1B visa-holders. For example, in 2023, 76% of H-1B visas were issued to workers from India, with the next largest proportion going to Chinese applicants (12%). Men also tend to be disproportionately represented, accounting for 71% of successful H-1B applicants in that same dataset.

The average salary for H-1B visa holders is just under $120,000 per year as of 2024, which is up slightly from about $115,000per year in 2023. As of the most recent data available, about 75% or 3 out of 4 jobs filled by H-1B visa-holders last year paid $150,000or less.

H-1B applications tend to be concentrated in computer science, IT, and/or finance-related work across a relatively limited range of industries, with a handful of tech companies dominating the H-1B lottery, followed by accounting/auditing firms, universities, investment banks, and consultancies.

Mployer’s Take

In the recent H-1B debate, both sides are right in a sense.

The H-1B program has been bringing top (largely tech) talent to the US since the days when the internet was coming through the phone lines, and that talent certainly contributed to building the global digital infrastructure that we’ve come to know today.

It’s also clear that the size of the tech industry where H-1B holders have largely landed and the demand for tech talent in general has grown much faster over the years than the number of H-1B visa holders available to fill that growing demand, so the impact of H-1B visas on the US tech labor force has actually shrunk over most of the last 35 years.

On the other hand, with potentially fewer than 6 million tech workers currently employed in the US, if 75% of H-1B visa-holders are doing or supporting tech work, that could account for almost 10% of jobs in the space and would drive down wages for US tech workers enough to validate their opposition to the program.

Given both Musk and Trump’s stated support, along with significant bipartisan endorsement, the H-1B program does not appear to be going anywhere anytime soon., Even if the program were significantly pared down, the resulting impact on wages would be negligible everywhere outside the tech industry.

That said, the impact of significantly reducing the H-1B program on US tech worker wages could be meaningful, and that is especially true when the tech industry is in a state of contraction itself.

Still, expansion of the H-1B program seems more likely than reduction, but in light of the pushback against H-1Bs we’ve seen from the Republican voter bloc over the last couple of months, any expansion that may be trial-ballooned is unlikely to bring the program back to anywhere near the level of influence it had on the tech industry in eras past.

Under business-as-usual circumstances, the H-1B program would carry on operating undisturbed just as it has for most of the past 20 years and the recent debate would be replaced by another that is just as soon forgotten, but with would-be agents of change like Musk bringing the issue to the spotlight, it is impossible to count out the possibility that the H-1B program could see a massive overhaul of one sort or another in the near future.

If expansion of the H-1B program is proposed in the next few years, it seems a strong possibility that it would be coupled with some kind of accompanying US technical skill training program to help offset any blowback from the base.

Regardless of how the H-1B program is managed over the next 4 years, however, the only real certainty is that the demand for these types of visas will remain strong among employers for as long as they are available, and that demand will likely continue to outpace the supply.