Here we go again. Another policy that lands hardest on the people least able to absorb it: entrepreneurs and small businesses. Last week, the President issued a proclamation requiring a $100,000 payment for each new H-1B visa petition. The intent is to protect American jobs. That’s a worthy goal, but if you subtract out politics and look at this from the ground level, the effect is devastating for smaller, fast-growing companies outside of major metro areas.
For Apple, Microsoft, or Google, $100,000 is peanuts. These companies already pay engineers $200,000 or $300,000 a year. Adding another $100,000 to bring on a skilled worker doesn’t move the needle for them. But if you’re running a small technology company in a city like Raleigh, Austin, Atlanta, or Denver, it’s a completely different story. The average salary for a software engineer in these places is closer to $130,000 to $150,000. Adding another $100,000 is like doubling the cost of an engineer. For a startup, that makes the H-1B untenable. It’s crippling. It’s the difference between hiring and not hiring.
I’ve lived this so I can say with certainty that for smaller, entrepreneurial ventures, every dollar matters. One new tax, one new rule, one new fee could knock these smaller companies out. That’s the daily reality for small business owners all over the country.
This is why the H-1B proclamation will have unintended consequences. It doesn’t just make life harder for entrepreneurs. It tilts the playing field further in favor of the biggest companies. They can keep hiring. They can keep attracting the best global talent.
And the irony is that small businesses are the real job creators. They are where new ideas come from. More than 60% of new jobs are created by small businesses, not large ones. They are the ones taking risks, building teams and creating opportunities in communities outside Silicon Valley. Here’s yet another example of a policy written as if the entire economy looks like San Francisco. It doesn’t.
There’s a simple fix here. Scale the fee based on company size or revenue. Let large companies pay the full amount. Let smaller companies pay less. That way, you discourage abuse of the visa system without shutting small businesses out of the talent pool. Because, at the end of the day, we want policies that protect American jobs, yes. But we also want policies that protect American entrepreneurs and American innovation, our most important strategic asset over the past 250 years.
If we keep building walls that only the biggest can climb, we’ll get an economy dominated by a few giants. Less competition leads to less innovation. Entrepreneurs deserve better. And, if we want the next generation of great American companies to come not just from Silicon Valley but from Raleigh, Atlanta, or Austin, we don’t need even more policies that crush them before they even get off the ground.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
