The latest U.S. jobs report served as a wake-up call about the economy’s fragility: we added just 22,000 jobs last month, less than a third of what economists had projected, and unemployment reached its highest rate since 2021. This outlook lies in contrast to Washington’s persistent push to lead in AI and tech innovation. The disconnect is glaring: we praise domestic AI ambitions while companies accelerate the exporting of the very work that should build it here.
We’ve put tariffs and tax credits behind factory jobs, but let high-skill tech jobs quietly slip overseas — undermining the AI ambitions that Washington champions. Domestic tech jobs drive wages, strengthen national security and fuel AI innovation. If the United States is serious about its economic and tech future, it needs to rebuild its domestic workforce.
Onshoring manufacturing comes with tariffs, credits and content rules for shifting production. But in tech, offshoring runs unchecked. Each year, U.S. companies offshore more than 300,000 high-skill tech jobs, often outsourcing entire departments without disclosing the number of jobs relocated or the U.S. wages displaced. IT is now the most outsourced business function, offering companies a cheap shortcut with no oversight, reporting or import-like taxes. In the last 18 months, tech leaders have laid off tens of thousands of American workers, only to ship their jobs abroad.
Now, 37 percent of IT tasks are performed overseas. At the same time, the 400,000 H-1B visas approved last year — 65 percent of which are for tech — are competing with entry-level roles that should be filled by American graduates. Instead of easing unemployment, they exacerbate the issue by sidelining a generation of U.S. talent.
Outsourcing may look cost-effective on a balance sheet, but when the code for banks, grids and hospital systems is built or maintained offshore, we import foreign-law exposure, vendors that are difficult to audit and slower response times when things break. That “efficiency” is a national security risk.
Moving domestic tech jobs overseas also means lost wages, lower tax revenue and rising unemployment rates. Unemployment among young U.S. tech workers has increased by 3 percent. In comparison, the overall unemployment rate for recent graduates has jumped to 9.3 percent — despite many being trained for the very jobs companies are outsourcing overseas. And while their jobs are sent abroad, lower-paid foreign labor fills the manufacturing roles that remain. Winning back factories while losing the future of U.S. tech is not an effective strategy.
AI’s rapid advancements and adoption make this issue even more urgent. The AI race is about having the right talent, not just chips. If America’s goal is to lead in AI safety, adoption and exports, it needs engineers, data scientists and systems integrators here, especially entry-level cohorts who learn fastest embedded with U.S. teams and government agencies.
The good news is that reshoring tech jobs is faster, cheaper and less disruptive than manufacturing, which requires permits, heavy machinery and years of capital buildout. Reshoring just needs smart policies and investment in U.S. talent.
Applying a digital tariff to outsourced IT services and expanding apprenticeships are good starting points. With a digital tariff, tens of thousands of jobs for college graduates and military veterans could return in months, not years — making it one of the fastest levers to rebuild the domestic workforce. Especially now, as AI drives demand for skilled workers, the U.S. needs pathways that allow Americans to gain AI skills in a matter of months.
The HIRE Act can help solve these issues by imposing a 25 percent tax on outsourcing payments and funneling the proceeds into U.S. apprenticeships and workforce programs. This move creates a direct financial incentive for companies to hire domestically. Meantime, U.S. companies reliant on H-1B visas should pay a tax that directly funds U.S. upskilling.
Nearly 400,000 H-1B petitions were approved in 2024 — 65 percent of which were for tech. Those are jobs that could’ve gone to recent U.S. college graduates, reducing unemployment and bolstering the economy. If we can move quickly on taxes for physical imports, we can move just as soon on a fair, enforceable policy for tech labor.
Preserving and growing America’s tech workforce must be treated as a national asset, with taxes and investments creating pathways to rebuild our workforce from within. And with the right incentives, like the HIRE Act paired with onshore delivery and paid apprenticeships, the United States can protect its jobs, drive innovation, strengthen national security and secure its position in global tech leadership.
