To H-1B or Not to H-1B...

The at­tempt to re­strict US visas for skilled pro­fes­sion­als will mostly die a quiet leg­isla­tive death

The Economic Times - - The Edit Page Longer Lifespan - Seema Sirohi

Aslew of Bills in the US Congress, and a pos­si­ble pres­i­den­tial ex­ec­u­tive or­der, are cur­rently in play to var­i­ously re­strict, cleanse, bal­ance and op­ti­mise Amer­i­can visas for highly skilled for­eign pro­fes­sion­als. In­dian IT ma­jors are ob­vi­ously con­cerned, as are US tech giants.

Flares went up and stocks down as re­ports emerged about an im­pend­ing White House ex­ec­u­tive or­der on find­ing ways to “make the process of H-1B al­lo­ca­tion more ef­fi­cient and en­sure the ben­e­fi­cia­ries of the pro­gram are the best and the bright­est”. The leaked draft calls for “site vis­its” to de­tect fraud on L-1 visas meant for in­tra-com­pany trans­fers and checks on for­eign stu­dents on ‘Optional Prac­ti­cal Train­ing’.

The draft is gen­eral in tone but sweep­ing in scope. The over­all in­tent is un­mis­tak­able: to tar­get for­eign work­ers, in­clud­ing through long-term data col­lec­tion on “to­tal num­ber of for­eign-born per­sons” autho­rised to work in the US.

US Pres­i­dent Don­ald Trump hasn’t yet signed the or­der. One, be­cause high-volt­age busi­ness moguls made high-deci­bel noise. Two, the mas­sive uproar around the travel ban gave him pause as the courts came down like a ton of bricks on the ban.

But the White House is un­likely to back off. Trump’s se­nior ad­vis­ers, Steve Ban­non and Steve Miller, and his at­tor­ney gen­eral, Jeff Ses­sions, all share a view of im­mi­grants and im­mi­gra­tion. They will keep com­ing at it.

They don’t ac­cept the fact that tech­no­log­i­cal changes af­fect the US job mar­ket far more than for­eign work­ers. This, when the full im­pact of au­toma­tion, cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence is yet to hit the work­force.

They don’t want to be­lieve that US com­pa­nies make de­ci­sions based on in­ter­nal dy­nam­ics, not on the avail­abil­ity of H-1B visa-hold­ers or im­mi­gra­tion pol­icy. A com­pany de­ci­sion to out­source a func­tion for what­ever rea­son — ef­fi­ciency or in­no­va­tion — is al­ready made be­fore any IT con­trac­tor comes into play. Com­pa­nies out­source so they can fo­cus on more crit­i­cal ar­eas.

Wrong Per­cep­tion

But a per­cep­tion has taken hold that H-1B visa-hold­ers are ‘re­plac­ing’ Amer­i­cans. A re­port by the US Chamber of Com­merce, how­ever, points out that even if that were true, the num­ber of jobs lost — around 600 a year that are blamed on out­sourc­ing — is about 0.0003% of the 20 mil­lion jobs lost ev­ery year in the US due to lay­offs, busi­ness clo­sures and other rea­sons.

Be­sides, In­dian com­pa­nies don’t get a ma­jor­ity of the H-1B visas, de­spite the pre­vail­ing myth. In 2015, only 17% of H-1Bs went to the top seven In­dian com­pa­nies. In to­tal, fewer than 15,000 slots, not enough to fill a big sta­dium in Amer­ica.

There is an ur­gent need to un­pack the mis­in­for­ma­tion blob hang­ing over the de­bate. It’s im­por­tant to dif­fer­en­ti­ate be­tween visas for skilled pro­fes­sion­als and the US’s gen­eral de­sire for im­mi­gra­tion re­form — a deeper, wider, more fraught is­sue and ex­tremely sen­si­tive to po­lit­i­cal touch.

In­dian am­bas­sador to the US, Navtej Sarna, has been mak­ing the case at Capi­tol Hill that tar­get­ing In­dian pro­fes­sion­als will ul­ti­mately hurt Amer­i­can com­pa­nies and their global com­pet­i­tive­ness. The largestever del­e­ga­tion of US Con­gress­men and women to In­dia — 26 in all — got the same mes­sage this week from Prime Min­is­ter Naren­dra Modi. A Nass­com del­e­ga­tion is also cur­rently in Washington to stress that it’s no longer about de­pen­dency but sym­bio­sis.

The Truth

In­dia is not free rid­ing. Some facts are worth re­peat­ing: Be­tween 200813, In­dian FDI in the US was around $28 bil­lion, In­dian IT in­dus­try sup­ported over 400,000 jobs in the US in 2015 — an an­nual growth of 10%. And it paid $22.5 bil­lion in taxes to the US Trea­sury be­tween 2011-15.

In 2012, IT pro­fes­sion­als also poured $5.6 bil­lion in so­cial se­cu­rity taxes, which they won’t get back in their old age be­cause the US gov­ern­ment finds it con­ve­niently in­con­ve­nient to dis­cuss a to­tal­i­sa­tion agree­ment. An Au­gust 2016 com­men­tary in the Har­vard Jour­nal on Leg­is­la­tion by Josh Crad­dock (So­cial In­se­cu­rity: The Case for To­tal­i­sa­tion with In­dia, goo.gl/g8ackK) es­ti­mated that In­dian work­ers put $27.6 bil­lion into the US so­cial se­cu­rity sys­tem over the last decade. This should count as In­dia’s sup­port for work­ing-class Amer­i­cans.

As for the many Bills float­ing in the US Congress to re­strict visas for skilled pro­fes­sion­als, most will die a quiet leg­isla­tive death, if his­tory is a guide. De­spite their grandiose ti­tles, they mis­di­ag­nose the prob­lem.

Con­gress­woman Zoe Lof­gren’s High-Skilled In­tegrity and Fair­ness Act 2017 got the max­i­mum at­ten­tion be­cause she wants to raise the min­i­mum wage for H-1Bs to $130,000, a whop­ping 200% in­crease. But she is a Demo­crat and in a Repub­li­can-con­trolled Congress, her Bill won’t get past the com­mit­tee stage, for­get com­ing to a vote.

Repub­li­can Bills may gain trac­tion. But the is­sue is so com­plex and the as­sump­tions so di­verse, it will be a while be­fore the de­bate is set­tled.

Then there are Bills along pro­tec­tion­ist lines that bear watch­ing. House speaker Paul Ryan wants to im­pose a 20% bor­der ad­just­ment tax on im­ports to lower Amer­ica’s trade deficit. He wants to rope in all coun­tries, but Trump doesn’t. Trump has spe­cific tar­gets in mind.

So far, In­dia doesn’t seem to be on the list and it should stay that way. An early visit by Modi can clar­ify the var­i­ous trade­offs on se­cu­rity and eco­nomic is­sues.

The con­sumer is King Kong

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