To H-1B or Not to H-1B...
The attempt to restrict US visas for skilled professionals will mostly die a quiet legislative death
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.
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.
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.
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