A senior official of the Trump administration has lambasted three leading Indian information technology companies — Tata Consultancy Services (TCS), Infosys and Cognizant Technologies — for resorting to ‘trickery’ for allegedly grabbing most of H1-B visas issued by the US Citizenship and Immigration Services (USCIS).
The H1-B visas are issued to foreigners who have ‘theoretical’ and ‘technical’ expertise in specialised areas to work in local (read American) companies for a temporary period. The US issues 85,000 such visas every year — 65,000 hired from abroad and 20,000 from those enrolled in the US universities/colleges.
Due to the heavy demand, the USCIS which runs the programme, receives several times more applications than it can grant and uses an electronic lottery to pick the ones that will go through. This results in a scenario whereby bulk of those hired from abroad go to the Indian companies – TCS, Infosys and Cognizant being top three recipients.
The average wage for H-1B visas for these three companies is between $60,000 and $65,000. By contrast, the median Silicon Valley software engineer’s wage is over two-and-a-half times at $150,000. This has prompted the official to conclude that the extant random lottery system is weighted towards lowest wage workers and there is a dire need for replacing this by a system that prioritises higher-skilled, higher-paid (albeit American) workers.
The observations of the official need to be viewed in the backdrop of an executive order called “Buy American, Hire American,” signed by President Trump on April 18, 2017 directing federal agencies to review the H-1B visa programme with an aim to end ‘fraud’ and ‘abuse’ and ensure only the “most-skilled and highest-paid applicants” were successfully processed.
For a country of the stature and pre-eminence as the US which for generations has espoused the cause of multilateralism and free international trade and investment, the sudden switch by the Trump administration to ‘protectionism’ by itself is not a good omen; neither for countries that export goods and services to the US nor for the American economy.
What is even worse is that in the context of IT industry, this policy reversal is sought to be justified by taking recourse to wild allegations such as ‘fraudulence’ and ‘abuse.’ The arguments advanced by the official are not only flawed but also malicious with the sole intent of showing Indian companies in poor light.
At the outset, in a scenario wherein the demand for professionals is driven by requirements of the business, there is no valid justification for imposing a ceiling on the number of H-1B visa to be given. Yet, if the administration has chosen to put a ceiling against the demand being much higher, necessarily there has to be a mechanism for addressing the gap. So, it opted for an electronic lottery system.
This is a standard, time-tested and transparent system. It has been in use for decades and no one ever found any fault or raised questions on its legitimacy and credibility. Now, to say that Indian companies are misusing it, is preposterous. The administration has faulted their act of putting in more applications ostensibly to grab more. Faced with a ceiling and given the need of business, what else could they do?
If, TCS needs to deploy, say 10,000 of its skilled professionals to execute outsourcing assignments from US based companies and this has to be garnered from out of a limited quota, it will have to put in a much larger number of applications. This is a fair and perfectly tenable strategy under the circumstances it faces. In the absence of a cap and administration sanctioning all those applied for, it would have submitted only 10,000 applications.
The administration is also committing a grievous error in equating “most-skilled” with “highest-paid” applicant. Simply because a professional is highest paid, it does not automatically follow that he is the most skilled. Conversely, if he is paid less, it cannot be inferred that he won’t be the most skilled. Put differently, if a most skilled foreign national is available at a lower price (at $60,000-$65,000 which is less than half the cost of a local/American), there is nothing unfair in it; instead, this should be welcome.
Services issue
In a fundamental sense, H-1B is a trade and services issue. The demand for such visa arises primarily because a good slice of operations of US-based companies are outsourced and a number of such contracts are bagged by Indian companies. The latter are able to offer competitive rates to the former on the strength of their pool of cheap professionals and technical capabilities.
Eventually, the benefit of engaging them for executing these assignments accrues to American companies and in turn, to the US economy which gains by way of boost to its GDP and employment.
The issue has to be viewed in this very perspective only and not mixed up with immigration per se. The endeavour of US administration under Trump now to view H-1B visa only as an instrument to give more jobs (albeit in skilled category) will be a losing proposition for all stakeholders. While affecting Indian IT companies (by way of reduced export earnings and denting their bottom line as nearly 60% of their revenue comes from the US), this will also undermine the growth and competitiveness of American companies.
The US president should come out of his election euphoria and recognise that Indian IT companies are contributing billions of dollars to US GDP as also in tax collections besides supporting over 5,00,000 US jobs. All of these gains will be lost if henceforth, the administration starts viewing H1-B visa as a purely immigration issue and indiscriminately reduces the entry of Indian skilled personnel. One hopes better sense will prevail and Trump will refrain from pursuing an agenda that could be potentially disastrous for both India and the US.
(The writer is a New Delhi-based policy analyst)
http://www.deccanherald.com/content/612143/visa-regime-hit-growth-competitiveness.html