Do High-Skill Visa Bills Unfairly Target Indian Companies?

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By Laura D. Francis

The president of an Indian IT industry trade group has a bone to pick with the U.S. about proposed changes in its temporary visa program for skilled workers.

These “so-called protective measures” take aim at the Indian information technology outsourcing companies that NASSCOM represents, R. Chandrashekhar told Bloomberg BNA. Yet Indian companies take fewer than a quarter of the 85,000 H-1B visas available each year, he said. If the U.S. wants to restrict visa usage, it should do so across the board, he said Feb. 24.

If an American worker loses a job opportunity to someone on an H-1B visa, Chandrashekhar said, what difference does it make if that visa holder works for one company versus another?

But the sponsors of bills to change the program maintain that their proposals focus on a problem with the H-1B program: the outsourcing companies’ ability to exploit it to hire cheaper labor to the detriment of U.S. workers.

U.S. tech firms such as Google and Facebook depend on the visas but are being “crowded out” by the outsourcers, Calvin Moore, a spokesman for Rep. Darrell Issa (R-Calif.), told Bloomberg BNA March 1. And the outsourcers are paying their H-1B workers just slightly more than the minimum salary needed to avoid the requirement that they attest that no U.S. workers were displaced, he said.

Issa’s bill would raise that salary threshold from $60,000 to $100,000.

Negative Attention

The H-1B program provides a total of 85,000 temporary visas per year for foreign workers in “specialty occupations.” It’s been a favorite of U.S. tech giants such as Google and Facebook Inc., as well as Microsoft Corp., Intel Corp., Amazon.com Inc., IBM Corp. and Apple Inc.

But there have been recent high-profile cases—at Southern California Edison, Walt Disney World and the University of California—of U.S. workers being laid off and replaced by H-1B workers employed by IT outsourcing companies. And that’s brought some negative attention to the program.

During his campaign, President Donald Trump called for overhauling the H-1B program to better benefit U.S. workers. His administration has yet to issue an official policy addressing the visas.

In addition to Issa, Rep. Zoe Lofgren (D-Calif.) also has introduced H-1B legislation. Like Issa’s bill, Lofgren’s would raise the salary threshold for avoiding the worker displacement attestation. But her bill also would restructure the H-1B program’s salary requirements—pushing them upward—and would allocate visas according to salary offered. Currently, the visas are distributed according to a random lottery.

Sens. Charles Grassley (R-Iowa) and Richard Durbin (D-Ill.) also have reintroduced legislation that would require companies to make a “good faith effort” to recruit U.S. workers before hiring an H-1B worker and would reallocate H-1B visas instead of using the lottery. Companies with 50 percent or more employees on H-1B visas would be allowed additional visas. The measure would explicitly prohibit replacing U.S. workers with H-1B workers.

The restrictive approach being contemplated “would not serve the American interest” of increasing job opportunities for U.S. workers, Chandrashekhar said. Instead, the U.S. should adopt a “more far-sighted” approach that best serves the interest of the American economy as well as the American worker, he said.

‘Mix-Up’ Over Indian Visa Usage

The focus on Indian companies may come from a “mix-up” in visa usage, Chandrashekhar said. “The visas that are taken by the Indian IT companies are less than 20,000 in a year” out of the total 85,000, he said. But some 70 percent of all H-1B visas go to Indian nationals—most of whom work for U.S., not Indian, companies, he said.

Policies that target less than 25 percent of the H-1B program aren’t going to solve the problem of U.S. workers needing greater access to job opportunities, Chandrashekhar said.

But “the program’s not working the way it’s supposed to right now,” Peter Whippy, a spokesman for Lofgren, told Bloomberg BNA Feb. 28. The H-1B program provides for four skill-level tiers with corresponding salary requirements, yet 80 percent of H-1B workers have been relegated to the lowest tier, he said.

H-1B visas really should be for the “best and brightest,” Whippy said. If employers want to hire workers for entry-level jobs, they can draw from the domestic labor pool, he said.

“Obviously there are a lot of jobs out there that are high-skilled but not necessarily high-wage,” Issa spokesman Moore said. Issa’s bill accounts for that while ensuring that employers aren’t just trying to hire cheap labor, he said.

The same goes for Lofgren’s bill, Whippy said. The measure’s proposed pay requirements take into account nonsalary compensation—such as bonuses and stock options—that may be offered by startups, he said. The only thing the bill doesn’t allow for, he said, are wage “clawbacks": providing H-1B workers a certain salary but then requiring them to pay for their own travel or paperwork.

What you couldn’t do under the bills is what happened with Southern California Edison, Moore said. The company was paying its IT workers about $110,000 but decided to “save some cash” by hiring outsourcers Tata Consultancy Services Ltd. and Infosys Ltd., whose H-1B workers only made $65,000, he said.

Both of those companies are represented by NASSCOM, although Chandrashekhar declined to comment on any specifics.

Technology Versus Foreign Workers

Chandrashekhar disputed the notion that the H-1B program is responsible for lost U.S. jobs.

“There are millions of jobs each year which are lost to technology in the U.S.,” he said. Nobody seems concerned because “that is the direction in which the whole technology-based economy is moving. It’s accepted as a reality of life,” he said.

But it “becomes easy to point a finger” when there are foreign workers involved, he said.

The National Foundation for American Policy, an Arlington-based think tank, came to a similar conclusion in a recent report.

Companies like Southern California Edison and Disney make outsourcing and layoff decisions before they put a contract out to bid, and so they aren’t deliberately choosing H-1B workers over U.S. workers, the NFAP said. And it’s only when foreign nationals are seen on-site that they get the blame for the layoffs, the report said.

Technology Destroys, Creates Jobs

“It is not all bad news,” Chandrashekhar said. “When technology destroys some jobs, it’s creating other jobs as well,” he said.

But usually those jobs require a different, higher skill set that the U.S. has trouble finding among its domestic workforce, Chandrashekhar said. But the H-1B proposals aren’t addressing that problem, he said.

“Without going to the root cause of the problem, which is the lack of an adequate number of skilled and qualified people, this is attempting to put restrictions on the inflow of high-skilled people,” Chandrashekhar said. And if those skilled workers don’t materialize, either the job goes undone or it gets shipped overseas, “a worse consequence for the U.S. economy,” he said.

For every skilled job that an Indian tech company brings to the U.S., 1.6 support sector jobs are created, Chandrashekhar said, citing NASSCOM research. And those skilled workers help bring technological innovation to other businesses, which allows them to become more innovative and competitive, thus creating more jobs, he said.

The U.S. needs “a very thoughtful and calibrated approach” to this issue “so we don’t throw away a good thing,” he said.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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