Prime Minister Modi issues statement on H-1B and L1 Visa
The Trump administration had some time back put a hold on H-1B Visas and L1 Visa for foreign nationals seeking to work in the US. This has affected the $150 Billion a year Indian Technology / Outsourcing Industry and Indian IT professionals. A major share of these visas has been used by the above and/or US based technology majors like Facebook, Microsoft, Google, Amazon and the like.
Modi tries to sell the H-1B Visa story
According to statistics released by the Indian government, the H-1B and L1 Visa regimes as leveraged by the ‘Indians’ has also contributed to the American economy. It is estimated that $100 Billion per year was the increased contribution to the US, revenue wise. The Indians working in the US have also contributed to creation of 400,000 additional jobs in the US, the Modi government estimates.
The Indian Government’s stance only accentuate the view by Consultants like McKinsey that outsourcing actually helps the US economy by enabling the US companies utilize their capital more efficiently.
Trump turns the traditional Republican view on its head
Readers might recall that in the previous Republican administrations (under the Bushes) India was relatively more at ease on H-1B visas. While the Democrat regime under Obama did cause some concerns , these gradually panned out relatively benignly.
Cool Chlli’s Views
Trump’s concerns not unfounded
The 85,000 H-1B Visas ( 65,000 + additional 20,000) are used to facilitate travel of resources like scientists, subject matter experts or computer programmers who are not easily available in America. However since the mechanism of awarding these visas is more on a lottery basis, the ones who have benefitted from (or exploited, as one sees) it are typically the Indian Technology Outsourcing Majors.
Trump playing Sons of Soil Card?
By sheer volumes of their requirements, the Indian firms have benefitted the most. A US tech major like Facebook may need to pay almost $150,000 to a ‘techie’ to get him or her into the US. But an Indian IT firm on an average shells out less than half that amount.
The Trump administration may feel that lower paying jobs given to foreigners reduce prospects for the American middle class.
In Ending
Cool Chilli believes that the World as a Global Village is here to stay. As Victor Hugo remarked, ‘All the forces of the world are not as powerful as an Idea whose time has come.” In the economic context, outsourcing has been one such idea (for the past 20-30 years) as much as Artifical Intelligence threatens to be the next such Paradigm shift.
Naysayers may have their logic and it may be relevant for a brief while too. But the political/electoral mileages that may be extracted to pander to one’s chauvinism are temporary. Trump may wish to show he is walking the talk to the base that voted him.
But longer term, it makes little sense, since the benefits of cross border engagements (with proper security safeguards) benefit all. As a percentage of all jobs available in the US, 85,000 or even 100,000 is not of much significance.
Non-Farm Establishment Jobs – 145,884,000
Private Jobs – 123,278,000
Government Employment – 22,276,000 (source http://americanjobmarket.blogspot.in/)
Related Reading
H-1B challenges for Tech majors
Indian Ambassador’s Views on Outsourcing
