The H1B Visa Conundrum

America has taken advantage of globalization for a very long time. They have benefitted as their corporations have sold goods in several new countries around the world and benefitted. However, as globalization backfired on America, it has changed its policies. The high wages paid to American workers was a primary reason that the jobs were being moved out to other countries. America has decided to adopt protectionist policies to avoid jobs being shipped off.

However, not only were the jobs being shipped off, even jobs in America were being taken over by immigrants. This created insecurity amongst the American workers who wanted to attack the root of the problem. This gave President Donald Trump and his team the motive to attack the H1B visa. This visa is often believed, to be the tool used by foreigners to usurp American jobs. In this article, we will look at the H1B visa program and how it has been abused.

What is the H1B Visa Program ?

The H1B visa program allows outsiders to immigrate and work inside United States of America temporarily. This program is administered via a lottery program. Hence, several people apply for H1B Visa, but the lucky few are randomly selected via a computer-generated lottery. 65,000 H1B visas are given each year to outsiders, and an additional 20,000 are given to foreigners pursuing higher course degrees in American universities. This visa allows the worker to work for three years in America and can be renewed as and when required. The biggest beneficiaries of this visa program are the Indian companies. Indian outsourcing sector depends upon this visa program to generate its massive multi-billion dollar revenues.

The Problem

The H1B visa program benefits the American corporation while harming the interests of the American workers. Interestingly, President Donald Trump admits having used it himself for his businesses. Now, since he is in charge of the United States government, he wants to prevent its use.

H1B visa is actually meant for hiring high-skilled labor which may not be available in the American markets. The intent is to ensure that the American entrepreneurship does not suffer due to lack of such talent.

However, the H1B visa has been prone to misuse. American companies are no longer sourcing talent that is not locally available via H1B. Instead, they are simply hiring foreigners that are cheaper via this program. For instance, if they have to pay $100000 to an American for a job, they can hire an Indian to work for (let’s say) $70,000.

The H1B visa is usually meant for people having advanced degrees in their field. People from less advanced universities with advanced degrees take up these jobs. However, the jobs that are created have nothing to do with the degree. Instead, they can easily be performed by people who have been to high school. The foreign degrees are just pretenses used to make foreign workers appear more skilled than they actually are.

In many cases like Walt Disney, the Americans were made to train their replacement under the threat of losing severance pay! The American populace has been viewing this as an act of cruelty.

The Steps to be Taken

Donald Trump believes that American jobs should only be given to American people. Though many may call this as being protectionist, his stand seems fair to a lot of Americans. His emphasis on this issue is so much that the moment he became President of United States he urged people to hire American and buy American.

The steps he will take are as follows:

  • He will raise the minimum wage for H1B visa to over $100000. This will ensure that the cost arbitrage that companies get when they hire foreign workers no longer exists. If $100000 have to be paid out, companies might as well pay it to Americans and not face the public ire.

  • Secondly, Donald Trump is going to make it mandatory that all H1B visa applicants be from world class universities. This would naturally limit the number of people that can apply

  • Lastly, Donald Trump would remove the cap on the maximum number of individuals. American industry is free to hire as many foreign workers as they want if they can meet these very stringent criteria.

Indian IT Industry Gets The Jitters

The Indian IT industry has got the jitters as soon as Donald Trump announced his plans. The industry has received as many as 70% of the visas granted. They are the ones who peddle low-cost workers for medium skilled jobs across America. The stock of the Indian IT industry has seen a downward trend ever since the intention to change the H1B visa policy was announced.

Silicon Valley on Board

Silicon Valley, on the other hand, has been very happy about the changes. They feel that they are the ones that have been using H1B visa like it is meant to be used. They only highly skilled workers and pay them high salaries. Under the current visa regime, they are often left in the lurch by Indian outsourcing companies. Silicon Valley is, therefore, looking forward to Trump’s policies.

The H1B visa conundrum is far from over. It promises to be interesting watches as different powerful groups with vested interests collide with one another.

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