H-1B Visa Proposal: 'Unintended Consequences' All Around

Ann All

It didn't take long for observers -- including us and the folks who read our blogs -- to begin buzzing about the H-1B visa reform legislation proposed earlier this week by Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.).


Several of the folks commenting on our earlier post seemed to welcome the prospect that the proposal, if passed, should reduce the number of Indian companies like Wipro and Infosys that set up so-called "body shops" filled with workers hired through the H-1B visa program, train those workers in the U.S., and then send them back to India to put those skills to work there.


As detailed in a BusinessWeek article provided by one of our readers, Infosys and Wipro alone accounted for 42,000 H-1B applications in fiscal 2006. Just three U.S. firms -- Cognizant Technology Solutions, Accenture and Deloitte & Touche, all of which employ large numbers of folks in India -- placed in the list of top 10 H-1B applicants for that year.


But not everyone supports the legislation. ZDNet blogger Larry Dignan raises the objection that the bill, if passed, will simply encourage U.S. companies to send more work offshore. "Foreigners will still be hired, but not on U.S. soil," he says.


Will some companies just move the bulk of their hiring activity to India? Sure. The CEO of Cypress Semiconductor, quoted in this Reuters story, says he hires in India rather than the U.S. so he won't have to worry about "the vagaries of government decrees." Other folks, including a Microsoft executive and an attorney with a firm that represents about 50 Indian companies doing business in the U.S., support this view.


It's worth remembering, however, that not all companies have the time, money or energy to establish operations in India. You can't find every skill in India. Those that get outsourcing firms to do everything for them sometimes end up regretting it. And if you start hiring all of your engineers in India, it may make sense to start hiring executives there, too.


Dignan mentions the "unintended consequences" of the H-1B reform bill. There are also bound to be some of those for companies that make cynical decisions based mostly on their desire to slash costs and escape government regulation.

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Add Comment      Leave a comment on this blog post
Apr 6, 2007 11:38 AM Dave Dave  says:
The purpose of the H1-B visa program is to bring in Cheap Slave Labor and replace US citizen workers.The Corporate Criminals who claim that there is a shortage of US talent are liars.Because H1-B workers are paid half of what US workers make, and because they c annot change jobs, it is muchmore attractive to employers to hire them instead of free workers.The H1-B visa program is the largest immigration fraud in American history. Reply
Apr 6, 2007 3:28 PM Gaurang Gaurang  says:
Hey Dave, You are completely wrong here. You are living in an isolated island completely unaware of whats going on. There were 150 thousand applications for H1b the first day of the application? Do you think there are enough people available here for those jobs? You are wrong! 150k is for one year -- there are millions of people on H1b -- are there millions of software engineers and other skilled professional people available here to replace them ? What are they doing now? American needs people with certain skills which are not easily available in the quantity required -- the demand is more than the supply. I know this will reduce the salary somewhat, but it will be 10-20%, but still that doesnt make the software engineers "poor". What will you get if you pay them 20% more , but you have only half of what you require? And same person with same skills is available in India for the 1/5th the price, so the higher pay you have here, the more likely the job will move to India. Reply
Apr 8, 2007 12:04 PM Jiri Velacek Jiri Velacek  says:
Hello Guarang,I'm sure you mean well, but how can you make such outlandish claims without any supporting references or documentation. You obviously don't review US Government labor statistics, nor do you read the publications of MIT professor Lester C. Thurow. Maybe these sources, don't serve your purpose. Although Dave's comment is rather strident, there may be more substance in what he says than in your unsubstantiated assertions.As a naturalized citizen of the US, I appreciate what this country offers, and resent any entity, corporate or individual, attempting to circumvent the rights of Americans to pursue a better life. Remember, the US Constitution does not grant such rights to corporations or foreigners, only to individuals. By bringing in foreign workers under the guise of satisfying a purported manpower shortage, congress and corporations are doing what our foreign enemies have not been able to do us, subvert the ability of the average middle class American to "realistically" strive (i.e. - burger flipping doesn't qualify) for a better life for herself, himself, and family (in effect subjugating people to the corporate whim). Why would American children work hard to get a graduate degree, when American firms would rather hire a foreigner, at about the same pay scale as a holder of an college undergraduate degree. This practice might be excusable if the talent level being brought in from outside was exceptional, but it is far from that according to my friends who are hiring managers or in human resources (i.e - these are not the Tellers, Ulams and Blochs of WWII, rather they comprise the everyday labor force which can be found stateside)Americans must make their voices heard in Congress, and tell our representatives - NO MORE! We should not tolerate having our livelihood, and the welfare and future of our children sold out for few dollars. Reply
Apr 9, 2007 1:54 PM HR Representative HR Representative  says:
The H-1B and employment-based green card programs currently work in tandem to defraud and displace white collar Americans from their careers. The H-1B regulations clearly state that it is permissible for an employer to hire an H-1B worker instead of an American, and that Americans can be displaced from current jobs in favor of H-1B workers. H-1B is also a dual intent visa, which means that any H-1B worker can be sponsored for an employment-based green card. H-1B holders will gladly accept less pay than Americans and endure harsh working conditions just to get a chance at legal permanent residence.Current law requires that employers make a good faith effort to hire Americans first before sponsoring any foreign workers for a green card. But employers routinely get around that requirement by running fraudulent job ads and conducting bad faith interviews of qualified American workers and then simply rejecting all American applicants and sponsoring a foreign worker for a green card. In some cases the green card applicant is an H-1B worker who is already employed by the company. The prevailing wage law allows employers to legally underpay green card applicants just as it allows them to legally underpay H-1B visa holders. I have over 10 years experience in corporate Human Resources departments and technical recruiting operations, and I have actually seen these tactics used. Many HR reps are aware of these tactics but do not speak out in public for fear of losing their careers also.All current and aspiring American middle class workers and their families should vigorously oppose both the H-1B visa and EB green card programs. Reply
Apr 9, 2007 2:57 PM Reality Reality  says:
Obviously, this issue brings forth a lot of emotions from both sides - supporters and detractors. Would be good if the discussion is kept civil instead of trading personal insults.It is true that H-1 visa is much abused by greedy employers. The H1 visa program definitely needs to be reformed. I'm an H-1 holder and even though I'm very good at what I do, I agree that my skills are hardly the ones you can't find in the US. At the same time, it is also true that US has shortage of labor that has the right IT skills. Yes, there is unemployment in IT sector but it may also have to to do with people not having the right skills. (For every jobless skilled IT programmer one can show, there is an inept/sub-standard-skilled person that is employed who prevents his/her company from being productive and profitable). You can not close the door on immigration. For example, it will be wrong to stop employment-based green card program. If you do that, what is the way to retain an engineer or scientist that may help add to America's edge? Political asylum? Citizenship through marriage? Lottery system? Ilegal immigration?Another angle to it is that this is a globalized world. Any US protectionist measure will be met with an equally unwise reaction from other countries. US has 300million people while the developing world has about 4 billion. US wants to get into these emerging markets but would like to keep the doors shut? If US needs to retain its pole position, employment-based immigration is a must.Reforms are definitely needed. Before that happens, there needs to be level-headed thinking with sentiments taking the back seat. Decisions taken emotionally may serve you well in the short-term but they quite often bring more disastrous results in the longer term. Reply
Apr 9, 2007 4:19 PM Eric Eric  says:
Gaurang,You claim that the application for 150,000 H-1B's in the first day must mean that there aren't enough US citizen workers for these jobs. Then you go on and tell Dave that he is "living on an isolated island unaware of what's going on." First of all, you probably come from a 3rd-world country that is overpopulated, poor, and plagued by poor government and no opportunity, which is exactly why its your people who want to come to my country instead of the other way around. Furthermore, there would be no opportunity for you and your people to come here without the generosity of the American people in opening doors to you. We most certainly do NOT need you. So keep that in mind before you go running your mouth to us.The fact that H-1B slots fill so quickly with applicants only "proves" 2 things: 1) There are a bunch of foreign workers slaivating at the mouth to get a job, and a shot at permanent residency, in the US; and 2) there are a bunch of greedy businesses anxious to acquire a cheap, disposable slave labor force. Reply
Apr 9, 2007 4:20 PM Legal Legal  says:
HR RepresentativeIf the EB Green card program is stopped, what will be the legal way to immigrate to US. (US is a country of immigrants.)A US educated foreigner with no family here is the US will have no options.oh yes! As always it'll be easier to stay illegal or walk into this country from the South! Reply
Apr 12, 2007 3:47 PM Ardit Ardit  says:
I see a lot of bitter americans in here, that try to close the programm, so the inepts can find jobs. I almost never hear good programmers complain, b/c they are always in the top of their game.It is the mediocre ones, left in a corner of the company, with no evolving skills, that complains the most.I am an H1-B holder, and get payed really well, probably more than my peers, and in top 10% for my age and experience (according to salary.com).My company is hiring multiple positions, and can't find enough good people to fill them!! If you are a Senior or Lead Software Engineer experienced in J2EE or J2ME (wireless), and you are good you will be hired right away.Our company is giving us 10,000 referals if we find somebody at that level.Yes, the shortage is that bad! To whoever said that there is no shortage, please get your head out of the sand.If you close your borders to skilled immigration, the whole country will end up boring, and backwards just as most of the white south is, where few immigrants want to move in. Reply
Apr 18, 2007 6:22 PM Louise Yelda Louise Yelda  says:
Ardit,I would love to respond to you, but your grasp of the English language and grammar is so pathetic that it is almost impossible to follow your points. Please study our language for another 10 years, then maybe you can intelligently respond to this "mediocre" (usage) inquiry regarding what you intended to say.By the way, I speak four languages proficiently, and manage a DBA group.Louise Reply
May 30, 2007 11:24 AM soapbox soapbox  says:
First off, a couple things-a) H1-B workers are not slave labor. I know this becuase I'm a recruiter. Yes, they make a little less than U.S. Citizens, but not by much. In fact, the IT market is so hot right now, that I've seen many making just as much as U.S. workers - and in some cases, even more. Especially in the field of ERP. b) India is going through its own issue of a "brain-drain". They're running out of skilled labor because most of it's been coming over here for the last decade. With companies like Accenture, Microsoft, etc. building huge campuses in places like Hyderabad and Chennai, a lot of H1-B workers are actually headed back to India. c) Having an H1-B does not force employees to stay with their respective company. An H1-B is transferrable to any U.S. employer who is willing to sponsor them, and an H1-B worker has the same Employment-At-Will protections granted by the State they reside in that any U.S. employee has. L1 visa holders, however, cannot leave the company that sponsors them. Reply
Feb 25, 2008 11:20 AM honestly honestly  says:
to those of you who want to make a difference, run for the president and make the change. stop bitching. Reply
Oct 8, 2008 8:34 AM xman xman  says:
No body in this discussion are native to this land.Dont fight between right and wrong.Think globally and do your best. Reply

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