Visa Power?

In a letter dated May 14, 2007, two US senators-Republican Charles Grassley

and Democrat Richard Durbin, asked nine companies a few questions on how they

used the H1B visas granted to them in 2006.

"We have been concerned about reported fraud and abuse of the H-1B and L visa

programs, and their impact on American workers. We are also concerned that the

program is not being used as the Congress intended," noted Grassley and Durbin,

justifying the reason behind the exercise.

An extremely sincere effort, one would tend to believe till one looks at the

name of the companies that they chose to target the letter at. One would tend to

believe that they would be the top recipients of these visas.

But no, there was one filter. American companies were ignored by the

senators.

The nine firms who received the senators' letters-Infosys, Wipro, Tata

Consultancy Services, Satyam Computer, Patni, Larsen & Toubro Infotech, i-flex,

Tech Mahindra, and Mphasis-were all Indian companies.

"Your company," wrote the senators, "was one of the top companies on the

list. Therefore, we are requesting your cooperation in providing additional

statistics and information on your use of H-1B visa workers."

Microsoft, which was the third largest recipient of such visas; Cognizant,

which was the fifth largest, IBM which was the eighth largest; and Oracle which

was the ninth largest recipients of such visas in 2006 were not considered

important enough by the senators whose answers would be of use to them in

probing the alleged "misuse" of these visas.

On the other hand, MphasiS (ironically, now majority-owned by the American

company EDS) which got just less than one-fourth of the H1-B visas as compared

to Microsoft, was considered important enough to be probed by the senators.

The letter is a shot in the arm for the protectionist lobby in America, which

got a huge mileage during 2004 presidential elections when democratic candidate

John Kerry made offshoring a major election issue. But Kerry's brand of

protectionism (many say populism) as well as that of Lou Dobbs challenged

liberal labor policies.

Grassley and Durbin have gone two steps further. Kerry's (and Dobb's) anti-offshoring

stance challenged both American and foreign companies who practiced offshoring.

Grassley and Durbin's, on the other hand, clearly discriminates between American

and foreign (incidentally all Indian) companies. "It is not protecting American

workers' interest; it is protecting American companies' interest," says an

industry veteran in India. That may or may not be true, but it surely points to

trade discrimination.

Not surprisingly, the Indian commerce minister reacted immediately. Kamal

Nath said in a statement from Paris, which he was visiting en route to Brussels

to take part in the Doha round of trade talks, "Temporary movement of skilled

professionals is an essential component of the global services economy and bears

no relation to immigration issues."

"Any move which creates uncertainty and unpredictability about such movements

will naturally have an adverse impact on the rapidly expanding services trade,"

he added.

In short, unlike the last time around, this time it has resulted in a serious

trade issue between the US and India. The companies concerned, of course, chose

to take a more cautious approach.

Points and Counterpoints



The senators have raised three points regarding the misuse of H1-B visas.

They are:

• Disparity of wages between HI-B visa holders and American workers
• Temporary recruitment of foreign workers and then outsource to offshore
  
  locations
• Large-scale layoffs

All these are, of course, important

issues.

The first point-disparity of wages between H1-B visa holders and American

workers-is an issue that has come up against all firms that do offshoring, not

just Indians, time and again and it is better that these companies clarify it

once and for all.

Temporary recruitment of foreign workers and then outsourcing to offshore

locations has not really been done by Indian companies, though there have been

debates again and again that Indian companies need to acquire large American

firms and move the jobs offshore. It may be their plans, but so far few Indian

companies have done that. Most of their overseas acquisition has been for skill

or customer acquisition and never for scale and moving jobs offshore.

The third point hardly makes sense for Indian companies. Indian firms are in

a growing phase and the question of large-scale lay-offs does not arise. If

anything, they are on a hiring spree to build onshore capability in solutions.

It is traditional American firms like IBM and HP that have announced large scale

lay-offs. And they are public announcements. Questioning Indian firms for this

and ignoring such publicly available statements will lead to nowhere. If the

senators are serious about these investigations, they should first look for

publicly available data.










Who Gets the H1-Bs?




Meanwhile, contrary to popular belief, the list of top 100 recipients of

H1-B visa in 2006 is not dominated by Indian companies. A first level analysis

shows that together with other offshore service providers (including American

companies such as Cognizant, which were ignored by the senators), they are

numbered 18-the same as the financial/consulting services companies in the list,

such as McKinsey, Deloitte, Citi, and Morgan Stanley. The non-services tech

companies such as Microsoft, Oracle, Intel, Cisco and Motorola were the second

largest category of H1-B recipient.

But surprisingly, the top category among the H1-B recipients last year was

that of the universities of America. The New York City Public Schools, for

example, received more HI-B visas than Accenture! Harvard, Stanford, Columbia,

Yale-all figured in the list of universities that had the visa power-the HI-B

variety.

The US universities are waking up to the call of Tom Friedman and other

intellectuals such as Craig Barrett that you cannot address the problem of

America without addressing the problems of education. They are tackling the

problem in the best way possible-by inviting more H1-B visa holders to teach.

You may call it ironic, but it surely is practical.

If only everyone was wise enough like the centers of excellence in education!

Shyamanuja Das




shyamanujad@cybermedia.co.in