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Will the H1B Bill help or hurt US interests?

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Will the H1B Bill help or hurt US interests?

[vc_row][vc_column][vc_column_text]With it, the new administration there intends to hire Americans, but in the end, the visa may prove to be the only way out if its own industries are to survive and thrive

By Sujit Bhar

In a somewhat desperate attempt to stop top international technical talent – especially those from India – from ruling Silicon Valley and supposedly depriving local American talent through the cost factor, a bill was introduced in the US House of Representatives which raises the minimum salary of H1B visa holders to $ 130,000. This is more than double the earlier level of $ 60,000.

The bill was introduced by California Congressman Zoe Lofgren. It is called the “High-Skilled Integrity and Fairness Act of 2017”. The raise was based on a survey and the bill suggests that H1B visas be given only to those companies that are willing to pay 200 per cent of the survey average as minimum pay.

The justification is perhaps the median national annual wage for Computer and Mathematical Occupations published by the Department of Labour Occupational Employment Statistics. That median is approximately $ 132,000. So this bill suggests a 35 percentile increase. The master’s degree exemption (for H1B visa applicants) has also been withdrawn, but that was expected.

Interestingly, there has been a 20 percent exemption, annually, on this H1B restriction, for small and start-up employers (50 or fewer employers). Technically, this is so that these small companies can hire cheaper labour to compete with the giants, creating some sort of level playing field. The bill says that this will, somehow, protect against outsourcing.

This presents an Achilles’ heel, which we will come to in a while, but we look at the situation this has created in India first. Indian tech stocks plummeted at the Bombay Stock Exchange and at the tech-heavy NSE.[/vc_column_text][vc_column_text]Will the H1B Bill help or hurt US interests?The following are stock market indications:

  • The BSE Sensex was pulled down by 0.92 percent with IT stocks within it living in the red following the new H1B bill news. The overall fall may have been greater if not for some FMCG stocks that somewhat saved the day for the index.
  • However, the BSE IT Index, which is a marker for the IT stocks, dipped 4 percent overall, though many individual IT giants took a bigger hit.
  • TCS, the country’s largest software company plummeted 5.6 per cent; Tech Mahindra dived 9.7 per cent; HCL Tech went down 6.3 per cent; Infosys was down 4.6 per cent; Wipro was at -4.23 per cent range.

Even American IT stocks across the board were down on an average of 1 percent.

The justification

Before looking further into the cause and effect of the bill, one needs to listen to the justification made by Congressman Lofgren. He has been quoted in the media as saying: “My legislation refocuses the H-1B programme to its original intent – to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them.”

Fair enough, but while the lion’s share of Indian tech giants’ revenues comes from the US and while around 60 percent (more or less) of their employees hold H1B visas, US tech giants would also be hit in the long run. Not for nothing is Satya Nadella the CEO of Microsoft and Sundar Pichai heads Google. They deserved their positions and so do other highly talented Indian techies in the US on H1B visas.

The other problem

And now we come to the crux of the problem. The H1B visa isn’t all for IT experts and fresh techies wanting to join Microsoft or Google or Intel or any such company. H1B is also for bright students joining the pharmaceutical industry as researchers, mathematicians, and several other areas.

There are ten broad areas of occupation that can draw H1B visa applicants, and only one among them is “Computer Science & IT, and Telecom Occupations”. The others are:

  • Occupations In Architecture, Engineering, And Surveying
  • Occupations In Mathematics And Physical Sciences
  • Occupations In Life Sciences
  • Occupations In Medicine And Health
  • Occupations In Education & Research
  • Occupations in Writing and Languages
  • Occupations in Finance and Administrative Specializations
  • Occupations in Business Management & Administration
  • OTHER Specialty Occupations.

One would want to ask the Congressman how he intends a “small” player in, say, the pharmaceutical industry to use some of the exempt H1b visas to research and develop a new drug that will then need extensive testing, needing huge  funding. How does a small company manage to raise that level of funding?

If the purpose of the legislation was to throttle cheap foreign talent in the IT industry, this could well have a sad ripple effect elsewhere.

The Cost & Talent factors

Problem No. 2 rises from the very two reasons outsourcing and H1B visas came into existence for the US IT industry: Cost and talent.

All of Silicon Valley started small, very small. And the principal reasons for their meteoric rise were just two: A brilliant idea that could change the way of life and a business model that could create massive footprint, leading to incredible return on investment.

The promoters and the venture capitalists and/or banks gathered around them talent that was available in the country and set about realising their dreams. Along the way, there was need for more talent where brainstorming sessions could yield more than what was bargained for. That was where it was realised that the US does not create the requisite numbers in brilliant students/professionals that was essential to man these units and sessions. (See box and US census bureau graph)

Importing talent was the only way out, just as American talent sets up oil producing rigs—on land and offshore—in the Midwest. It would be interesting to note how the US would react if the Arab countries had designed a similar visa format and restricted US skill entry.

It happens all across the world. The Indian companies are taking on the losses today, but they are nimble, and they do have the talent pool. They have already started hiring Americans in the many Indian projects and companies in the US and while the new legislation will hurt their bottomlines, the cost will ultimately be passed on to the consumer. One guesses the US consumer would be the biggest loser in this.[/vc_column_text][vc_column_text]

This could be a reverse IP challenge for Americans. In the pharmaceutical sector, for instance, while the per unit gain may be small in sales [for the US], the massive market that exists outside the US can assure similar returns for the drug, whose IP will be India (or China)-owned

[/vc_column_text][/vc_column][/vc_row][vc_row css=”.vc_custom_1485871830501{margin-bottom: 20px !important;background-color: #e0e0e0 !important;}”][vc_column][vc_custom_heading text=”The Disparities”][vc_column_text]Graph with Box

A US Census Bureau report (Link: http://www.census.gov/content/dam/Census/library/publications/2016/demo/p20-578.pdf ) highlights the following disparities under the heading “Educational Attainment in the United States: 2015”:[/vc_column_text][vc_column_text css=”.vc_custom_1485871919994{margin-top: 5px !important;margin-right: 5px !important;margin-bottom: 5px !important;margin-left: 5px !important;border-top-width: 10px !important;border-right-width: 10px !important;border-bottom-width: 10px !important;border-left-width: 10px !important;background-color: #e0e0e0 !important;}”]HIGHLIGHTS

  • In 2015, almost 9 out of 10 adults (88 percent) had at least a high school diploma or GED, while nearly 1 in 3 adults (33 percent) held a bachelor’s or higher degree.
  • The percentage of women who had a bachelor’s degree or higher (33 percent) was not statistically different than the percentage of men (32 percent) with this level of education.
  • Educational attainment varied by race and Hispanic origin. More than half of Asians aged 25 and older had a bachelor’s degree or higher in 2015. Asians were more likely than non-Hispanic Whites to have at least a bachelor’s degree.
  • Asians and non-Hispanic Whites were more likely to hold a bachelor’s degree or higher compared with Blacks and Hispanics.
  • Native adults were more likely to have a high school education or higher but were no more likely than foreign-born adults to hold an advanced degree.
  • Adults without a disability were more likely to hold a bachelor’s degree or more than adults with a disability.

DEMOGRAPHIC PORTRAIT OF EDUCATIONAL ATTAINMENT

In 2015, the majority (88 percent) of adults were at least high school graduates and more than half (59 percent) had completed some college or more. One out of three adults (33 percent) reported they had a bachelor’s degree or more education, and 12 percent reported an advanced degree, such as a master’s, professional, or doctorate degree. Educational attainment varied by age, sex, race and Hispanic origin, nativity, and disability status.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]There will be options

As for software for Indian and Chinese consumers, options can be easily developed for every existing common software needed for the regular market. For all specialised applications developed, such as logistics for railway or airline systems, they are already being developed by Indian firms in the US, with offshore research. The price escalations in these will be borne by the consumer, mostly western.

Then there is the India-China domestic market factor. Agreed, that the US market is by far the largest today, for IT. However, with the India-China economic growth, there will be need for companies—even western ones that would set up facilities abroad—based in these countries to develop proprietary software that will then earn IPs under that country’s law, namely, say, India.

How will that benefit consumers in the US? This could be a reverse IP challenge for Americans. In the pharmaceutical sector, research and detailed tests may be shifted to these countries and with lax drug testing laws, these drugs will come on to the international market beyond the legislation and watch of the FDA. While the per unit gain may be small in sales, the massive market that exists outside the US can assure similar returns for the drug, whose IP will be India (or China)-owned.

H1B protects not just talented individuals to the US from, say, India. It also protects the Americans from a world of invention that they would have priced themselves out of.

While hiring Americans, as per President Donald Trump’s exhortations, is a good thing in itself, Trump has to understand that to fill top technical posts with Americans, the country first has to have those talented people.

As per latest reports, the US does not. H1B is the way out, one way or the other.[/vc_column_text][/vc_column][/vc_row]

India News

Farmers take out tractor march near Yamuna Expressway in Uttar Pradesh’s Gautam Budh Nagar

The Noida police had issued an advisory for daily commuters and warned them of traffic jams at many places which also included the Delhi-Noida border. The farmers are planning to carry out the tractor march along the Yamuna Expressway, Luharli Toll Plaza and Mahamaya Flyover and traffic diversions have been imposed by the police at these places.

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Farmers took out a tractor rally near the Yamuna Expressway in Uttar Pradesh’s Gautam Budh Nagar on Monday to protest against the central government for accepting their demands, which included a legal guarantee for minimum support price (MSP) for crops. Videos showed many tractors being driven on the road. The rally was stopped by the police at the Yamuna Expressway’s entry point.

They were not allowed to carry out their rally on the expressway. The development comes even as farmers have delayed their march to the national capital till February 29 after a decision is made and are staying at the Khanauri and Shambhu points on the Punjab-Haryana border.

The Noida police had issued an advisory for daily commuters and warned them of traffic jams at many places which also included the Delhi-Noida border. The farmers are planning to carry out the tractor march along the Yamuna Expressway, Luharli Toll Plaza and Mahamaya Flyover and traffic diversions have been imposed by the police at these places.

The police have barricaded the Delhi-Noida border and police will conduct checking of vehicles entering Delhi or Noida. Daily commuters have been advised not to use the Yamuna Expressway and to use alternative routes or the metro to avoid inconveniences.

Farmer leader Baldev Singh Sirsa said a farmer named Pritpal Singh was doing Langar seva at the Khannauri on the Punjab-Haryana border when he was allegedly dragged by the policemen from his tractor trolley and was badly beaten. He said Pritpal Singh was admitted to a hospital in Rohtak. But he got shifted to PGIMER at Chandigarh.

Farmer leader Sarwan Singh Pandher said Pritpal Singh has suffered multiple injuries and they strongly condemn the action of the police. He said the prime minister should take action against policemen who indulge in such barbaric acts. Former Punjab chief Minister and senior BJP Leader Captain Amarinder Singh condemned the barbaric act of violence against Pritpal Singh.

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India News

Allahabad High Court refuses to ban ongoing puja at Vyas Tehkhana inside Gyanvapi mosque complex, grants permission for worship to continue

Advocate Vishnu Shankar Jain who is representing the Hindu side said today the Allahabad High Court has dismissed the first appeal from orders of Anjuman Intezamia which was directed against the order of 17th and 31st January and the effect of the order is that the ongoing puja in the Vyas Tehkhana of Gyanvapi complex will continue.

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The Allahabad High Court on Monday dismissed the Gyanvapi Mosque committee’s appeal challenging the Varanasi district court’s decision to offer prayers in a cellar in the Gyanvapi mosque complex. Justice Rohit Ranjan Agarwal of the Allahabad high court pronounced the judgement.

He said after going through the entire records of the case and after considering arguments of the parties concerned, the court did not find any ground to interfere in the judgement passed by the District judge dated 17.01.2024 appointing DM, Varanasi as receiver of the property as well as the order dated 31.01.2024 by which the district high court had permitted puja in the Tehkhana.

Advocate Prabhash hailed the verdict and said it is a big victory of Sanatana Dharma. The judge dismissed the pleas that the Muslim side had filed against the District judge’s order. He said this means that the puja will continue as it is. The District magistrate will continue as the receiver of the Tehkhana and the Muslim side can go for a review of the decision.

Another Advocate Vishnu Shankar Jain who is representing the Hindu side said today the Allahabad High Court has dismissed the first appeal from orders of Anjuman Intezamia which was directed against the order of 17th and 31st January and the effect of the order is that the ongoing puja in the Vyas Tehkhana of Gyanvapi complex will continue. He said if the Anjuman Intezamia comes to the Supreme Court, then they will file their caveat before the top court.

The Varanasi court on January 31 had ruled that the Hindu side can offer prayers in the southern cellar of Gyanvapi masjid – the Vyas Tehkhana. The court had also directed the District magistrate to make arrangements for prayers and a priest which is nominated by Shri Kashi Vishwanath Temple Trust.

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India News

MEA rejects reports about Indians seeking early discharge from Russian Army

The Ministry has clarified that India is actively pursuing all cases related to the issue and that some Indians have already been discharged.

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The Ministry of External Affairs on Monday issued a statement denouncing several media reports claiming that Indians serving in the Russian Army are seeking an early discharge. The Ministry has clarified that India is actively pursuing all cases related to this issue and some Indians have already been discharged.

The statement was issued following a report that stated some Indians are working as security staff in the Russian Army and are forced to fight alongside the Russian soldiers in the conflict zone of the Ukraine War.

The statement further added that every case brought to the attention of the Indian Embassy in Moscow has been strongly taken up by the Russian authorities. Furthermore, the matters that have been brought to the attention of the Ministry of External Affairs have also been taken up with the Russian embassy in New Delhi. 

The Ministry of External Affairs also mentioned that it remains committed and its priority is to actively pursue all relevant cases of the Indian nationals for early discharge from the Russian army with the Russian authorities.

Addressing a press conference on Friday, Randhir Jaiswal, spokesperson for the External Affairs Ministry mentioned that the ministry is aware of Indian nationals who have signed up for support jobs with the Russian Army. He further advised all the Indian nationals to be cautious and steer clear of the Ukraine conflict. 

Meanwhile, All India Majlis-e-Ittehadul Muslimeen [AIMIM] leader, Asaduddin Owaisi had urged the External Affairs Ministry to rescue the Indians. He asked External Affairs Minister S Jaishankar on X, formerly Twitter on Wednesday, to use his offices to bring those men back home, adding that their lives are at risk and their families are justifiably worried.

Reportedly, a 23-year-old Indian named Hemil Mangukiya had died in a missile strike in Russia on February 21. He has been working as a helper in the country and had reportedly been inducted into the war zone on the Ukraine Border.

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