siliconindia | | December 20169H-1 B The Trump effect is not limited to manufacturing or FMCG industries, his election have the entire Silicon Valley concerned. Many feel Trump will pass stringent immigration laws prevent-ing foreign workers from moving to the U.S. which will have a significant impact on the IT industry. In a speech last March, Trump specifically targeted H visas and declared his intention to forever end the use of H-1B as a cheap labor program, and reaffirmed his aversion for outsourcing and the need to bring manufac-turing jobs back home in the U.S. This has also rung alarm bells in the Indian IT Sector because Indians have been consistently award-ed a significant number of H-1B visas in the IT Sector. Companies like Tata Consultancy Services (TCS), Infosys and Wipro depend on the H-1B pro-gram to service their clients in the U.S. The H-1B visa is a non-immigrant visa that allows U.S. companies to employ foreign workers in specialty occupa-tions that require theoretical or techni-cal expertise in specialized fields. The H-1B quota is set at a total of 85,000 (65,000 plus an additional 20,000 for International students that graduate with master's degree or higher from a U.S. University).Proponents of the H-1B visa pro-gram have stated for years that the U.S. lacks the workforce to fill the specialized knowledge jobs in the IT Sector. Critics have criticized the pro-gram calling it a source of cheap la-bor. In light of the fact that the H-1B visa holders have to be compensated, according to prevailing wage for their profession, the cheap labor argument has little teeth. Trump has proposed raising the minimum prevailing wage for H-1B workers to take away the fi-nancial incentive of hiring internation-al workforce. Senators Bill Nelson of the Democratic Party and Jeff Sessions of the Republican Party introduced in Congress to reduce the H-1B quota by 15,000 and reserve it only for high in-come positions.Does it make sense financially to do away with H-1B visa or reduce the number of visas issued each year? Not really. The last time the H-1B visa quota was reduced it gave a boost to outsourcing. It was a win-win for the private companies and for foreign countries where the jobs were out-sourced, the only loser was America. Not only did America as a country lose jobs to countries like India and China, they also lost the ability to impose in-come tax on foreign workers because they were employed overseas, hence, losing significant revenues. Although a reduction of quota will significantly impact Indian I.T. sector, it will also prove to be counter-productive to the U.S. I.T. sector. This will also have a ripple effect in the education indus-try. A reduction in H-1B quota will make U.S. less attractive to foreign students. Most for-eign students take large student loans to study in the U.S. in the hopes of getting employed in U.S. and repaying their debt. A lot of foreign students will not consider the U.S. for high-er education due to a lack of opportunity. Realistically, the H-1B program is essen-tial for the American economy. It is essential for innovation in the IT industry because it keeps the labor costs in check, which allows capital to be invest-ed in research and development. It is hard to imagine that the H-1B pro-gram will be done away with. Howev-er, it does seem realistic that the H-1B quota will be reduced and the prevail-ing wage will be increased to promote hiring of American workers. Amer-ican IT companies will have to ex-plore hiring of American workers and balance the cost by outsourcing more jobs abroad. Abhinav Lohia
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