siliconindia | | December 20169The Trump effect is not limited to manufactur-ing or FMCG industries, his election have the entire Silicon Valley concerned. Many feel Trump will pass stringent immigration laws preventing 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 aver-sion 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 awarded a significant num-ber of H-1B visas in the IT Sector. Companies like Tata Consultancy Services (TCS), Infosys and Wi-pro depend on the H-1B program to service their cli-ents in the U.S. The H-1B visa is a non-immigrant visa that allows U.S. companies to employ foreign workers in specialty occupations that require theo-retical or technical 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 program 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 program calling it a source of cheap labor. 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 financial incentive of hiring international workforce. Senators Bill Nel-son 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 income 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 outsourced, 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 income 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 industry. A reduction in H-1B quota will make U.S. less attractive to foreign students. Most foreign 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 higher edu-cation due to a lack of opportunity. Realistically, the H-1B program is essential 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 invested in research and development. It is hard to imagine that the H-1B program will be done away with. How-ever, it does seem realistic that the H-1B quota will be reduced and the prevailing wage will be increased to promote hiring of Amer-ican workers. American IT companies will have to explore hiring of American workers and balance the cost by outsourcing more jobs abroad. Abhinav Lohia
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