Friday, February 08, 2008

What is the purpose of skilled worker visas?

Many countries allow visas for skilled foreign workers. Singapore, for example, makes it pretty easy to get such visas. It is also fairly easy in Europe. In the United States, if you have a masters degree, you can expect to be offered a skilled worker visa if you want one. However, the filing requirement are enormously complex. There is a quota of 65,000 visas for for-profit companies, which is always oversubscribed.

Additionally, companies where than 15% of the workforce are non-Americans must prove that American workers weren't displaced. On the face of things, I find that a bit xenophobic. Whether we like it or not, we are all competing globally. Sergey Brin, cofounder of Google, got here on an H1B visa. Additionally, who's to say that Americans seeking work abroad aren't in some way displacing equally-qualified local talent? Finally, there are American politicians, like the otherwise progressive Dennis Kucinich, who would end the H1B (skilled worker) visa program, because it allegedly displaces Americans.

There is evidence that the H1B visa is being used as as "outsourcing visa". See this International Herald Tribune article:

But the H-1B visa is being put to a starkly different use: It is now a critical tool for Indian outsourcing vendors to gain expertise and win contracts from Western companies to transfer critical operations to places like Bangalore.

"It has become the outsourcing visa," the Indian commerce minister, Kamal Nath, said by telephone this week while attending global trade talks in New Delhi, at which India is pushing the United States for a larger H-1B quota.

"If at one point you had X amount of outsourcing," he said, "and now you have a much higher quantum of outsourcing, you need that many more visas."

This month, the annual quota of 65,000 H-1B visas evaporated in a single day after U.S. officials received more than 133,000 applications. Last year, the quota lasted nearly 60 days.

If the past is any guide, many of those applications were for people with no intention of staying in the United States for the long term. Eight of the 10 largest H-1B applicants last year were outsourcing firms with major operations in India, according to a tabulation of U.S. Labor Department statistics by Ronil Hira, a professor at the Rochester Institute of Technology in Rochester, New York, and a critic of the visas. A year earlier, the figure was four in ten.

As Indian outsourcing companies have become the leading consumers of the visa, they have used it to further their primary mission, which is to gain the expertise necessary to take on critical tasks performed by Western companies, and perform them in India at a fraction of the cost. Thousands of H-1B visas every year are being won by individuals acting as outsourcing ambassadors. Highly skilled and easily meeting the objective standards for excellence that the law requires, the employees interact with U.S. companies like Morgan Stanley and Boeing, gathering an outsourcing mandate and lubricating the flow of tasks to an Indian back office.

"To deliver the solutions from a remote environment," said B. Ramalinga Raju, chairman of Satyam Computer Services, a leading Indian vendor, "you need a certain number of people being with a customer, understanding his needs and collecting the requirements."

Indian vendors have helped lift the proportion of H-1Bs going to Indian nationals to more than half in 2006 from 7.5 percent in 1992. Last year, Indians received 43,167 of the 65,000 visas allotted.


Senator Richard Durbin of Illinois (and a Democrat), said "Our immigration policy should seek to complement our US workforce, not replace it." He has proposed legislation that would limit the number of H1B visas. Frankly, I can see why.

However, it isn't exactly a simple job for H1B visa holders to get permanent residency, either. The wait times are interminable. An immigration lawyer could explain this better, but many countries have exceeded their quotas of permanent residents. Applicants from these countries have to years before being considered for residency. Does America really want to attract skilled workers to stay here? If so, why not make it easier to achieve permanent residency? The current immigration laws are saying that America is pretty ambivalent about letting skilled workers stay here, and is not particularly distressed if they leave. (By the way, skilled workers are taxed in the same manner as US citizens, and pay all the payroll taxes, even though they may leave.)

Consider the deployment of Atul Pevekar, a 29-year-old Indian engineer for Tata Consultancy Services, an outsourcing vendor. A year ago, and five years out of college, he was sent to Minnesota on an H-1B. His assignment: to work with a U.S. retailer to relay its information technology needs back to TCS's Indian staff, to which the retailer has outsourced scores of jobs.

"I am a link between the people who are doing coding in India and the client," Pevekar said by telephone.

He earns $60,000 a year, five times his pay in India. But he must leave the country within a year or two. Like many Indian vendors, TCS does not seek permanent residency for most employees, even though the H-1B lets companies do so.

And so he will not join, at least not now, that narrative of the industrious outsider who makes a fresh start in the United States, brings his zeal and drive, invents something grand, creates jobs and pays taxes. Instead, he will empty his bank account, take his savings home and vanish from the country as quietly as he arrived.


I think a lot of Americans are more welcoming of skilled workers coming here to stay and contribute to the country, despite what their country's laws say.

The rules around nonprofit corporations hiring H1B workers are more relaxed. They're not subject to the quota. Although USCIS (citizenship and immigration services) has been progressively hiking the filing fees, posting another barrier to people staying here, I think nonprofits are exempt from those. They will, however, have to hire the lawyers, which are costly. Nonetheless, its easier for large nonprofits to hire workers. Most hospitals in the States are nonprofits, which does mean its easier for them to hire health professionals (although hiring doctors who aren't citizens may present some other challenges I'm not clear about).

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