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Insights into Editorial: Downing the shutters: On H1-B visa halt

H1B_visa

 

Context:

The White House has made a proclamation restricting the issuance of non-immigrant work visas across the board, purportedly to clamp down on American jobs going to foreign workers, a consistent policy priority of the Donald Trump administration.

H1-B visas among those suspended till year end:

The broad-brush order includes the H-1B visa for skilled workers, which is widely garnered by Indian nationals, the H-2B visa issued to seasonal workers in the landscaping and hospitality industries, the L-1 visa for intra-company transfers, and the J-1 visa for students on work-study summer programmes.

It will also impact the H-4 visa for dependents of H-1B visa holders. The proclamation will enter into force on June 24 and be applicable until the end of the calendar year, which notably includes the November 3 presidential election.

It is intended as a follow-on order reducing the number of foreigners entering the U.S., as it comes on the back of the 60-day halt in legal migration that began on April 23.

What is the H-1B visa programme?

It is a non-immigrant visa programme for highly skilled foreign workers. Indians are the largest beneficiaries of the programme, getting more than 70 per cent of the 85,000 given out annually by the United States.

The H-1B is the largest guest worker programme in the United States, and an important channel for high-skilled immigrants to get into the country.

It allows companies to employ foreign workers in occupations that require technical expertise in areas that are difficult to fill. The H-1B programme has benefitted the tech industry enormously.

Tech giants slam visa curbs:

  1. The order will impact both IT firms like TCS, Cognizant and Infosys as well as big tech companies like Google, Apple, Amazon and Facebook, who use the H-1B programme for their staffing needs. Each year, the U.S. issues 85,000 new H-1Bs, most of which go to Indians.
  2. Those whose H-1B visas become operational in the next U.S. fiscal year — October 1, 2020 will be severely impacted.
  3. The date is just about a month before the U.S. elections Mr. Trump has been selling his policies to curb legal migration as efforts to save American jobs and he is expected to use executive order as a campaigning point with his base.
  4. While the May [unemployment] rate of 13.3% reflects a marked decline from April, millions of Americans remain out of work.
  5. The order’s impact would save 5,25,000 American jobs by the end of this year, a senior administration official told reporters.
  6. Nevertheless, unemployment rates in ‘computer occupations’ was just 2.5% in May 2020, according to Bureau of Labour Statistics analysed by the National Foundation for American Policy, a non-partisan research organisation.
  7. While a broad swathe of workers is likely to be affected by the latest pause in visa processing, the latest restrictions will not apply to visa-holders who are already within the U.S., or those who are outside it and have already been issued valid visas.
  8. The reasoning offered by the White House is that the ongoing COVID-19 pandemic has “significantly disrupted Americans’ livelihoods,” to the extent that the overall unemployment rate in the country nearly quadrupled between February and May 2020 to 13.3%.

How is H-1B visa important to India?

Majority H-1B visa holder: India has been the only country that takes 70 per cent of the 85,000 H-1B visas applied annually. The H-1B visa is crucial for the IT sector in India.

IT professionals: The technology companies of US depend on it to hire tens of thousands of employees each year from countries like India and China. Hence, a cancellation of H-1B visas will most adversely affect Indian IT professionals.

Talent flow: The US should not obstruct the flow of talent from India as it is an important part of the economic cooperation and almost acts as a strategic bridge between the two countries, and is important for the bilateral ties.

Present system criticised by Immigration hardlinesrs:

President Trump and immigration hardliners argue that the present system is being abused to bring foreign workers on low wages to displace Americans, instead of attracting the really talented as its original mandate.

The Trump administration also points towards a “loophole” in the system that allowed companies to hire foreign workers and then “domestically outsource” them to other companies, replacing their American workers.

They do so by bypassing a rule prohibiting the hiring of a foreign worker if it directly led to the firing of an American worker.

Outsourcing through a third-party personnel system is critical to the business model of Indian IT services companies.

 Conclusion:

The Trump administration will also seek to plug a “loophole” in the existing H-1B programme that allowed companies to hire foreign workers and then “domestically outsource” them to other companies, replacing their American workers.

They do so by bypassing a rule prohibiting the hiring of a foreign worker if it directly led to the firing of an American worker.

Outsourcing through a third-party system is critical to the business model of Indian IT services companies.

There is little doubt that the policies of the Trump White House are likely to genuflect to the broader requirements of the 2020 presidential campaign, one of which is a sharp focus on “America First,” or in this case the need to project aggressive action against American jobs allegedly being lost to foreign workers.