Trump's H1B gift to India

Trump's H1B gift to India

February 1, 2017 | Kumar Mangala

History is bound to repeat itself.


You are fired

In my view, India's economic rise is partly credited to the technology offshoring of the past two decades.

Offshoring to India was born largely on account of the bursting of the Tech Bubble of 2000s in the US. The technology crash brought on the collapse of fiber optic companies (Global Crossing and it's friends), which was brought on by the overcapacity to begin with, which ultimately led to low cost internet and long distance telecom world over, especially between India and the US, by an order of magnitude. This gift from the greedy Global Crossing folks keeps on giving.

The Technology Crash of the 2000s also had a significant impact on the H1B program for years. As the US economy recovered the thirst for talent kept increasing, the cheap telecom coupled with the broken H1B program gave birth to the Technology Outsourcing and Offshoring we know of today. Hundreds of thousands of jobs were offshored to India since 2001 - perhaps Millions. Which in turn kick started the Indian economy of today. There is no doubt, offshoring of these jobs has benefitted US companies with lower cost talent - however India benefitted equally or more by nurturing domestically a significantly more talented and experienced workforce. Over these two decades India's technology workforce has become the world's envy and is among the top of the world's economies - so much so that Indian Techies in India are equally if not more talented than Indian Techies in the US or US Born Techies.
If you haven't read Thomas Friedman's The World is Flat - I highly recommend it. He has really gone into great detail on this subject.
If the new bill proposed by Congresswoman Lofgren seeking to double the minimum wage payable to H1B visa holders is implemented, once again going to prove to be a gift for India's economy. If it were implemented retroactively and companies employing H1-B holders are required to comply. Then, companies that were paying their H1B employees in the salary range of $60k+, now are required to increase their salaries to $130k or replace them with US citizens who can work for $60K+ and neither scenario is going to pan out - leaving most companies to offshore the work.

Here's the top of the list:

Sponsor Companies List

Consider that even prior to this new bill being conceived and presented, more than half a million high-skill computer science jobs are languishing unfilled in the US today - in HOT areas like IoT, Data Science, Cloud, Cyber Security and Healthcare IT. These are jobs that are so technical that there aren’t enough workers in the US to fill them. If the new bill becomes law tens of thousands to as many as half a million of H1B workers will no longer be legal.

Companies will have no other choice but to consider offshoring. Offshoring, as a result of this move alone, could cost the US Government a whopping loss of revenue from the loss of income tax. According to one estimate Indian based Tech Companies have paid $20B in taxes and created nearly a Million jobs in the US over the past five years. Not to mention the losses to the trickle-down-economy which the auto and housing market depend on. We could expect a mass exodus of H1B workers who can no longer be employed legally - which will bring about a fall in the housing market causing the US to go into an unwanted recession. Was this the trumponomics we were expecting? I hope not.
Regardless of whether the bill becomes law, Tech Outsourcing & Offshoring will grow. Younger engineers will remain in India. Although, the more experienced "older" engineers who had been minted over the past two decades will be eligible for the higher wage and more experienced work, of which there are thousands, if not millions, thanks to the offshoring of the 2000s.

If Trump wanted to eliminate technology immigration, he would have simply gotten rid of the H1B program or seriously reduced the quota of H1Bs - especially from India. And built a wall between India and the US...but he isn't.

In my opinion, in the long run, the US could benefit from higher paying jobs remaining in the US while lower skilled jobs are offshored. Although there are far fewer high-paying jobs than mid-to-low-paying jobs. If both India and US benefit - perhaps it isn't such a bad move - I am super optimistic. Whether his actions are misguided or strategic only time will tell.

Life isn't a crapshoot as some might imagine, this mass exodus of H1Bs will usher Tech Staffing into another golden period - time to cash in - here's your Ticket to Freedom.

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