Jun 22, 2012

H1B Visas hurt America and American Jobs

Ron Hira is a man who Indian IT companies love to hate.  He told a US house judiciary panel that the H-1B programme does more harm than good. He believes that loopholes in the H-1B programme make it too easy to bring in cheaper foreign workers, who substitute for Americans. Hira spoke to ET on Sunday, about why he thinks H-1B visas hurt America.

What are the biggest problems with H-1B visa programme?

The biggest problem with the H-1B programme is that it is being used outside the scope it was intended. Instead of providing foreign workers who complement the American workforce, employers are bringing in workers who substitute for Americans. Employers can do this because of loopholes in the programme that allow foreign workers to be paid below-market wages.

When the cap was announced, many companies had asked for the numbers to be increased, but now there are very few takers. Has the H-1B visa lost attraction?

There are a number of factors for the lower H-1B intake last year and this year. The US job market has been in the doldrums. Compared to a decade ago, we have 30 million more people in America. Yet we have 2 million less jobs. There are additional factors such as the memo that limited the ability of smaller body shops to use the H-1B visa programmes.

How would you link the H-1B programme to outsourcing? What could be ways to correct it?

The major offshore outsourcing firms state in public that the H-1B and L-1 visa programmes are critical to their business models. To be fixed, the H-1B programme needs an effective labour market test and true market wages to be paid. Greater portability for the H-1B worker is also needed so that they can more easily change positions, this will provide greater bargaining power and protection.

Your views on outsourcing have not been very well received by Indian IT companies. Does that cause you concern?

Former Congressman Bruce Morrison, who created the H-1B programme when he was in Congress, has said that, "If I knew in 1990 what I know today about the use of it [H-1Bs] for outsourcing, I wouldn't have drafted it so that staffing companies of that sort could have used it." My guess is that a few in Congress and very few Americans think H-1B programme was intended to be used for outsourcing and still support it.

Will limiting the H-1B programme make corporate America less competitive globally?

It is wrong to equate the profits of US-based companies with America's national economic interests. There are many stakeholders and interests and the singular aim and claim that the only thing that matters is 'American' corporate profits is wrong. Profits are at record levels but the labour market is still not creating enough jobs.

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