H1B Visa – It is Skilled Job Visa and Not Cheap Labor Visa
US senate recently has imposed strict conditions on all American companies that receive federal bailout money on hiring H1B visa holders. The stricter conditions have almost made it impossible to hire H1B visa holder in any such American company. This was what the independent senator from Vermont, Bernie Sanders had to say “The very least we can do is to make sure that banks receiving a taxpayer bailout are not allowed to import "cheaper labor" from overseas while they are laying off American workers”.
See the words “Cheap labor”. Isn’t H1B visa a skilled job visa? How can it be Cheap labor visa? Either the senator is making such a statement for political gain or due to total ignorance? How can HIB visa be a cheap labor visa when the company that hires a H1B visa holder ends up paying more than what it has to pay for an American worker in the same position?
Let us see the filing process of H1B visa. Once an American employer decides to hire a non American in a H1B visa, prior to filing the H1B petition with USCIS, the employer must file a Labor Condition Application (LCA) with the Department of Labor. Among other things the employer has to affirm in the LCA that the wage offered to the applicant is AT LEAST AS HIGH AS THAT PAID BY THE EMPLOYER FOR THE SAME TYPE OF JOB, and the number EQUALS OR EXCEEDS the prevailing wage for that job in the same geographical area. What does that mean? If an American was doing a job X and was paid $Y, the H1B visa holder should also be paid $Y and that amount should be equal to or exceed the prevailing wage for that job in that geographical area. So any law abiding company cannot pay “cheap” salary and get the services of a H1B visa holder.
In addition if an employer decides to hire an employee in H1B, the employer has to pay for his/her visa application, immigration lawyer fees etc that will run into thousands. If you add all these, hiring an American in place of a H1B visa holder is less expensive and less time consuming for the company. Still American companies hire H1B visa holders. Why?
To answer this question let me take you to a graduate class in any University in US. More than 80% of the students in those classes will be non-Americans. Go to any Computer Science or Electrical Engineering classes and you may be extremely lucky if you can find an American in that class. Bottom Line – Americans will high skill sets are almost an extinct species and American companies are forced to hire skilled people by sponsoring H1B visas.
Now what will happen if politics takes an upper hand and makes H1B visa rules stricter? The US is going to lose big time and countries like India and China are going to gain big time. Let us see how it is?
Suppose it becomes difficult to get H1B visas. The majority of the H1B visa holders, who pump majority of their salaries back to US economy will find it tough to get a job and go back to their motherland. The skilled people have gone back and the US employers cannot find enough “qualified” Americans to fill the skilled jobs even though there are lot of “unqualified, unemployed” Americans. In the mean time there will be thousands of qualified skill people in India who cannot be brought to US because of visa restrictions. What will the American company do? Outsource the work to India. What does that translate to? America’s loss is India’s gain.
Thomas L Friedman, the author of “World is Flat” wrote a nice article “The Open-Door Bailout”, about the ill effects of stricter H1B visa rules. Let me conclude by quoting him.
“In an age when attracting the first-round intellectual draft choices from around the world is the most important competitive advantage a knowledge economy can have, why would we add barriers against such brainpower — anywhere? That’s called “Old Europe.” That’s spelled: S-T-U-P-I-D.”
MAKING H1B VISAS STRICTER – STUPID DECISION THAT WILL BACKFIRE ON "USA"