My Thoughts about Anything and Everything Under the Sun
Tuesday, February 24, 2009
H1B Visa Restrictions in Stimulus Package – What Exactly Does it Mean?
Last week President Barack Obama signed into law the stimulus package that proposed to pump 787 billion dollars into the US economy to help recover itself from recession. One of the clauses in the stimulus bill is to tougher restrictions on companies that receive bailout money from hiring H1B visa holders. According to Wall Street Journal
The provision (on stimulus bill) imposes higher government scrutiny on banks and other businesses getting federal bailouts if they use the H-1B visa program to hire skilled workers. The program generally grants temporary visas to at least 85,000 workers a year.
Instead of barring H-1B workers, the stimulus law temporarily increases the number of procedural hurdles that banks and other bailout recipients must clear. It also gives the government much greater ability to scrutinize companies' hiring practices when it comes to the foreign workers.
Once the stimulus package was passed media, especially in India, started interpreting it many different ways. It varied from “Indian workers' prospects of living the American dream may turn sour” to “unlikely to have a majorimpact”. The Economic Times in one of the article writes
The time when young budding IT professionals of Bangalore would head to the United States for either higher studies or to fetch themselves the 'dream' job, seems almost to be over.But with the US Senate imposing restrictions on hiring foreigners on H1-B visa, the feeling has come hitting hard on the highly skilled Indians that the door to the US might actually close for them.
Nearly 100,000 skilled Indian workers' prospects of living the American dream may turn sour with the Congressbarring firms thatreceived bailoutmoney from hiring foreigners through HI-B visaprogramme if they replace US citizens. Estimates suggest that there are 100,000 Indian nationals among the 163,000 from across the world that had applied for the skilled worker visa in FY2009.
It didn’t end with the media. The political parties did their part also. The Vishwa Hindu Parishad (VHP), an organization closely associated with main opposition party BJP in India, made a statement to boycott US goods in retaliation of the H1B visa restrictions. This was what VHP leader Praveen Togadia has to say
Terming as "discriminatory" the US move to bar firms receiving government bailout from hiring Indian and other foreign workers through the skilled worker visa (H1-B) programme, the VHP on Wednesday threatened to boycott goods of US-based MNCs in the country.
"The proposed discriminatory clauses that US companies employing H1-B visa holders will not be eligible to receive any sanctions from the 787 billion USD stimulus package are hurting Indians abroad. We are determined to take up this issue in a similar fashion by disallowing American products in India," Togadia told
The US Senate’s move to restrict H-1B visas to banks and companies receiving aid under the stimulus package is unlikely to have a majorimpact on Indian IT players. According to analysts, there are two reasons for this. First, offshoring, which is on the rise, has not been directly targeted by the amendment, and second, other categories of visas are still available.
Now with all these contradictory reports what is the truth? Do these restrictions have a major impact on the H1B visa holders and their job prospects? My answer to this question is that it is only going to have a very minimum impact. Let me tell you why this restriction is going to be a non starter.
A total of 21,800 foreign US work permitswere requested for immigrant workers over the past six years from the 12 banks that received the largest rescue packages, totaling $15 billion.
Each year US issues 85000 H1B Visas. So in six years the US could have issued 510,000 visas. In that only about 22,000 visas went to the major banks that received bail out money. This number is less than 5% of the total visas issued. So yes, in the next two years these banks may not be able to hire new H1Bs and that can have minor impact.
At the same time there is another side to this story. Everyone knows that number of H1B visa holders working in these banks will definitely be more than 22,000. The practice these banks follow for many years now is that they don’t hire a H1B visa holder directly. They hire a H1B visa holder through a consultant. This works like this. You get your visa sponsored through your consultant and come to US. This consultant places you in one of the companies receiving the bail out money from the stimulus plan.Now since the company is not directly hiring the H1B visa holder, the company doesn’t have to comply with the stricter H1B rules and it gets the right people for the right job. This was and will continue to be the major way the banks recruit H1B visa holders. With the new restrictions this practice will increase along with outsourcing.
So the net effect of restrictions for H1B visas on stimulus package – a stimulus for consultants out there and business as usual for companies getting bail out money.
In early 2000, while I was working in Chennai I used to go to Indian Institute of Technology (IIT) at Chennai. I made a lot of good friends there especially those who were doing Masters in various fields of Engineering. These were all students who scored very high marks in GATE exam (entrance exam for Masters). They used to work hours and hours in the lab working on their area of research. Most of them seem to have a fairly good idea of the subject they were working on.
But this interest in the subject ends when the campus interviews come. A mechanical engineer or a civil engineer or a aerospace engineer or from any engineering stream will be preparing to solve the puzzles, questions so that they can get a job in software companies like Infosys, CTS, TCS etc. Once they get a job in one of the software companies they join these companies never to come back to their area of specialization.
I always used to think what an utter waste of ability, when I see students from premier engineering institutes shift their job to software engineering after graduating in another field. If they wanted to become a software engineer why the hell did you come to IIT and do bachelors/masters in Aerospace engineering? One has to slog day in and out in a particular area before you get a degree. Now you are going to a field where you are not going to use any of what you learnt in your class.
The aura with software jobs in India will wane big time with this recession. The graduates from premier institutes like IIT and NIT graduating in core engineering subjects like civil, mechanical or electrical will think twice before accepting an offer from a software company. This recession has taught us a lesson that it may be better off in the long run to find a job in his/her field of study even if the salary is a little less initially.
Another side effect of recession is the bursting of the real estate bubble in India. Land prices were so inflated that it was almost impossible for a common man with a decent job to buy a home or a piece of land. My friend was telling me the other day that to buy a decent flat in Chennai you need a minimum of 50 lakhs of Indian rupees. Only a cream of the Indian society can afford to spend such an amount to buy something that huge. With global recession hitting India, the inflated prices have started the downward journey and hopefully it will go down so that more people can dream of owning a house.
Karthik in his blog has expressed almost similar views.
Now on a lighter note – below is an email forward I got a couple of days back. This was an advertisement that appeared in keralamatrimony.com website. How the recession has affected the “marriage market” of people holding certain jobs. A year back no one could imagine such a forward coming to our mail box.
On the whole recession has hit every one of us very hard. Even during the hard times some good things happen and I believe the two I described above are the good things to happen during these hard times.
Countdown to Loksabha Elections – Meet Ramesh Chennithala, KPCC President
India goes to poll in couple of months to elect a new parliament. The political parties are gearing up all resources to fight the coming elections. The main opposition party Bharatiya Janatha Party (BJP) has announced that its charismatic leader Lal Krishna Advani is going to be their prime ministerial candidate. On the part of Congress this will be the first election where Rahul Gandhi will be taking up a bigger role. Then we have lot of small parties who can make or break the party of Congress or BJP.
The political heat of this election has already reached Kerala with all major parties doing something or other to stir up the energy and enthusiasm of their followers. With twenty seats at stake, every political party is doing everything possible to turn the political climate to their favor.
If Congress Party has to retain power in Delhi, they should win big time in Kerala. Here is man who is entrusted with that mission of winning maximum number of seats from Kerala for Congress – Ramesh Chennithala, KPCC Chief. Here is an interview with Ramesh that appeared in the program “Thirakkil Alpam Neram” aired by Amritha TV.
In this video below he talks to anchor Rekha about the Save Kerala campaign, about present LDF government, his chances of contesting the Lok Sabha election, his rise in politics from the grass root among many things. Watch this video.
Ramesh talks about his association with former Indian Prime Minister Rajiv Gandhi like how Rajiv made him the NSU President in this video below.
It is a well known fact that Ramesh could reach here with a lot of help and blessings from leader K Karunakaran. They had their own share of political differences in the past and in this video below he talks about his association with former Kerala Chief Minister K Karunakaran. He also talks about Muraleedaran and his views on siblings of politicians entering politics in the video below.
In the last part he talks about his family, his first election to Kerala Assembly from Haripad, his religious beliefs etc. The interview ends with a question about this expectations of Congress and UDF in the coming Lok Sabha election.
Will be back with more politcal stories/interviews as Loksabha election dates come closer
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"
I have heard lot of Indians in US including me telling at some point of time – “I will save some money in US and go back and settle in India”. I have seen only very few people who have actually done that. Why? The answer is very simple. In a fully capitalistic county like US it is too tough to save. Majority of the people are forced to live from pay check to pay check.
Lot of Indians come to US not knowing that it is very tough to save in US. Once they are here soon they will find the harsh realities of life here. Here are a couple of observations I made during my stay in US.
“We were better off in Middle East financially than here. We have only debts here and no saving”. This was what one of my friends who moved to US from Middle East told me other day. His family consisting of his wife and two kids moved to US two years back with a green card, thanks to his wife who is a nurse. Both left a well paid job in Middle East to pursue their dreams in the land of opportunities.
In the Middle East they had company paid apartment to live, company paid transportation to and from work, a month of paid vacation, ticket for the entire family to go to India and back during vacation etc and on top of it you don’t pay any taxes. They were saving a lot and thought that if they land in US they could save more since they are going to earn in dollars – a myth lot of people have.
Harsh realities struck the family from day one of their landing. One third of your salary goes as tax, another one third goes a rent to your apartment and after you pay monthly installment for your car there was nothing left to save. Send your kid to preschool and that will rip off your pocket. If even after that you save something it will all be gone by the time family of four go for an India trip and back.
Another one that comes to my mind– one of my undergraduate class mates came to US one year back with his wife and kid. He knew that I am here for more than seven years and during the very first conversation I had with him after he landed him in US he was asking me “You might have saved at least 50 lakhs Indian rupees (approximately 100K USD) by now. He was telling me that he is planning to save over 60% of his salary and go back to India in another five years. He was planning so many things - to stay in a studio, use public transportation thus saving on buying a car, planning to convert his wife’s visa to a working visa so that she can also work and so forth. While he was letting me know all his dreams I interrupted him and told him – “Let us talk about this after six months”. After about three months he called me. He shifted from a studio to a two bed room apartment as studio was too small for a family of three; brought a new Honda Civic and was telling me that he couldn’t even save 20% of the salary. All I told him is “Welcome to US”. If I have told him the time he landed about all these he is not going to believe it. Now the harsh realities made him realize that he was living in a dream world. Now he has dropped the idea of going back and now in the long queue for Green Card and thus an American Citizen in the long run.
Does that mean that you cannot save a lot in US? The answer is “Yes’ and “No”. If you are a bachelor it may be possible but once you have a family it is really tough. Most of the times your expenses will balance out or exceed the biweekly pay check and there is hardly anything left to save.
Bottom Line – if your intention of coming to US is to save money and return back think again. Chances are that it is not going to happen as you don’t save enough to return. On the other hand if your intention of coming to US is to have a challenging environment where you can sharpen your skill, work on the latest and cutting edge technologies and get recognized for it, US is the place to be in.
Know More About Leader K Karunakaran – See This Documentary About Him
Almost three years ago I wrote a blog about Congress leader K Karunakaran titled “Why I respect Leader K Karunakaran”. Since then lot has happened – Karunakaran left Congress, formed a new party only to join later.
Karunakaran, one of the senior most living politicians in India was born on July 5th 1918. He actively became involved in politics during the Quit India Movement in 1942. He was elected to Kerala Legislative Assembly seven times from Mala constituency in Thrissur district (1965-94). His experience in the administration is vast that includes a seven year term as Home Minister, four times Chief Minister of Kerala and one stint as Union Industry Minister.
If someone asks me what his greatest achievement was, it shall be the way he handled the naxalite issue that plunged Kerala in the early seventies. He dealt the naxalites with an iron fist. This is the kind of iron fist the national leadership is lacking now in their fight against terrorism. If Karunakaran was little complacent in tackling naxalites, we might have still faced the issues of naxalism.
Here is a documentary shown in Doordarshan about Leader K Karunakaran.
Here is a documentary about Karunakaran known as Leader to the people of Kerala. It was shown in Manorama Vision Channel a few months back.
In the first part Karunakaran’s brother Appunni Marar remembers their childhood. This is followed by Karunakaran’s friend and film director Sivan recollecting the contribution of Karunakaran for the movie industy in general and creation of Chitranjali studio in particular. This part also has an interview with M P Virendra Kumar, former Minister and Janatha Dal leader who talks about his likes and dislikes of Karunakaran. Watch Part 1 below.
In the second part, a long time personal doctor and friend of Karunakaran, Dr.M.Krishnan Nair talks about the leader and his contribution to the health sector of Kerala. P.K.Kunalikutty, Muslim League, talks about Karunakaran’s contribution to the upliftment of minority communities in Kerala. Saradha teacher, widow of late chief minister E.K.Nayanar, narrates the friendship shared between families of Karunakaran and Nayanar. This is followed by Karunakaran talking about his wife and her influence in his life. Watch Part 2 below.
Sukumar Azhikode, one of the most vociferous critics of Karunakaran shares his thoughts about Karunakaran in the next part. Padmanabhan Nambiar, his cook talks about his eating habits. This part of the video ends with Karunakaran’s son K Muralidharan recollecting his thoughts about his father. Watch Part 3 below.
World renowned director Adoor Gopalakrishnan talks about why he respects Karunakaran. This part also has interviews with two people who had seen Karunakaran from very close quarters – Congress leaders K.P.Kunhikannan and G.Karthikeyan. Watch Part 4 below.
Former minister and BJP leader O.Rajagopal talks about the leader and the good qualities he possesses. This is followed by an interview with his priest and assistant Parameshwaran that throws some light into the highly disciplined life Karunakaran leads that has enabled him to live such a healthy life. Congress leader T.V.Chandramohan talks about the mental state of Karunakaran once he walked out from Congress Party. Watch Part 5 below.
Cheriyan Philip, a former Congress leader who climbed up the ladder in Congress party under the watchful eyes of Karunakaran talks about the influence Karunakaran had on the youth of Kerala. The documentary ends with an interview with Padmaja, Karunakaran’s daughter, who takes us through the various stages of his life. The documentary ends with a call from Leader Karunakaran “Let us all unite forgetting the difference based on caste and religion”. Watch Part 6 below.