Report suggests US paranoia about H-1Bs largely unsupported by facts or stats
The fact that Indian IT firms gamed the application system to get a large share of H-1B visas is indisputable.
The habit of using Indian H-1B workers on contract from Indian outsourcers reached a boiling point, with several news reports describing how Americans were forced to train their Indian counterparts or risk losing their severance altogether, a decision that was both tactically and ethically disastrous.
Yet, what if, in general, reports of marauding Indian firms displacing American techies have been hugely overstated? What if the belief of there being a large supply, if not an oversupply, of American tech labour is simply not backed by numbers collected from US agencies? What if fears about outsourcing eventually led to a crisis in American tech employment?
A recent policy paper by the National Foundation for American Policy (NFAP), an organisation that describes itself as non-profit and non-partisan, reveals some interesting numbers that paint a very different picture of not just H-1Bs, but also the future of American tech employment.
VASTLY REDUCED APPLICATIONS
The fact is, around the time when US President Donald Trump began campaigning in 2016, Indian IT firms had already voluntarily vastly dialed back their H-1B filings in 2015, and therefore the number of visas acquired by them the following year. The leading seven Indian IT players collectively received 37 percent fewer visas, a drop of 5,436 of these approvals in 2016 compared to 2015.
In fact, Senator Richard Durbin went so far as to say that TCS and Infosys, among the big four in Indian IT, received "more than half" of the annual H-1B quota in a statement during a congressional inquiry -- which the report shows to be patently false. TCS orchestrated a 56 percent annual decline in 2016, and Infosys a 16 percent drop. Collectively, the two received a scant 5 percent of the 85,000 quota.
The top seven firms, which include Wipro, Cognizant, and HCL, received just 11 percent of the 85,000 quota in FY 2016, a far cry from the existing image of rampaging Indian IT replacing American labour wholesale. Moreover, the drop is hardly something that can be attributed to Trump's crusades while on the stump or soon after being elected.
A THREAT TO US LABOUR FORCE?
Which brings us directly to the paper's related point -- that the 9,356 new H-1B approved petitions for the top seven firms in 2016 made up just 0.006 percent of the US labour force.
"While the threat of job loss has long been exaggerated by critics, it reaches illogical proportions when discussing fewer than 10,000 workers in an economy that employs 160 million workers nationwide," the paper said.
In fact, the NFAP goes one step further. It analysed data from the Bureau of Labor Statistics to show that the unemployment rate in the US for "computer and mathematical science" occupations was 2.5 percent -- a little more than half of the 4.4 percent figure for all occupations.
It also highlighted the unemployment rate for jobs in the architecture and engineering fields at an even lower 2.1 percent, which it said "illustrates a disconnect between reality and claims that high-skilled foreign nationals are preventing US workers from pursuing careers in tech fields".
Then there are the omnipresent figures from Code.org that have been making the rounds for a while, which the report cites as showing an estimated future shortage of 1.4 million more software development jobs than able applicants by 2020, not to mention the proliferation of 500,000 open computing jobs nationwide.
On top of that, an analysis by Glassdoor mentioned in the report points to STEM students five years out of college as representing nine out of 10 of the highest-paying majors.
This doesn't mean that American workers mired in low-end tech jobs haven't been replaced or will be soon, but it's hardly a bleak landscape for American tech workers in general. In fact, Indian techies at home are experiencing a bloodbath thanks to the carnage that automation is causing in exactly the same segment. If anything, the shift to cloud and AI means that more US workers are being hired over the past few years by Indian IT in the US than ever before.
H-1B WAGE EXAGGERATIONS
While there have been plausible reports of how Indian firms and sub-contractors were exploiting their H-1B workers by underpaying them and making them work longer hours than they should have been, the report suggests that the figures cited by the Trump Administration -- that around 80 percent of H-1Bs are paid less than the median wage in their fields -- is seriously flawed.
"This statistic is misleading, as it relies on a Department of Labor database that includes multiple applications for the same individuals, since a new filing is generally required when an H-1B professional moves to a new area," the report said. "That means it double or triple counts anyone who works in more than one geographic location (primarily younger workers sent to multiple offices)."
According to the report, the median salary for H-1Bs who logged at least three working years by 2015 was around $7,000 higher than the median salary in the industry.
LESS OUTSOURCING MEANS MORE IMMIGRATION
Finally, the bottom line is that in this volatile and rapidly shifting technological landscape, most economists think that if the US government is going to restrict immigration, specifically visas like H-1Bs, companies will simply pick up and move to a part of the world where they are able to access the kind of labour they desperately need.
This is why Canada is home to a growing number of large and small American tech companies, and why India is now home to a growing number of large datacentres and AI labs started by the likes of Cisco, Microsoft, and GE.
"If you're worried about outsourcing, you should probably have a more liberal rather than a less liberal attitude toward immigration," George Mason University economist Tyler Cowen said.
"If the United States takes in more immigrants, the areas in which those immigrants work are less likely to see jobs outsourced abroad. Immigration makes it possible to keep those jobs at home. In fact, the bigger a threat outsourcing becomes, the more important immigration is for keeping us competitive and for keeping other complementary jobs in place."