​'Keeping American Jobs Act' introduced to prevent replacement of US tech workers by H-1Bs. Will it work?

While the passage of this Bill will come as welcome relief to American tech workers, some say that the effort may be an exercise in futility.
Written by Rajiv Rao, Contributing Writer on

In the latest onslaught against the H-1B program -- or specifically, the alleged misuse of the H-1B program by cost-cutting American companies and Indian IT firms -- another Bill was re-introduced late last week that aimed to choke off the undermining of American tech workers by foreign ones.

The Keeping American Jobs Act was brought back into the fray by Derek Kilmer (Democrat) and Doug Collins (Republican) that aims to prevent companies from making their existing American workers train H-1B tech workers in the country before permanently moving those jobs overseas, a process popularly known as "offshoring".

The Bill was first introduced in Congress in February 2016 under the Obama administration. "We can't allow the law to be exploited to displace American workers and send their jobs abroad," the two congressmen said in a statement back then.

It calls for Immigration and Nationality Act to be tweaked in such a manner "to modify the provisions governing employment of non-immigrants under Section 101(a)(15)(H) (i)(b) of that Act to prevent the transfer of knowledge from United States workers for the purpose of facilitating their jobs being moved abroad" according to the Economic Times.

The whole impetus for this Bill probably came from certain high profile imbroglios in 2015 when companies such as Walt Disney and Southern California Edison shipped in Indian tech workers from Indian outsourcing firms. They then had their in-house workers train them under threat that they would not receive severance, and then, when the job was done two months later, promptly fired them. The companies mentioned claim that they did nothing wrong and that the move would end up saving more jobs in the long run.

The cases attracted widespread notoriety in the US, with Donald Trump expending his wrath at these companies while on the campaign trail last year, making public appearances with various Disney employees in solidarity. Lawsuits filed against Disney were to no avail as the judges ultimately sided with the company.

Those cases, however, used the argument that Disney and its outsourcing firms violated federal law because the contractors were misleading when sponsoring workers for the visas. A fresh round of suits filed against Disney in December 2016 used a different tack -- that the employees were discriminated against on the basis of race and national origin -- and are still ongoing.


Having to train someone before they replace you is perhaps the most dispiriting and humiliating experience that any professional can go through. Yet, isn't this exactly in line with the kind of free market capitalism that the US has been a cheerleader of, pressuring other countries to adopt similar philosophies of "opening up" (Russia in the early '90s) and free labour mobility?

The comparative advantage of companies and countries -- a theory postulated by classical economist David Ricardo, who, along with Adam Smith and James Mill, formed the bulwark of modern capitalism -- stated that if a country is not able to produce certain goods as cheaply as another one, then it should shift production to a good in which it has a comparative advantage and leave the production of the one in which it is disadvantaged to those who can do it cheaper. Isn't this after all why our phones and washing machines -- in fact pretty much any consumer good we use -- are made in China and not in North America and why they are at the price points that they sell at?

Of course, many argue when talking about H-1Bs that there is a quality quotient that is ignored when shipping in foreign workers, and that many of these H-1B jobs deliberately under-pay and overwork the foreigner, producing sub-standard work while ignoring scores of well-qualified American techies who are unemployed and both need and deserve those positions (these are all generalisations, of course, with some truth to them). Others suggest that the economics of the job are simply not in their favour.

The problem is that in a globalized world -- one whose architecture was primarily shaped by the US -- this legislation may prove largely ineffective. Or so thinks Stephan Manning, associate professor of management at the University of Massachusetts (Boston) who studies outsourcing, whom I previously referenced.

"Whether Disney tech staff is replaced by H-1B workers onshore or by Indian workers offshore does not really matter in the end," Manning said. "In other words, trying to protect higher paid, yet generic tech jobs on US soil is futile. US salaries for such jobs will soon adjust to global competitive standards." Here, by and large, the lowest bidder will invariably win. Whatever managerial oversight needed for a project can be handled by a few employees onsite.


Very soon, even these H-1Bs will no longer exist. Ironically, both American and Indian techies will be fighting the same scourge -- automation technologies such as machine learning and robotics.

HfS Research said that by 2021, the global IT industry will see a 9 percent -- or 1.4 million -- net decrease in jobs. India itself will shed 640,000 low-end jobs to automation. In other news, Trump's Treasury Secretary Steve Mnuchin thinks this is all nonsense. He shocked the tech community when he toldAxios' Mike Allen a few days ago that displacement of jobs by artificial intelligence and automation is "not even on my radar screen" because the technology is "50 to 100 more years" away.

Whichever way you look at it, if the Bill passes, American tech workers -- who have long complained bitterly about being undermined by what they say is a craven industry and its pet politicians -- will soon see what they think is some much needed justice being administered.

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