H-1B visa restriction may affect US IT production: Report

The Center for Global Development (CGD) in a report titled as 'The IT Boom and Other Unintended Consequences of Chasing the American Dream' said that H-1B visa is advantageous for both India and the US.

By: Express Web Desk | New Delhi | Published: August 8, 2017 2:37 pm
H1 b visa, H 1 B visa benefit, US economy, what is H 1B visa, india us workers, Indian economy, indian express news, world news The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields. (Representational image)

The restrictions on H-1B visa programme will lead to the Information Technology (IT) sector in the US lose its competitive edge in the market. A top American think-tank said that US IT sector will find it difficult to attract open talents from India and America, PTI reported.

The Center for Global Development (CGD) in a report titled ‘The IT Boom and Other Unintended Consequences of Chasing the American Dream’ said that H-1B visa is advantageous for both India and the US. Gaurav Khanna, fellow at the CGD and co-author of the research paper, said, “It is really important to make sure that the I-T sectors from both countries are allowed to attract the right kind of people, because they really allow for innovation and growth in both the countries.”

The report gives a detailed description of how the H-1B visa programme affects the economies of the both the US and India. Khanna told PTI, “Both the economies have really benefited from the H-1B programme.” He also warned that the IT companies might look for other options and move to Canada if the H-1B clampdown will happen. He said, “What our paper is really trying to stress, is that on average the US is better off because of the H-1B programme. So clamping down on the H-1B programme will basically not allow the US IT sector to attract the open talent from places like India. The US might then lose its competitive edge in IT production.”

He added, “If you think about what happens in India, you know the prospect of migrating to the US and earning such a high wage …it seemed they really encouraged certain students and workers to acquire skills that would be valued by the H-1B programme.”

The research report examines the relationship between migration and the outsourcing of IT production to India since the early 2000s and says that because of the H-1B programme, US workers are on average better off by about $431 million or $1,345 per additional migrant in 2010. It also includes crucial mechanisms like innovation by businesses, trade with other countries, and the choices made by students and workers to become computer scientists, a PTI report said.

The research also helped to know that the overall productivity is benefitted due to better technology, as a by-product of this immigration of tech workers. Khanna said, “The average worker in each country is better off because of immigration, and US native workers have made big gains because of the H-1B visa programme. Yes, there may be things that can be done to blunt distributional impacts that affect a subset of workers, but overall, this policy has been a net-positive for the US economy and workers.”

“Together, the brain-gain to India under the H-1B programme outweighs any brain-drain,” the report said. Khanna said that the increase in IT sector productivity allowed India to eventually go ahead of the US in software export because of the additional knowledge and skills that the workers learned in US before the expiry of the visas.

The H-1B visa is an employment-based and non-immigrant visa category for temporary workers. It permits US companies to temporarily recruit foreign workers. Indian IT giants like TCS, Infosys and Wipro are among the major beneficiaries of this programme.

(With inputs from PTI)

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  1. Alfred E. Neuman
    Aug 8, 2017 at 10:22 pm
    India has decided that the H-1B is good for the USA. American voters disagree and that is why Trump is President. The economic good ascribed to the USA goes to corporations at the expense of American workers. A tariff on IT services would both put Americans to work and bring back billions of dollars to the USA.
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    1. K
      kulaputra kulaputra
      Aug 9, 2017 at 4:11 am
      Neumann for President - This was the old cry. Now, Neumann is the president !
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    2. V
      v b
      Aug 8, 2017 at 6:58 pm
      The grant of H1B Visas led to increase in education in software. Some out of the candidates educated in Software, though not, have been creative, more so due to exposure to the creative lot of those who worked in USA based on H1B Visa. From this perspective India’s brain gain may have been ahead of its brain drain. Most USA Whites are unwilling to do the mugging-up which is necessary, to some extent, to learn and carry out Software work. Even if they do, their ry expectations are far higher than those of Indians willing to work on H1B Visas. The met overall position is that USA will stand to gain by continuing H1B Visas on a larger scale than hitherto.
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      1. J
        Joshua Kendall
        Aug 8, 2017 at 9:42 pm
        Stupid Indians do "mugging" instead of real creative learning which the Anglos are better at than the curry-smelling Indians. Indians can't manufacture , they have no reliable manufacturing base in India, and they always play con-games and look for ways to deceive others. H1-B visa system has subtly wrecked havoc on US IT industry, IT education in US, and domestic(US) IT work pool. Over the past 50 years, the low cost IT rascals from India displaced local IT workers, disincentivized American citizens from pursuing an IT education and career, and disincentivized US universities from offering IT education training and courses needed by the IT industry. As a result, the US became enslaved to the low cost inferior quality Indian IT workers, causing a threat to the Make In America agenda, and contributing to the growing government debt of the US. It is time to Make in America using American citizen workers, and deport all the H1-B rascals back to India.
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      2. P
        PLAIN FACTT
        Aug 8, 2017 at 6:19 pm
        PRAY, TELL US, HOW COME THE U.S ECONOMY IS NOT SOOO HOTT, WITH BARELY 3 PERCENT UNEMPLOYMENT. THAT MEANS, NINETY SEVEN PERCENT OF THE AMERICANS ARE GAINFULLY EMPLOYED. A WORLD RECORD, NOBODY, NO AMERICAN PRESIDENT EVER DID THIS...AMERICA SHUD BE THANKFUL TO THEIR PRESIDENT FOR SUCH ACHIEVEMENTS...RECALL THE WORLDS LARGEST EVER DEAL DONE BY THE PRESIDENT- 12O BILLION DOLLAR DEAL...AND THE ECONOMY IS SO HOT, ITS A BENCHMARK FOR THE WORLD OVER...SO PLEASE STUDY THE STATS AND REALITY RIGHT...ANYWAY H1 PPL AND AL INDIANS MAX ACCOUNT FOR 25B SURPLUS, EVEN IF U KIKK OUT ALL INDIANS, USA WILL SAVE MAX 25B A YEAR. CHINA IS TEN FIFTEEN TIMES BIGGER LOOOTER. CHINA TAKES OUT 1B DAY FROM USA TREASURIES, THATS ABOUT FOUR HUNDRED BILLION A YEAR. SO IF U TAKE CARE OF CHINA ISSUE, U SOLVE NINETY FIVE PERCENT OF YOUR PROBLEM. THATS PLAIN REAL FACTS OUT THERE.
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        1. J
          Joshua Kendall
          Aug 8, 2017 at 4:44 pm
          H1-B visa system has subtly wrecked havoc on US IT industry, IT education in US, and domestic(US) IT work pool. Over the past 50 years, the low cost IT rascals from India displaced local IT workers, disincentivized American citizens from pursuing an IT education and career, and disincentivized US universities from offering IT education training and courses needed by the IT industry. As a result, the US became enslaved to the low cost inferior quality Indian IT workers, causing a threat to the Make In America agenda, and contributing to the growing government debt of the US. It is time to Make in America using American educated workers, and deport all the H1-B rascals back to India.
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          1. Richard Race
            Aug 9, 2017 at 2:19 am
            I disagree. I think the people from india are coming it at a price equally as low as some of the guys here in the US doing IT consulting work. In the end, the client will pay what they want to pay. The question is how low will they go, and will the job get done right? The abundance of techs and lack of work in addition to cost cutting businesses are all components to the issue in IT. Cost is controlled by supply and demand. If they supply was meeting the demand, the price would be higher. This is enough evidence that they are not responsible for the issue.
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