No cheap labour please: How the new bill on H1-B visas can impact Indians

In lieu of claims by US President-elect Donald Trump that the H1-B visa program is being used to undercut American workers, two US Congressmen have reintroduced a bill backing key changes that allows skilled workers from other countries to fill jobs in the US.

The 'Protect and Grow American Jobs Act', by long-time Republican Congressman Darrell Issa, proposes important changes to the eligibility requirements for H1-B Visa exemptions. The bill was backed by fellow Congressman Scott Peters.

According to Moneycontrol, the bill may give jitters to Indian IT companies.

Reshaping immigration is one of the most imperative agenda of Trump.

What are the key changes in 'Protect and Grow American Jobs Act'?

This bill increases the minimum salary of H-1B visa to $100,000 per annum (currently it is $60,000 per annum), says The Economics Times

The Bill eliminates the Master’s degree exemption.

The lawmakers have argued that this will help ensure that these jobs remain available for the best and brightest talent from around the world.

The Bill comes after a number of companies — Disney, SoCal Edison and others — have come under fire for abusing the programme.

Here is what Congressman Darrell Issa and Peter Scotts have to say on the Bill:

Darrell Issa: The legislation we’re introducing will ensure that our valuable high-skilled immigration spots are used by companies when the positions cannot be filled by the existing workforce.

Peter Scotts: Curbing abuse of the H1-B system will protect American jobs and help ensure that visas are available for innovators who need them to maintain a competitive workforce. This bipartisan Bill makes one of the much-needed updates to our high-skilled visa system to level the playing field and help prevent companies from taking advantage of the system to offshore jobs.

Will it benefit anyone?

Boon for Indians: The bill says you can import foreign workers as long as you pay them well. Hence, yes, Indians in America, who manage to get a job will get a decent package. New Jersey and California are states which have the maximum concentration of Indian Americans.

Boon for Americans: It will put a check on some companies who get away by employing cheap labour at the expense of American worker. The economy, being close to full employment, is on track to produce about 1.25 million jobs per year over the next four to five years, Zandi said to Reuters.

What changes in immigration policy mean to India:

Indians account for 60 per cent of H1-B visas issued by the US Government, mostly in the IT sector, according to Moneycontrol. The $143-billion Indian IT industry derives about $65 billion of total export revenues from US market alone.

What the 'experts' say

According to a report published in Business Standard, "experts say that the ‘concern’ of politicians is that outsourcing results in loss of jobs for the locals who are short-changed by getting ‘cheap’ replacements from countries like India. But the fact is there are not so many ‘locals’ available with the required skill set.

R Chandrashekhar, President, Nasscom says that data from the US labour department shows that there is a shortage of skilled workers. Unemployment rates among skilled workers are around two per cent – anything less than four per cent is considered a shortage. Secondly, Chandrashekhar points out that by 2018 there will be more than one million IT skilled jobs in the US that will remain unfilled due to lack of availability of skilled people in the country. 

In a statement to Reuters, Mark Zandi, Moody's Analytics' chief economist said, "The gap between employment growth in the service economy and losses on the goods side persists. Smaller companies are struggling to maintain payrolls while large companies are expanding at a healthy pace," Zandi said.

However, he also said, "changes in government policies that encourage more immigration, productivity and investments could raise the 1.25 million annual growth rate".

What is H1-B?

H1-B is a non-immigrant visa in the United States under the Immigration and Nationality Act. It allows US employers to temporarily employ foreign workers in speciality occupations. If a foreign worker in H1-B status quits or is dismissed from the sponsoring employer, the worker must either apply for and be granted a change of status to another non-immigrant status, find another employer, or leave the US.