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Desperately Seeking Visas

Submitted by Data, Jan 7, 2008 12:13

S. Kolger wrote: "every other type of white-collar jobs stop getting offshored to India"

(1) New H-1Bs account for .07% of U.S. labor force each year. (page 9)

(2) The top 10 Indian "outsourcing" companies used 14,768 (< 14%) of new H-1B petitions approved in 2006 for initial employment. (page 12)

(3) The number of approved petitions for new workers is not identical with the number of workers on the job because

(a) workers are occasionally sponsored by more than one employer,
(b) the job offer may subsequently be withdrawn,
(c) the job offer may be declined, or
(d) the worker if residing outside the country, may be denied a visa. (page 31)

(4) Since 2004, at the height of concerns about outsourcing, US unemployment rate has dropped from 5.6 percent (February 2004) to 4.7 percent (October 2007) and the number of net new jobs in the US has increased by more than 7 million, according to Department of Labor data. "While global software and IT service outsourcing displaces some IT workers, total employment in the United States increases as the benefits ripple through the economy," according to the economic consulting firm Global Insight in a report released by the Information Technology Association of America. "The incremental economic activity that follows offshore IT outsourcing creates over 257,000 net new jobs in 2005 and is expected to create over 337,000 net new jobs by 2010." (page 13)

(5) Senator Durbin and others have made much of the fact that a number of H-1Bs come to the US to work for Indian companies and then return to India to work. The impression created is one of Indians being trained here like soldiers so they can return to India and "kill" American jobs. This type of zero-sum thinking is far from the reality of the dynamic workings of a global economy and places the mutual benefits gained by consumers and producers in a threatening posture for political effect.

Yet even in the context of a zero-sum analysis the statements by critics don't match the facts. The small number of H-1Bs sponsored by Indian companies each year is less than 1 percent of the 1.6 million workers today in India's IT software and services sector. While the US work experience is certainly useful, it would still represent a tiny increase in India's IT capabilities even if all returned to India (some obtain permanent resident visas in the US or could later go to Canada or the UK). Besides, if the individuals are working on contracts in India for US companies they are likely making US companies more efficient and competitive.

(5) If these companies were not allowed to hire any H-1Bs in US, they would still service US customers in India or elsewhere. They operate in US because they are servicing US customers that wish to contract with them and prefer certain work to be done in US. Like other foreign companies in US they pay taxes and make purchases in the local or national economy that create jobs beyond those produced directly by the company.

While in this country, H-1Bs are paying US taxes on their earnings and purchasing US goods and services, which creates jobs. Moreover, when they return to India or elsewhere they would have gained a natural proclivity for US products, which can be seen in many parts of India today. Human resources specialists point out many H-1Bs pay taxes into the US Social Security system with no hope of receiving benefits.

-- Driving jobs and Innovation Offshore, The impact of high-skill Immigration Restrictions on America, National Foundation for American Policy (NFAP) Policy Brief, Dec 2007
http://www.nfap.com/pdf/071206study.pdf

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