U.S. Senate Targets India Outsourcers

Posted by: Bruce Einhorn on August 8, 2010

How unpopular are Indian outsourcing companies from India in the U.S.? They can manage to unite squabbling Democrats and Republicans in the Senate. With the GOP filibustering most of the time, it’s news when Senate Majority Leader Harry Reid and his Democratic colleagues manage to get 60 votes to pass anything at all. Getting all 100 Senators to vote unanimously on a bill is near miraculous. On Thursday, though, the Senate unanimously passed a bill sponsored by New York’s Chuck Schumer to increase visa fees on companies that send workers to the U.S. if more than half of their America-based employees use work visas. In other words, Indian IT outsourcing companies. (Companies like Microsoft and Google that bring people to the U.S. on these work visas, too, don’t have to worry since those employees are just a tiny percentage of their U.S. workforce.) The extra money will pay for additional security measures on the U.S.-Mexico border.

In case the message wasn’t clear enough, senators made a point of singling out Indian IT outsourcers. Missouri Democrat Claire McCaskill said the bill would hit “a handful of foreign-controlled companies that operate in the United States such as Wipro, Tata, Infosys and Satyam,” Indian wire service PTI reported. PTI also quoted Schumer turning up the heat on the Indians. “The emergency border funds will be paid for by assessing fees on foreign companies known as chop shops that outsource good, high-paying American technology jobs to lower wage, temporary immigrant workers from other countries,” Schumer said during debate on the Senate floor. “These are companies such as Infosys.”

Chop shops! I’ve followed the debate about outsourcing for a while, and this is the first time I’ve heard of a top lawmaker likening India’s blue-chip IT services companies to crooks who specialize in taking apart stolen cars. Nasscom, the Indian IT industry’s lobbying group, came out with a statement after the Senate vote pointing out that less that 12 percent of H-1B visas. “But U.S. compnanies, which use the bulk of these visas, would remain unaffected by the legislation,” Nasscom President Som Mittal said in the statement. “This is simply unfair to foreign companies.” For now, the new tax won’t hurt Infosys and other Indian companies too much; Bloomberg News quotes Kaufman Bros. analyst Karl Keirstead saying the new fees will be “relatively innocuous” for a company like Infosys, which earned $1.3 billion in the most recent fiscal year. With the U.S. unemployment rate hovering near 10 percent, though, Infosys and other Indian IT companies should expect more over-the-top attacks from American politicians from both sides of the aisle. They can’t agree on much, but they all know that there’s little downside to beating up on Bangalore.

Reader Comments

jef

August 8, 2010 10:12 PM

This is a dog and pony show by the government to show that they are sincerely interested in creating jobs.
What we need is manufacturing, which actually is the main engine of employment in any country including ours and nobody wants to bring manufacturing back because we are too fearful of China. I don't think any of the Democrats or Republicans for that matter are ignorant enough to know that not many jobs would be created or brought back through the issuance of this bill which mainly targets a very specialized small section of the industry where there is a perennial shortage of skilled labor.

dev

August 8, 2010 10:14 PM

Next time American government officials come lobbying for deals in India, the Indian government should politely show them the door!

@jef

August 8, 2010 10:54 PM

Jef, what manufacturing jobs can we bring back to America? You think consumers will buy Amercian made goods, similar quality but 10x the price? They wouldn't have been outsourced if majority of consumers have a deep pocket, for crying out loud. Stop being a talking head, dude!

Dhurandhar

August 8, 2010 11:02 PM

The senators should carry out one more survey. How Unpopular are AMERICANs outside of US. Its a country that invades countries like Vietnam, Cuba, Iraq, Pakistan, Afghanistan and other country that strikes oil, and whenever the president of US gets up on the wrong side of the bed. Americans off course have never heard of this phrase "Charity begins at home" May be its a BRITISH phrase, and anything British is out of fashion this season. They have enough problems on hand like Unemployment, astronomical fiscal deficit, but they seem to poke their nose in every issue outside of US. All the time people believed that best scientists in the world are based in the US. But they cant plug a leaking hole ?

Not going far enough

August 8, 2010 11:04 PM

Not going far enough! This should apply to all foreign companies operating in US. If they do not employ 80% American work force, they should be penalize NOT with $2000! The should be fined 30% of the average wage (which sould come to 10's of thousands of dollars). Then only they will change their practice and hiremore Americans! Also, big corporations, must also be fined some amount, if they hire non-ciizens/legal residents. Let them fing that Einstein who they really want and then they will be happy to pay that fine. Our politicians must act vigoruoly to protect and create more American Jobs. Pl. write to our Senators demanding, an ecn to H1B and L1 visas, when there is 9.5% unemployment here! There are plenty of qualified Americans for any job.

Jared

August 8, 2010 11:34 PM

Isn't this an incentive for foreign companies to keep American jobs out of the America? This imported labor, pays for rent, food, entertainment, transportation and many other things in the US! This makes us competitive and stimulates the our economy through consumption. Perhaps its time our senators took some classes in economics.

nimesh

August 8, 2010 11:38 PM

As always, Congressmen are being disingenuous. Its easier to beat up on Indian companies than their US counterparts and democrats don't want to appear anti business. Mr. Schumer knows well that US multinationals sign contracts to outsource projects. Its not like indian workers magically appear out of nowhere to sit at a desk and do the work.

MB

August 8, 2010 11:40 PM

We should formalize our infrastructure and nuclear deals with Europe and Russia.India should show US a door and start taxing American Corporations selling crap in India. Shut down operations for Ford,Apple & GM which don't create jobs in India. India is not dependent anymore on outsourcing and let these dumbos know loud and clear.

anuj

August 8, 2010 11:41 PM

i dont why americans are so angry at indians. its not like we're the ones who are the head of most the companies outsourcing to india. they should be mad at their own government and these corporations which choose to go to china or india because its cheaper labour such as many of the manufacturing jobs have gone. its unfair is you ask me they're singling out india unfairly

Kumar

August 9, 2010 12:00 AM

American cowards. They never utter a word about the manufacturing job losses to China. They are scared of China.

BQ

August 9, 2010 12:07 AM

The real job loss is Manufacturing!! The US has the third largest population why on gods green earth do we outsource to China? Maybe to profit a few capitalists that socialize their looses to the US tax payer?

All countries should realize they need to manufacture locally. Good for jobs, good for the environment. Bad for China.

Chad

August 9, 2010 12:23 AM

Well as an Indian working in the IT sector I don't see this measure as a big concern for now as the delivery centers and communication infrastructure in India can easily handle the impact.Large companies like Infosys, Wipro already have a contingency plan to utilize Americans for tasks that require local presence and these tasks are just a small part of the development life cycle.The impact could be higher on smaller/medium businesses that provide technology staff augmentation. The point America needs to understand is that the next decade will not revolve around itself and it will have to share the limelight with India & China or else there are lot of developed countries waiting for business from us.

AM

August 9, 2010 12:47 AM

Bottom line is, that the US on the one hand is taxing India corporations, on the other lobbying India to open its markets to American retailers and banks. The Indian government is not stupid. While the amount of revenue generated by taxing these corporations is almost neglegible, this sends a clear message to the Indians. Protectionism is rising in the US and so tit for tat. Tax the US corporations that are operating in india, penalize them severly for any mishaps and dont buy any weapons from the Americans, stick with the Russians and the Israelis.

I think the Americans will soon see that it is very hard to do business on their terms if they want access to a market of 600 million midle class consumers

govind

August 9, 2010 12:53 AM

It is high time that US stops thinking it to be the best in the world. It has to stop outsourcing cheap jobs out of US to China / India , and also has to stop abusing other countries like it has been doing decades back.
If the Americans are ready to work for competitive salaries, no company would be outsourcing jobs in US.
Even today, the number of jobs outsourced by US companies in US could be at least ten times that of the jobs outsourced by non-US companies. And the US politicians have safely decided not to talk or do anything about these.
All the politicians are junks wherever they are, and the US politicians seems to be the leaders ??? here too.
Today you have the likes of regional powers like South Korea, China , Brazil , India and Singapore, on whom the US's dependence is more.

Jason

August 9, 2010 1:25 AM

"Next time American government officials come lobbying for deals in India, the Indian government should politely show them the door! "

We get no deals now. US exports to India was $16 billion in 2009. That was far less than our exports to even China which stand at $70 billion.

We gain nothing from our Indian trade except losing jobs. We don't even get anything back. At least a cheap Chinese toy is something I could hold. An Indian taking away an American job gives us back absolutely nothing. All it does is make some CEO wealthier for destroying American jobs.

LW

August 9, 2010 2:59 AM

This law is not meant to provide jobs to Americans at all. It is simply generating funds for government more spending. With regards to the comments from "MB and Dev" if you both feel that India can afford to cut off relations with the US feel free to try it out.

KG

August 9, 2010 3:47 AM

What idiots there are in the US Senate.

H1-B workers comprise less than 0.1% of the jobs in the US. Plus, these are LEGAL, LAW-ABIDING immigrants. The Senate has made it clear that they prefer illegal, low-skilled immigrants from Mexico, so punishing legal, skilled immigrants is natural.

The biggest force against the creation of US jobs is the US government itself. A tiny number of Indian software engineers (who pay taxes here, mind you) is not the problem.

Imran

August 9, 2010 5:21 AM

We all think a alot but in the end it is those fat cats of the coporate world who rule the so called senate so we Indians need not worry about any deals. 200% Hike in one visa fees makes no real difference to Indian IT companies who margin rates well above 25% per resource. As long as there is greed int he Capitalist Market we are there to serve them at fraction of the cost they would pay in their own Country. Well Cry poor Americans. I will come to your country next year to work :)....You all know that.

tinasilvee

August 9, 2010 5:27 AM

Outsourcing has so many benefits:
1) Cost Savings
2) Time Zone Benefits
3) Quick Turn Around Time
4) Standardizing Business Processes
and many more....

http://www.outsourcewebsite.com

A Reader

August 9, 2010 7:25 AM

"Nasscom, the Indian IT industry’s lobbying group, came out with a statement after the Senate vote pointing out that less that 12 percent of H-1B visas."
I think that Bruce Einhorn forgot to complete the sentence here.

"But U.S. compnanies..."
Blogger typo.

Much like the mistakes that the blogger himself made, politicians make verbal mistakes too. I can guess that Senator Schumer really meant to say "job shops".

In spite of this blogger's attitude, the legislation itself is quite "under the top". Why do Americans need these companies operating as they do within their borders at all? They've persistently demonstrated that discrimination in hiring is their game: these companies operations within the U.S. go way over 50% Indian staff... more like 90%, with no real movement toward hiring more Americans (albeit maybe some empty talk of it). Their hundreds of thousands of employees operating in the U.S. have crowded out and displaced many thousands of competent American equivalents who were perhaps older and more expensive and let's not forget less Indian. Personally I don't believe these third-party "body shops" (another variation) should be allowed to sponsor H-1B visa candidates: I think that only the end-user companies (the Microsoft and the Intels) should be able to sponsor the temporary foreign workers.

RoyFan

August 9, 2010 7:32 AM

Unfortunately this new legislation does not go far enough. The last thing American workers need right now is imported cheap foreign labor. Maybe Congress hasn't noticed the current 9.5% unemployment rate but the American people have.

India bans the import of cars with engine sizes in the range of 1000cc to 2500cc.

America should ban the import of foreign labor paid less that $200,000 a year.

Saurav Mohanty

August 9, 2010 7:33 AM

American automobile makers like Ford and GM's are counting on India and already having triple digit growth. The WestingHouse and GE are counting on tens of billions of nuclear machineries and fuel sales to India. India is Boing's 2nd largest buyer in commercial segment, and sales are in billions. US law makers lost millions of jobs to China. The manufacturing industry for consumer product which represents almost half of any major economy's work force, has been outsourced to China. Last week unemployment rate in US stood at 9.5% after more then $700 billions pumped to the economy by Obama. India should put tariff on all the US made products. H1B represents less then one tenth of the work force. China's currency manipulation creating serious threat to US trade balance and gives advantage to the Chinese exporter. US law makers will do nothing and the reason is that China might retaliate by dumping, if not all, at least a good portion of American T Bonds and which might bring down the dollar to a level which might destroy US Economy. They don't realize that if it is not done today then, US Economy will collapse anyway in next few years. They just want to punish Indian companies just because they know we are a Gandhian nation and we will have a muted response to any negative action taken by US.

mewler

August 9, 2010 7:47 AM

its sad the Great Khan is in such a state it has to steal money from a developing country to build a fence on its own property!

shows the direction things are headed. things are changing on the steppe.

Eric

August 9, 2010 8:24 AM

@Dev - People living in glass houses shouldn't throw stones. The Indian gov't is protectionist too. India is no longer the lowest cost and it is feeling the heat from Egypt, Malaysia, Philippines, etc.

@MB - C'mon. Forget the hubris. The US and India have a great, and improving, relationship. Russia? For real?

The impact of this legislation and the words they uttered is minimal. India needs outsourcing badly. India needs to work with the US and other countries. If the Chinese finally start to speak English your outsourcing business will be dead.

@all - manufacturing is part of the solution. we also need knowledge worker jobs.

sam

August 9, 2010 8:38 AM

Not gone far enough! Any company that does business here, and has more than 20% of their workforce non-citizens, must be fined helftly, say 30-50% of the average salary. This meagre fine doesn't go far enough and it is simply an eye wash on American people. With unemploymet at 9.5%, there are plenty of qulaified Americans out there looking for a job.

Frank A

August 9, 2010 9:02 AM

The solution is simple. Hire more Americans. Yes, it will impact the bottom line of the outsourcing companies but I'm sure they will pass the expense on to their clients.

Newbie

August 9, 2010 9:41 AM

Dev and MB,

You're right. When the time comes, India will deal with the American companies and the Indian lawmakers too will have their day. Remember, when somebody attacks you, the trick is not to get angry and upset at that moment, but to get even at the right moment.

This incident reminds me of former Australian PM's failed bid to International Cricket Council presidency. 15 years back Howard had upset the Afro-Asian countries when he was the PM. They got even 4 weeks back. They did not forget, and they got even at the right moment.

John Dingell

August 9, 2010 10:23 AM

What a link!!! Outsourcing to border security? Guess only our politicos can come up with this "brainy idea". How about letting the $ fall in value as compared to the chinese currency? That will reduce the trade imbalance. Oh wait ! that would mean I/USA am not a super power!

Jack Taylor

August 9, 2010 10:26 AM

My dear senators and reps: please think before you legislate. Does it make sense? If you are targetting these guts, why not target the stuff being sold in Walmart and Target which are made in china? You will be able to fund tons of order fences with this revenue. PLease, show some SENSE (cannot expect this from you everytime, but atleast once a year?)

AS

August 9, 2010 11:09 AM

Another xenophobic reaction by US lawmakers.
Outsourcing is the canary in the coal mine.
US lawmakers need to worry about math skills of US workers rather than Indian companies.
Let's see .. US wants to sell the next generation of fighter planes to India ?

CompEng

August 9, 2010 11:14 AM

I'm not against H1B visas in principle, because I believe they increase opportunities for Americans. In cases where greater than 50% of the workforce are H1B holders, that isn't really the case: I don't see the ROI for America there.

I'm sorry, but I hardly equate that with "beating up on Bangalore", although I suppose some of that may be happening too.

Indian Guy

August 9, 2010 11:45 AM

China is taking all the jobs not India OK!!!!!

DDJ

August 9, 2010 12:01 PM

The main culprit is the american way of living. Americans (we) use 20 times natural resources and live lavish life style because of which we cannot afford work for little. I dont understand how on earth you can punish others for that.

Jobs will go one or other way, protectionist vision is not going to help stopping economic development. This is completely contraty to our own vision that we sell to all other countries. What an example we are setting when we see others doing better and well on our own turf.

God bless America.

Alec

August 9, 2010 12:01 PM

I would say let US show the door all H1B visa workers and we will see how India continues to be independent. Maybe they can struck a deal with Russia again which only can do kissing each other!

Karyn

August 9, 2010 12:09 PM

This is a good start but doesn't go far enough. The fee should be 10x that amount, make it count. A large portion of this fee can then be put into a scholarship fund to fund a US citizen to study math, science or engineering.

The nature of the H1-B and L1 visa is to fill a "temporary" shortage of skilled workers. The US cannot keep importing these workers forever. We need to start nurturing our home grown talents. Most of these workers are not even that skilled. Most are below average programmers who are willing to work cheap. The L1s don't even pay taxes, yet I'm sure they have children enrolled in our schools.

As to those who complaint about getting manufacturing jobs back from China, forget about it, those low end, labor intensive, highly polluting manufacturing jobs are gone for good! Even China doesn't want them anymore. They are trying to move up the value chain.

Those who think our competitor is China is completely missing the boat. Our competitors are Japan and Germany, the 2 countries that continue to manufacture and export high end machines everywhere, incl. to China. We want to encourage our citizens to study industrial engineering, so we can invent and manufacture new and better industrial and medical equipment to sell to the world!

Shiv

August 9, 2010 12:22 PM

It is fair for American Politicians to look after US interests, but there was no reason to use fould language against Indian companies.
The politicians are trying to manipulate US citizens to create a distraction against their failures.
This is a attention deflection mechanism.
US and India are good world trade parterns.

Shailu

August 9, 2010 12:44 PM

This can only hurt US gov. agencies and companies as they depend on Indian brainpower for a lot of IT services. Also note that the western world is now dependent on foreign direct investment from countries in Asia for their economic sustenance as evidenced by British PM’s statement during his recent visit to India.
High cost of health care, fear of being sued, tough environmental laws deter companies from manufacturing goods in the US. This is unlike other advanced countries (in Europe, Canada, Australia) which still retain some manufacturing base. Yes a lot of inventions and new innovation happen in the US. But putting an innovation into practice to produce economic wealth day after day and doing it efficiently is what counts in the long run. And countries in Asia practice and perfect this skill.

JJ

August 9, 2010 12:48 PM

Just because we have such dumb politicians here in the US, we need more and more outsourcing including outsourcing of manufacturing which I too think is the most powerful creator of jobs in any country.

LOL

August 9, 2010 12:58 PM

America, stop whining, and start innovating.

The new generation of jobs will lie in Green technology and Green energy sector.

China is already leaping into massive R&D injection which is leaving US behind in the dust.

The jobs of the future is not manufacturing, it's GREEN TECHNOLOGY jobs, and US isn't doing enough in this arena compared to China anymore!

China is winning the Green race!

max

August 9, 2010 1:10 PM

Outsourcing and H-1Bs have brought the American economy to its knees. It just took one trillion dollars of deficit spending to prevent a depression in the United States and it still remains to be seen if that vast amount of money will be enough. A decadent congress along with media companies like WSJ, Bloomberg, and Business Week have misled the American public into believing that outsourcing and H-1Bs will increase our prosperity. They have fooled the masses and have enriched themselves at the expense of the middle class. The economic problems of the United States are now structural in nature and may not be fixable due to the power and influence of the pro-outsourcing and pro-H-1B enablers. The anti-middle class business elites have placed the United States into a position when China and India can feed on the U.S economy like vampires and they are sucking the life out of what was at one time a prosperous economy.

Alec

August 9, 2010 1:46 PM

My 2 cents is: better lift your own people from the poverty and provide jobs at your home country by yourself instead of coming and taking some others people jobs if you feel independent enough!

AK

August 9, 2010 1:53 PM

Today when Boeing is making multi billion dollar deals with India and Ford and GM bankrupt here look up to their India devision for growth...I wonder how we lose sight of the fact that its all tied together.
The total s/w and services export from india to US is still in single digits in %. How can this be the primary cause of Job Loss. It will harm American companies more than it will help.
You can not expect to keep doing the same thing for 100 years and expect to be prosperous. America has been leading the way in Innovation and they have to do the same.

Paul

August 9, 2010 1:54 PM

Who pitches for more and more outsourcing? CEOs of American companies. Who stands for these CEOs? Law makers? Who votes for these law makers? We, Americans!

NG

August 9, 2010 1:59 PM

I hope better sense prevails...Schumer does not understand the repercussions here.
India could also start to heavily tax american corporations in retaliation...(and yes, proceeds from higher taxes could then be spent on something to do about problems with another country).

BobP

August 9, 2010 2:06 PM

I don't see this ending well. Currently our trade with India is pretty balanced. We export about $17 billion and import about $21 billion. That includes revenues to India from IT/software industry. Compare that to the huge $200 billion trade DEFICIT we have with China. So the real problem is with manufacturing. But the democrats are cowardly when it comes to addressing that issue. They would say one thing in the campaign and turn around and sign a trade treaty with Mexico when they are voted into power.

What do you think will happen to US jobs if India retaliates, Chuck? Remember the $17 billion we export? That's all agri products, petro products, fertilizers and industrial engines and machines. They can get most of that stuff for dirt cheap from China. Why should they buy them from us? See the slippery slope you have set down on, Chuck?

shirish kokatay

August 9, 2010 2:07 PM

Politicians catering to the lowest level of constituent's biases and passions to deflect attention from an unattractive economic reality at home is nothing new. It has been ignobly practiced all over the world and is a form of cowardice unbecoming decent human beings.
One cannot embrace globalism as a means of increasing universal productivity (rising tide lifts all boats) and subvert those parts of it that are not as immediately profitable. It is childish to 'take the ball and go home' which is what the Senate is doing - it is indeed not their finest hour.

The ill effects of this ignominity may not be apparent for a while, the results of bad Karma will even the score somewhere down the road, or as it said - for every action there is an equal and opposite reaction.
There is little or no wisdom in attaining short term gains when long term ill effects may haunt the next generation or one yet to be born.

AK

August 9, 2010 2:08 PM

This will only ensure that Indians who come to US and work here and spend most of their earnings here(rend, food, school, medical care...) will work from India and will spend in India.
Do you know how much money Immigrant workers contribute to Social Security which they are never going to get??
Have you ever heard on Indian immigrants doing drug dealings and robbing at gunpoint? Only time they get involved, is when they become the victims.
All along Inian Immigrants including the migrant works have been generally law abiding, tax paying, money spending and contributing members of the society.
This will be counterproductive.

RKS

August 9, 2010 2:38 PM

So when the Indian Airforce bid for a MULTI BILLION Jet FIghter deal comes up in Nov when BO visits India, maybe India should send a link to the Chuck comment and EOM there. Sad to see a senator calling a GLOBAL company a chop-shop ... downright racist.

BB

August 9, 2010 2:47 PM

Some claim that the H-1B program helps to create American jobs, but it is currently being used by some companies to outsource American jobs to foreign countries. Under current law, an outsourcing company can use American workers to train H-1B guest-workers, fire the American workers and outsource the H-1B workers to a foreign country where they will do the same job for a much lower wage. In fact, Indian Commerce Minister Kamal Nath has referred to the H-1B as “the outsourcing visa.”

Employers can legally discriminate against qualified Americans by firing them without cause and recruiting only H-1B guest-workers to replace them. The U.S. Department of Labor (DOL) has said: “H-1B workers may be hired even when a qualified U.S. worker wants the job, and a U.S. worker can be displaced from the job in favor of a foreign worker.” Some companies that discriminate against American workers are so brazen that their job advertisements say “H-1B visa holders only.” And some companies in the United States have workforces that consist almost entirely of H-1B guest-workers.

gabe, san diego

August 9, 2010 2:50 PM

Finally, US politicians doing something for the US......Indian services and products suck! Poor quality and trinkets, much like the Chinese products!

Bharat Desai

August 9, 2010 3:01 PM

It is a pity that the Senators believe that by passing such a minor bill with very limited effect on employment, they can fool the American People regarding their inability to create long lasting private sector jobs.Billions have been wasted without any results. Shame on our government who try to hide their inability to help millions and millions of American People who are looking for work everyday in the streets of major cities and towns.

KKM

August 9, 2010 3:06 PM

The US big companies are worried about Indian or other companies earning more and finally started lobbying for that matter. It sounds like they are not worrying about unemployment. I totally agree with BQ. They should increase import tax so when the product\service is done in foreign land and end up in USA it should cost more or less same.

sanjit

August 9, 2010 3:44 PM

So now the US intends to expand the tax net to include foreign 'chop shops' to pay for their anti-immigration bile :) Yahoo.. maybe the tax wars should begin. How about India slapping a countervailing import duty on all American companies operating in India? I'm sure Chinese and EU firms will rub their hands in glee... given that the balance of trade is in favor of US, I'm sure India will make more money from this than the US will out of this new measure.

Vasan

August 9, 2010 5:31 PM

I agree with the guys here who are talking of manufacturing. It is really a shame to see America importing so much of the things that were made with pride in the USA. I was deeply disappointed when I heard recently that the new tower for the pride of the US engineering The San Francisco-Oakland Bay bridge has been pre-fabricated in china and has arrived ready to install! If anyone walks along the Golden Gate or the Old Bay Bridge you will know what pride went into these structures. I cannot imagine being proud of a bridge built in China. Sure someone designed it here, but it is just not the same. Manufacturing prowess is critical to any country and provides millions of well paying jobs.

Anosh

August 9, 2010 5:37 PM

Manufacturing jobs have left for a host of reasons. For America to get manufacturing jobs back there would have to be a significant shift in American culture e.g., tort reform, employee compensation, environmental law, etc.

TKD

August 9, 2010 5:38 PM

Doing this to the Indian IT isnt gonna help much to bring Jobs back to the U.S. any one thought about manufacturing?? what happen U.S is afraid of China...they let China to export their crap over here. You know how may jobs can be created in manufacturing 10-15 times of the IT.

Bikram

August 9, 2010 6:09 PM

It is very easy to target the usual bunch of outsourcing firms for their work is visible to the public in form of temporary workers in USA but the fact is Government of USA is doing what can only be termed as 'Penny wise Pound foolish'.

JM

August 9, 2010 7:40 PM

Outsourcing software and service jobs to India has been no where near as destructive as offshoring manufacturing jobs and industries to China. Software jobs are easy to create/destroy/move but manufacturing is very capital intensive and can not be easily undertaken by small companies anymore; it needs much more protection than the software industry. Even India's manufacturing industry is struggling against dumped Chinese goods.

Tex

August 9, 2010 8:05 PM

Lol, there will be no trade war over this. Sorry, Indian companies are not allowed to circumvent American laws to make a Rupee. Do you really think India would allow this sort of behavior in their economy? MB, maybe you need to take a look at the trade surplus India (and every other country) is running with the U.S. before you start with the tough talk. Trade war? Bring it.

http://www.census.gov/foreign-trade/balance/c5330.html#2010

Way Out West

August 9, 2010 8:22 PM

This is why globalism does not work. The US southern border is threatened by vicious drug cartels that know no bounds. Mexico is second to Pakistan as a nation that could simply implode. It is potentially a failed state. US young men could bleed for both causes.

But the young males of fighting age from India and Pakistan in this county are immune from the fight.

This does not work. Globalism does not work in a nation-state.

The H-1b program should be terminated. Intel and Microsoft should also forfeit foreign workers also.

RS

August 9, 2010 8:31 PM

All

As an American let's face reality. Every nation requires BOTH manufacturing & service jobs. Alot of my friends have lost their jobs to Indian outsourcing. Not only are they low paid but also low quality. This is not just sour grapes. I have heard fro many people some customers as to how bad the overseas service is in India. Not to mention the high turnover in their software developers. Their projects never seem to get finish.

John

August 9, 2010 10:12 PM

Isn't this long overdue? Don't you think that any company where more than half of American based workers rely on work visas is grossly abusing the system? No wonder the US has an unemployment rate approaching 10% and well-educated white collar workers can't find jobs! It's because the Indians are making the US a colony! I'd say that the Senate didn't go far enough. The US government should stipulate that for any foreign worker a company hires, it must hire at least 5 -10 workers who are American citizens. This should apply to any company with 50 or more staff. This will prevent Indian companies to bring in slave labor from that poverty striken country to steal American jobs.

Victor

August 9, 2010 10:21 PM

If this is the case, U.S products may get the same treatment from Indians. It seems Indians have to build their on computers instead of HP and Dell. Also huge govt orders for U.S military equipments will stop along with nuclear reactors. The U.S will also stop getting talent when Indians are kept out. I wish the U.S tightens the screw on Visas. Let Indians contribute to India only.

Sunny

August 9, 2010 10:51 PM

H1B program is just a scapegoat to divert attention from real problems US is facing now. Targeting Indian IT company is also one more distracting technique. they hardly employ few thousands and 50 millions are unemployed or under employed. Promoting manufacturing can only solve this problem. The irony is that Dems are considering amnesty for close to 15 million illegal's and kicking out one of the best talent in world. H1B and L1 are being cheated as they pay social security and they are kicked out in 5-6 years. Lets get out best talent back and compete with US IT companies globally. also India should kick out US companies from India or put heavy levy as punitive action on US goods. Teach them good lesson. Don't open Indian market for US companies, no defense deal no deal in atomic reactors. Cancel Boeing order, Airbus makes better plane. No consideration for F16 or F18. Lets kick US comapnies out from India as we did in past with Coca Cola and IBM.

Roger

August 9, 2010 11:02 PM

What a bunch of yo-yo's on this site. The Indians indeed ARE showing the Americans the door! They dont buy SQUAT from America as it is. Trade is a one way street. Like China, Free trade means that they are free to drain America for all it's worth.

AK

August 9, 2010 11:09 PM

This is an all out counter productive step. It will only make sure that Indian immigrant workers who earn and spend their money in America contributing to economy will earn and spend the money in India draining out more money from American markets. If sufficient skilled immigrant workers dont come here work will go to them.
Lets do a simple arithmetic. An Indian immigrant IT worker spending an average of 3 years in US will pay on an average USD 12000 towards social security which he will never get back. Smart American Policy makers are trying to trade this for USD 2000 as visa fees. No wonder they need people from India to write software.

doug

August 9, 2010 11:45 PM

finally, the indians have been stealing our jobs and social security for years without anyone noticing or protesting.

derkonig

August 10, 2010 1:06 AM

The USA depend on India IT prowess to be competitive in the world economy!
American companies without India highly efficient IT skill, American companies would lose her technological edge and cost advantage! IBM, HP, Dell, Oracle, Microsoft and many other American companies would have to fold and lay off million of American worker without Indian high tech prowess..
80% of all the start up in the USA are done by India, 40% of NASA scientist are India, Pentium and Window software are Indian product! Where would the USA be without India brain power! Jai Hind!

jcage

August 10, 2010 1:27 AM

India is not the top 10 or even top 20 export destination for American product; therefore, even if India stop buying American products,it would not affect American economy at all.
However, India export IT workers to the USA to replace American IT worker and engineers while the USA export IT job and engineer jobs to India. One can simply do the math who is taking all the American job and who is winning on this USA and India business relationship! This got to stop! When time is good then H1 and L visa but not now when American are losing job to India!

what a waste of time

August 10, 2010 1:44 AM

This blog is garbage.

HJT

August 10, 2010 1:53 AM

Only when Americans learn to work like Asians will outsourcing stop. Discriminating legislations will only hurt America in the long run. Stop whining, get off your obese asses and get to work.

Saudagar

August 10, 2010 2:03 AM

Many of you guys have no knowledge about the IT Engineers, do you know who predicted that with the start of 21st century all computers could be collapsed, he was an IT/Engineer from India, no one wanted to believe him and when proved it, then we all watched near the end of the century every Government, Big or small corporations, big and small Banks started to fix Y2K problem with the software developed by Indian IT/Engineer, and issued L-1 and H-1 Visas so majority of IT/Engineers from India came here to fix the Y2K problem with in short time.
January 1st, 2000, we all heard: "thanks God, I still can withdraw money from my Bank".

jcage

August 10, 2010 2:39 AM

India Rupee need to go up in value since the Rupee is so undervalue that it give Indian IT an unfair pricing advantage over American IT and engineering worker!
Rupee exchange rate is 47 rupee per dollar so it give India IT companies an unfair advantage! Rupee need to go up in value!! Unfair advantage that the cheap Rupee give to Indian IT companies to compete against American IT workers!

SiliconValleyEngineer

August 10, 2010 2:41 AM

The fees need to be a lot higher, $100K annual fee per H-1B that is applicable to both American and foreign companies. Since the H-1B proponents claim that they are the best and brighest, don't you think companies would be willing to pay this fees in order to hire the best and brighest? Hint: I don't think so. It's all about cheap labor an exploitation. With the 100K annual fees, the H-1B would disappear like an endangered species.

Not only that, the U.S. needs to copy the European Union to impose a VAT (Value-Added-Tax) for all foreign outsourcing services performed outside the U.S.


"A new E.U. “place of supply” rule that went into effect Jan. 1 requires VAT to be charged based on where the recipient of services is located. That reversed the previous requirement that the tax be assessed in the place where the service was rendered.

The rule creates a new tax liability for E.U. businesses that outsource services to countries such as India that have no VAT. Insurers and reinsurers that outsource to countries with lower VAT rates than their home countries also will see their tax bills increase."

Ninety Nine

August 10, 2010 3:09 AM

How does this bill help America? It sounds like another deceitful stunt by the government.

I mean, it only encourages Indian companies and American clients to increase the outsourcing chunk and send fewer personnel to US! The visa holders atleast pay US taxes, contribute to Social Security and spend on US shores.

Am I missing something here?

jcage

August 10, 2010 3:56 AM

American also pay taxes, contribute to SS, and spend on US economy? What is your point? American need these job that are being outsourced to India!

DAB

August 10, 2010 4:11 AM

Along with the fine, the senate should prohibit local, stae and federal employers, school boards etc. from filling vacancies through H visas.

Husin O'Bama

August 10, 2010 7:11 AM

Outsource those cheap call center jobs to Mexico so that they will not just walk in or work for the drug cartels.

It is a farce!

August 10, 2010 9:05 AM

$2000- fee is too meagre. These Greedy corporations will be happy to pay that and hire more H1Bs and L1s. I am tired of our "senselesss" politicains who do not know what is going on. I shoud say the fee should be $50,000/- per year. It should bite. And this should apply to all Corporations. If they really want the one and only expert in the world, let them pay this fee and get him/her. I am in the IT field, with over 15 years of experince and I can say that this field is completey "%$%$%" by the Consulting companies/placement agencies, who hire only H1Bs and L1s as they get a higer cut! This has been going for years and Americans are getting screwed left and right. Mr. Schumer, bump up the fee to 50,000/ if you want see any impact, otherwise, it is simply an eye ash on the American people. Pl. write to your Senators demading a stricter action. Do Something!

Prashanth

August 10, 2010 9:56 AM

Yes USA go do it! Let all good engineers stay in India and work for India. Let the Americans produce expensive dumb products.

DC

August 10, 2010 9:59 AM

many indian outsourcing companies provide poor quality sources. these people were told to read the dummy books and to make up a resume from a template provided by the company. how do i know? coz i was recruited by an indian outsourcing company. you would be disgusted by what they tell you to do in order to get the job. That said, many of the indians i went to school with are super smart! these people should be hired and paid well! not the xyz recommended by a major indian outsourcing powerhouse!

Ed 'Too Tall' Jones

August 10, 2010 10:33 AM

The Arizona Republic reports that 276,252 H-1B visas were issued in 2008. That's because the annual quota of 85,000 annual H-1Bs does not apply to 'research institutions', 'non-profits' and 'universities' (University of Phoenix?).

http://www.azcentral.com/arizonarepublic/business/articles/2009/06/29/20090629biz-visas0630.html

In addition, the number of annual L-1 'temporary' visas has been running at about 400,000 annually. There is no cap on L-1 visas issued each year. In the last three years, an average of 315,000 L-1 visas have been issued each year.

http://www.infoworld.com/d/adventures-in-it/companies-may-have-found-way-around-h-1b-visa-limits-208

Why does OUR country need 100s of thousands of 'temporary non-immigrant' visas issued annually to 'guest workers' in the midst of the greatest recession (depression?) since the 1930s?

How can people in our country on H-1B/L-1 'temporary non-immigrant' visas claim the title of 'legal immigrant' anyway???

H-1B is supposed to be used ONLY when no American can be found willing/able to do the job. How has it become central to the Indian outsourcing model? Why can't the Indian companies operating in America hire Americans?

Cancellation of H-1B visas would not affect the 'best and brightest' since they already have a visa all to themselves - the O1 visa. O1 visas have no quotas!

Durbin-Grassley H-1B/L-1 visa reform would mitigate many of the problems associated with this program. If passage of this legislation leads to a trade war with India, then we should treat it as all wars and fight to win. Why do Indians feel entitled to US jobs and immigration anyway?

Despite claims otherwise, India is not even among Americans top 15 export markets;

http://www.census.gov/foreign-trade/statistics/highlights/toppartners.html#exports

Why can't the US have a work visa policy like Indias?

India to Chinese investors: No more visas, hire Indians

http://economictimes.indiatimes.com/Features/Visa/India-to-Chinese-investors-No-more-visas-hire-Indians/articleshow/5019239.cms

Put 50K fee, not 2K. It is peanuts!

August 10, 2010 10:45 AM

$2000 fee is peanuts for these corporations! what a joke! Our politicians, do not get it! Put 50K fee for every H1B and L1 hired for a job in US. This is the only way to encorage these companies to look for Americans. I am in the Technology field, and there are plenty of qualified Americans looking for a Job. H1B and L1 hiring must be discouraged.

Sunny

August 10, 2010 12:17 PM

@jcage: Rupee is not undervalued. it is floating. update yourself you dumb a***. This rule is not for all H1B visa. Still MS, Google, Intel etc. continue to hire on H1B. You guys couldn't stop manufacturing job going to China. Outsourcing is all about cost saving. you wont buy a $2000 iPhone if it is made in US. In today's globally connected world offshore - onshore doesn't matter much. more jobs will be outsourced to foreign countries and US economy will loose whatever contribution H1 L1 people are doing in terms of paying taxes or spending. They also pay social security and medicare taxes with nothing in return. One of the biggest reason for foreign students to come to US is OPT and then H1B. US education system will also suffer if US abolish H1B.

Joff

August 10, 2010 1:18 PM

Some of the Indian posting here make me sick. To booster your case, you trample on others (China) that won't effect your cause one way or another. We call such behavior racist! Like those white supremacists badmouthing non-whites to cover up their own inferiorities! SHAME ON YOU!

@Gabe of San Diego

August 10, 2010 1:40 PM

Gabe, poor Chinese products? That has to be the biggest myth the media, politicians and China haters has perpetuated. Sure, given 90% of manufacturing goods comes from China, there must be bad apples. Do you brand all white male rapist because of some white rapists? You get what you pay for. Remember? You think an Apple/HP/Dell/Sony... sticker on the box will make it American product? Some people are so easy to brainwash and manipulate. Anyone younger than 30 might not remember how expensive a 386 PC costed. Were they better quality made by American themselves? What about all those American-made expensive cables with limited choices and innovation. China owes you nothing. They earn a more honest living than you tried to paint. And they did it with blood-sweat-and-tears!

Jack

August 10, 2010 1:52 PM

What Indian IT prowess? What Indian can do everybody else can't? Only America is dumb enough to outsource some IT work to India, because someone wrongly thought you were the only one in Asia who could speak some English. For the country in the rest of the world, don't they do IT in their own countries? Do the Chinese still use Abacus? Do the German still use 4-figure Tables and slide rules? Data processing is not some advanced technology Indian wants you to believe. Anyone with a logical mind can do. You don't even need an engineering degree.

Roger

August 10, 2010 2:11 PM

At a time when India is demanding at the World Trade Organisation's Doha Round negotiations that the developed world, including the US and the European Union, should drastically reduce their trade-distorting farm subsides and substantially open up their markets for goods and services from the developing countries, the World Bank has termed New Delhi's trade regime as "much more restrictive" than its peer emerging economies like Brazil, China and Russia.

The World bank has ranked India a poor 117 th of 125 countries after judging it by the latest Trade (Most Favoured Nation) Tariff Restrictiveness Index (TTRI). It has also ranked India 59 th out of 125 countries on the latest Market Access TTRI (including preferences) saying Indian exports face more favorable access to foreign markets than its comparators.

"In agriculture, the country's average tariff of 42% is about seven times that for nonagricultural products (6.4%) and one of the highest in the world. MFN duty-free imports were only 7.8% of total merchandise imports in 2005," the World Bank said in its latest World Trade Indicators (WTI). WTI is an interactive tool to benchmark a country's trade policy and institutions and help policy makers, advisors, and analysts' to identify the main border and behind-the border constraints to trade integration.

The report said the 43% (1997) nontariff measures frequency ratio for India was one of the highest in the world and the overall TRI that incorporates their trade impact was the second highest in the world.

The report also ranked India 177 th in the subcategory Enforcing Contracts (177 th ). It added that India's Ease of Doing Business overall rank is 120 th (out of 178), which, although a substantive improvement over its previous rank of 132 th , still reflects a generally poor business environment.

JJ

August 10, 2010 2:32 PM

Let's be all equal. Tell Indians STOP these Chop Shops. I worked for a recruiting company and I know how they manipulate these consultants.
Let's be fair. Tell Indian workers put the same amount up front as the US citizen does for their education. And then they can come to work in USA. It takes about 60K to get the masters degree in Us and if the Indian worker spends the same amount with similar education and experience, then yes, they should be allowed in USA.
Fair Deal?? Let's see then how many Indians come to US...Guess what NONE...

Hugh

August 10, 2010 3:58 PM

"Saudagar
August 10, 2010 2:03 AM
Many of you guys have no knowledge about the IT Engineers, do you know who predicted that with the start of 21st century all computers could be collapsed
"

Saudagar, I've been in the IT industry for 30 years. I am saying, "You are full of it!".

About time

August 10, 2010 5:29 PM

Microsoft might have a "small percentage" of their direct payroll on H1-B, but indirectly, they hire tens of thousands more H1-B workers in the Seattle area through bodyshops like Infosys and TCS. They used to have a lot of testers, now almost all their testing functions have been outsourced to India, or Indian H1-Bs.

There are so many Indians in the Seattle area, most are either directly or indirectly employed by Microsoft. Recently an apartment complex in this area was sued by the fed government for discriminating against Indians. The owner got tired of them stinking up the apartments with curry smell and breaking all the appliances and try not to rent to them.

There are at least 1.2Million workers on H1-B in the US since 2000, not counting those who've gone on to get their green cards. This increase in fee will only result in a $200M loss of revenue to these Indian IT firms, a drop in the bucket out of $60B a year of their total outsourcing revenue.

Ever wonder why Indian IT firms are the only ones complaining? Because they are the only companies brazen and shameless enough to import their own cheap labor by the thousands. Can you imagine if Toyota or BMW begin to import Japanese and German auto workers by the hundreds of thousands? No other country is so brazen and shameless in exploiting our immigration laws, other than perhaps Mexico. No wonder these are now the 2 countries with the highest immigration rate to the US. Since 2009 India became the country with the highest % increase in immigratiion to the US. I say charge them $100k per visa. Also, we should charge $1M per green card for anyone who wants one, provided they pass a criminal check. This could go a long way towards helping us bring down our budget deficit.

Man

August 10, 2010 7:32 PM

Guys why can't you stop H1 B permanently instead of teasing.

New H1 B

August 10, 2010 7:59 PM

I think both Indians and Americans should try to understand the situation. Present US leadership is trying to encash the emotions of job less citizens. Stopping outsourcing and taxing non US companies may help US to create some jobs but at the same time US need to re create the lost jobs. I dont know exact figures of import export blah blah but I wondered to see most of the products sold in US were made in China or some other country. A country like US should behave more stable while tackling with economic downturn else it may loose the Super Power tag. H1 B was defamed because of some other companies who do their illegal CHOP SHOP work. All top Indian companies do a fair trade and never ever dare to some thing CHOP SHOPPY. At least from now on Indian Govt should try to create jobs by their own rather that licking Aaamerica P***y,

Silver Lining

August 10, 2010 8:19 PM

Indian IT companies should dump US companies and offering IT outsourcing services. Given the pathetic state of USA, tossing back the jobs to USA perhaps may be a better thing do. Given the scant respect that US has outside. The senate does not have problem "Outsourcing" war and chasing WMDs where none exist. They want to go after IT outsourcing.
India should hit back with the Nuclear liability bill and impose huge liability on US companies wanting to start Nuclear power plants in India. The business opportunity here for US companies is worth over US$100 billion.

Edgy

August 10, 2010 8:52 PM

Every time Sen. Schumer does stuff like this, it opens the door to more chances that Smoot-Hawley will be repeated, and a new depression in the US will ensue.....

Chanti

August 10, 2010 9:00 PM

So why are we hiring all these Indians? Why do our companies need them so badly? Because America's education system is broken. We can't produce engineers. College costs are climbing out of reach for many Americans and too many of our kids don't have the capacity to major in math and science. And those that do would rather go into finance. So until America truly has the resources to compete with India we need their skills to remain competitive--for now. India's excellent educational system knows national prosperity begins with education. A lesson we taught the world and then forgot.

@Chanti

August 10, 2010 9:48 PM

Chanti, you're just another clueless Indian cheerleader. Excellent Indian educational system? What a laugh. Don't see it had done India much good. You can't even compete with those Commies north of you. Incidentally, before I retired from IT, the best IT workers I had worked with in the US were Chinese, NOT INDIAN! I bet they still are!

sds

August 10, 2010 11:02 PM

Not good. Currently our trade with India is pretty balanced. We export about $17 billion and import about $21 billion. That includes revenues to India from IT/software industry. Compare that to the huge $200 billion trade DEFICIT we have with China. So the real problem is with manufacturing.

jcage

August 10, 2010 11:55 PM

There are lot of American engineers, programmer, IT, and technician that are out of work so there is not point to keep hiring more H1 and L1 visa! During good time it fine to do it but not now!
India does not allow Chinese worker into India so why should the USA allow masses of Indian in the USA?
http://blogs.wsj.com/indiarealtime/2010/08/10/is-america-the-only-one-being-protectionist/
In December, however, India’s labor ministry tightened its work visa standards by barring Indian embassies from directly issuing employment visas for projects where the total number of foreign workers exceeds a certain threshold. The threshold is 1% of the total workforce or a maximum of 20 employees, whichever is higher. The restriction holds for all industries except power, which can have a maximum of 40. Any more than that and the labor ministry steps in to have a closer look at the visa applications.

China’s Ministry of External Affairs has “expressed concerns to India on many occasions” about the visa issue, a ministry spokesman said.
Is America the Only One Being Protectionist?

Victor

August 11, 2010 12:32 AM

You can trust DC to come up with a populist measure before the elections.

Has anyone checked the unemployment rate among programmers? Forget programmers, just consider college educated Americans. From what I last read it is about 2% higher than the peak employment figures. Go figure. Most unemployed Americans are former manufacturing workers whose jobs were shipped to China over the past two-three decades. The construction boom masked that job loss but it shows up in the decline of the US middle class during this period.

And no one talks about the productivity gains made by the entire US economy thanks to lower cost of IT services. IT is primarily a productivity enhancement tool. If every two-bit programmer was getting a $200K salary (like 1999), would IT be like a utility which we can take for granted? Where would US competitiveness (& wages) be if US corporations were not able to use IT to increase productivity?

Low cost IT allows rest of the American economy to work efficiently. It is an enabler which is helping us maintain the wage gap. It has allowed US companies to maintain their profitability during the great recession. The stock market and job losses would have been much worse if the companies lacked the IT-Knowledge infrastructure to react to rapidly changing circumstances.

Within IT, most of the work which gets outsourced is low to mid skill level support or infrastructure work. It is the $60-100K kind of jobs; not the $150-$200K high skill kind of jobs. During the boom time a decade ago, any one who could type on a keyboard was able to get a six figure salary. Now there is differentiation.


If things were so bad, why is IT consistently rated the best career choice when it comes to overall balance between income, quality of life and work?

USAborn

August 11, 2010 2:10 AM

Having worked on the original internet networks in the 80s, I have seen the greed on companies on outsourcing/insourcing I.T. jobs. Currently, 19% of U.S. college graduates with I.T. degrees have jobs after 10 years. Most of the internet and important software was developed by US born personnel, yet we are being outsource due to companies focus on the bottom line. This industry was U.S. made and needs to be retain as was the auto industry. We need to force U.S. companies to hire U.S. citizens over all others for the welfare of our country.

joey

August 11, 2010 2:44 AM

How about we just send all the Indians back home?

Isn't this our country, and our jobs?

Who cares about $2000? Cut the number of visas in half, double the price on the rest, and start employing AMERICANS!!!

Bill

August 11, 2010 7:47 AM

America is no longer the same. America is no longer the super power. America is no longer Innovative. America is no longer a Roll Model. America is no longer the Brave Hearts. American cant compete because their confidence level is diminishing. They can't rule the world any more. Now they have become very much dependant on countries like China, Russia. Dare to wage war against China & Russia he he he. At the max they can show their power to only small nations like Iran. Even with small nations like Iraq & North Korea they cant wage war he he he..Funny America...
America is Scared, Paled, Lost its charm,Americans Started thinking negatively , lost its confidence.These are the known facts as of Aug 2010

Vignesh

August 11, 2010 8:01 AM

American Govt. might feel great about passing this bill, but finally they should remember that "what you give is, what you take?". It is not that we are dependant only on America, even America is dependant on India in some aspects. Finally America should understand one important fact that "India is a fast growing economy and has enough means to turn into a super power within no time." So it is good for America to re-think on this issue.

It is a joke!

August 11, 2010 10:07 AM

$2000- fee that Senator Schumer proposing is too meagre. It is peanuts! An eye wash on Americans! These Greedy corporations will be happy to pay that and hire more H1Bs and L1s. I am tired of our "senselesss" politicains who do not know waht is going on. I shoud say the fee should be atleast $50,000/- per year. t should bite them. And this should apply to all Corporations. If they really want the one and only expert in the world, let them pay this fee and get him/her. I am in the IT field, with over 15 years of experince and I can say that this field is completey "%$%$%" by the Consulting companies/placement agencis, who hire only H1Bs and L1s as tehy get a higer cut in profit! This has been going for years and Americans are getting screwed left and right. Mr. Schumer, bump up the fee to 50,000/ if you want see any impact, otherwise, it is simply an eye wash on the American people. Pl. do Something for US! Pl. propose amendments to add this to all corporations and bump up the fee 25 fold to 50,000/. Otherwise, it is just peanuts for these corporations!

@Victor

August 11, 2010 11:24 AM

Victor is badly mistaken when he says, "During the boom time a decade ago, any one who could type on a keyboard was able to get a six figure salary." That was never true, and was debunked by Washtech nearly a decade ago. The vast majority of American IT workers never made more than a middle class salary, and many of them not even that. The notion that we were ridiculously overpaid is a myth promoted by Indian outsourcers. Funny, it is illegal for the H-1B to cost less (though this is never enforced), yet they are shameless about advancing that as an argument.

Victor

August 11, 2010 12:07 PM

Hmmm . . . was watching Avatar a couple of weeks ago . . . at the end of the screening a white kid in the back row remarked . . "I did not like the way American soldiers were treated like d***he bags in the movie . . ".

Well, to me it summed up a lot of things . . .

Robert

August 11, 2010 2:55 PM

A heavy surtax should be levied on all companies using L1 or H1-B visa while the unemployment rate is above 5%.
This fund should be allocated to pay for the current unemployed Americans.
There should be no tears for corporate America who dumps their own people
on the streets and hire importing cheap labor...

Larrypoo

August 11, 2010 2:56 PM

They shouldnt increase the fees, they should cut them all together.

Shre

August 11, 2010 3:42 PM

Please scrap the skilled/ slave worker visa program. We have enough people here to do the job for slave wages now.

Sam

August 11, 2010 4:44 PM

Has anybody wondered what's the % of IT workers of this 9.5% unemployed? Are we prescibing the wrong medicine? Have we lost more manufacturing jobs? How is Border sealing connected with legal H1B program? If H1B visa is a security threat, why don't we scrap the crap? Can we ask Fortune 500 companies who are salivating at the growing Indian Middle class to not shop from the Chop?

Jitendra

August 11, 2010 4:50 PM

This does seem like really really bad reporting. The US govt has increased fees for the companies that employ more than 50% H1B workers (if that means mostly Indian companies, then that really means there is something real wrong with these companies). Expecting that atleast 50% of the workers are American citizens in the US companies, whats wrong with it? We also have reservations in India in schools etc.... The reporters just like to make a big news by giving it the spin, their job is to state the facts not to twist them.

Jitendra

August 11, 2010 4:57 PM

Whats wrong with expecting that atleast 50% of the workers in US companies are American citizens? The only issue I see here is how the headline of the news had been twisted to get more attention, bad reporting. Nowhere in the bill it says Indian IT companies. And the US govt is just fixing the problems that were there to start with. I do not see anything wrong that they charge more fees if the companies does not employ atleast 50% of American citizens. Just be glad that only the fees are increased, otherwise there could have been bill asking reservation of 50% American citizen in US companies (we Indians know reservations very well right?).

steve

August 11, 2010 5:28 PM

victor,

what jobs can Americans still do? It seems they are not appropriate for anything anymore? If you are focused on cutting costs so much that you are cutting jobs you will eventually run into the problem that there won't be anyone in American who can afford your low cost products/services no matter how cheap they are. If you do not have a job, how can you pay for the $30 tablet PC? All of this outsourcing is just corporate greed, corporations interested in profit and not caring about the long term sustainability of their policies.

Joe the Programmer

August 11, 2010 9:00 PM

@Dhurandhar... don't see tens of thousands of Americans looking to sneak across the border to the slums of Mumbai !!!

If you don't like it in America, feel free to leave NOW, and don't let the door hit you in the backside !!!

Unz

August 11, 2010 10:31 PM

It's pretty hilarious to see Indians complaining when the Indian government is extremely protectionist itself.

Trade works TWO ways. If you insist on being extremely protectionist in India, prepare to deal with the consequences.

Kedar

August 12, 2010 5:25 AM

So Indian IT companies are taxed to protect America from Mexico. This is just one of the problem currently faced by America. Very soon, Politians will have to explore more and more such areas to tax to solve other problems.

Taxing the imports is easiest solution but will not do much good to economy. This is true for all the countries including US, India and China.

Most of the areas where foreign IT companies operate, are low to medium skilled areas. But take case of Apple or Google or Facebook, the brain behind these companies is American. Cost of resources was not a problem for these companies as these are founded with excellent innovative idea. The only way to counter foreign IT worker inflow is come up with more and more such innovative ideas. American are better at this than India or China.

As far as job loss is concerned, it is not going to help it. In most of the IT projects, Indian companies send average 20% of work force to work at customer site. Remaining 80% work from India. So such regulations can reduce some % of these 20%.

Finally, there is no point in making Bangalore as stress reliever for other problems. Problem with Mexico? hit Bangalore, low unemployment, hit Bangalore. This is not going to solve the real problem.

Indian Transplant

August 12, 2010 10:34 AM

The United States not only loses jobs because of outsourcing but also loses valuable Federal Income Tax, Social Security and Medicare contributions for the lost jobs. So on the one hand outsourcing has created unemployment in the US and on the other hand it has created a drop in entitlements that the older American citizens have worked their entire life for. The US is seeing a drastic loss in business ethics. Corporate executives outsource jobs not because people are more productive or more intelligent in India but because they are much cheaper. Cheap labor increases profits inspite of declining revenue (because of the quality of cheaper labor). Executives are paid bonuses based on profit and not productivity gains or revenue growth. It is a deadly combination that has ruined America over the last 10 years. India has gained a lot of jobs under the garb of "outsourcing". The least the Indian companies can do is pay higher visa fees. Ideally, there should be a VAT tax that for all goods and services that are produced outside the US but are sold in the US. Don't we have Custom's duty and VAT taxes in India? How come the US does not have either of these? All outsourced goods and services must be taxed - till such time, the only thing we can do is levy additional visa fees. India has to stop shouting "Protectionism." It is one of the countries that has extreme protectionst policies and laws - leave alone the corruption.

bye

August 12, 2010 2:27 PM

This India illusionist outsource business indirectly taking toll on 900 million helpless Indian poor and farmers just to create few thousands IT jobs near major urban centers like Bombay,Bangalore,Delhi,etc.The most of Indian companies getting into outsource business just to steal farmers land they are making more money in real estate business than actual IT and outsource jobs.

Ashley Hall

August 12, 2010 3:23 PM

I have to agree with @CompEng. When over half of a company’s employees are in America on work visas, it becomes a more difficult situation, especially when there are so many Americans without jobs right now. I don’t see a problem with companies sending some of their employees to the U.S., but that shouldn’t be the situation for the majority of their workforce.

Trip

August 12, 2010 3:50 PM

Current U.S. politicians make ridicules amounts of money and make lousy decisions left and right. For everything that doesnt work right, they blame china, russia, terrorists and everyone else but themselves. Their jobs should be outsourced as well

giri

August 12, 2010 5:23 PM

Americas leadership in Applications, Search, Mobile, O/S No one can challenge in long term or near term. Indian companies are body shoppers. Neither creative nor innovative. In next few years cloud computing will overpass out sourcing. Infosys would be absorbed by google.com. When iphone been developed by 5 pepople 100000 people infosys unable to develop not even small product. America would be number one always...

SlamDunk

August 13, 2010 8:56 AM

@Giri:
I love the US and its way of life. But,

Get real man. These are american companies, but check the brains behind the development of these search engines or OSes.

Let me give you some statistics. The world's largest IT firm IBM employes 105,000 in India. Why ? its an american company right ? Tell Mr. Obama to send them a notice to stop giving jobs to Indians and close shop here. Same with Accenture / Oracle / Google / HP.

Jobloss in the US is not just because of H1 or L1 issues it is because of education and willingness to work hard. If any American is more educated, more experienced and has more intelligence, why would any Indian be employed ?? I would employ Americans not Indians in the US, if the above becomes true, and believe me there are a few, but not enough.

As for the legislation, this hike does not even make a dent in any of the large Indian IT companies, it is just for the News value.

John80224

August 13, 2010 12:56 PM

@Bruce. You are correct that these are over-the-top tactics. In the end, this specific one has no noticeable impact except to populist appeasement while ever so slightly giving a nod to the US companies also abusing the H1-B intent.
As to Nasscom’s position, so what? Since when is the pecking order of the US gov’t. supposed to be 1) US Companies, 2) Foreign Companies, 3) its citizens? I know we fell to #2 long ago, but really? I’m not naive enough to say that repercussions have no weight, but foreign lobbyists really should stick to telling the US gov’t. how its decisions might backlash than complaining that a sovereign nation is not looking out more for the desires of other nations’ companies.
@Chanti. RE: “We can't produce engineers.” We absolutely can produce STEM graduates, but those of us left in those fields are telling our kids to find something else. I’m not claiming there aren’t things to fix, but it’s simply implausible that one of the previously top few, if not best educational systems in the world suddenly became third-world caliber while the third-world supplanted it.
In countries where there is little opportunity to do something better, getting such a degree is the golden ticket. In a country that still has a higher level of opportunity than most, there’s just no reason to get tens of thousands in debt pursuing fields that you’ll be barred from when you graduate. Thanks to both the truths of globalization and the lies of US corporations, a STEM degree in the US is more the discarded ticket stub.
@ Dhurandhar. I’ll be the first to admit that many of the wars my gov’t. has pursued are questionable and that there are a number of oafish Americans who represent us poorly when travelling abroad. But other than the unpopularity of the US, your post pretty much makes no sense and contradicts itself.
Do you even know what “charity begins at home” means? It is saying that you essentially need to take care of yourself and those close to you before you take care of those unknown to you. While this is a clumsy, low-impact attempt, that’s exactly what this bill is attempting.

Next, how is this yet another example of the US poking its nose into other nations? It is legislation dealing with how other nations poke their noses into the US? This influx of external “talent” is driving US talent away from the science and engineering you seem to be (rightly) suggesting we should be pursuing.

obsthetimes

August 21, 2010 8:23 PM

@Karyn,
You're perfectly right, and your thoughts are commendable. how about some action.
H1B do hurt the American workforce by shutting them out of intellectually critical areas of 21st century business.
but its funny that most of the folks most aggrieved on this blog are obviously not american. Its apparent from their writing. They're probably migrant workers who becomes citizens overtime and now feel they have the right to beat up on H1Bs.

Logic

August 22, 2010 7:25 PM

If there is not demand for outsourcing then it wouldn't happen. Outsourcing is a natural business process that has become the norm in the tech industry. In fact, it always has been the norm. The Irish software industry most closely resembles the Israeli software industry in that the focus is on providing a variety of software development and support services. However, a large percentage of the software firms in Ireland are foreign owned, and most of the development work is geared towards supplying other European countries with software localization and translation. Irish software firms do not compete with low wage countries such as India, China and Russia in providing low level coding and maintenance services. Instead they have targeted niche software products and services from which they can add the most value. They also derive a significant portion of their revenue from the implementation, internationalization and localization (adaptation to local European languages) of packaged software applications, rather than on development or maintenance of software. Currently, there are over 640 Irish owned software firms1 which export approximately Euros €1.3 billion2 worth of software and services. This figure includes both packaged software and outsourced software services for multi-national corporations.

The key success factors for the Irish software industry are Ireland's location, culture and low-cost business environment. Ireland is conveniently located within six hours from the eastern US, and two hours from continental Europe. This prime location, along with excellent transportation infrastructure has enabled the nation to serve as the primary software hub for US companies doing business in Europe. Ireland also has tremendous advantages in that the official language is English, and that the Irish government has provided a very business friendly environment, which doesn't burden corporations with high-costs such as those in continental Europe. All these factors have combined to allow Ireland to enjoy one of the fastest growing economies Europe, with particular emphasis on software and high-tech manufacturing.

IrelandMan

August 22, 2010 7:27 PM

The indigenous Irish software industry, made up of over 640 firms, employees approximately 18,000 people. The average Irish software programmer earns approximately USD $23,500 a year3, with senior level developers earning USD $40,000 a year4. Obviously, the Irish software sector is much higher cost than that of India, China or the Philippines. However, Irish programmers generally do not engage in the low-level maintenance work low-cost countries focus on. Instead, one of the biggest strengths of the Irish software sector is that the skilled, highly educated workforce available in Ireland, allows Irish software firms to specialize in such areas as e-commerce, middleware, network security, network management and messaging software. Unfortunately, Ireland's Achilles heel is that due to its low population (3.9 million in 2002) Ireland manages to produce only about 11,000 software developers a year5. This pales in comparison to the 60,000+ thousand that Russia, China and India produce on an yearly basis. Such low output of software talent will continue to drive up costs and limit market opportunities for Irish software firms in the software services sector.

Ranj

August 31, 2010 5:23 AM

At the end of the day, it is all a business! No need to get patriotic and bad mouth any country. They are all there to make more money, lessen the costs incurred and generate more profit. Outsourcing is just 1 of those things. And to compare US and India is just not fair. America has been independent since 1776 (if I am not mistaken). We Indians received our independence in 1947. We are a MUCH younger country and yes, we have a long way to go before calling ourselves a superpower. Give us some time and then compare. The only point I want to make is India is not the only country where jobs are being outsourced to. So, I don't understand this hypocrisy or hatred towards Indians. If they are against outsourcing, let them stop outsourcing jobs to all other countries. Would they do that??

James

September 1, 2010 3:01 PM

I live in Europe. The corrupt Indians and Pakistanis have ruined this continent. I believe it is already to late for the USA. These people will take over your schools, your politics, your laws etc. They dont have your values, they just want what you have. If these people were so smart and hard working, how come India is a giant slum with a billion people. How come it is so corrupt. The Americans are about to regret the day the first one arrived.

James

September 1, 2010 3:04 PM

Try emigrating to India, try getting a job in India. These people are more racist and protectionist than any American firm or public. In addition to the USA, the Canadians are currently being deluged with them. It is a scandal that North America has sold out. These are a nasty, scam infested people and NA is about to find this out the hard way.

Toma

September 5, 2010 10:40 PM

I hope, really hope that politicians will stop outsourcing to Indian. This hurts American middle class a lot. The number of IT positions outsourced is huge. Look at every big corporation IT department. There are more Indians then Americans. Do not understand how this is even legally stands? How they can issue H1B Visa when unemployment is so high. Need good lawyers to stop it.

Timka

September 5, 2010 11:11 PM

You are asking why Americans are so angry with Indians? We are not. We are angry with our politicians who are not doing anything to stop this. And now.. Imagine for a second.. You are computer programmer with BS degree in computer science, 20 years of experience, called to HR and told that your position is outsourced to India. Would not you be angry? !

american

September 26, 2010 10:39 PM

Twice I have trained H-1B holders then lost my job. TWICE.

Yes they were nice young men, no they weren't any better than the young Americans who were given token interviews to meet legal requirements. I had to TRAIN them, they had no special skills, other than to work cheap. I'm not angry at them , thats like being angry at a stick, the stick you were beaten with.

My children wanted to be Engineers and Programmers like myself and my father, but I can't encourage them to go into a field thats been gutted by cheap imported labor.

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Bloomberg Businessweek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies.

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