What Does the H1-B Proposal Mean to America and the World

Are we looking at the tunnel’s end in outsourcing?

The outsourced worker must keep mum for now. There is looming fear about his future in the land of opportunities. Synonymous with America are H1-B visas. These are awarded by lottery each year. The program offers 65,000 visas, and an additional 20,000 are reserved for those who would study in the US. Just last year, the government received more than 236,000 applications. Out of the H1-B visa workers, 39,734 worked in New York for an average salary of $98,640. In 2015, Los Angeles took the spot, with 4,886 H1-B workers with an average salary of $79,278.

Now, under the new plan, companies that have over 50 employees, with 15 percent of H1-B visa workers must submit proof that they have advertised jobs to American workers as wells as global ones. The exceptions are companies with such workers who have master’s degrees or are paid at least $60,000 annually. However, if this proposition would be approved by Senate, the minimum wage also must increase to $100,000 annually, and the American worker would be given priority over an outsourced worker.

Trump’s policy with the visas seems a tad serious. With an unemployment rate that is not deterring, his policy plans make one ponder. The proposition will certainly bring about many changes. The companies may still be able to employ foreign skilled workers, but at a higher cost, which will reduce their number. On the other hand, this would also reduce the abuse of this program by companies that employ a large number of them. Outsourcing companies would have lost a lot because of minor differences between market wages and salaries of their employees.

Significant losses are expected for countries of origin of these workers. Outsourcing industries like those in India, for example, employ millions and the revenues from these workers account for around 20 percent of its exports (earnings). In 2015, the most of such workers had come from India, China, South Korea, Canada and Philippines. Closing one of the largest channels of international commerce is inviting serious criticism. There are also questions about the immigrant threat being cultural rather than a threat to the labour market. Is the though too far-fetched, or is there a connection between the recent occurrences in the Western world? There is definitely more attention that is being paid towards national and cultural differences today than before. Also, it is true that H1-B visa program has had adverse effects on the wages, particularly in computer-related occupations. The positive effects on the improvement of the US workforce and competitiveness that are brought in by the foreign skilled workers are being ignored. Another series of concerns is about why an American employer would pay a foreign worker that much when he could pay the same or less to a resident worker, for the same kind of job? The answer is simple. Foreign workers have exhibited more skills and have been relatively more flexible about transfers to other offices.

The visa proposition may be a detrimental, if not a neutral move. Thinking that the changes in visa policies will have a positive effect on employment in the country, may be a disparate conclusion. Instead of closing American borders to foreign workers, initiatives must be made to focus on the improvement of education and skills of domestic workers, and to continue to import skilled workers, for the sake of continues economic growth. Being vulnerable to globalization cannot be an endgame. In the meantime, while there are policy propositions on visas, and the MNEs look for profitable pastures, workers both domestic and foreign, dawdle somewhere in the middle.

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  1. The H1-B: A Solution And A Mess – The Radical Economist

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