Tech

Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

President Donald Trump just made life a little easier for Tim Cook and Sundar Pichai. And a lot harder for Vishal Sikka and Rajesh Gopinathan.

"Right now, H-1B visas are being awarded in a totally random lottery. And that's wrong," Trump told workers in Wisconsin, announcing a reform of the visa category. "Instead, they should be given to the most skilled and highest paid applicants."

Whatever your views on Trump, he is factually correct on that last point. H-1Bs are supposed to go to those working in an occupation that requires "theoretical and practical application of a body of highly specialized knowledge."

On Contract
U.S. H-1B visa applications are dominated by IT outsourcing and consulting companies
Source: MyVisaJobs.com
Based on Labor Condition Applications (LCA) filed in fiscal year 2016.

It's hard to make a case that the jobs being filled by the Indian IT outsourcing firms that dominate H-1B visa issuance -- such as Tata Consultancy Services Ltd. and Infosys Ltd., which Sikka and Gopinathan helm -- make use of highly specialized knowledge when they regularly pay less than other firms like Apple Inc. or Google parent Alphabet Inc.

Best and Worst
The highest paying H-1B visa sponsors are U.S. tech companies. Outsourcing firms rank in the bottom half of the top 100 employers
Source: MyVisaJobs.com
Note: Annotations show rank. Disclosure: Bloomberg LP is the parent of Bloomberg News and Bloomberg Gadfly.

On the first point, Trump's a little off, though, because the awarding of H-1Bs isn't a totally random lottery: A 2015 amendment to the Immigration and Nationality Act outlined a pecking order the Secretary of Labor is meant to follow. The 65,000 annual cap is also exceeded because of exceptions and rollovers that put the annual figure at over 180,000 last year.

The flood of H-1B applications does make the reviewing and awarding of visas a slow process. The U.S. Citizenship and Immigration Services center in California is only now processing applications made back in August, for example.

That's bad for companies like Apple and Google, led by Cook and Pichai, which seek far fewer H-1Bs. I've written before of employees being parked offshore while they await the correct paperwork, and the risks to the U.S. of this situation continuing.

Underpaid
Indian companies routinely pay lower salaries than other H-1B applicant employers
Source: MyVisaJobs.com
*Founded in California, UST Global has a significant Indian presence and leadership, and global headquarters being built in Kerala, India.

Fellow Gadfly Andy Mukherjee and I have also separately outlined the threat to Indian outsourcers and the benefits to Indian workers from this crackdown.

In tightening the rules -- he can't unilaterally rewrite them -- Trump will help those tech titans that really need the talent, as evidenced by them paying such high salaries for their H-1B workers.

Yet he won't be doing much for manufacturers like tool maker Snap-on Inc., where he delivered his broadside. That's because factories in Asia still offer cost benefits over the U.S., and Trump's decision to trade a weaker Chinese currency for assistance on North Korea shows how hard he's willing to push Beijing in the effort to ease the plight of American workers.

By making bold statements about H-1Bs, Trump has played to his working-class support base but also diverted attention away from dependence on Chinese manufacturing. And that's definitely good for Apple.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story:
Katrina Nicholas at knicholas2@bloomberg.net