The controversy over visas for high-skilled workers from abroad looks like it's about to get even hotter.
The program for what are known as H-1B visas was originally set up to allow companies in the U.S. to import the best and brightest in technology, engineering, and other fields when such workers are in short supply in America. But data just released by the federal government show that offshore outsourcing firms, particularly from India, dominate the list of companies awarded H-1B visas in 2007. Indian outsourcers accounted for nearly 80% of the visa petitions approved last year for the top 10 participants in the program. The new data are sure to fuel criticism of the visa program from detractors such as Senators Chuck Grassley (R-Iowa) and Richard J. Durbin (D-Ill.). "These numbers should send a red flag to every lawmaker that the H-1B visa program is not working as it was intended," said Grassley in an e-mail.
Infosys Technologies (INFY) and Wipro (WIT), both based in Bangalore, top the list of visa beneficiaries in 2007, with 4,559 and 2,567 approved visa petitions, respectively, according to data from the U.S. Citizenship & Immigration Services. Each visa allows the companies to bring one worker to the U.S., where they have substantial operations providing tech support and other services to corporations, complementing services provided from India. Overall, six of the top 10 visa recipients in 2007 are based in India; two others among the top 10, Cognizant Technology Solutions (CTSH) and UST Global, are headquartered in the U.S. but have most of their operations in India.
Microsoft (MSFT) and Intel (INTC) are the only two traditional U.S. tech companies among the top 10. Microsoft received 959 visa petition approvals, or one fifth as many as Infosys, while Intel got 369.
Critics such as Grassley and Durbin charge that the outsourcers are abusing the U.S. program. The work visas, they say, are supposed to be used to bolster the U.S. economy. The idea is that companies like Microsoft, Google (GOOG), or IBM (IBM) can use them to hire software programmers or computer scientists with rare skills, fostering innovation and improving competitiveness. Instead, critics say, companies such as Infosys and Wipro are undermining the American economy by wiping out jobs. The companies bring low-cost workers to the U.S., train them in the offices of U.S. clients, and then rotate them back home after a year or two so they can provide tech support and other services from abroad. "Valuable high-tech jobs are on a one-way superhighway overseas," said Durbin in an e-mail.
A clash is likely in the coming months. Durbin and Grassley are pushing for more restrictions in the program, even as tech companies are advocating for a sharp increase in the number of visas handed out each year. The senators want to tighten the program's criteria, by requiring participating companies to try to hire American workers first and to pledge that visa workers will not displace American workers. U.S. tech companies, meanwhile, want Congress to increase the visa cap from 65,000 a year to at least 115,000.
The offshore outsourcers deny they're abusing the program. The visa program is open to any company with U.S. operations, no matter where its headquarters. More important, the outsourcers say they're helping U.S. companies stay competitive, allowing them to reduce costs and concentrate on their core competencies. "
The Indian IT industry has helped improve the competitiveness of our customers in the U.S.," said Som Mittal, president of Nasscom, the trade group that represents the Indian companies. He added that Nasscom's members are "strong upholders" of regulations in client countries.
Infosys and Wipro declined to respond to criticisms they are misusing the program. In the past, they've said the jobs they fill in the U.S. are higher skilled than those in India, involving sales and custom software development. Infosys has about 9,000 workers in the U.S., including 7,500 on H-1B visas. (It has 88,000 workers worldwide.)
Tech companies say more visas are necessary so the U.S. can attract top talent. Bill Gates is scheduled to testify on Capitol Hill on Mar. 12 about how to keep the country competitive. He is expected to repeat the points he made a year ago in Congress, when he argued for more H-1Bs and green cards. "It makes no sense," he said, "to tell well-trained, highly skilled individuals—many of whom are educated at our top colleges and universities—that the U.S. does not welcome or value them."
Differences are growing between the U.S. tech companies and the outsourcing outfits. U.S. companies often try to keep visa workers in the country and help them become American citizens, while the outsourcers typically employ visa workers in the U.S. on a temporary basis. Some American tech companies say they may support reforms in the visa program to crack down on any abuse. "If Congress decides the visas are being used in ways that don't benefit the economy, there should be additional enforcement provisions or measures," said Jack Krumholtz, Microsoft's chief lobbyist.
Many U.S. workers oppose any expansion of the program. They say H-1Bs let companies hire cheap workers from abroad, rather than Americans. They say the timing for expansion couldn't be worse, with the economy faltering. "Foreign workers are coming into the U.S., even though Americans need jobs," says Kim Berry, president of the worker advocacy group Programmers Guild. "It turns the intent of the H-1B program upside down."
Business Exchange related topics:ImmigrationHigh Skill Work VisasGlobal Outsourcing