Indian Dreams, Thwarted by Trump
Figuring out which of his campaign promises Donald Trump is going to cheerily ignore once in office is a large and flourishing industry at the moment. But whatever the fate of climate change negotiations or a special prosecutor for Hillary Clinton, one theme of his campaign appears to have carried through into his transition: opposition to the current U.S. work-visa scheme. That's bad news for innovation in Silicon Valley. It may be worse news for India.
Among Trump's early priorities, according to a video he released on YouTube, would be directing "the Department of Labor to investigate all abuses of visa programs that undercut the American worker." That's a pretty direct attack on the H-1B program, under which 65,000 temporary workers -- and 20,000 with advanced degrees in tech-related fields from American universities -- are allowed to work in the U.S. each year. (Various renewals and country-specific exemptions mean the total number of temporary workers is higher.)
Even so, you could reasonably ask if those words mean what they appear to mean, since Trump has a history of flip-flopping on this issue, sometimes within hours.
Fortunately, a more explicit commitment from the president-elect than his own words is available. And that's his appointment of Senator Jeff Sessions as the next U.S. attorney general. Sessions is one of the most hardline voices on immigration you can find -- and he has reserved particular ire for the H-1B program. Indeed, he tried to effectively gut it last year, in legislation he co-sponsored with Senator Ted Cruz. Sessions also co-wrote a letter to then-AG Eric Holder -- and two of his Cabinet colleagues -- demanding an investigation into "abuse" of the program by "some large, well-known, publicly-traded corporations." (In another sign of how nativism unites the extreme right and the radical left in the U.S., the letter was co-signed by a certain Senator Sanders.)
So it's almost certain that the H-1B program won't survive in its current form. What could replace it?
Well, one idea floating around is to ensure that any temporary workers earn a pretty hefty wage -- the figure in the Cruz-Sessions bill was $110,000 a year. Another is to replace the current lottery system with an auction, again keeping out lower-paid engineers. But it's entirely possible that the next administration will want to go even further. Trump's chief strategist, Steve Bannon, for example, has lamented the fact that "two-thirds or three-quarters of the CEOs in Silicon Valley are from South Asia or from Asia."
It's important to note that a good number of those executives began at the bottom -- Google's Sundar Pichai or Microsoft's Satya Nadella are unlikely to have pulled in the big bucks when they first came out of graduate school. It's near-impossible to design an immigration system that selects only the highest-paid and still protects the inventiveness and meritocracy that has made Silicon Valley the center of the tech world. Half of all technology start-ups in the U.S are founded by immigrants. Like all forms of protectionism, the Bannon-Sessions vision would lower standards and reduce productivity, eventually causing the U.S. to lose the edge -- and the income -- that comes with being the undisputed champion of innovation.
The other big loser, of course, will be India. The behemoths of the Indian IT industry -- companies like Infosys and Tata Consultancy Services -- are already struggling with a business model that technological change might have made obsolete. But they're still dependent on H-1B visas: The list of top applicants under the program reads like the directory of a Bangalore office park. For these companies, getting temporary employees to directly service their clients in the U.S. used to be crucial. It was the most efficient way to provide IT services, and drove growth and profitability for both vendor and client. Trump's policies will accelerate their decline, unless they learn to adapt a lot quicker than they have in the past.
And finally, what of that much-loved figure, the Indian software guy in the U.S.? For years, getting an H-1B was the second-highest aspiration for a graduate of one of India's many engineering schools -- beaten in the hierarchy of needs only by the key to the Garden of Eden, the green card. It isn't a simple matter of more money, incidentally -- many H-1B hopefuls imagine that going to America will mean they can change tracks, and wind up doing more interesting and productive work than is typically available back home. The H-1B has been such a staple of Indian middle-class dreams for so long, I can't even imagine what will replace it once it's gone.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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Mihir Sharma at firstname.lastname@example.org
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