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H-1B Visas Keep Down US Tech Wages Says Study. Will it Cause Harm to Indian IT Companies?

The prolonged discussions over H1B visas have gained momemtum with Donald Trump's electoral promise of bring American Jobs Back.
H-1B Visas Keep Down US Tech Wages Says Study. Will it Cause Harm to Indian IT Companies?
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While the United States is taking longer-than-expected time to make clarifications on H1B visa guidelines, a Wall Street Journal (WSJ) report has stated that the influx of skilled foreign workers has historically led to lower wages for US workers.

The prolonged discussions over H1B visas have gained momemtum with Donald Trump's electoral promise of bring American Jobs Back. A US Department of Homeland Security regulation specific to ‘highly skilled workers’ was into effect just days before Trump took office. The future of thousands of skilled IT workers from India who may or may not get H-1B visas is still in a limbo. Unequivocally, it’s harder to calculate the effect of H-1B visa reforms on the Indian IT industry.

A recent WSJ study suggests that the influx of skilled foreign workers has historically led to lower wages and employment for American tech workers. However, would it possible for the US to retain its tech leader in the world status if a crackdown on H-1B visa holders is carried out will be worth a watch. 

As per the report Wall Street Journal, such findings could further inflame debate around immigration of high-skilled workers, but some economists caution against making too much of the result.

While analyzing employment, wages and other factors over an 8-year period ending in 2001, economists from the University of Michigan and the University of California, San Diego, found that, while the visa program bolstered the US economy and corporate profits, tech-industry wages would have been as much as 5.1% higher in the absence of the H-1B visa program and employment of US workers in the field would have been as much as 10.8% higher in 2001.

As of now, Indian IT workers are relieved that Trump has decided to relook H1B visa rules once again. In hindsight, the Indian government is playing a proactive role in pushing the US not to tighten laws for Indians to work in United States.

Indian IT minister, Ravi Shankar Prasad, today said Indian IT firms are assets for the US. 'Indians don't steal jobs, they create,' Prasad was quoted as saying by Indian media. 

"We have conveyed our concern at the highest level (US administration) and I hope the American administration should know Indian companies don't steal jobs. They create jobs for a better India and a better US," Prasad said on Friday. 

Prasad said the Indian IT companies have given nearly $20 billion as taxes in the last five years particularly for the US citing Indian IT companies' presence in 200 cities in 80 countries.

"They have given jobs to 4 lakh people there. They have given value addition to nearly 75 per cent of the Fortune 500 companies. Indian IT initiative is an asset for America," Prasad said. 

Edition: March 2017

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