The image we chose for the headline on this article should generate a lot of page views, as it combines three of Twitter’s most reliable click-generating mechanisms: attractive women, Donald Trump, and #H1B. There is, however a story behind this image. In 2017 when Donald Trump appeared at a Snap-on tools factory in Wisconsin to sign his “Buy American, Hire American” executive order some of the more astute reporters pointed out that Snap-on themselves were employing H1-B workers at a salary far below the average for the area out of which they were contracted. While it’s tempting to chalk up this oversight to a less than diligent staffer (as appeared to be the case during the “Four Seasons Total Landscaping” blunder), it’s also a good reminder of how ubiquitous this visa program has become. While the H1-B and its associated issues are often talked about in the context of Big Tech and Silicon Valley, in reality the logic of its current implementation cuts across virtually all American industries that utilize skilled workers.
As we said in last week’s edition, broadly speaking the H1-B is a net positive for America. That doesn’t mean there isn’t room for improvement. Most of the controversy at the national level about the H1-B tends to revolve around IT jobs, Big Tech, and India. A quick look at the statistics will indeed show you clearly that whatever the intent of the H1-B program was initially, as currently implemented it does appear to be disproportionately resulting in a massive inflow of skilled Indian workers, mostly in IT.
These proportions vary a bit year on year but this graph is pretty representative. The country of origin for H1-B visas is massively skewed to India, even accounting for its large population. For those interested in such things, there are a number of other demographic oddities with this cohort, including a lopsided representation of men vs. women that isn’t present in other countries (China maintains almost an even M/F ratio).
Here we see the breakout of industries that are requesting these visas. While there are surely a large number of skilled Indian workers in all of these categories, they dominate the top 2 industry classifications that are largely used by U.S. companies seeking IT services and related high-tech skillsets.
So why is this? Well, the history goes back a ways. The H1-B was technically created by the Immigration Act of 1990, but it did not come into its own until the mid-1990s, when what we now know as “Big Tech” began its inexorable expansion into nearly every facet of American life. These companies had to scale up massively, and they couldn’t always do it with traditional staffing models and HR structures. The IT field needed a source of labor that was cheap, flexible, had adequate technical skills and could adapt quickly to the American corporate environment.
Like any void that exists to be filled, a cottage industry quickly coalesced around facilitating visa applications for Indian workers. During the gold rush period from 1995-2010 there were many players in this game, making large handfuls of money connecting willing employers with potential candidates. As the need for workers became more pressing, these staffing companies evolved a strategy known as “benching”, which meant they would recruit and obtain visas for workers who did not, in fact, have positions waiting for them at U.S. companies. They would instead be put “on the bench”, so when a willing employer came forward they could be put in position immediately and circumvent the long legal process of obtaining a labor certification, requesting a visa, waiting for a visa appointment abroad, etc.
In 2010 USCIS issued a memorandum which marked the end of the gold rush period in the H1-B world (note: link above is not the original memorandum but a revision made later that year). Going forward those who requested H1-B visas would be required to establish a clear employee-employer relationship between themselves and the visa holder. This included very specific evidence of the relationship, like being able to hire/fire or supervise the daily work of the employee. This led to a consolidation of the H1-B facilitators, as smaller companies could no longer afford to actually hire and pay for workers they weren’t actually using. It didn’t solve the problems with the H1-B overnight, but it significantly raised the barrier to entry. From that scrum emerged the current titans of the H1-B game: Tata, Infosys, and Cognizant.
As you can see, these companies are far from scraping the bottom of the barrel, salary-wise. They bring in and place large numbers of highly skilled, highly paid professionals. But they are “H1-B dependent”, which suggests that their business model would not be viable without this program. This seems to fly in the face of the self-professed purpose of this program, which is to match highly skilled foreign workers with companies that have trouble recruiting similar talent within the United States.
That aside, these companies (and a few others who have managed to consolidate effectively under the new paradigm) are the predominant recruiters of large numbers of Indian workers which make up the lopsided figures in the statistics charts we looked at earlier. Many of the applicants from other countries use job seeking resources to directly connect with employers and facilitate their own recruitment with the American companies they eventually work for, and the companies utilize their own HR process or contracted legal assistants to process their visa authorizations.
So, in sum, the India IT issue is a real thing. It’s not the same playbook that the rest of the H1-B program tends to go by. Is it a problem? Or is it simply the jobs market finding a way to leverage the immigration system to meet its needs? That is in the eye of the beholder, or tax payer perhaps. The companies I mentioned earlier are subject to the same rules, laws, and fees that any other U.S. employer who wants to recruit foreign workers under the H1B program is subject to, and they consistently meet those standards year after year. Until the law changes, this will continue to the be the status quo.
That’s not to say that the lopsided recruitment of Indian citizens doesn’t create knock-on effects and problems. The massive and lengthy backlog for green cards for employment-based applicants from India is directly a result of their over-representation in this category in a system that still has country-based quotas for the next step: green cards.
In addition, due to the lop-sided gender ratio mentioned above, Indian women who accompany their husbands to the U.S. on H4 (spousal) visas are subject to the whims of an extremely schizophrenic U.S. immigration system regarding their ability to work. As most of these women are also highly skilled and educated, the shifting attitudes in the U.S. political class regarding their ability to obtain work authorization cards is a major issue and impediment.
Finally, the H4 issue extends to children. With a 10 year plus wait to receive a green card, many Indian (and Chinese) families in the U.S. with H1-B visas have young children who “age out”, meaning that they can no longer obtain H4 “dependent” visas after turning 21. This is despite the fact that in many cases they have lived in the U.S. for a decade or more at that point. There are various efforts to address this issue, including some legislation in the new Biden immigration plan adopted from the S386 wording which would offer a DACA-like path to residency for adult children of H1-B holders under certain conditions.
In conclusion, it is somewhat true that India occupies a large part of the H1-B controversy for various reasons. Next week we will look at some of the ways we can improve this visa process and mitigate the problems for both Indian applicants and H1-B workers in general. By implementing much needed reforms and rejecting some of the failed policy prescriptions in the recent past, the future of the H1-B program will be bright and many of the perceived harms surrounding the current system can be mitigated. Join us next week for part 3, on how to treat foreign workers right!
Note from editor: We have received a lot of feedback that people are interested in a digest-like format regarding the week’s immigration news with short commentary. We are planning to pilot this kind of approach in the coming weeks, with long-form newsletter type content interspersed as the opportunity presents itself. Any feedback regarding this kind of shift is welcome to polish and improve our content offerings. Looking forward to hearing thoughts from our subscribers!
In the news:
How will the Biden administration handle immigration? - There are a lot, a LOT, of local news stories this week on immigration related topics and Biden’s plan. This tells me that this is a story of broad interest to many local communities (of course one knows that but it’s nice to see the market for an audience reflect that). Obviously people are hoping for relief regarding their specific immigration issues, but the interest in this topic that would bring it to the attention of local news orgs is probably reflective of the broad agreement among Americans that this issue is important and worthy of attention politically. This is what is generally known as “grass roots” support and it will be critical to achieving some kind of political solution in the new Congress.
Chad Wolf: Biden immigration action 'absolutely' goes against the law - Boy this guy didn’t waste much time shifting from “Acting” whatever to hack pundit. Kind of curious under what authority he continues to speak to the press, as he is still an employee of DHS and generally those who are not the head of an agency or a designated spokesperson don’t have carte blanche to go on TV and undercut the President’s position. I guess it’s going to take a few months for the status quo to shift from the shill free-for-all that existed over the last four years to something resembling a normal administration.