Blessing in Disguise for India ???

H1-B Visa

Some facts
H1-B visa meets its limit of 85,000 for the annual year 2008, on the first day itself. Out of these, 65,000 are for candidates who have a bachelors degree from any part of the world and the remaining 20,000 are reserved for candidates who have a masters degree from USA. Infact the USCIS has received around 200,000. It is quite obvious that they have received more than 65,000 applications filed under bachelors degree, and it will now follow a lottery system to select those 65,000 applicants out of the 200,000 odd. And, if they received more than 20,000 applications filed under masters category, the same lottery mechanism will be used to filter those extra applications. They will use computers for random selection.

So, the fate of the applicants who applied for the H1-B visa now hangs entirely no luck. Is USA sending a message across to talented foreign students that are welcome to study in USA, but USA will not allow them to work here in this country ?

According to me, it is very obvious that H1-B programme followed by USA needs to be revised, for the interest of the H1-B applicants, USA economy and for the Americans themselves. First let us see what the supporters and opponents of the reform of this H1-B visa programme have to say and I will follow up with my explanation.


1] Supporters

a) Compete America
A coalition comprising Microsoft, Intel and Oracle and several silicon Valley companies have lobbied Congress to increase the number of H1-B visas doled out each year, arguing their innovative edge is at risk when they're unable to fill job openings.

b) Information Technology Industry Council (ITIC)
Backers include Apple, Dell, eBay and Intel, and last year asked that the cap be raised to 115,000.


2] Opponents

a) Programmers Guild organisation
What they have to say
1) there are enough talented American workers ready to fill those slots - but they're not willing to accept the lower wages that companies can pay immigrants.
2) the H1-B visa programme is used for body shopping by the companies.

This is untrue, as Microsoft itself has posted a job opening at programmer guild's site with the pay being $100,000. Click here to go that page.


Even, if it is true, there are ways to limit such frauds by:
(i) Checking the authenticity of the H1-B applicant for the type of job applied for.
(ii) Ensuring that the minimum wages are same, if they are not, for both the H1-B and the native american employees.


3] Government's stand

There are now dueling bills in Congress that address the H1B visa situation.

a) One would lift the cap of 65,000, but that bill is included in a comprehensive immigration reform package.

b) Another bill would leave the cap in place.



My Explanation

I would first like you to go through Bill's testimony to the US Senate Congress on how to maintain America's competitiveness. It addresses 3 topics, one of which is based on immigration policies i.e. about the H1-B visa programme. I think Bill's testimony is a must read for anyone who wants to understand the need for H1-B programme overhaul or even for those who want to make any passing comments related to the subject.

Transcript of Bill's Oral Testimony is available online. Click here to go to his testimony page

For those who do not have time to read through the entire testimony, the website also has a video link of his testimony which is of 2 hrs, 2 mins, where he answers convincingly all the queries posed to him by the committe members.

For those who neither have time for reading nor for the video, below are some of the important remarks in his testominy:

Any discussion of competitiveness in the 21st century must begin by recognizing the central role that technology and innovation play in today's economy. The United States has a great deal to be proud of in this respect. Many of the most important advances in computing, healthcare, telecommunications, manufacturing, and many other fields have originated here in the United States. Yet when I reflect on the state of American competitiveness, my feeling of pride is mixed with deep anxiety. Too often, it seems we're content to live off the investments previous generations made, and that we are failing to live up to our obligation to make the investments needed to make sure the U.S. remains competitive in the future. We know we must change course, but we have yet to take the necessary action.

In my view, our economic future is in peril unless we take three important steps:

1] First, we must equip America's students and workers with the knowledge and skills they need to succeed in today's knowledge economy.

2] Second, we need to reform our immigration policies for high skilled workers so that we can be sure our workforce includes the world's most talented people.

3] And third, we need to provide a foundation for future innovation by investing in new ideas and providing a framework for capturing their value.

The second major area, and one I want to particularly underscore today, is the need to attract top science and engineering talent from around the globe to study, live and work in the United States. America has always done its best when we bring the best minds to our shores. Scientists like Albert Einstein were born abroad but did great work here because we welcomed them. The contributions of such powerful intellects [have] been vital to many of the great breakthroughs made here in America.

Now we a face a critical shortage of scientific talent. And there is only one way to solve that crisis today: Open our doors to highly talented scientists and engineers who want to live, work, and pay taxes here. I cannot overstate the importance of overhauling our high-skilled immigration system. We have to welcome the great minds in this world, not shut them out of our country.

Unfortunately, our immigration policies are driving away the world's best and brightest precisely when we need them most. The fact is that the terrible shortfall in the visa supply for highly skilled scientists and engineers stems from visa policies that have not been updated in more than 15 years. We live in a different economy now, and it makes no sense to tell well-trained, highly skilled individuals – many of whom are educated at our top universities – that they are not welcome here. I see the negative effects of these policies every day at Microsoft. In my written testimony, I discuss some of the shortfalls of the current system.

For 2007, the supply of H1-B visas ran out four months before the fiscal year even began. For 2008, they will run out even earlier, well before degreed candidates graduate. So, for the first time ever, we will not be able to seek H-1Bs for this year's graduating students. The wait times for green cards routinely reach five years, and are even longer for scientists and engineers from India and China, key recruiting grounds for skilled technical professionals.

The question we must ask is: "How do we create an immigration system that supports the innovation that drives American growth, economic opportunity and prosperity?" Congress can answer that question by acting immediately in two significant ways: First, we need to encourage the best students from abroad to enroll in our colleges and universities, and to remain here when they finish their studies. Today, we take exactly the opposite approach. Second, we should expedite the path into our workforce and into Permanent Resident status for highly skilled workers. These employees are vital to U.S. competitiveness, and we should encourage them to become permanent U.S. residents so they can drive innovation and economic growth alongside America's native born talent.


After his testimony, Bill addressed various queries from the senate members. Some of them are as below:

Particularly interesting conversation was between SEN. JUDD GREGG and Bill, wherein he says he is in total agreement with Bill on attracting foreign skilled workers. He also asks Bill for an appropriate number for H1-B visas to replace the current 65,000.

Their conversation is as follows:

SEN. GREGG: The one place we do have a role is in this area of immigration, which you've mentioned. And I'm also in total agreement with your view, which I would characterize, maybe inappropriately, as going around the world and picking the best and the brightest, and having them come to the United States. And that's what we've done as a culture, and we've been very successful. So, I guess my first question to you is, do you have a number that you think we need relative to the H1-B visa program? Today it's statutorily set at about 65,000, but we're up to 520,000. Do you think that number should be raised to 200,000, 300,000? What would make America – give us the capacity to get the people we need to come here to take advantage of our society, and we take advantage of their abilities?

BILL GATES: Well, my basic view is that an infinite number of people coming, who are taking jobs that pay over $100,000 a year, they're going to pay taxes, we create lots of other jobs around those people, my basic view is that the country should welcome as many of those people as we can get, because people with those great talents, particularly in engineering areas, the jobs are going to exist somewhere, and the jobs around them are going to be created wherever those uniquely talented people are. So, even though it may not be realistic, I don't think there should be any limit. Other countries have systems where based on your education, your employability, you're scored for immigration, and so these people would not have difficulty getting into other rich countries. In fact, countries like Canada and Australia have been beneficiaries of our system discouraging these people with both the limits and the long waits and what the process feels like as they go through the security checks. There are some suggestions about if we could, say, in the green card system not have to count the family members. If you somewhat more than doubled that, you could start to clear the backlog and not have that be a problem. Likewise, with H1-B, if you had a few categories, like people who are educated here in this country, that you gave an exemption outside of the quota, that somewhat more than doubling would get us what we need. But to some degree that's sort of like a centrally managed economy, so we'll --

SEN. GREGG: Unfortunately, because my time is going to be up, unfortunately that's what we have here. I agree 100-percent that we shouldn't have a limit on highly skilled people coming into the country, but we do have a centrally managed economy, and right now it's not being managed well. So, I would presume that if we were to double the number, say, to 300,000, you wouldn't have any problem with that, since you're willing to go to infinity?

BILL GATES: Well, it would be a fantastic improvement. And I do think that there's a draft bill that has provisions that would largely take care of this problem.

Another important topic touched by Sen Sanders on outsourcing and Bill's response to that.

"The fact that sufficient foreign skilled workers were not allowed to enter States because of the H1-B cap limit, those jobs had to be relocated to other countries like India. And alongwith additional jobs that revolved the core technological and engineering jobs, had to be relocated as well. One way to limit outsourcing would be allow these so called foreign highly skilled workers (read Indian math and computer science engineers) to work here in USA for these high tech companies."


SEN. SANDERS: Thanks very much. Let me ask you this, and this is a sensitive issue, and a touchy issue. I think there is no disagreement on this committee or in the Congress that as a nation we're doing a terrible job in math and science, that it is a disgrace how few engineers we are graduating. And you have done a fantastic job in focusing on that issue. But there is another side of the coin where you and I may disagree, and I'd like your comments on that, and that is the issue of outsourcing. And that is my understanding is that from January of – this is according to the Bureau of Labor Statistics, that from January of 2001 to January of 2006, the information sector of the U.S. economy lost 644,000 jobs, et cetera, et cetera. Also, I think you would probably agree that many major corporations, including your own, if they can hire qualified labor, engineers, scientists, in India or China for a fraction of the wages being paid in the United States, they're going to go there. And we have quotes from people like Andy Grove and John Chambers, leaders in information technology, who basically predict that the IT industry may end up in China. Now, how do you address that issue, understanding we are in agreement, all of us are, the need to do a heck of a lot better job in education, high school education, math, science, but isn't there still going to be a lure, unless we get a handle on it, that companies are going to be running to China and India for qualified workers who are often paid a fraction of the wages they are in the United States?

BILL GATES: The demand worldwide for these highly qualified engineers is going to guarantee them all jobs, no matter where they're located. So, anyone in the United States who has these skills, no matter whether they're born here or came here, not only will they have a super-high-paying job, there will be many jobs created around them that are also great jobs. And so we should want to have as many of those people be here as possible, and have those jobs that are created around them. We've been increasing our employment in the United States, and a limiting factor for us is how many of these great engineers that we can get here. And, yes, that does cause a problem. The IT industry I guarantee you will be in the United States to the degree that these smart people are here in the United States, and that's why I think it's important to maximize that number. You know, by and large, you can say is this country a beneficiary of free trade, and the answer is overwhelmingly yes. Why can our inventions, whether it be drugs or movies or software or planes, why can we invest so much in those products? It's because we're able to sell them into a global market. And by having people of this skill level, we can have an economy that has very high defense costs, very high legal costs, very high medical costs, and yet continue to capture our fair share of the economic improvement that takes place. If we do things that artificially shut off our ability to engage in that trade system, then the impacts on our leading industries would be fairly dramatic. So, we love these high-paying jobs, and our industry has continued to draw people into these jobs. We pay way above the prevailing wage rate because of the shortage that we see.

SEN. SANDERS: Well, thank you very much.


Sen Kennedy asks Bill about the acuteness of problem in the current immigration policy and what would be the time line for the same to take correcive mesures. Bill responds by explaining the plight of those students who intend to graduate in the spring quarter saying that they would not be able to file their H1-b application because by the time they graduate, the USCIS would have already run out of the limit.


SEN. KENNEDY: Just one additional point. In the H1-B there are provisions in there where they pay a fee into a fund so that they train Americans and upgrade their skills as a part of the H1-B. Let me just finally ask you this. You've given a number of recommendations on competitiveness and immigration and others, in education. What's your – just if you could summarize your sense of urgency, how much time do we have? I mean, what's the framework, where would you say, as somebody that's obviously thought about this a good deal, has specific recommendations, and is familiar with these forces in other parts of the world, what guidance can you give to us about the sense of urgency? I think for all of us who deal with education think every day that's gone by with a lost child, for a child to lose that opportunity for learning is a day that probably can't be recaptured. There's a sense of urgency in terms of education as years go back and we lose these opportunities. What's your sense just in terms of the country, the competitiveness, and what's happening in other parts of the world?

BILL GATES: Yeah, I think both of these are incredibly urgent issues. Education, because as you say, it takes a long time, and so you've got to get started now improving the teachers and trying out the new incentive systems – even if it's going to take decades, the sooner you get going the better. In the immigration case it's much more of an acute crisis in that the message is clearly here today that you come to the U.S., go to these great universities, and you go back and not only take your very high paying job, but also all the jobs around it back to another country. And other rich countries are stepping up and showing the flexibility of trying to benefit from the way we're turning these people away. In every way this country benefits by having these very high paid jobs here in this country. And so if you talk to a student who's in school today, going to graduate in June, they're seeing that they cannot apply until they get their degree, and by the time they get their degree, all those visas are gone. If somebody is here on an H1-B, if you're from India, say, with a bachelor's degree, the current backlog would have you wait decades before you could get a green card, and during that time your family can't work, there are limits in terms of how you can change your job. There was one calculation done that the fastest way you'd get a green card is to have a child who becomes a United States citizen, and then your child sponsors you to become a U.S. citizen, and that's because there's more than 21 years in some of these backlogs. So, this is an acute crisis. And it's a thing, as you say, there are fees paid, and Microsoft makes no complaint about those fees. We end up paying a lot more to somebody who comes in for these jobs from overseas than we do to somebody domestically. We have every reason – we have 3,000 open jobs right now. We're hiring the people domestically, everyone that we can. In fact, there's a great competition, this wage rate continues to go up, as it should. And the wage rate for this type of skill set is not that different in other countries. It's escalated very rapidly in India and China. And particularly if you include the tax cost and the infrastructure cost that we pay to support this kid of job in those countries, this is not about saving a ton of money for a top engineer, this is about being able to put them here in this country where the other skill sets around them are the best in the world, and there's not a shortage in those other skill sets. And India and China haven't yet – and it will take them a long time before they're as good at the management, testing, marketing elements that go around those engineers. So, this is an acute crisis and one that in terms of the taxes these people will pay, the fees that get paid around them is fiscally accretive to the United States immediately in terms of what happens. So, to me it's a very clear one with basically no downside that I can see whatsoever.

Sen Lamar acknowledging that we need to welcome highly skilled people, and referencing to it as "insourcing brainpower". According to me very important acknowledgement and very important coining of a new term.

SEN. LAMAR ALEXANDER : Thank you, Mr. Chairman. Two comments and a question. One is you've been a very eloquent spokesman for what I like to characterize as "insourcing brainpower", and I think helping our country understand that insourcing – we talk a lot about outsourcing jobs, but insourcing brainpower is insourcing jobs, too, which you've said several times today, and which is a point we don't make as well.


One thing that enraged me was that there was this politician who in her/his political campaign openly says she/he will stop all outsourcing and stop all immigration and there will be no unemployment and stuff, but when she/he had the best opportunity to present her/his views about her/his strong opinions, she/he opted to be remain quiet and ask absolutely unrelated questions.


My Explanation Continued ...

My below explanation would be reference to India as 70% of H1-B applicants are Indians for the last few years, though the reasonings could be applied to other countries as well, for example China. Also, for the same reasons I will restrict myself to the field of Computer Science as most of the H1-B visas are granted to professionals who have significant skills as a software engineer, programmer, etc.

The following remark of Bill Gates makes so much sense. It says the whole story according to me.

"Too often, it seems we are content to live off the investments that previous generations made. We are failing to live up to our obligations to make the investments needed to make sure the U.S. remains competitive in the future. My feeling of pride is mixed with deep anxiety."



Blessing in Disguise for India !!!

One important question to ask here is that, why USA inspite of having the best educational system in the world unable to produce sufficient math and science engineers and has to rely on foreign students particularly Indians to meet this requirement.

I think there is a 2-fold answer to this.

a) I think the USA has a better higher education system (masters and phd programmes) , but
not a good high school and undergraduate education system in the world.

b) Another important factor is that there are too many options/choices/distractions for the
American students in determining their career. Having too many options to choose from is
generally considered a good choice and I am sure it still is. But I think the lack of it, has
helped the Indian students a lot.

To elaborate this point, let me recount my own experience, when I studied in India, I used to always complain about the Indian educational system, as to how it was unflexible. All my years of education, right from school, diploma and engineering I hardly had any choice of subjects to study. The syllabus was more or less fixed. Also, in India, as an aspiring student one does not have many choices for an education stream to choose from in terms of developing a long term career out of it. The two was most obvious choices would be to study medical or engineering after high school. But here in USA, one has so many options to choose from say apart from engineering and medical they can choose to enter law, psychology, nursing, etc etc. In addition there are so many professional sports team. This is something unheard and unthinkable for Indians. So, I guess this was and is still the primary reason that aspires a lot of Indian students to take up engineering as their career. This perhaps explains why India and for that matter China produces so many math and computer science engineers.

Not only India produces these engineers in huge numbers but also of very high quality. The reasoning behind this according to me is India's population and the high supply demand mismatch. There are far too many aspiring students and too few good quality schools/colleges. This in turn lead to intense competition among students in the form of various entrance exams. And those who have given their GREs or GMATs while coming to USA for pursuing their masters would agree that it was a piece of cake as compared to the entrance exams we have even for the undergraduate level namely the JEE, CET, CAT, GATE, etc.

Thus it is very easy for an american student to get an admit in a decent school within USA, but the same is not true for an Indian student in India. Also, once you are in a particular school, the classes in Indian school are really huge. I still remember my class had a strength of 120 students in India, in comparison to 30 max in American schools. In short the level of competition is very very high and the system to a large extent is unforgiving in India.

Come to think of it, I now sometimes feel it has been a blessing in disguise for the Indian students.


Another blessing in disguise for India ???


USA should have realised quite a many years back that it should have reformed its high school education, if it wanted to have a strong tech force which would be competetive in this global age. However it seems that it is in the process of committing another huge mistake, by having very restrictive immigration policies. Not only does the USCIS limits the number of H1-B workers to 20,000, under the masters quota (higher education from an American University) but it also has a very long and complicated policy for permanent residency.

We are already seeing many highly skilled Indians who have worked for significant years in USA, returning back to India only because they were fed up with their permanent US residency process. America's complex and inefficient immigration policy has also benefitted other countries such as Canada and of late Australia and New Zealand.

I think after seeing the Bill's testimony, it appears that the committee members are very well aware what the repercussions could be if they do not remove the H1-B cap. One can make this out by the kind of appreciation they showered for Bill's testimony as also from the type of questions they asked.

Why then we see no reforms ? The only possible reason I can think of is that of vote-based politics. Both the democrats and the republicans know how they are endangering the USA economy by such restrictive immigration policies. The government fears backslash from the ordinary people. The ordinary American is of the view that H1-B programme is responsible for their loosing the tech jobs. Sure there have been people who have lost jobs due to the H1-B programme and this in turn has fuelled a lot of insecurity amongst them. But they fail to realise that it is their high school education system which is the reason for their loosing their jobs. It is a well know fact that USA is failing to deliver sufficient math and computer science engineers.

Instead of taking advantage of this and playing vote-based politics, the USA government should take up the responsibility of educating them. Ordinary Americans should be educated about this. Because such narrow-minded view would only cause more harm to them in the long run. They should also understand why such restrictive policies would further result in loosing jobs.

e.g. If there are 10 people needed for a project and you found 5 qualified and willing Americans and you could hire the other 5 on visas you would keep the project in US but if you didn't have the visas you would send the entire project abroad and fire the 5 Americans you did find.


The Americans should also understand that in such changing times, they should learn to accept the reality, instead of running away from it by implementing very restrictive immigration policies. They are now living in the so called "Information Age" or in a "Knowledge Economy". They should realise in today's world technology would be they key driving element. Wherever these highly skilled engineers reside, businesses are going to develop around them. By not
allowing highly-skilled engineers from India, I think the USA risks in loosing many other jobs that are created around it.

Also, we all know that major giant companies such as Microsoft, Oracle, Symantec, Cisco, Morgan Stanley and so many more have already opened their development offices in India. Such restrictive immigration policies would further force smaller companies to set up their centres in India as well, if they want to remain globally competetive.

This in turn would help develop many other avenues for Indians such as in areas of hotel management, architecture, infrastructure development, construction, sales, marketing, etc.

The USA has already committed one mistake by not admitting about their high school education standards and thereby not undertaking any reforms to improve the same.

I think they are in a process of committing another huge blunder, for which the future American generation would not forgive them.

Could this be another blessing in disguise for India ???