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India trade group chief criticizes proposed H-1B bill

Patrick Thibodeau | June 29, 2009
Nasscom's Som Mittol says Grassley-Durbin bill could push more U.S. IT work offshore

Unlike the auto model, [Indian companies] need people to come here on a short-term basis and then go back. Having said that, our success rate has been low in the attempts that we made to hire in the U.S. The acceptance rate was less than 25% of the offers made because these applicants had the choice of either joining a U.S. company or an Indian firm, and they always went there (to a U.S. company). Currently there may be a little more ease in resources, and that gives us an opportunity to hire local people. Before this meltdown happened, companies like Microsoft and Cisco had, at any point in time, more than 4,000 open jobs. [And] because they couldn't fill them [locally], they were hiring people from India.

And [Indian] companies such as TCS and Wipro announced centers [in the U.S.] before Durbin-Grassley [was filed] and are hiring [U.S. workers] already.

Part of the Durbin-Grassley bill responds to criticism that a lot of the contracting firms are paying low salaries to H-1B workers, which is allowing them to win more contracts. Passage of the bill would change the way wages are calculated and likely increase wages for H-1B workers. Do you have a problem with that provision?

I think the U.S. already had an already robust [prevailing wage] process in the H-1B bill. I think that works quite well.

A recent study that found that the use of H-1B visas is decreasing wages of some technology jobs in the U.S. by as much as 6 per cent. And New Jersey's CTO has said he believes that the widespread use of H-1B workers is lowering salaries. What are your thoughts on the impact of H-1B visas on technology worker wages?

On average Indian companies get 12,000 H-1B visas a year. People stay [in the U.S.} for an average of two years here; it isn't as if you are accumulating H-1B visas over time. How could a few thousand people impact the wages so much?

So you don't believe the H-1B visa is lowering the wages of U.S. workers?

No, I would not say so. It's about the total cost of a company to get an H-1B visa person here. The total cost of these employees is not cheaper than like-to-like skills.

What do you think will happen if the Durbin-Grassley bill is approved?

I think there will be business models that have to change. The work that was done on site will then move either to offshore back to India or to nearshore centers in Canada and Latin America if it has to stay in the same time zone. The global sourcing model will continue.

 

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