Smart new taxes or fools gold?
The U.S. Senate just passed legislation that would significantly increase fees for skilled-worker visas. The proposed law would increase the cost of H-1B visas by $2,000 or so per worker at companies where foreign workers make up more than 50% of their workforce. Current fees are typically at $2,300 per worker. In 2009 there were 214,271 approved H-1B visas.
The rational from the sponsors of the bill is to pay for new border security measures.
So what do you think? Will this really be a new source of revenue? Or is this fools gold and the foreign firms currently sending skilled labor to the U.S. will simply decide to keep those skilled workers at home? After all a large chunk are in the outsourcing business... 48.1% of the approved H-1B visa are from India and many of these work for huge outsourcing firms like Wipro, Tata and Infosys.
Wait - let me get this straight - Indian companies are exporting skilled talent into the United States to perform work here for American companies So now you're asking why aren't they hiring Americans to do these jobs? Good question. Perhaps there is a labor cost difference and American companies find it more cost effective to outsource skilled-labor jobs to India based companies who are willing to place skilled-labor workers in the United States.
It is a strange world we live in, but before the Senate or the House get too far down the road, thinking they have found a new gold vein in H-1B visas, they should understand the business dynamics of this sector and realize this new legislation could just as easily become a catalyst to push these skilled-labor jobs offshore. Washington is famous for unintended consequences. This new legislation looks ripe for continuing a trend that makes America an expensive place to do business. This labor cost gap inevitably drives jobs off shore.
We're talking about 214,271 skilled-labor jobs. Instead of looking at these as a source of new taxation on foreign companies we should understand why it is more attractive to bring foreign citizen workers into America instead of hiring Americans. We need to work at making American workers more cost effective, more productive and more attractive than foreign workers brought in from abroad.
It looks like a sticky problem - but raising the cost of doing business in America will not keep jobs in America. It makes more sense to outsource...
www.electiangilyeat.com
The rational from the sponsors of the bill is to pay for new border security measures.
So what do you think? Will this really be a new source of revenue? Or is this fools gold and the foreign firms currently sending skilled labor to the U.S. will simply decide to keep those skilled workers at home? After all a large chunk are in the outsourcing business... 48.1% of the approved H-1B visa are from India and many of these work for huge outsourcing firms like Wipro, Tata and Infosys.
Wait - let me get this straight - Indian companies are exporting skilled talent into the United States to perform work here for American companies So now you're asking why aren't they hiring Americans to do these jobs? Good question. Perhaps there is a labor cost difference and American companies find it more cost effective to outsource skilled-labor jobs to India based companies who are willing to place skilled-labor workers in the United States.
It is a strange world we live in, but before the Senate or the House get too far down the road, thinking they have found a new gold vein in H-1B visas, they should understand the business dynamics of this sector and realize this new legislation could just as easily become a catalyst to push these skilled-labor jobs offshore. Washington is famous for unintended consequences. This new legislation looks ripe for continuing a trend that makes America an expensive place to do business. This labor cost gap inevitably drives jobs off shore.
We're talking about 214,271 skilled-labor jobs. Instead of looking at these as a source of new taxation on foreign companies we should understand why it is more attractive to bring foreign citizen workers into America instead of hiring Americans. We need to work at making American workers more cost effective, more productive and more attractive than foreign workers brought in from abroad.
It looks like a sticky problem - but raising the cost of doing business in America will not keep jobs in America. It makes more sense to outsource...
www.electiangilyeat.com
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