The US government, as part of its stimulus plan to revive the depression in the US economy, recently decided on including an amendment that imposes a ban on firms receiving government bailouts, from hiring workers from other countries. Microsoft has recently been asked to remove foreign workers that are employed under the H-1B Visa program, resulting in the software giant announcing that 5,000 jobs will be cut in the next six months; including 1,400 immediately.
H-1B visas are offered by the US government to enable international students and highly skilled international workers, from all over the world, or who are already living in the USA, the opportunity to live and work in America legally.
From the beginning, there has been criticism from various quarters, over the role of the H-1B program in replacing US workers. There were several instances of US staff being replaced with H-1B workers. The ploy employers used is to hire these H-1B replacements from contract job shops. This way the companies could claim that they had not applied for H-1B visas, making it possible for them to legally replace their US staff.
Another complaint was that US Employers hired H-1B workers because they pay significantly less than they would have to for US workers. This cheap labor causes depression in the overall wage structure.
Currently, 65,000 H-1B visas are granted by the US annually to Hi-technology workers from countries like China, India and Philippines.
The US government states that they are not against the H-1B program, but it has to be used in the actual spirit of why it was started in the first place – to have alternatives for specialized workers when there is no availability in the US. It was also clarified that since the 900 billion dollars for the stimulus plan is being paid by the American taxpayer, it is only fair that American workers are hired.
This decision for foreign countries could mean hundreds of thousands of foreign students studying in the US universities will not get employment and millions will be made jobless.
The US government is also planning on controlling outsourcing. American firms that move their jobs to other countries will not be eligible for any tax breaks. Obama, in his address said, “We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.”
This will affect more than 1,000 American firms that have over the years moved their jobs outside the country. The government is doing away with a particular provision of the tax code where US companies pay lower taxes for profits earned from foreign countries. There has been opposition for this tax code for a long time, as it was seen as an encouragement for companies to send their jobs abroad, when they rightfully belong to the American workers. The government’s aim through this move is to make outsourcing unattractive to companies in the US.
However, many believe that tax breaks when compared to savings through outsourcing do not stand a chance. While the idea of tax breaks would certainly appeal to the US businesses, it would require a huge tax break to change the established trend of global outsourcing. It would be highly unlikely for companies involved in significant outsourcing to take their businesses, and the related infrastructure and human-resource costs back onshore. So, the impact of this move may be very little.
People who oppose this move say that this move will only hurt the US as outsourcing makes a lot of sense; both economic and logical. It is left to be seen what actually happens. However, with Obama focusing on the revival of the US economy, this is the kind of positive reaction that Americans expect from their new President.
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Right on, Hasan. But the corporate visa programs - federal government laws - do allow companies to layoff local, highly skilled speciality workers and then recruit abroad to replace these workers.
Sanders did the American public a favor - the TARP bank fight revealed this secret inadvertently. Now we need to make all US employers H-1b dependent!
Why Obama can't stop outsourcing
The Indian information technology industry has reacted with a mix of hope and caution after President Barack Obama said last week that he will not allow US companies that send jobs away to enjoy his tax breaks.
Obama is presumably talking about industry-specific tax breaks, though the details are not clear yet. But it is clear to me that he cannot go very far.
For instance, the US plan can affect General Motors, which is getting government help. I know from experience that GM is doing advanced design for its next generation of automobiles using aviation-standard materials in Bangalore. Does Obama's budget mean that GM will stop using India as a base for innovation? How will GM keep a global edge?
Now, take Accenture, which many think is a US company. It is actually incorporated in Bermuda. Will a US-based retail company (like J.C. Penney, for instance), handing over IT work to Accenture suffer from Obama's moves? If it does, and rival IBM gets a deal that Accenture might have had, remember that IBM has tens of thousands of employees in India, doing work for US clients. The simple point is that US has itself led efforts in making the world economy in an inter-connected web. The nitty-gritty of crunching IT spending is going to be painful.
US firms have already lost the game of efficiency in automobiles to the Japanese and in overall manufacturing to the Chinese. In pharmaceuticals and services, Indian firms can shake the US in everything but blockbuster product development. If you take new products, IT and distributed global research and development are at the heart of whatever remains of Ameri-can capital efficiency, innovation and competitiveness.
In other words, US firms are no longer US firms, but effectively global firms. By doing harm to what Americans call outsourcing, Obama may be axing a branch he is sitting on. Which is why I see his speech as little more than symbolic post-election posturing. If the benefits of tax breaks are outweighed by the gains of outsourcing, US firms will do what makes more sense to them.
The tax code currently accomplishes this redistribution of income in many ways, including progressiveness, phase-outs, and the granting of the child tax credits to non-taxed ‘taxpayers’. I don’t know if you will get this, but isn’t the ‘Earned Income Tax Credit’ a funny oxymoron? Anyway, efforts by Steven Forbes et al. in the past have fallen ‘flat’ in part because of their failure to adequately address this second function.
Well, looks like Obama is going far...
As it is commonly known America like most of the other western countries is faced with acute shortage of nurses and the past few years have seen medical personnel from countries like India, Philippines and China immigrate to work in US hospitals.
It is a fact that rhere are more vacant nursing positions that there are qualified registered nurses in the US. A legislation was introduced in the US congress last week for the creation of a special category for nursing visas, which would make it easer to bring trained nurses from these countries.
However, Obama feels otherwise. He is strongly proposing training nurses within US and avoid getting them from other countries.
Nursing training is not something that can be completed in a few months, will take years. Wonder what Obama has in mind to fill these vacancies in the short-term.
It is high time that ALL U.S. corporations who: Offshore, outsource, use all manner of visa workers and illegal aliens receive NO tax breaks. Their loyalty is obviously NOT to this nation! Furthermore, our education here needs to step up to the plate and focus on educating our own (and also NOT saddle us with enormous costs that are out of control). Finally, let the job of educating foreigners belong to their prospective nations. It's not our job to educate everyone else but our own.
Why do you think United States provides education to these international students? Because international education makes a significant contribution to the U.S. economy. It was estimated that in the academic year 2007-2008, foreign students contributed approximately $15.54 billion to the U.S. economy.
The amount of money these foreign students spend in the U.S. for their tution fee and to support themselves is astounding.
Education to international students is certainly not being provided to help their countries.
Sorry outsourcing from the start was always shortsighted and has put the US in this spot. Growth of the US was once about the industrial revolution. Now you'd be hardpressed to find products - actual tangible goods that are made here.
It's import now for those companies that have received gov't funds to stay afloat invest in US employees until their funds have been repaid. It's that simple. Companies like Citigroup who are agressively seeking outsourcing of jobs most be halted ASAP until they get their yard in order.
Instead of spending on infrastructure they are looking to turn a quick profit in 2009 to stay afloat. This after taking 3 bailouts.
The reason the USA has a shortage of nurses:
isn't because we have not produced our own: it is
because of the hemoraging of our USA BORDERS and
the heathen breeders via sperm donor exponentials
crossing to drop a NUMBERS USA just in time to be
handed auto-welfare citizenship from womb to tomb
on the backs of diminishing working USA Citizens
of generations as working taxpayers now EIGHT
GENERGATIONS of breeders and future breeders with
no contributions to our nation...they bleed us as
a plague upon our lifes choices..send them back ASAP
Who or which IT companies are the recipients of the
$l.5 BILLION for:
the databasing of yours and mine
our medical records
How about that: a Kenyan born USA Prez's priorities
supported and guided by a dual citizen-Rahm Emanuel's brother a COMMUNIST-PRIORITIES to have each of our personal medical records databased for
GLOBAL SHOPPING CATALOGUE of B O D Y P A R T S.
Ain't life grreattt.
Electronic MEDICAL RECORDS of USA citizens:via India, the top TEN IT FIRMS in the USA!
And you thought ID theft was a non-stop bureaucratic sell out--
PS Since we have I M P O R T E D
nurses and physicans and other medical personnel
from other nations....of which their primary language is not E NGLISH...
see the MEDICAL ERRORs double, and beyond....
and the majority are not even reported.
RECENTLY Veterans have been experimented upon
How could any pathetic person call themselves MEDICAL anything when they used any instrutment or machine on l00's of individuals without sterilization? That is the VA's routine on US TROOPS
SICK and SICKER...it isn't bad enough when we send US TROOPS each generation to die or be systematically sacrific ed on foreign soil: they come home in body bags, or without arms and legs; wait for med care while whores from US Border receive auto-welfare for birthing against l2 AMEND but our US soldiers wait l0-12 months for care OR have to pay for their own; or die when in the filthy care of the VA or USA gov run institutions via foreigners and US incompetent et all.