Talk of depressed wages is not just hot air. A recent study found H-1B visa use is reducing IT wages in some fields, including programming, by as much as 6 percent. That comes from research by Prasanna Tambe, an assistant professor of information, operations, and management sciences at the New York University's Stern School of Business, and Lorin Hitt, a professor of operations and information management at Wharton School of the University of Pennsylvania.
IT services to Mexico? It could happen
It's worth remembering that the globalization of IT services (along with many other sectors) is very far down the road. Indian firms are reportedly laying the groundwork for a move of some services to Mexico and Canada should U.S. regulations become too strict.
A report in DNAIndia quotes Apurva Shah, a Mumbai-based analyst: ""Companies such as TCS, Infosys, and others are setting up delivery and development centers in Mexico and Canada, which are close to U.S. This helps firms save on costs as well as serve U.S. customers from those locations, since people from Mexico and Canada do not need H-1B visas under the North American Free Trade Agreement (NAFTA)."
I have no idea how reliable this report is, and there are many jobs that could not be done offsite. But moving at least some of the work now done in the United States by H-1B visa holders is certainly plausible, and I'll bet that Indian techies working in Mexico will be paid even less than now.
As for Patel, he's facing deportation, and Cygate Software and Consulting, the company that brought him to New Jersey on allegedly false pretenses, is facing a criminal charge.
H-1B: A solution in search of a problem
When H-1B first became law in the 1990s, the premise was simple and made sense: The growing technology industry couldn't find enough skilled workers to fill key jobs. In response to lobbying by the industry, Congress permitted companies to hire foreign workers under a new provision of immigration law that established fairly liberal quotas for skilled workers.
Fair enough -- but that's no longer the case. With thousands of highly skilled and experienced IT workers looking for jobs, it's hardly plausible to talk about a labor shortage. No doubt there are exceptions. But not 85,000, which is the total number of H-1B slots available this year and last.
There needs to be a moratorium on H-1B entrants to the labor market. But before we point fingers at the foreign-born workers who come here to better their lives and support their families, we should condemn the companies that exploit them.
(Patrick Thibodeau, a writer for our sister publication Computerworld, has done a great job covering this issue, and I've used some of his reporting here.)
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