Can an Industry Police Itself?

Will H-1B Abusers Corral Their Collective Greed or Ruin Things for Everyone?

Data from the U.S. Citizenship and Immigration Services (as reported in BusinessWeek March 17, 2008), indicates that large offshore outsourcers have materially dipped into the well for H-1B visas for their workers. Infosys led the way in 2007 with 4,559 followed by Wipro (2,567), Satyam (1,396), Tata (797), Patni (477) and i-flex (374).  Cognizant, a US-based firm with the bulk of its workers in

India

received 962 visas.

As the BusinessWeek article (www.businessweek.com “Guess Who’s Getting the Most Work Visas”) indicated, these visas were intended to be granted to the world’s best and brightest. As originally envisioned by Congress, these visas were to be offered to extraordinary individuals with unique skills and abilities. C++ programming language skills are neither.

What’s at risk for Indian offshore service firms is the loss of onshore personnel if Congress reacts badly and publicly to their collective abuse of the H-1B visa program. As the late Ben Franklin was fond of saying “Moderation in all things” and by all, that includes visa applications. There’s no doubt offshore firms would be stung by a retraction of these visas, tightened qualifications or new penalties levied against firms who are abusing the program or taking away US jobs from equally qualified US workers.

Will any Indian firm voluntarily scale back their desired allotment of visas? That’s highly unlikely as many of these firms would gladly accept far more visas than they’re granted now. Moreover, competitive pressures would dictate they grab all they can lest a competitor have an unfair advantage.

Should Indian firms self-regulate? That would appear to be a logical alternative and one that might meet with acceptance in

Washington

. However, these firms would have to agree to some sort of allotment arrangement that would satisfy existing and upcoming offshore providers. Given the number of firms involved, this seems unlikely. Worse, a fixed allotment would favor larger firms and prevent smaller firms better access to US markets. But the real reason self-regulation won’t work is that Indian offshore firms may be all over the map as to how serious the H-1B matter is. For those who don’t see it as a problem yet, no effort will be made to self-regulate.

In markets where there appear to be scarce permits (like taxicab permits/medallions in major US Cities), the government auctions them off to the highest bidder. That may be the best approach for the

US

. Auction off H-1B visas and let market forces bring the best and brightest to its shores. Better still, use those auction proceeds to fund unemployment compensation and training programs.