Why Donald Trump’s H1B visa order hurts Sikka but helps Cook

By Rob 0

Taipei: President Donald Trump just made life a little easier for Tim Cook and Sundar Pichai. And a lot harder for Vishal Sikka and Rajesh Gopinathan.

“Right now, H1B visas are being awarded in a totally random lottery. And that’s wrong,” Trump told workers in Wisconsin, announcing a reform of the visa category. “Instead, they should be given to the most skilled and highest paid applicants.”

Whatever your views on Trump, he is factually correct on that last point. H1Bs are supposed to go to those working in an occupation that requires “theoretical and practical application of a body of highly specialized knowledge.”

It’s hard to make a case that the jobs being filled by the Indian IT outsourcing firms that dominate H1B visa issuance—such as Tata Consultancy Services and Infosys Ltd, which Sikka and Gopinathan helm—make use of highly specialized knowledge when they regularly pay less than other firms like Apple Inc. or Google parent Alphabet Inc.

On the first point, Trump’s a little off, though, because the awarding of H1Bs isn’t a totally random lottery: A 2015 amendment to the Immigration and Nationality Act outlined a pecking order the secretary of labour is meant to follow.

The 65,000 annual cap is also exceeded because of exceptions and rollovers that put the annual figure at over 180,000 last year.

The flood of H1B applications does make the reviewing and awarding of visas a slow process. The US Citizenship and Immigration Services centre in California is only now processing applications made back in August, for example.

That’s bad for companies like Apple and Google, led by Cook and Pichai, which seek far fewer H1Bs. I’ve written before of employees being parked offshore while they await the correct paperwork, and the risks to the US of this situation continuing.

In tightening the rules—he can’t unilaterally rewrite them—Trump will help those tech titans that really need the talent, as evidenced by them paying such high salaries for their H1B workers.

Yet he won’t be doing much for manufacturers like tool maker Snap-on Inc, where he delivered his broadside. That’s because factories in Asia still offer cost benefits over the US, and Trump’s decision to trade a weaker Chinese currency for assistance on North Korea shows how hard he’s willing to push Beijing in the effort to ease the plight of American workers.

By making bold statements about H1Bs, Trump has played to his working-class support base but also diverted attention away from dependence on Chinese manufacturing. And that’s definitely good for Apple. Bloomberg

First Published: Wed, Apr 19 2017. 12 14 PM IST

[Source: livemint.com]