America’s extension of its ban on work visas for non-citizens will probably harm its own business interests, not save American jobs. Cynical politics must not defeat economic sense
On 22 April, with the US economy in the grip of covid-19, its President Donald Trump had issued an executive order banning the entry of overseas workers for two months. On Tuesday, news broke that he had extended that ban. Various US work visas, including the H-1B sort popular among IT professionals, and the H-2B kind that let non-US citizens in for food and farm sector jobs in America, will remain suspended for the rest of 2020. The official aim is to secure American jobs in a country battered by the pandemic. “Many workers have been hurt through no fault of their own due to coronavirus, and they should not remain on the sidelines while being replaced by new foreign labour," said Trump. These barricades are unlikely to help the US fight its recession. What it may help Trump fight off, though, as his re-election team seems to have calculated, is a challenge to his presidency as the US goes to the polls towards the end of this year. His politics may go by tags like “America first", but his brand of populism has been observed to rely on whipping up passions that seek to keep “aliens" out. The irony of a nation of immigrants turning xenophobic was lost in the electoral support such a campaign got him back in 2016, when he won the White House, and perhaps he expects similar dividends this time around. Will it work? This election is likely to focus on the covid crisis and its trail of economic destruction. While saving local jobs for local residents may make for a catchy slogan, blocking work visas would only make a bad situation worse.
There was once a time that India’s IT services sector relied heavily on H-1B visas for Indian engineers to go help fulfil contracts signed with clients in the US. Thankfully, this is no longer so. Trump’s myopic vision led him to squeeze H-1B arrivals even before the corona crisis emerged as a pretext for it. He had also made it far more expensive for American companies to hire H-1B workers in the US. Signs of a shift in policy gave our IT service exporters some time to reconfigure their operations and reduce dependence on visas. It was achieved by a combination of local hiring in the US and remote mechanisms deployed for various tasks. As a result, the extension of Trump’s visa ban is not expected to have a drastic impact on their business performance. Yet, there is no denying the disruption that ongoing IT projects will face. Let us not forget why our IT export model worked so well. As education in India is cheap and salaries low, our firms can deliver high value at low cost across the world. Erecting barriers in the delivery process only raises the IT costs of client firms, hurting their competitiveness. As with trade, both buyers and sellers stand to gain by striking deals across the high seas. Studies have shown that the H-1B visa programme, in particular, had economic benefits for the US as well as beneficiary countries.
Politics should not get in the way of mutually beneficial commerce. But economic sense, sadly, has fallen victim to a political agenda in the US, a country once admired widely for its openness. This needs to be bemoaned loudly. Sundar Pichai, the Indian-born chief executive of Google, has expressed dismay at America’s restrictive work visa regime. Other business leaders are speaking up, too. The use of a pandemic for political purposes is highly cynical. If this goes on, no economy will be able to call itself “first". It’ll be a lose-lose scenario for all.
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