1B or not 1B

The numbers tell the story: Indians still account for 70% of H-1B recipients, but only three of the top 10 H-1B employers had ties to India in 2023, down from six in 2016, according to Pew Research.
Trump's $100,000 H-1B visa shock: Why US may lose more than India

This somewhat undersells things. This story, from Al Jazeera, makes the change plainer (it shows head to head numbers from 2014 and 2024). But the BBC does nod to it: "Indian outsourcing giants such as TCS and Infosys have long prepared for this by building local workforces and shifting delivery offshore." And raises a question. If TCS and Infosys have been scaling back their use of H-1B visas to bring workers into the United States, and we're not hearing about their businesses suffering, what was up with all of those workers they were importing? If Tata Consulting and Infosys could start hiring domestic labor once they saw the writing on the wall, what was stopping them previously?

There's an unspoken assumption in the H-1B visa debate, when it comes to supporters of the program, that the skills that the United States was importing simply weren't otherwise available. But what is India providing graduates that the United States is not? Not much other than a willingness to work for lower wages, as far as many Americans are concerned. As far back as 2013, Rutgers University put out a paper questioning the persistent complaints from business leaders about a talent shortage.

According to [the Council of Advisors on Science and Technology's] analysis of the engineering workforce, the nation is currently graduating about 25,000 more engineers every year than find work in that field.

They also noted that in 2011, when Steve Jobs told President Obama that the primary obstacle to employing 700,000 Americans in manufacturing was an inability to find workers, at going labor rates, that many domestic hires would have zeroed out pretty much all of Apple's net profit for the year. And this is what leads to the widespread skepticism about the H-1B visa program (and outsourcing, for that matter) among Americans of many political persuasions... the suspicion that it's just a way to lower labor costs at their direct expense. And so more and more American workers feel that their incomes are being sacrificed in the name of corporate profits, and that credulous politicians (like President Obama) were buying into cynical corporate misinformation. And while some Americans are cheap enough to look the other way when people a few towns over are rendered unemployed, there's a certain self-importance that tends to to awaken when unemployment comes for them, personally.

The idea that the main reason that Indian companies like Cognizant, Tata Consulting Services, Infosys and Wipro led the list of H-1B visa utilization in 2014 (and three of those companies are still in the top ten) is that they were Indian companies, preferring to hire Indian nationals (rather than Americans) to work in the United States, became pretty well entrenched. And the boosters of the guest worker program tend to avoid addressing that, instead turning to the tried-and-mostly-sucessful playbook of claiming that labor is the one commodity that somehow avoids having its price drop with greater availability.

There are, of course, all sorts of predictions that the United States labor market will fall apart without the approximately 100,000 annual entrants that the various H-1B programs allow. But if, as the Rutgers paper suggests, part of the reason that Americans were avoiding STEM fields was that the degrees were expensive and competition from guest workers made the return on that investment uncertain, in a handful of years, the shortfall would be made up.

The problem with the Trumpist way of doing things, though, is that it's not likely to stick. Students who suspect that the next President won't continue the policy are likely to go into other fields, not wanting to face a sudden influx of guest workers showing up just in time for them to graduate. The President's open nativism doesn't help, either, as it taints the entire exercise with a whiff of racism that people who would otherwise support the change want no part of.

Shareholder primacy and profiteering, abetted by a political class who feel they need piles of money to get their messages to a passive public, are starting to drive more and more conflict between the business class, who are seen as the haves, and general public, who view themselves as the have-nots. The ghost of President Reagan's trickle-down theories of economics still haunts Washington D.C. (not to mention many state capitals), and politicians seem to constantly buy into empty promises that corporate welfare will turn into corporate largess for the population at large.

President Trump understands this, and is tapping into it. It's remarkable that he's managed to play a fairly strong hand so poorly.