Trump signs H-1B order - sort of

Profile picture for user slauchlan By Stuart Lauchlan April 18, 2017
Buy and hire American First - nice rhetoric from US President Donald Trump yesterday as he signed another executive order, but not one that takes the H-1B visa debate on that much further for now.

Another day, another order

Right now, H-1B visas are being awarded in a totally random lottery and that’s wrong.

So said US President Donald Trump as he addressed workers in Wisconisin yesterday, finally taking action on an issue that has been an elephant in the room from the minute he stepped into the Oval Office in January.

It was always likely that he’d take a tough stance on the matter and yesterday he played his hand. His view on H-1B visas is simple and playing to the home crowd:

They should be given to the most skilled and highest paid applicants and they should never, ever be used to replace Americans. No one can compete with American workers when they're given a fair and level playing field, which has not happened for decades.

Right now, widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries to fill the same job for, sometimes, less pay. This will stop.

Signing off his latest executive order, Trump added that US projects should be completed using US goods:

No longer are we going to allow foreign countries to cheat our producers and our workers out of federal contracts. Everyone in my administration will be expected to enforce every last Buy American provision on behalf of the American worker, and we are going to investigate every single trade deal that undermines these provisions.

The H-1B issue is one that has been on the agenda of Indian outsourcing firms for some time, but gained particular focus since the Trump ascenendency. Last week, Infosys CEO Vishal Sikka said he’d seen no material impact around H-1B uncertainties, but added:

There is a lot of curiosity, a lot of interest and a lot of clients want to know what’s going with the whole H-1B situation…The fee working with companies like ours is not just about outsourcing or taking costs out and the stuff like that, but it was about really bringing capabilities and innovation that no one else can bring. There is no rethinking of that. It is simply that, for example, if there are workers that would be impacted by [H-1B issues]. the clients would think about ways of ensuring that their workers [are sourced], the way you structure the contracts and so forth, to take into account all of that and so forth.

Little change

In reality while yesterday’s executive order sigining was another good photo opportunity and a chance for Trump to tell his home base what they need to hear, there was actually precious little that changes anything around the H-1B scheme - for now at least.

The executive order calls for US government heads, including the Secretary of Labor - and incidentally, there actually isn’t one of those in place at the moment - to come up with planned reforms and new rules and guidance for preventing fraud and abuse of work visas.

So rather than actually doing something, it's fairer to say that Trump has ordered other people to come up with something that can be done.

That means that, for now, nothing really changes - which probably explains the deafening silence yesterday from the likes of Apple, Facebook, Microsoft and all the other tech firms that have been very nervous about what the new admninistration would do on the skilled immigration front.

On the other hand, the The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) indicated that it did not see yesterday’s executive order as doing enough to change things:

Executive orders alone cannot accomplish the sweeping changes necessary to achieve a fairer, more inclusive economy, so we urge the administration to work with Congress to further improve these programs…Although short on specifics, today’s order addresses critically important issues.

With respect to immigration, the labor movement consistently has called for reform, rather than expansion, of temporary work visa programs that make US and foreign workers more vulnerable to discrimination, displacement and exploitation. A serious look at the impact of these captive-work programs on rights, wages and working conditions is long overdue. It’s crucial that working people’s experiences inform efforts to crack down on employer fraud and abuse.

Meanwhile the Indian outsourcing industry lobby group Nasscom hit out:

We believe that the current campaign to discredit our sector is driven by persistent myths, such as the ideas that H-1B visa holders are cheap labor and “displace American workers who train their replacements”, none of which is accurate. The fundamental issue is the shortage of highly skilled domestic talent in the United States, in IT, healthcare, education, and other fields. The visa system exists specifically because of the persistent shortage of highly skilled domestic talent in the United States.

Regarding the concept of reorienting the H-1B lottery to be a system that prioritises the “most-skilled or highest-paid” visa applicants, the [Trump} Administration needs to be careful about unintended consequences. Using salary levels as the metric is not necessarily the best indicator of benefits to the US economy and unless such a system reflects variations in prevailing wages in all parts of the US,it could advantage certain regions, such as Silicon Valley, over other regions of the US. Using skill levels as the metric could put federal bureaucrats in the role of  technology consultants and human resource specialists. There is simply too much variety and dynamism in the skill sets needed for such a system to work under the direction of federal bureaucrats.

My take

So far, it's just gesture politics to play to the home crowd, but with the prospect of trouble yet to come. Still, the executive order does lay down clear enough guidelines about the requirement to ‘buy American’, guidelines that will no doubt be adhered to by the Trump empireno doubt.