Financial Daily from THE HINDU group of publications
Saturday, Feb 14, 2004
Info-Tech - Insight
Industry & Economy - Economy
Visa violations charge against Indian IT firms US citizens' earnings unharmed
Chennai , Feb. 13
INDIAN IT firms, including Infosys, TCS and Wipro, have been accused by certain `labour organisations' in the US of violating US L-1 visa conditions, and depriving US citizens of jobs.
If that were indeed the case, one would have expected to see significant increases year after year, in labour payments to residents working in the US on work visas. But that is hardly the case. According to the data released by the US Census Bureau, such payments have grown at a marginally lower rate than the rate of growth in the US personal wage and non-wage incomes as the accompanying table shows.
The percentage of compensation to those living in the US on work visas to that of the total personal wage and non-wage incomes was 0.09 in 2001 that is down marginally from the 0.0903 in 1992. A clear pointer to the fact that overall personal incomes in the US have been growing at a faster rate than incomes accruing to those under work visas during this period.
When viewed against the value of imports of goods and services and other payments, the compensation accruing to those under work visas has shown a dramatic decline. It is down from a two-thirds of a percentage point in 1992 to less than half in 2002.
The figures suggest that visa-violations, even if there have been any, do not pose even a minor threat to earnings of US citizens. It is also difficult to believe that violations on a massive scale has been going on since 1992, the timeframe for the present analysis. The growth of Infosys and its ilk is a more recent phenomenon.
As a matter of fact, Infosys wasn't even a listed entity back then.
The heat generated by the forthcoming elections in the US, does, however, give demagogues and vested interests, within the IT industry and outside it, an opportunity to fan flames of xenophobia that would be difficult to douse; without employing simplistic solutions of the sort that have sometimes been trotted out, for public consumption by the President, Mr George Bush.
For example, even as apparently uncontrollable forest fires were causing enormous damage to life and property in the southwest, the President was heard telling a `town hall' meet that, "If there weren't any forests, there wouldn't be any forest fires. It's that's simple. I don't know how the environmentalists don't get it." He should try that tactic once again.
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