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If Obama wins, what'll happen to H1B bodyshops?

Tejas Jain
Ranch Hand

Joined: Mar 04, 2008
Posts: 119
It looks like he is winning. What's next? He said he will tax the companies offshore US jobs. Did he say he would increase quota of H1B?
[ November 07, 2008: Message edited by: Todd Jain ]

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Henry Wong
author
Sheriff

Joined: Sep 28, 2004
Posts: 18896
    
  40

What's happenning with the financial meltdown should have some impact on offshoring. What's happening with the stock market should have some impact on offshoring. What's happening with the exchange rate of the dollar should have impact on offshoring. What's happening with up and coming countries should have some impact on offshoring.


IMO, Obama's impact will probably be less than all of these.

Henry


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Tim Holloway
Saloon Keeper

Joined: Jun 25, 2001
Posts: 16142
    
  21

There was an article on that in today's COMPUTERWORLD.

As I understand it, Obama has actually been somewhat more pro-H1B than McCain. However, he's got a very large and unhappy crowd of voters to please, so while companies will want more H1Bs to cut costs, people who are insecure about employment are going to want citizens to have precedence. And unemployed citizens don't do much to bolster the US Economy, but they have plenty of spare time to vote.

I really think that a cut in imported/offshore labor would ultimately be good for both the US and India in the long run. Information technology is too important in today's world either for one country to offload the job to another or for another country to neglect its own needs because it's more profitable to apply its talents to someone else's benefit at the expense of their own.

If the work from the US dries up, prudent Indian IT companies are going to look elsewhere for opportunities. If they can find and exploit opportunities within India and its neighbor countries, they can become less dependent on the misfortunes of others and they'll avoid the sad fate of the proverbial shoemaker whose own children went barefoot.

Plus, an Indian solution for Indian problems is likely to be different than a US solution. We already know that a lot of the progress in the Western style is neither scalable nor sustainable. The entire world can only benefit if good alternatives are created.


Customer surveys are for companies who didn't pay proper attention to begin with.
Bobby Sharma
Ranch Hand

Joined: Mar 18, 2008
Posts: 574
    
    1

Thanks Tim for precious information.Obama rocks

best regards,
omi


Back to Java , again.
Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi Todd,

Obama said he will tax the companies offshore US jobs. Did he say he would increase quota of H1B?

The first point is not obvious at all since it could easily become counter-productive, companies already outsourcing could do much more so as to cover extra taxes, and the crisis will anyway draw wages to a low end thus nullifying the interest of offshore since plenty of locally available recently laid off US workers will be eager to work for less. So nothing should happen at all until the situation become clearer, offshoring will anyway suffer much as it has much less advantages in times of crisis.

About the second point I firmly believe no one would ever dare to increase quota of H1B anyway since public opinion would violently reject it, as importing more foreign workers in a depleted local economy where unemployment is on the hike is an idea impossible to defend. Even the republicans which are much in favor of such ideas wouldn't have dared to do it in such conditions, so quota of H1B surely won't increase. It seems logical to me that H1B visas will either much decrease or even will be completely postponed until the crisis is over. This matches too the traditional democrat behavior which involves much protectionism, even where there is no crisis to justify it.

Best regards.


Eric LEMAITRE
CNAM IT Engineer, MS/CS (RHCE, RHCX, SCJA, SCJP, SCJD, SCWCD, SCBCD, SCEA, Net+)
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Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi omi,

Obama rocks

I would like to avoid political considerations, but all economists so far, even democrat ones, are definitive when they analyze Obama's 300 billion $ spendings program: Obama doesn't stand the slightest chance to realize all the programs he swore to achieve, even the Health Care Reform alone seems completely out of reach considering present state of economy.

So either Obama will keep his word hence making already unsustainable US debt skyrocket and recession last much longer, or he won't so as to get out of the crisis ASAP, but there is simply no way the budget he needs for his programs technically becomes available before a really long time.

A good way to check it is with stock market's reaction, which immediately anticipates the market's behavior: the day after Obama's election NYSE increased a little since anyway FUD about the new president was over, as it would have done anyway whatever the result, but in following days NYSE collapsed even more (DJIA index lost 9.7% in 2 days only, the worse NYSE's collapse since October 1987's crash). This shows the market dooms present Obama's program by advance, market considers it will much harm US economy if applied as such.

So wait and see before stating "Obama rocks", Obama will do what he can do with the worse recession in 50 years so likely very little anyway. Much deception has to be excepted anyway when what he promised will be matched against what he could effectively do with such a bleak economy.

Best regards.
Bobby Sharma
Ranch Hand

Joined: Mar 18, 2008
Posts: 574
    
    1

When I said "Obama rocks" , I did not think about all of jargons
you explained to me in your last post.

It was totally personal comment ,like some one says "Brad Pitt rocks" ,
"Brazil rocks" and "You rocks".

I had no intention to force everyone to say "Obama rocks".

I said "Obama rocks" because of his manner of talking,style of public
speech,and his cool outfit etc. etc.

I hope you understand brother.

best regards,
omi
Tejas Jain
Ranch Hand

Joined: Mar 04, 2008
Posts: 119
Originally posted by Eric Lemaitre:


The first point is not obvious at all since it could easily become counter-productive, companies already outsourcing could do much more so as to cover extra taxes, and the crisis will anyway draw wages to a low end thus nullifying the interest of offshore since plenty of locally available recently laid off US workers will be eager to work for less. So nothing should happen at all until the situation become clearer, offshoring will anyway suffer much as it has much less advantages in times of crisis.


I'm actually wondering how the companies off-shoring jobs are got taxed. A C-corp pays up to 35% tax on their incomes. Let's assume that the tax would be increased by 0.01% for each position off-shored. I think M$ offshores at least 5000 jobs. Does it mean that M$ would pay 85% tax?


About the second point I firmly believe no one would ever dare to increase quota of H1B anyway since public opinion would violently reject it, as importing more foreign workers in a depleted local economy where unemployment is on the hike is an idea impossible to defend. Even the republicans which are much in favor of such ideas wouldn't have dared to do it in such conditions, so quota of H1B surely won't increase. It seems logical to me that H1B visas will either much decrease or even will be completely postponed until the crisis is over. This matches too the traditional democrat behavior which involves much protectionism, even where there is no crisis to justify it.


We heard that many times, but what happened was opposite. I remember Bill went to Capitol Hill because the young generation of American are not talent enough and too expensive.
[ November 09, 2008: Message edited by: Todd Jain ]
Luke Kolin
Ranch Hand

Joined: Sep 04, 2002
Posts: 336
Originally posted by Todd Jain:
Let's assume that the tax would be increased by 0.01% for each position off-shored. I think M$ offshores at least 5000 jobs. Is that means M$ would pay 85% tax?


Most likely companies that shipped jobs overseas would be denied certain tax deductions or credits.

The problem I have with such a solution is that while it may "protect" the jobs of Americans who are already employed, it is a powerful disincentive to hire more of them. It's not offshoring if you have a new position that needs to be filled and you choose to base that position in Canada, Ireland, India, China or the Czech Republic instead of the US.

Cheers!

Luke
Gregg Bolinger
GenRocket Founder
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Joined: Jul 11, 2001
Posts: 15299
    
    6

Originally posted by Luke Kolin:
It's not offshoring if you have a new position that needs to be filled and you choose to base that position in Canada, Ireland, India, China or the Czech Republic instead of the US.


It isn't offshoring according to the definition. However, I believe if the intent is the same then it can be a form of offshoring. Taking a job that could be done in one country but having the job done in another country. The difference between that and offshoring is that the job didn't exist before. To me though it is really the same thing.


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Paul Clapham
Bartender

Joined: Oct 14, 2005
Posts: 18657
    
    8

Originally posted by Gregg Bolinger:
However, I believe if the intent is the same then it can be a form of offshoring. Taking a job that could be done in one country but having the job done in another country. The difference between that and offshoring is that the job didn't exist before. To me though it is really the same thing.
Now consider a company like Microsoft which is a multinational company. Sure their head office happens to be in the United States, but they have operations in many countries. In Europe and Asia they have European and Asian salespeople, don't they? So why should they be limited to hiring only American programmers?

Or the company that I work for. It has operations in the US and Canada, with head office in the US. I don't consider myself to be an offshore programmer any more than the people who work in our warehouses in Canada are offshore warehouse workers.
Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi all,

So wait and see before stating "Obama rocks", Obama will do what he can do with the worse recession in 50 years so likely very little anyway. Much deception has to be excepted anyway when what he promised will be matched against what he could effectively do with such a bleak economy.

I answer to myself (which is a good way to avoid criticism ), on Friday 7th November, Obama announced his welfare redistribution program which was the cornerstone of his election promises must be already postponed considering the tremendous acceleration of unemployment hike in US, as unemployment rate in US is the highest since 25 years and still on the rise. A classical emergency economical boost plan has to be applied instead in favor of employment and automotive industry in particular (GM should go bankrupt on the eve of 2009 without help).

So it looks like pragmatism wins before ideology, the economical situation decides of the economical policy, after all.

Source (BEWARE, it is in French): Barack Obama annonce un plan de relance

Considering present post, although possible concrete decisions about labor immigration are still unknown, this suggests to me that labor visa will be either maintained or even canceled, but NOT EVER increased, considering the urgency of the situation.

Still wait and see, but things seem to go along a logical and pragmatical way.

Best regards.
Bear Bibeault
Author and ninkuma
Marshal

Joined: Jan 10, 2002
Posts: 61424
    
  67

Pragmatism should always trump ideology -- anything else is simply non-realistic and reeks of ruinous "stay the course" stubbornness.


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Rambo Prasad
Ranch Hand

Joined: Feb 23, 2006
Posts: 628
It is natural for things to move from high pressure to low pressure..Heard that Indian lobby in US has become powerful,next only to the Israeli lobby..Ultimately it is business lobby which will decide what will happen..

If the benefits incurred due to offshoring is more than the gains due to tax concessions ,offshoring will continue to happen..


Helping hands are much better than the praying lips
Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi Rambo,

Ultimately it is business lobby which will decide what will happen..

I completely disagree on this point: up to now in US, when the economics was "good" (or believed so anyway) the 2 lobbies of domestic IT people and industrial one were completely neutralizing each other about the H1B question, because the motto "importing the temporary workers US industry cannot find locally" was somewhat credible (much argued but credible). The neutralization was so strong about the H1B question that congress couldn't decide anything for years so had to keep an absolute status-quo, hence the nickname of "nodoers" for congressmen (even the non-controversial end of the DV lottery voted by both chambers was NOT applied, although it was clearly no issue as everyone agreed on it). But now the present critical level of the crisis will certainly break this forced status-quo in favor of domestic IT people, for all the arguments of its industrial counterpart become obviously wrong and impossible to defend considering present situation.

What is more I am convinced that democrats will do all they can in favor of local labor since anyway the one who has to manage the crisis will suffer much when new elections arrive, in 2 years. The only way for them to soften the hard measures which will have to be taken anyway will be to favor in excess the domestic IT people lobby during the crisis peak.

Don't forget too that H1B even if it is about skilled immigration is about immigration anyway, which relies on purely political decisions, even if of course economics figure are taken into account, because the social consequences can be appalling. For EU raw figures of needed immigration to replace the retiring baby-boomers stated an insane 13.5 millions of required immigrants each year (article in French, sorry: D�mographie et immigration : suicide collectif des Europ�ens ?), mainly from Africa who are reputed to NOT integrate (in Europe at least), so would lead to a replacement of original European population by non-assimilated aliens within a few generations only, which is of course absolutely non-workable at all. Such example demonstrates that business lobbies cannot (and shouldn't ever) decide alone of economics policies.

A good point is probably that all the previous purely political status-quo situations will have to blow out, remaining inactive being simply impossible with such acute a crisis. So things will have to go ahead again, but at least for better or worse they will move forward.

If the benefits incurred due to offshoring is more than the gains due to tax concessions , offshoring will continue to happen..

I am convinced that offshoring has already reached its peak, so it should last but shouldn't increase any further. In practice the remote offshorized departments have to be replaced with local cutting edge QA departments which are about as costly as the offshorized ones, since quality of offshorized stuff can be anything between excellent to catastrophic and varies constantly because of a tremendous turn-over (I believe HP claimed 2 weeks turn-over in India at one time), so globally the disadvantages offset the advantages by now.

Best regards.
Gabriel Claramunt
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Joined: May 26, 2007
Posts: 375

Incidentally, I heard today that Obama supports a temporary H1B increase to be replaced by a comprehensive immigration reform...


Gabriel
Software Surgeon
Ulf Dittmer
Marshal

Joined: Mar 22, 2005
Posts: 42277
    
  64
to be replaced by a comprehensive immigration reform

I doubt that's going to happen, what with the hefty Democratic majorities in Congress. McCain and Ted Kennedy have been pushing for immigration reform, but it went nowhere. I doubt that's going to change.


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Gabriel Claramunt
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Joined: May 26, 2007
Posts: 375

I agree... fix the immigration system has a much lower priority than the economy, the war, energy, etc. Just wanted to note the current "official statement"
I have the perception though that as the Republicans are "oil companies friendly" the Democratic party is more "high tech companies friendly" thus more inclined to satisfy them with a quota increase.
Ulf Dittmer
Marshal

Joined: Mar 22, 2005
Posts: 42277
    
  64
In my perception, elected officials of the Democratic party are also more likely to be protectionist, both in general and specifically with regards to jobs (the unions generally being supportive of Democratics), so maybe those sentiments cancel each other out.
[ November 11, 2008: Message edited by: Ulf Dittmer ]
Tejas Jain
Ranch Hand

Joined: Mar 04, 2008
Posts: 119
Originally posted by Ulf Dittmer:
In my perception, elected officials of the Democratic party are also more likely to be protectionist, both in general and specifically with regards to jobs (the unions generally being supportive of Democratics), so maybe those sentiments cancel each other out.

[ November 11, 2008: Message edited by: Ulf Dittmer ]


I did not see a software programmer union in US?
Jane Somerfield
Ranch Hand

Joined: Jul 20, 2002
Posts: 193
Originally posted by Todd Jain:
It looks like he is winning. What's next? He said he will tax the companies offshore US jobs. Did he say he would increase quota of H1B?


I recall Joe Biden said it is illegal to pass US citizens to hire H1Bs.
Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi Todd,

I did not see a software programmer union in US?

Perhaps it is not a bad thing at all, considering what UAW did to GM...

Best regards.
Eric Lemaitre
Ranch Hand

Joined: Jul 03, 2004
Posts: 538

Hi Gabriel,

Incidentally, I heard today that Obama supports a temporary H1B increase to be replaced by a comprehensive immigration reform...

US already has or will have very soon the very same issue than almost all developed countries: a huge part of skilled workforce (the babyboomers of course) is retiring right now, which requires anyway a huge skilled immigration to compensate, millions of people in the case of USA. So a comprehensive immigration reform is a simple necessity for letting in a huge amount of aliens, for even if they are skilled and educated the social challenge won't be easy to cope with.

Until now nothing serious has been done about the bogus immigration system, plagued with loopholes marginally fixed with some minor patches like the special 20,000 quota apart for US MS/PHD owners, so a comprehensive immigration reform would be an excellent and much expected thing, all past "fixes" to present system were lame.

I even believe Alan Greenspan when he spoke some years ago about the alarming subprime housing bubble inflation considered the only coherent solution was to get rid of DV lottery and let in instead enough skilled people to be able to take over the housing assets at their present inflated price, kind of the present H1B lottery indeed (I read it on a French site but couldn't find any other source to confirm).

Best regards.
 
Don't get me started about those stupid light bulbs.
 
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