While the candidacy of Donald Trump has brought some light to the abuse of immigration “guest worker” programs, most Americas still aren’t aware of the issue and few know about the Indian companies profiting behind the scenes.
Until Donald Trump changed the election conversation last year, H-1Bs were the immigration crisis that nobody was talking about. The middle-class suffered as educated U.S. workers were being pushed out of jobs through immigrations programs like H-1B and L1.
As The Economic Times reported:
The majority of the work done by H1B employers is really not specialist work. Most of them have between three to eight years of experience and they go on to do work for large IT departments for US banks, insurance companies, telecom operators.
While many well-meaning conservatives spent their time talking about the low skill workers coming over the border illegally from Mexico and Central America, they ignored the wage stagnation caused by the planeloads of H-1B workers flying legally into the country from India.
Indian-owned and connected companies are at the center of the H-1B controversy, but most Americans aren’t even aware of who these companies are.
If you take a look at the list of the top companies spending money lobbying for immigration reform, you’ll see a lot of instantly recognizable household names in the world of high tech and consumer electronics like Intel, Microsoft, and Facebook. However, one name won’t be familiar to most Americans: a company called Cognizant.
Cognizant Technology Solutions is a New Jersey based company that delivers IT, consulting, and outsourcing services. Even though most people have never heard of them, Cognizant is a significant player in the world of H-1B and the politics of immigration reform … and its stock just received a “buy” rating from 17 of 19 brokerages.
Cognizant isn’t the only big player in the outsourcing world: other major companies include Infosys, Wipro and Tata.
These are big companies. Wipro had revenues of $7.3 billion dollars in 2014. Infosys has revenues of $8.25 billion and Cognizant brought in a cool $8.84 billion. Tata is a nearly 150-year-old conglomerate that is involved in many areas other than outsourcing and their combined revenue for 2014-2015 was near $109 billion dollars.
Cognizant, Wipro, Infosys, and Tata all profit by supplying foreign workers to American companies via the H-1B visa program and almost all the workers are Indian. Wipro, Tata,
and Infosys are Indian companies and even though Cognizant is in New Jersey, over half their workers are Indian and 64% of all H-1B Visas go to Indians.
Cognizant alone spends millions of dollars lobbying politicians on immigration policy; nearly $3,000,000 in the last two years. A look at Cognizant’s lobbying and contribution numbers show the bipartisan nature of the push for comprehensive immigration reform. They cover the table, supporting both Democrats and Republicans. On one hand, one of their lobbyists is Heather Podesta, the powerful Democrat known as the “It Girl” of Washington. On the other hand, they were big donors to the National Republican Congressional Committee.
Why are companies like Cognizant spending so much on lobbying? It’s simple business: they make a lot more on the H-1B Visa program than they spend on lobbying.
These big outsourcing companies actually hold more H-1B visas than anyone. As India’s GlobalPost reported:
Getting an H-1B visa has become a major career step for many IT graduates, and a major source of profit for the outsourcers.
For Indian workers, a job in the US means opportunities and money. For the outsourcing firms, the Indian IT workers are significantly cheaper than their American counterparts — by about 25 percent.
Tech companies have been lobbying to increase the cap — Facebook founder Mark Zuckerberg set up pressure group FWD.us to campaign on immigration issues. Microsoft founder Bill Gates has been a long-time advocate of making it easier for foreign-born high-skilled workers to immigrate.
The lobbying investment that the outsourcers and high-tech firms have to American politicians in both parties has paid off. Just last year, the new Republican Congress was ready to expand the H-1B Visa Cap.
Some criticism came from surprising sources. In April 2014, Illinois Democrat and comprehensive immigration reform advocate Sen. Dick Durbin brought up the subject of H-1B abuse by the Indian outsourcers. Durbin alleged:
These outsourcing firms like Infosys, Wipro, Tata and others — Americans would be shocked to know that the H-1B visas are not going to Microsoft; they’re going to these firms, largely in India, who are finding workers, engineers, who will work at low wages in the US for three years and pay a fee to Infosys or these companies.
I think that is an abuse of what we’re trying to achieve here. Most people would think, well, Microsoft needs these folks, and they’d be shocked to know that most of the H-1B visas are not going to companies like (Microsoft); they’re going to these outsourcing companies,
Even after that spanking, the media has continued to ignore the H-1B issue. There have even been major settlements over H-1B abuse by outsourcing companies, but still the issue has gained no traction in the noisy debate over immigration. GlobalPost wrote about one settlement in 2013:
In October, Infosys paid a $34 million settlement to the Federal Government — a record for an immigration case — over allegations of “systematic visa fraud and abuse of immigration processes.”
Unable to get its cheaper Indian employees to the US to work on short term contracts, Infosys used a different visa — the B-1, normally given to foreign businessmen who need to travel to the US to complete deals.
According to an official from the Department of State’s Diplomatic Security Service, special agents spent two and a half years examining the records of 6,500 foreign Infosys employees on B-1 visas.
“Instead of attending ‘business meetings and discussions’ … many of these individuals … were working for Infosys in the United States, in violation of the conditions of their B-1 visas,” the official told GlobalPost via email.
Infosys employees were even given lists of words and topics to avoid when applying for the B-1 visas, including “implementation, design & testing, consulting” and “work, activity.”
Sometimes, it’s not just jobs being lost…it’s valuable U.S. trade secrets. As Reuters reported in April:
Epic first sued Tata in 2014 with allegations that it illicitly downloaded documentation for software it had been hired to help install at Kaiser Foundation Hospitals, accusing the Indian company of “brazenly stealing” confidential information and trade secrets in order to help its competing healthcare software provider, Med Mantra, according to court documents. It filed an amended complaint in 2015.
The jury in federal court in Wisconsin on Friday found in Epic’s favor on seven claims including breach of contract, misappropriation of trade secrets, unfair competition and unfair enrichment. It awarded $240 million in compensatory damages and $700 million in punitive damages, court documents said.
The traditional GOP approach to immigration has been paying lip service on the southern border, while largely ignoring H-1B Visas.
Meanwhile, the wages of U.S. workers has remained flat for a decade. For years, Republicans and Democrats were ready to come together to make things even worse. Politicians, lobbyists, high-tech companies, and outsourcers have all made money at the American worker’s expense.
Political outsider Trump may be the only hope American workers have to shake up the system.