Five reasons why legislation to limit outsourcing fails

Outsourcers can adapt to laws looking to cut H-1B use; trade and exports are key economic issues for state, federal leaders

By , Computerworld |  Government, outsourcing

Congress headed home this week to focus on mid-term election campaigns, and offshore outsourcing is certain to be a topic of interest to many voters.

A just released NBC News/Wall Street Journal Poll of 1,000 people illustrates the strong interest in offshore outsourcing issues this year.

For instance, the poll asked whether respondents agreed with the statement: "U.S. companies are outsourcing much of their production and manufacturing work to foreign countries where wages are lower." The result: 68% strongly agreed; 18% somewhat agreed; 12% disagreed; 2% were unsure.

But despite the growing public anger and calls for action in Washington, few bills that impact IT offshoring are ever passed by Congress, and those few that are generally accomplish little.

Here's a list of reasons why such proposals and legislation do little to change the status quo.

One: Offshore firms can manage the risk of new laws.

Congress recently approved a bill that hikes H-1B application fees by $2,000 for companies where visa holders make up at least half of the total workforce.

U.S. Senator Chuck Schumer the H-1B fee increase is aimed primarily at "a handful of foreign controlled companies," including Wipro Technologies, Tata Consultancy Services and Infosys Technologies.

Indian officials denounced the bill and called it protectionist. But it isn't likely to change the H-1B strategies of the targeted Indian companies.

Infosys CFO V. Balakrishnan may have summed up the offshore industry's view when he told investors that the visa fee increase, which could cost his company between $15 and $20 million a year, "is manageable." Infosys is one of the largest users of H-1B visas : in 2008, it was approved for about 4,500 visas, up from 440 a year earlier.

Two: Congress hasn't acted, and isn't expected to act soon, on the bill offshore outsourcers fear most.

The legislation most feared overseas is a bipartisan proposal from U.S. Sens. Charles Grassley (R-Iowa) and Dick Durbin (D-Ill.) that includes a so-called "50-50" rule that would limit the number of workers on H-1B or L-1 visas to half of a firm's total U.S. headcount.

Democratic leaders, so far, haven't pushed this bill, which remains in limbo.


Originally published on Computerworld |  Click here to read the original story.
Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question
randomness