Rs, 20,000 reward for H1B pay proof
By Bala Shah

Like many journalists, I subscribe to the view that free flow of capital and people are good for the global economy.  Not surprisingly, India is a big winner for the time being.  But many Indian IT-ITES companies,  because of rising costs in places like Bangalore and in echoes to what happened in USA, are setting up offices in China, Mexico and other  'cheaper' countries.

Today’s winner India may lose a bit tomorrow.

I also subscribe to the view that while most Indian technology companies won huge outsourcing contracts based on merit and cost, there were a few tech companies and body shops that made millions by exploiting hard working Indian techies.  Some of these Indian firms took $120,000 from American clients but paid the Indian techie only $40,000.  Unfortunately, some Indian managers in USA also actively drove out the highly skilled but relatively higher cost American techies some of whom are of Indian origin.

On May 22, 2010, my colleague Techgirl had written about a farcical academic report published in USA that claimed that Indian techies on H1B Visas in America were being paid more than American techies.  This was so blatantly untrue that we laughed about it, published an article about the farcical research and forgot about it. 90 percent of Indian techies I know who were sent on H1B Visas to work in America were paid much less than their local colleagues.  Some were not paid at all till they found a job.

Bizarrely, a week later on May 29, one of America’s most powerful technology blogs Techcrunch published an article by a high profile Indian American Vivek Wadhwa saying the academic report was true and that techies on H1B Visa were paid more than American counterparts.  Vivek has made millions running his own tech business and is now a Visiting Scholar at UC-Berkeley and a Senior Research Associate at Harvard.  How could Vivek get it so wrong?

Vivek wrote in the Techcrunch article: “This new study was completed by University of Maryland professors Hank Lucas and Sunil Mithas, using data from a survey of 50,000 I.T. professionals that InformationWeek and Hewitt Associates conducted from 2000 to 2005.  After adjusting for educational qualifications, work experience, and other individual characteristics, the researchers found that I.T. professionals without U.S. citizenship earned 8.9% more than U.S. citizens”.

For about a decade, Indian tech majors and American technology companies have borne the brunt of criticism that they pay Indian workers less.  If they were paying Indian workers more than Americans as this report suggests, don't you think they would have made the data public themselves?

It is still not too late. A couple of Indian tech majors can stop half the H1B criticism by releasing aggregate data showing they pay Indian H1B workers more. Would they release such salary data? What do you think?

There is another way to prove or disprove this.  Today, Techgoss is offering a reward of Rs, 20,000 to anyone who can provide us hard evidence that any Indian firm did indeed pay Indian techies on H1B Visas more than the Americans doing similar jobs. Indian tech firms have usually cornered the largest chunk of H1B Visas.

Naturally, there are terms and conditions.  The evidence has to be recent – between 2006 and 2010. It has to be concrete.  The Indian firm had to have at least 100 of its workers on H1B Visas between 2006 – 2010.  And at least 80 percent of them were being paid more than American wages. Your reward payment of Rs. 20,000 will be via PayPal.  If you prefer, we can give you anonymity.  Contact Us on our front page has all our email details.

(You can also send us anonymous tips backed up by hard facts)

(Techgoss had published the following on May 22, 2010)

Farcical H1B report?
By Techgirl

I work full-time as a technology journalist and have also been writing part-time for Techgoss for a number of years.  Like all my colleagues in mainstream Indian media, I have a good idea on how the Indian IT-ITES sector works.

The two factors driving the success of our booming IT-BPO sector are costs and quality.  Underlying these two factors is a highly educated, intelligent workforce. Cost is the main driver especially for our BPO’s.  Like most Indians, I believe that outsourcing is a fact of life in a flat world, and it good for a balanced global economy.

Over the last 8 years,  my sources in the IT-ITES sector have send me tips with documentation showing the paltry amounts they were paid when they first visited clients in USA and Europe.  One BPO which had sent staff to USA was providing shared accommodation, shared transport, food plus a paltry amount of $30 a day.  I have received at least 30 emails from sources which have proof that many Indian IT majors were paying their techies only $40,000 in America while their local counterparts were paid $60,000.  Even the top Indian Analysts and specialists get at least 10-20 percent lesser than their foreign colleagues. 

To their credit, when some companies like Microsoft USA import Indian techies to America, they give them the same salary and perks offered to locals.  There are other companies that do the rights thing, but they are the exception rather than the norm.

Most Indian techies who have migrated via Indian body shops had a hard time when the first reached America.

So, I was shocked when I saw this unbelievable report published by the University of Maryland which bizarrely claimed that Indian techies were paid more than Americans.

“
The use of H-1B and other work visas to hire foreign information technology (IT) professionals in the United States has attracted significant controversy and policy debates. On one hand, hiring high-skill foreign IT professionals on work visas can be advantageous for U.S. firms and the overall economy. On the other hand, high-skill immigration can adversely impact the wages of foreign and American IT professionals. This study uses data on skills and compensation of more than 50,000 IT professionals in the United States over the period 2000–2005 to study patterns in compensation of foreign and American IT professionals to inform these debates. Contrary to the popular belief that foreign workers are a cheap source of labor for U.S. firms, we find that after controlling for their human capital attributes, foreign IT professionals (those without U.S. citizenship and those with H-1B or other work visas) earn a salary premium when compared with IT professionals with U.S. citizenship. The salary premiums for non-U.S. citizens and for those on work visas fluctuate in response to supply shocks created by the annual caps on new H-1B visas. Setting lower and fully utilized annual caps results in higher salary premiums for non-U.S. citizens and those with work visas. We discuss implications of this study for crafting informed visa- and immigration-related policies by the U.S. government, for staffing practices of firms, and for human capital investments by IT professionals.
“

This report has been widely published in the Indian media. While many Indian tech leaders have politely disagreed with the report, others have used it to push their self serving point that Indians are not taking jobs away from Americans.  American media have found this report so inaccurate that no one has picked it up.

What is even weirder is that this report is more than 5 years old from the period of 2000-2005.  And the first dot com crash happened in 2000-2002 when tech salaries in America were in freefall.

This reports looks like academic bullshit to me.  It was done for the period of 2000-2005.  The report was finally accepted by the University 4 years later in 2009.  And it was finally published only in May, 2010.

So many years of work not only wasted but plainly wrong.

(Email me at my blog or Techgoss if you have a story tip you want me to follow up)

Techgoss note:  Techgirl is a senior Tech journalist who reports on the IT, KPO and KPO Sectors for a leading media house.  In her spare time, she dabbles in satire in her blog http://techgirltalk.blogspot.com