Wednesday, April 04, 2007

The final Cap

If you guys are following the news, you would know that the H1B cap reached on the first day itself. The immigration services received a whooping 150,000 applications to fill 65,000 H1B quota( 6800 of which is reserved for people from Singapore). It is yet to be decided that how many of those applicants held an advanced degree from US. The US government has decided that it will randomly select 65000 applicants from the applications received and reject the rest. That effectively means that around 70,000 people will not get the visa(even the ones who have already got a job). Add to that, the number of people who might get a job(people like me).

Now let me do some simple maths here.
  • 90% who apply for H1B visas have technical jobs with salaries > $50000.
  • A new grad can earn anywhere from 65K to 90k.. and pay 15k to 30K in taxes.
  • Let me take a conservative estimate and say that all 70,000 people would have paid $10,000 in taxes.
  • This means that they would have contributed to $700 million to the US economy.
Now what happens to that $700 million?? Those generated jobs don't vanish into thin air... they are outsourced. What happens next?... the government cries about outsourced jobs.. while other economies flourish. If US was a privately held firm, the CEO would have been sacked by now.

PS: Who would have thought that I would write about international politics and economy.


  1. US is a privately held firm ;)

    700 million contribution to the economy does not translate to profit. Maybe the increased infrastructure and support expenditure for 70,000 people is more than that..?

  2. @aadil:"Maybe the increased infrastructure and support expenditure for 70,000 people is more than that..?"
    NO WAY... $700 million was just a conservative estimate.. add to that the service taxes and the tax 70,000 people will pay on the resources.. They are not given free accommodation or free food.. they are paying for it and paying taxes on them.. plus they dont avail the benefits of these taxes(like SSN tax).. all the govt pays for is some paperwork, some database entries, and the security people at immigration.