The short answer is that most of Cognizant’s 166,400 staff are based in India. Only 29,000 work in the US, mostly at the firm’s headquarters in Teaneck, NJ. Cognizant is a major player in the global outsourcing industry, and India is the world’s outsourcing hub. But most of its revenues come from the US.
In its most recent quarter, the company reported earning $1.78 billion in the US, boosted by “Obamacare.” Insurers and states hired Cognizant to help code online insurance exchanges. For many Indian techies, working for a company like Cognizant is a chance for a US transfer and a slice of the American dream. And those 10,000 new American jobs that got so much Indian media attention may mean 10,000 fewer jobs for them Indians.
Outsourcing giants
The US Congress created the H-1B visa program to enable American companies to hire foreigners with exceptional skills. Instead, critics say, it is increasingly being used to find workers willing to accept lower salaries.
The program allows up to 65,000 high-skilled foreign workers to work in the US for up to three years. Competition is intense: The visas are handed out on a first come, first served basis and it took just four days for the 2014 quota to be filled after it opened on April 1, 2013.
Most come from India — 64 percent of last year’s applicants, according to the White House. Four Indian firms — Cognizant, Infosys, Tata Consultancy Services, and Wipro — brought more than 26,000 Indians to work in the US in 2012 under the H-1B visa scheme, according to research by Professor Ron Hira, of the Rochester Institute of Technology.
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.
“Since these [outsourcing] companies depend on the program so heavily they flood in applications,” Professor Hira told GlobalPost. “The firms ‘bank’ visas — keep people back in India on the bench and then utilize them when needed. Also, they rotate workers in the US to ensure they don't establish roots, and rotate them back and forth to India. These firms are growing so fast that they need a bank of visas to meet any new growth.”
Scammers abound
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.” The official was unable to comment on “ongoing investigations” but said the department wanted to “raise awareness about how the visa process is being circumvented.”
There are several other recent cases.
In October, IBM, the seventh largest H-1B visa user, paid a $44,400 civil penalty for favoring foreign H-1B workers over US citizens. In addition to these cases, which cost US workers' jobs, US officials have been forced to defend the foreign employees from exploitation by the outsourcing firms.
In February 2013, Mumbai-based Tata Consultancy Services paid a $30 million settlement over its practice of forcing employees to sign over their tax refund checks when they finished working in the US.
There is an ongoing case involving 18 American IT workers who claim they were laid off from their jobs at Molina healthcare in Long Beach, California, to be replaced by Indian workers hired by Cognizant.
American lose jobs and wages
Unemployment rates are high for information systems graduates, with 14.7 percent out of work. The competition from foreign workers also depresses wages for Americans. The average hourly wage for computer and mathematics graduates was $37.27 in 2000, and $39.24 in 2011 — an average rise of less than 0.5 percent per year.
And research from the Economic Policy Institute contends that only half of American students who graduate with a degree in science, technology, engineering or maths ends up with a job in that field. According to a paper by Professor Hal Salzman and other researchers, a third to half of new IT jobs go to foreign workers rather than graduates.
Based on figures from the State Department, the Department of Homeland Security and Current Population Survey data, they estimate that 160,755 foreign workers were given H-1B or other work visas for IT jobs in 2011, out of 483,692 jobs that went to candidates with a bachelor's or master's degree.
“It has nothing to do with any lack of American workers,” Professor Hira said. “It is simply that the foreign workers will work for less.” Neither Mark Zuckerberg nor FWD.us responded to GlobalPost's requests for comment.
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The Indian Mega-Companies Behind the H-1B Visa
Crisis
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, 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 Indian 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:
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:
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.
