Monday, January 24, 2005

Defend the American Dream Act of 2004

The Economic Times of India reports on a US bill with interesting economic implications. There is a proposal in congress to further modify the US H1-B visa scheme that is meant to provide employers with incentives to hire US residents and citizens.

According to the proposal, "...employers need to attest that they had looked for American workers before hiring an H-1B visa holder." Perhaps more interestingly, it also attempts to ensure that H1-B holders will not be hired at salaries lower than those of comparable US workers.

So the government wants to introduce some rigidity into the labor market. No surprise.

Who wins, and who loses? Here are my first guesses:

Winners: the least productive US workers who compete with H1-B visa workers. they just saw the likelihood that they will be laid off decline significantly.

Losers: US productivity and competitiveness, the US unemployed, US economic growth, the workers that will be laid off from firms that can no longer compete in the global marketplace because they are no longer competitive, foreign workers who are willing to provide superior services for competitive wages, foreign countries that receive remittances...


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