Coronavirus upends the American dream for Indian students and H-1Bs

Rajkamal Rao | Updated on May 15, 2020 Published on May 15, 2020

Lay-offs for Indian workers don’t just mean the loss of a job and income. They may have to leave the US for good

When America first announced a full lockdown of its economy two months ago, no one had a clue how things would turn out. The goal was to flatten the curve and sacrificing the economy seemed to be a just compromise.

Today, American infections and deaths are the highest in the world, and they continue to rise, causing senior public health officials to advocate for continued lockdowns for months to come. Reasonable people are asking if the shutdown was actually worth it and are taking to the streets to protest.

The US government has already spent more than 10 per cent of GDP to inject massive funds to help. The Fed is printing money like it never has. Yet, Fed Chairman Jerome Powell cautioned that the current situation, unless rectified through additional fiscal intervention, could permanently damage the economy.

Rising unemployment

With nearly 36 million people now unemployed and the unemployment rate reaching nearly 15 per cent, the highest level since the Great Depression — it was just 3.8 per cent two months ago — tens of thousands of Indian workers are being let go. The numbers are staggering. There are nearly a million Indian H-1Bs; about 180,000 spouses on the so-called H-4 EADs; and over 220,000 students on OPT (Optional Practical Training) visas. The number of L-1s, intra-company transferees, is unknown but is expected to be in the tens of thousands.

Lay-offs for Indian workers don’t just mean the loss of a job and income; they may have to leave the US for good. H-1B employment rules are strict. Where the employee works, the compensation, job description, qualifications, and whether or not an American is being displaced are all monitored by the government. Laid off H-1Bs need to obtain another employer sponsor within 60 days, under conditions nearly identical to the original H-1B agreement, or the employee risks violating its terms.

OPT students, who are the junior-most cadre of staff in a company are especially vulnerable. They too have 60 days to find another industry position, hard to come by when most companies have frozen hiring. The H-4 EADs are mostly in non-technical roles in small businesses, thousands of which have already closed down, unable to withstand the forces of a prolonged lockdown. Even if H-4 EADs are not laid off, they lose their work privileges when their H-1B spouse loses legal status.

With so many millions of Americans unemployed, there’s little support in Congress to extend any concessions to these affected Indians. Many lawmakers have said that those without jobs should return home, echoing groups like NumbersUSA and Progressives for Immigration Reform, which advocate for American workers. Some are lobbying President Trump for a moratorium on future visas — until the economy returns to pre-Covid levels.

Financial stress

The financial impact on displaced Indian workers is crippling. For starters, they do not qualify for generous unemployment stimulus benefits of over $1,000 a week for 39 weeks. With time running out, they have to dip into their savings to survive, and make difficult decisions to sell homes and cars, often at a loss because the market already has an oversupply of both and demand is limited.

Indians who have borrowed should ideally repay all their debts before leaving America. Credit histories, tied to social security numbers, are maintained for seven years, so anyone wishing to return to America later cannot afford to have spotty records with unpaid obligations, or else they could be denied credit and even jobs, because passing credit checks is often a pre-requisite for employment. Workers who were comfortably paying off India-sourced student loans in dollars will face the prospect of returning to a tight Indian labour market and repaying in rupees at a time when the rupee is falling.

The emotional consequences for returning families are harsh. Many have lived in America for years, with US citizen children knowing of life in no other country. At least, the children could come back to the US when older. The case of returning families with children not born in America is far worse. These children will have to begin their own immigrant journey afresh when they are older, through the OPT, H-1B, and Green Card route.

Meanwhile, in India, for nearly two decades, hundreds of thousands of students each year had no Plan B. Their Plan A was etched in concrete as soon as they entered Indian degree colleges: Graduate even with a mediocre record, travel to America to study, work, and settle down in the hopes of eventually getting a green card. American universities sought Indian students with welcome arms, enamoured by the full fees that foreign students pay. Suddenly, this path appears closed for the next several years.

An invisible enemy has upended the lives of millions in ways no one could have imagined. The official policy of the Indian government is to aggressively lobby for exporting as many tech workers to America as possible. The loss of valuable foreign exchange remittances as workers return home and the immediate supply of hundreds of thousands of qualified employees at a time when India’s labour demand is low will create numerous headaches for policymakers.

The writer is Managing Director, Rao Advisors LLC

Published on May 15, 2020

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