Blasé Capital Another Lottery

It was a migration lottery, which was criticised by experts and American policy-makers because it allowed low-skilled, low-salaried foreign tech employees to enter the US. These people stole American jobs at the entry level, and mid-levels, which left a sizable population of young local graduates jobless. Starting next year, it will be replaced by a new high-tech lottery which, analysts feel, will force the Indian and Chinese firms to not just pay more for the visas but limit the migration to high-skilled, highly-paid workers. The changes in H-1B visas, say Indian experts, will reduce the flow of tech workers, impact innovation, and productivity in America, and encourage offshoring, or more work flows to the Indian campuses. The next change may impact the foreign students, who go to the US for studies, and stay on by getting work visas for a few years. Later, members of both the categories, students, and H-1B visa holders become citizens. So do their spouses, and children.

Although the new lottery system is as much a game of chance and dice as the earlier version, it seems more sophisticated. According to media reports, there are considerable differences. In the earlier regime, the H-1B applicants were granted visas based on random selection through a computerised lottery. The names were lumped together, and a simple lottery would decide the winners. Since there was an annual quota (65,000 + 20,000), large firms would flood the system with applications, and enhance their chances of getting visas. Imagine a firm filing 1,000 applications for 100 visas, and others filing a mere 100. The former has a greater chance to grab the visas. Add to this the scenario where of the 1,000 applications, 950 are of those with 1-3 years of experience, and who earned low salaries. This hiked the entry chances for low-experienced, lower-paid workers. Of course, this eliminated the opportunities for young American tech employees, who lost out largely because they cost more.

In the new sophisticated version, the lottery will be graded, and linked to the applicants’ salaries. Candidates will be divided into four tiers, with Tier IV comprising those in the highest salary bracket, followed by Tier III, II, and I. The name of the Tier IV candidate will be put into the lottery system four times, three times for Tier III, two for Tier II, and one for Tier I. In simple terms, if there are 100 candidates each from each tier, the new lottery will not have 400 names as earlier, but 1,000 (400 from Tier IV, 300 from Tier III, 200 from Tier II, and 100 from Tier I. Of course, there will be multiple names. In this scenario, the higher-paid candidates have better odds to win the lottery, and the chances reduce in a graded manner as one comes down the salary ladder. It is about probabilities.

Under the old system, each candidate under the four salary tiers, whose name was entered only once in the lottery, had a selection odds of nearly 30 per cent. If there were more applicants from the lower-salary category, their chances shot up. “The National Foundation for American Policy, which had analysed the draft rules, had stated that under the new mechanism, the probability of selecting an individual at Level IV (Tier IV) … would increase by 107 per cent but fall by 48 per cent for individuals at Level I (Tier I). Effectively, the rules would tilt opportunities heavily towards mid-career professionals, or those in senior roles, while creating a barrier for entry-level professionals, including the bulk of recent international graduates from US universities,” explains a media report. A probabilistic tweak in the lottery system fixes the odds in favour of highly-paid employees.

Of course, the new system underestimates the skills of the visa gamblers, punters, and fixers. The game can still be fixed by numbers. If, as the US policy-makers allege, large firms gamed the earlier lottery through an informal cartel by hiking the number of applications, they can do the same. Instead of the number of applications, they will focus on the numbers related to the applications under each level or tier. Less or minimal applications under Tier IV, and huge numbers under Tier I. In this case, they will ensure that all the Tier IV candidates get the visas, but comprise a mere 10-15 per cent of the total. The bulk, or say, 50-60 per cent may go to the lowly-paid candidates. There will be a slight change in the percentages of juniors and seniors who will fly to America. Indians and Chinese will still ‘steal’ most of the junior jobs.

The trick in both the lotteries is to beat the odds. Just because one changes them does not imply that they cannot be gamed. The strategy and tactics will change. The firms will decide how to grade their application numbers to ensure 100 per cent odds for a select few senior employees, and increase the odds for the entry of junior workers. Experience has shown that when casinos rejig games to reduce odds for outsiders, and increase them for the ‘House,’ smart punters, gamblers, and fixers invariably find new solutions. In effect, the ’House’ is always a few steps behind. The White House may find itself in a similar situation within a few months, or in March 2026.