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Impact of hike in U.S. H-1B/L-1 visa fees for technically-skilled employees of foreign companies: the U.S. administration step towards indigenization with emphasis on equal pay for equal work is commendable.


In as much as the U.S. economy has been slow in recovery from deep recession with unemployment hovering around 9 per cent due to the short-sighted non-Keynesian approach of the U.S. administration by imposition of highly expensive visa fees with restrictions on employment of foreign skilled labour dwarfing the multiplier effect leading to sluggish effective demand and leading to further slowing down of the U.S. economy. The strategy suggested in this study for fast recovery is to generate effective demand by creating employment for low-skilled-cum-less educated people who form the bulk of the population through establishment of medium-scale micro enterprises and to improve the quality of life by promoting large-scale affordable housing facilities for the majority poor (at the U.S. poverty level of annual income of US$ 22314 for a family of four persons) and for whom the marginal utility of one U.S. dollar is worth much more than to a millionaire for whom it is worth almost nothing.

Keywords : U.S. economy, Non-Keynesian approach, Expensive visa fees; Foreign high-skilled labour, Majority poor, Micro/medium-scale enterprises

JEL Classification : E24; 131; J31; J41; 051


According to the celebrated expert on multinational enterprises, John H. Dunning,
   The capitalist system has already gone through two
   distinct phases entrepreneurial capitalism (which
   represented by the prevalence of entrepreneurial
   pursuits by relatively small independent enterprises
   whose craft (or both)--based production is coordinated
   largely by the market in an arm's--length fashion which
   lasted between 1770-1875 followed by hierarchical
   capitalism, which is characterised, by the dominance
   of mass-production (scale economies) pursued by
   large-scale hierarchical enterprises (1).

The 'Organization Revolution' which is multifaceted involving technological change International trade, etc., is propelled, in large part, through advances in conjunction with corresponding human skills, transforming the flow of information in modern economies. A major implication of this transformation is that it calls for new forms of organizing economic activity and these in turn, appear to be exerting a major influence by reversing the gear from labour mix: one engineer --five technicians--fifty craftsmen during era of the Industrial Revolution to a new labour mix in the proportion : fifty engineers--ten technicians--five craftsmen during the present regime of the 'Organization Revolution' with heavy reliance on fast dissemination of sophisticated technical knowledge through highly sophisticated-cumcomplex technology requiring very high level technical manpower--all these have exerted influence on the recently evolving patterns of wage differentials (2).


By contrast, the Industrial Revolution was driven, to a significant degree by inventions that permitted mass production through the exploitation of economies of scale through division of labour which led to a situation where invention led to innovation through heavy reliance on the use of non-academically qualified but highly skilled labour with labour mix in the proportion (one engineer-five technicians--fifty craftsmen) and this led to glaring wage differentials, especially among craftsmen and technicians--highly-cum-heterogeneously skilled manpower.

Since the Organization Revolution is changing the conception of skills, it makes little sense to say that the demand for skilled labour has increased at the expense of unskilled labour, because the skills appropriate to the traditional organizational structures are different from those appropriate to the new ones. Such transformations have occurred repeatedly in the past. Prior to the Industrial Revolution, craft production relied exclusively on handicraft skills: craftsmen used hand tools to make customized products. Being skilled in this domain meant having the ability to perform a wide variety of related tasks necessary for the production of entire products from start to finish. It often also involved the ability to train apprentices and work within small teams. But once the Industrial Revolution was in full swing, being skilled meant, among other things, the ability to operate, maintain, and work in conjunction with the newly invented machines, to supervise workers in the newly erected factories, and to manage the flow of mass-produced goods to mass markets.

Now the Organization Revolution is again redefining skills. To be "skilled" in the new organizational setting often means, as noted, versatility across tasks, the ability to learn new tasks, the aptitude to take advantage of complementarities between them, and the ability to communicate with other employees in a team, with suppliers, and with customers. It may involve the ability to accept some responsibility and decisionmaking power within teams and to take initiative in responding to changing customer needs. In short, the Organization Revolution is increasing the demand for a new set of labour characteristics. Other things being equal, people who have the desired characteristics are seeing their earnings rise at the expense of people who don't have these characteristics. Labour Command Theory of wage differentials (4).

Labour Command Theory of Wage differentials (4)

In a progressive society, due to more and more roundabout methods of production, the need for difference in wages becomes more impelling. Is there any analytical tool to handle the question of wage differentials? Some economists offer marginal productivity theory as an answer. Marginal productivity theory emerges as an extension of marginal utility analysis to the problem of the factors, an imputation of value to the factors from prices of finished products. For instance, marginal productivity theory loses its validity when we take account of different grades of labour due to differences in the qualities of people: differences in willingness to work at a place, differences in sense of responsibilities, and so on. There are differential demands on the part of employers for workers. These heterogeneities are present all over the world. The moment we bring in heterogeneous units, marginal productivity theory fails us, as we need to go to a three or more dimensional diagram. In this stifling state of affairs any attempt to build a logical and fact-oriented structure of principles comes like a breath of fresh air. Adam Smith considers wages as progressive element and rent and profits as regressive elements. According to Adam Smith--

the annual produce of the land and labour of any nation can he increased in its value by no other means but by increasing either the number of its productive labourers or the productive powers of those labourers who had before been employed. The number of its productive labourers can never be much increased but in consequence of an increase of capital or of the funds destined for maintaining them. The productive powers of the same number of labourers cannot be increased, but in consequence-either of some addition and improvement to those machines and instruments which facilitate and abridge labour; or of a more proper division and distribution of employment. In either case an additional capital (wage fund) is almost always required (3). The following tool may be suggested which we shall call the Labour Command Theory of Wage Differentials (4) Cost of production may be split into wages, rent and profit. Total labour command (in a developing society) is:

[W+R+P/Wage Rate]

Total labour command in a farm society is:

[W/Wage Rate]

The difference between a farm society and an industrial society lies in the appropriation of the product in the form of rent and profit. In a complex industrial society total labour command is:

[[W.sup.1]+[R.sup.1]+[P.sup.1]/Wage Rate]

Renowed labour economists like Killingsworth and others have been talking of automation as one of the methods to increase productivity in the context of complex industrial societies like the U.S.A. and automation is defined as follows :

When output per man is sharply increased, as frequently happens in automation applications, the employees and their unions insist that this higher productivity justifies a higher wage rate even though the automated job may require far less physical effort and less skill than the predecessor job (5).

In companies where wage rate determination is not on a systematic basis, the productivity argument has sometimes been accepted. The fact that unit labour cost may be greater reduced by automation and the desire to buy employee and union acceptance of the technology have also been persuasive factors in the decision to grant higher wage rates. A series of such decisions, taken without regard to the emerging pattern, may result in an illogical wage structure and perhaps ultimately a crisis in bargaining *

For instance a tool room in a plant would ordinarily constitute a job cluster. The training and skill of the machinists who operate the various specialized machines--lathes, cutters, seesawers--are similar, Their work is closely inter-related in the productive process--they have, common interests. Because of this, we have the formation of unions of workers. As Adam Smith has rightly pointed out in the Wealth of Nations, it is easy for the workers to get together and form unions in view of their common interests. Seldom do we find unions of highly skilled workers or professional people. The objectives of a union of lawyers, if at all there exists or there would exist, is or would be quite different from those of semi-skilled workers' unions. From the above analysis, it is clear that our Labour Command Theory of Wage Differentials takes account of heterogeneous elements of the day--different methods of increasing productivity per man hour, the emergence of labour unions with varying interests resulting in job clusters and wage contours and so on. It seems meaningful to include the contribution of technically skilled, i.e., those who have gained the skill not only by technical education but also by on-the-job training; and the contribution of professionally skilled (skill gained by experience only) and who are technically nonqualified academically; semi-skilled, and unskilled workers. Each of these categories contributes, in some measure, to the increase labour command or the national product. Our formulation (4) may be expressed in the following manner:

Labour Command or Income is = [(C+I).sup.I/L]/W]

where C stands for consumption, I stands for investment and W stands for wage rate. I/L, represents the ratio of contribution of skilled and unskilled workers (capital-labour output ratio) to the growth of (C+I) or GNP in order to determine I/L, we need to take into account the capital-labour output ratio in relation to capacity utilization. To assume that capital-output ratio which depends on too many complicated variables is constant over a long period of time is next to impossibility; whereas the concept of labour-output ratio does not depend on so many complicated variables hence this seems to be a useful concept. But one ratio by itself presents an incomplete picture without taking into account the other ratio. Therefore, the proper index of economic development should not only be capital-output ratio but also labour-output ratio. The importance of the ratio depends on our postulation regarding the growth of GNP of the country (5).

In our above formulation it is recognised that wage determination is neither the function of a predestined wage fund as such, nor of the marginal productivity of labour considered as a whole and introduces into the formula the important concept of the heterogeneity of labour and the idea of resultant wage differentials, whereby wages will depend on a relationship between, on the one hand, the goods and services or their equivalent available for consumption and investment; and the relative contribution of labour with different orders of productivity on the other. In this context the following questions may be posed:

* what are the principles which should govern wage policy where this is a matter of ideological social choice rather than of economic justification?

* Second, how is one to determine the proportions of the contributions of various orders of skill, training and inherent competence in an acceptable way?

U.S. Employment Pattern

According to the Federal Reserve Bank (of New York and Kansas City) economists:

The employment patterns appear to reflect two key factors: long-term trends and cyclical fluctuations. The strong employment growth for highly educated and older workers is a continuation of longer term shifts toward a more highly educated workforce and the aging of the baby boom generation. The employment gains for men are associated with men having a stronger cyclical attachment to the labor force when labor market conditions are weak.

The employment patterns based on this analysis do not provide evidence of a mismatch of workers and jobs at this stage of the labor market recovery. The workers in highest demand are those with the most education, yet the population of highly educated workers has increased at a faster rate than employment in the recovery (6).

Employment for workers with a bachelor's degree or higher has increased by 1.1 million, and employment for workers with some college or an associate degree has increased by 345 thousand. Employment has declined for less-educated workers, by 576 thousand for workers with a high school diploma (or equivalent) but no college, and by 66 thousand for workers with less than a high school diploma. Employment for workers age 55 and older has risen by 1.4 million. For young workers, ages 16 to 24, employment has risen by 281 thousand. Employment of prime-age workers, those ages 25 to 54 who comprise the bulk of the labor force, actually has fallen during the recovery by 512 thousand. The recent pattern is part of a broader shift in employment toward more highly educated workers.

Persons Responsible for Technical Progress (7)

Engineers are by inclination and profession the builders of society. A nation's growth and progress rests in the hands of its engineers supported by technicians and craftsmen whose roles are intertwined and without each one's contribution would result in lopsided growth and derail the organic techno-economic development path. As per edicts of scientific personnel management, the duties and responsibilities of persons responsible for technical progress may be noted:

A. Role of Technical Personnel (7)

* Technician

A technician works with tools and equipment, sweats and understands what is skilled labour and may be categorised as Intermediate Technical Know-how.

Knowledge of Skill Required

Ability to communicate orally and in writing, including the presentation of a clear and concise account of a situation, knowledge of draughting techniques to enable him to interpret and inter-relate engineering drawings and to produce reasonable drawings and sketches. An understanding of the capabilities of common manufacturing process and materials and an appreciation of supporting activities such as planning, production and control.


1. A Technician can certainly (theoretically) go up the professional ladder by obtaining AMIE (Associate Membership of the Institution of Engineers) which corresponds to B.E. or B.Sc./B.S. Engineering degree. Normally, a technician does not go up very high in his professional career. A technician assumes the form of a born-profession and the constraints imposed upon him render a technician remain a technician forever.

2. As an illustration, in the U.K., a student after completion of G.C.E. '0' level in four subjects (including Mathematics) is eligible for admission to the OND course in a College of Technology, and for those aspiring to obtain higher education there are three options open for them:

* enter for a degree course in Engineering in a university; or

* enter for a course leading to Higher National Diploma in a College of Technology; or

* enter into industrial employment.

To qualify as a Chartered Engineer registrable by the Council of Engineering Institutions (CEI), a HND holder requires one year further study, while a person falling in the above third category requires several years of combined employment and further study. For example, it may be noted COREN (Council of Registered Engineers of Nigeria) is patterned on CEI. It is self-explanatory that HND and Engineering Degree qualifications, though not equivalent, are very close in that, good HND holders can successfully perform the functions of professional engineers.

3. If a technician trained for instance, in a Nigerian Polytechnic is to acquire training in an industrially developed country, he finds it hard to cope up with the standards of training and thus picks up very elementary know-how which is not useful for Nigerian economic and technological development.

B. Technologists / Engineers

Duties cover a much broader-range of activities and requiring a much more extensive range of technical knowledge, whereby the engineer creates and the technician executes and organises (but not supervise) the work of others. An engineer plans and designs an engineering structure or system and may be classified as High-Level Technical Manpower.

Knowledge of Skill Required

He must fulfil all the requirements of a technician but covers a wider range of activities. He must have deeper understanding of abstractions and translating them into practical language and have a good knowledge of human relationship and management.


1. i) In the U.S.A., a candidate spends four years in the college to get B.S. degree in Engineering and by spending an additional year he obtains M.S. degree in Engineering. Thus, one has to spend five years in the U.S.A. after High School to get M.S. degree,

ii) In India, one has to spend six years in college after High School (G.C.E. '0' level) to get B.E. degree, (one year towards pre-university and five years for B.E. or B.Sc. engineering degree).

2. In Nigeria after spending four years in a polytechnic the student obtains Higher National Diploma (HND) which enables him to become a Technician and nothing more. In as much as a HND (Higher National Diploma) holder is much better off or at the most equal to an engineering degree holder, it is not defacto recognised as equal to B.E. or B.Sc. engineering degree. This is a predicament.

C. Craftsmen

He is the one who actually manufactures, maintains, and repairs a machine: Artisan and craftsman are used interchangeably, the difference is a matter of degree. Menders, panel beaters are classified as artisans. Craftsman comes in the category of one possessing Elementary Technical Know-How.

Knowledge of Skill Required

Craftsman works in a particular field and thus specialises in a particular craft like panel beating.


The technician acts as an important link between the craftsman and the engineer. The engineer based on high technical knowledge gives technical instruction to the technician as to what should be done and the technician interprets these to the craftsman and guides him on how to achieve the end result.

Industrial Revolution/Organization Revolution and Transfer of Sophisticated Technology

Thus, the 'Organization Revolution' which is multi-faceted involving technological change, international trade, etc., is propelled, in large part, through advances in computer and telecommunication technologies etc. in conjunction with corresponding human skills, transforming the flow of information in modern economies. According to the research findings of economist M. R. Kumara Swamy, a major implication of this transformation is that it calls for new forms of organizing economic activity and these, in turn, appear to be exerting a major influence by reversing the gear from labour mix (one engineer--five technicians--50 craftsmen during the era of the Industrial Revolution) to a new labour mix in the proportion:

50 engineers--10 technicians--five craftsmen during the present regime of the 'Organization Revolution' with heavy reliance, on fast dissemination of sophisticated technical knowledge through highly sophisticated-cum-complex technology requiring high level technical manpower (6).

The Industrial Revolution was driven, to a significant degree by inventions that permitted mass production through the exploitation of economies of scale through division of labour which led to a situation where invention led to innovation through heavy reliance on the use of non-academically qualified but highly skilled labour with labour mix in the proportion (one engineer--five technicans--50 craftsmen) and this led to glaring wage differentials, especially among craftsmen and technicians (highly-cum-heterogeneously skilled manpower)--For example, coke-smelting of iron, the steam engine, the weavers' flying shuttle, the spinning jenny, steelmaking through puddling, the agricultural threshing machine, the railway, and other breakthroughs all promoted this development.

Mechanic (Technician) from a Developed Country like U.S.A. Robes Chief Engineer (Hi-tech manpower) Dress in a Developing Country

On a contrasting basis, it is a sad, but a true commentary, that the MNC-controlled developing countries have been resorting to baseless, unwarranted and unjustified (for the same job) wage (salary) differentials based on nationality considerations--for instance, a technician or a mechanic, say in the U.S.A. or U. K., wears the robe of a specialist engineer in developing countries--all in the name of technological development of developing countries and earns non-productivity (due to under-qualifications-cum-professional incompetence)--based abnormal salaries and help perpetuate technological overdependence on developed countries and MNCs.

On the other hand, a highly competent and professionally qualified technical personnel (say from India) in a less-advanced developing country (who can very well supervise the work of the "so-called specialist engineer" from an advanced country like the U.S.A. (for reasons explained above) earns not only lower salaries--not commensurate with his qualifications and experience--but also are placed in subordinate (lower) positions. It is high time that such less advanced--cum--MNC--dependent developing countries stopped practising this unethical technique of non-productivity--based wage differentials (at MNCs--behest) based on nationality or other considerations as it does not augur well for techno-economic self-reliance from good business ethical-cum-long-run point of view. Many times one finds that consultants retained for the design of a project--and especially those trained in the western world--have an in-built bias towards the establishment of capital intensive facilities. This may be so because they hope that eventually they will be involved in the actual construction of the plant; often, it is so, because they believe that only large-scale plants will help to modernize the developing economies.

In the same perspective, it may be recalled that during 1962-63, under USAID (US Agency for International Development: the erstwhile T.C.M. (Technical Cooperation Mission) programme, in the name of technology transfer from the U.S.A. to a developing country like India, technical collaborations were entered into between the U.S. universities and the Indian universities. Sadly, an instructor in a U.S. university who was not eligible to handle/teach courses on his own except assisting an Assistant or Associate Professor was deputed to the Pune-based (formerly Poona), Chennai based (formerly Madras) Engineering College in the rank of a Visiting Professor earning fat (abnormally high) salaries and enjoyed associated perquisites. Subsequently very senior academic staff from the same Engineering College were sent on deputation to the same U.S. university (where the Instructor in the U.S.A.--turned Visiting Professor in India) to undertake graduate study programmes leading to M.S. and Ph.D. degrees. When the Principal of the same Engineering college (in India)--a renowned Metallurgist--was deputed to the U.S.A. under the TC.M. programme (on observation tour), he happened to visit the said university and found out to his shock that the so-called 'U.S. Instructor in the U.S. University turned-visiting professor in the Indian Engineering College' was a very junior academic staff in the rank of instructor and was not allowed to teach courses on his own. After discussions with competent authority in India, the exchange programmes with the US university were terminated.

In this context, it is highly pertinent to mention of the opening in January 1926 of the King Edward VII Memorial Hospital and G S (Seth Gordhandas Sunderdas) Medical College in Mumbai (Bombay), India--although built by Indian philanthropists, European doctors managed/controlled the Hospital and the College and usurped prestigious positions. When Dr. K. N. Bahadurji (of India) returned to Mumbai (Bombay) with an M.D. degree from London : was rejected for the post of Professor in favour of an underqualified Englishman; also Indian medical students were not even allowed in the operation theatres and they were forced to buy German books, translate them and slowly study the art of surgery. Irked by these slights meted to the Indians in their own country by the Europeans, Indian doctor Bahadurji proposed that the Bombay Municipal Corporation (BMC) establish a College staffed and managed by Indians--In 1909 the BMC agreed to set up a fully equipped hospital (8).

Unjustified Wage Disparities Among Skilled Workers Based on Nationality and Other Considerations

Heinous Practices Adopted by U.S. Employers and Governments and Private Sector in the Middle Eastern Countries

In the midst of the U.S. overdependence on imports of practically every item needed to satisfy merit wants--consumer and manufacturing goods--there is excess and undue dependence, based on selfish and unethical considerations (and keeping in view the capitalistic approach to profit maximization--maximum productivity at least cost), on high-tech manpower employed by U.S. organizations at abysmally low wages/salaries from countries like India, the Philippines, China, Korea, especially in the IT (Information Technology) industry and which have rendered the U.S. college/university-qualified American engineering/science first degree and post-first (post graduate) degree holders--a good majority of whom are married (and some with children) and in the above-27--year age group--and who cannot per se afford to accept such low wages/ salaries as they do not cover even a quarter of their loan-financed/self-financed--cum--saved-money financed education--unemployed. Similar is the case of immigrant (especially from Mexico) workers whose wages are deplorably low (much lower than the poor people in the U.S.A.

From a different perspective, it may be pointed out that countries like Libya, Kuwait, Saudi Arabia, Oman, Bahrain, etc., have been having very high purchasing power rates (high values) for their currencies; Alongside, these countries are overdependent on foreign technology and foreign technical manpower (through MNCs parented in western countries) and the high values for their currencies provide an inducement to attract MNCs to those countries as they are considered as difficult-to-live in areas and MNCs, based on selfish motives, aim to earn around 600 per cent profits from their business/investment in those countries --all in the name of promoting techno-economic development. For instance a foreign technician in Oman earns a monthly salary of 500 Rials; while, for the same duties as an Indian technician performs, a technician from the U.S.A, Australia, U.K. etc is paid five to six times higher salaries per month (2000 Rials--3000 Rials)--based on nationality, etc., considerations. It may be mentioned that the foreign technician (from India, Pakistan, Bangladesh, Korea, The Philippines), while classified as a junior staff in Oman leads the life of a top executive on transfer of funds from Oman to his country by taking advantage of high purchasing power of Oman Rial. This unethical-cum-heinous practice of payment of differential wages, based on nationality, etc., considerations, by operating MNCs and governments in these countries must be stopped forthwith and the axiom should be equal wages (salaries) for equal work without regard to race, nationality, religion, etc.

U.S. Visa Fees Hiked Defeats Objectives of 'Organization Revolution (9)

H-1B/L1 visas are supposed to be used in situations where a job cannot be filled by a U.S. personnel (worker) with equal or better qualifications. In such situations, Information Technology, (IT) and allied companies, on the pretext of filling in the vacuum created by non-availability of U.S. skilled technical manpower, depute their own employees to the U.S. company on H-1B/L1 visas carrying lower salaries and perks than normally paid to naturalized U.S. workers thus depriving them of employment opportunities to work on standard salaries--this causes widened wage differentials between U.S. workers and migrant workers on U.S. visas leading to mounting unemployment of naturalized U.S. skilled workers which does not angur well (for economic recovery.

(For example, if the prevailing wage (for a naturalised U.S. citizen) of System Analyst in Massachusetts is say US$ 55000 per annum, the employer (say IT company in India, the Philippines, Singapore, Bangladesh) who brings in his company worker to work in the U.S., on H-1B visa has to pay the same salary (amount, i.e., US$ 55000 per annum)--However, the 'said' company tends to employ workers on much lower salaries. In consideration of the above factors and as a step towards progressive indigenization of the U.S. economy, the U.S. Administration has hiked by about US$ 2000 H-1B/L-1 visa fees to US$ 4000 and upto US$4500 respectively costing, for example, the foreign IT company who employ 50 or more employees in the U.S.A., an additional US$ 400 million per annum.

Conclusions and Implications for policy

Are high-wage unemployed workers the type of worker that is finding employment in the economic recovery? The answer is as follows :

* First the majority of the employment gains during the labour recovery have occurred in industries that employ a large share of highly educated workers. These industries include education and health, professional and business services, and finance

* Second, all of employment gains have been concentrated among workers with a high level of education.

* And third, increases in employment of men account for nearly all of the employment gains during the labour market recovery.

Overall, the strong job gains in the recovery appear to be driven by cyclical factors. As the recovery gains strength and labour market conditions improve, employment growth by gender may be expected to become more balanced as broad-based business expansion and rising wages produce desirable employment opportunities for both men and women.

As the U.S. economy is a consumer-oriented economy and not a consumer-goods manufacturing/producing country which makes it a highly vulnerable economy (it is common sight in almost every mall/department stores in U.S.A., to come across, 'Made in China', 'Made in Korea', etc., consumer goods starting from crockery, utensils, camera, ready-made garments, students' instruments (drawing), sports materials, etc., there is a strong financial management case for scrapping the U.S. visa system (H1B, etc.,) in its present form and for the establishment of small and medium-scale micro enterprises (SSEs & MSEs) throughout the U.S.A., to fill in the vacuum by not only the production of the much-needed consumer goods but also to generate increasing job opportunities for less-educated and unskilled Americans who presently are deprived of opportunities for employment; also, there is the urgent need to promote low-cost housing (affordable) for low-income (poor) Americans and according to the U.S. Census Bureau Annual Report (2011), one out of six Americans is branded poor--at the official poverty level annual income of US$ 22314 for a family of four persons with Blacks and Hispanics accounting for 54 per cent of the poor.

Professor M. R. KUMARA SWAMY, M.A., Ph D.


Om Sai Ram Centre For Financial Management Research

Mumbai, India

email :

The author owns full responsibility for the contents of the paper.


(1.) Dunning, John, H., Globalization, Economuic Restructuring and Development: The Rual Prebisch Lectures delivered on the occasion of the 30th anniversary of the UNCTAD. Geneva April 29, 1994.

(2.) Growth models : A Reappraisal, Economia Internazionale (1 : 1963)

(3.) Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations : 1776 (New York, 1937)

(4.) SwamyM.R.K.,

i) The Labour Command Theory of Wage Differentials. Indian Journal of Labour Economics (July-Oct. 1966)

ii) Financial Management Appraisal of Labour Command Theory of Wage Differentials : Empirical Research Findings, Journal of Financial Management and Analysis (January-June 1999)

iii) Focus on Technology Gap versus Wage Differentials vis-a-vis. Capacity Utilization in the Context of'Organization Revolution', Financial Management Implications for Policy, Journal of Financial Management and Analysis (January-June, 2006)

(5.) Killingsworth, C.C., Industrial Relations and Automation (Mimeo): Michigan State University. Labor & Industrial Relations Center (East Lansing)

(6.) i) Sahin A. and Willis, J.L., Employment Patterns during the Recovery : Who are Getting the Jobs and Why? Federal Reserve Bank of Kansas City Economic Review (Third Quarter : 2011)

ii) Snower, D. J., Causes of Changing Earnings Inequality, Symposium on Income Inequality : Federal Reserve Bank of Kansas City (August 27-29, 1998).

(7.) Swamy, M.R.K.,

i) Focus on Technology Change Versus Productivity of Skilled and Unskilled Workers through 'Organizational Revolution', Journal of Financial Management and Analysis (January-June 2005)

ii) A Financial Management Analysis of Transfer of Technology: Adapted or Sophisticated--A Measure of Technological Gap in the Nigerian Economy, Nigerial Journal of Financial Management (June 1983)

(8.) KEM Hospital/GS Medical College, Releases (Mumbai)

(9.) The Times of India (Mumbai), U.S. to Double H-1B, LI Visa Fee; Indian IT Firms to be Hit (December 18, 2015) and official releases by the U.S. Government.

* It is argued that some differences in job classification mix in the automated and non-automated plants were reported with there being an increase in the proportion of skilled or apprenticeable trades in the new plant. Almost 25 per cent of the work force in an automobile plant in Detroit had classifications of this type. Management in the plant did not feel that new skills were required semi-skilled classifications on automated lines and the training programme was set up for, machine repairmen through special training programmes in hydraulics and electrical circuits. The most important personnel problem posed by automation in the automobile plant, however, was the lack of skilled, salaried technicians and engineers.

It is true that automation does result in job clusters (signalmen, machine repartmen and so on) and results in smaller wage differentials. Based on J. B. Cairnes theory of non-competing groups, it may be said that there would he wide differences, for example, in the wages of brick layers (masons) on one extreme and of lawyers on the other extreme. In other words, where there is no job competition, we will find high wage differentials: where there is job competition (in the intermediate range), and, as a result, job clusters, we will have wage contours.

Indicator                          Net         Per cent
                                   change      change

Total Employment
(age 16 and older)                 1,116,000   0.8
By level of educational
attainment (age 25 and older)
Less than high school diploma      -66,000     -0.7
High school graduate, no college   -576,000    -1.7
College or associate's degree      345,000     1.0
Bachelor's degree and higher       1,103,000   2.5

By Gender (age 16 and older)
Men                                1,514,000   2.1
Women                              -314,000    -0.5

By Age
Ages 16-24                         281,000     1.7
Ages 25-54                         -512,000    -0.5
Age 55 and older                   1,430,000   5.2

Source: Household Survey (Current Population
Survey & Bureau of Labor Statistics)
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Author:Swamy, M.R. Kumara
Publication:Journal of Financial Management & Analysis
Article Type:Report
Geographic Code:1USA
Date:Jul 1, 2015
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