ICE + H-1B Economics Will Test European Companies Too
ICE, the parallel military force in charge of pushing migrants out of the US homeland, as well as the new visa regime (H-1B) for qualified work visas, are political horrors as well as powerful benders of business models, including for European issuers.
Consider a company such as Compass with nearly 600,000 staff and c. 70% of revenues in the US. It is likely to have more than a fair share of its c.300k US staff being undocumented staff. Which raises two speculative questions:
- What proportion of this staff has gone underground, left or been arrested and what is the cost of replacing these peoples (training and possibly higher wages)?
- What part of the business is to service ICE prison facilities with backlash risks on the quality of service and corporate image.
Perfectly straightforward catering businesses are thus cornered by political urgencies long in contradictions and short on preparation. Compass-type businesses are unlikely to be thrilled by the agenda. Here is a short list of European issuers with lowly-paid staff, possibly at ICE risk.
Of note Teleperformance has big sales in the US but, presumably, its vast number of low-paid staff does not sit in the US but in low-wage countries;
Next to ICE is the H-1B visa nasty surprise whereby new entrants to the US visa system will be charged $100k instead of $10k. The WSJ computes that this only makes sense if the wage is well above $200k over a three-year stint. The $100k top-up effectively closes the doors to the highly-educated Indian or Chinese working for US corporations, most notably in tech-related ones. This hurts European-listed companies too with big operations in the US and already facing staff shortages. Think of Capgemini but just as well of a Publicis or the big Pharmas keen to politically-relocate to the US and who need highly competent staffing. The list is vast of corporates which will see their US staffing economics change dramatically and for the worse while they promised to rush US reshoring plans. There should be second order effects such as faster wage expansion.
Here is an arbitrary list of European issuers which must be scratching their heads about what to do with this $100k visa:
Consider a company such as Compass with nearly 600,000 staff and c. 70% of revenues in the US. It is likely to have more than a fair share of its c.300k US staff being undocumented staff. Which raises two speculative questions:
- What proportion of this staff has gone underground, left or been arrested and what is the cost of replacing these peoples (training and possibly higher wages)?
- What part of the business is to service ICE prison facilities with backlash risks on the quality of service and corporate image.
Perfectly straightforward catering businesses are thus cornered by political urgencies long in contradictions and short on preparation. Compass-type businesses are unlikely to be thrilled by the agenda. Here is a short list of European issuers with lowly-paid staff, possibly at ICE risk.
Of note Teleperformance has big sales in the US but, presumably, its vast number of low-paid staff does not sit in the US but in low-wage countries;
Next to ICE is the H-1B visa nasty surprise whereby new entrants to the US visa system will be charged $100k instead of $10k. The WSJ computes that this only makes sense if the wage is well above $200k over a three-year stint. The $100k top-up effectively closes the doors to the highly-educated Indian or Chinese working for US corporations, most notably in tech-related ones. This hurts European-listed companies too with big operations in the US and already facing staff shortages. Think of Capgemini but just as well of a Publicis or the big Pharmas keen to politically-relocate to the US and who need highly competent staffing. The list is vast of corporates which will see their US staffing economics change dramatically and for the worse while they promised to rush US reshoring plans. There should be second order effects such as faster wage expansion.
Here is an arbitrary list of European issuers which must be scratching their heads about what to do with this $100k visa:
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