Sunday, July 28, 2013

Solving Detroit's Problems

America has several things going for it.  However, I am going to focus on just two things that foreigners salivate about – American education and H-1B visas to work in America.  This will make my job easier in recommending solutions to the Detroit problem. 

Let me first handle American education.  Chinese and Indians are the two largest foreign groups of students making a beeline to US universities in spite of high tuition fees.  So, let me suggest that the Michigan Government decide to offer admission to the first 100,000 undergraduate international student applicants  at a tuition fee of not more than $10,000 per year.  At this tuition rate, getting 100,000 foreign students to the state university of Michigan is not at all a problem.  Every foreign student coming to any of the State Universities of Michigan will spend another $10,000 on living expenses and that is $1 billion of spending that will galvanize the Michigan economy.  Take a surcharge from that to pay Detroit.

The second suggestion is to issue 200,000 H1B visas to foreign employees of IT companies as a one-time emergency measure with 2 conditions – (1) the companies need to pay a surcharge of $10 per hour of work to the Michigan State Government for the first 5 years, and (2) the IT companies should employ these foreign H1B workers only in the state of Michigan for 5 years.   IT companies such as IBM, Accenture, CSC, Capgemini, TCS, Infosys, Cognizant, and, Wipro will gladly grab these H1B visas.  This will fetch $4 billion in such surcharge per year.  The state taxes from the employee income is another $500 million.  These employees will spend on housing and other assets in the state that will also enrich the state economy.  Use a surcharge from this to pay for Detroit.

My job as an academician is to offer suggestions; I have done it now.  Do not ask me how to implement these suggestions.  It is for the Michigan Governor and the Detroit Mayor to figure out; they are the ones who have the mess to clean up.

- Sankaran Raghunathan
Dean, The National Management School

1 comment:

  1. Excellent suggestion. North Dakota and Texas are creating almost 12 to 22% employment. They can alps take some ideas from both the governors.