The Hindu Business Line : H-1B visa cap: Is there still hope for Indian techies?

Researchers point out that the job losses were the direct consequence of various measures, including the shipping of work to low-cost countries and the use of H-1B visas, which can be used to import computer programmers and other skilled workers.

Pune , Oct. 4

WITH the annual cap on the H-1B visas granted under the US guest worker programme kicking in on the opening day, Indian techies have every reason to be despondent. But there's hope yet with Sen. Saxby Chambliss (R) initiating a push in Congress to revise guest visa programmes in general and to legislate an exemption to the annual cap of 65,000 new H-1B visas for foreign students graduating with master's and doctorate degrees from US schools.

As matters stand, exemptions to the cap are restricted to institutions of higher education, non-profit research groups and governmental research organisations.

The proposed legislation, which is currently under discussion in the Senate, has the support of business — but is vigorously opposed by labour even though it contains pro-worker clauses involving authority for the US Labor Department to carry out random audits of companies in possible violation of the H-1B programme and a review of the controversy ridden L-1 visa programme which covers managers and skilled workers.

It is understood that the legislation is being fast-tracked because Congress is likely to be adjourned this month.

It may be recalled that in May, a coalition called Corporate America, comprising various businesses and trade bodies, had urged Congress to rework the H-1B visa programme on the basis of the argument that foreign nationals who obtain masters and doctorate degrees from American universities should be exempt from the annual cap. The coalition had pointed out that in engineering, roughly 50 per cent of all master's and doctorate degrees awarded American varsities now goes to foreign nationals.

However, the proposed legislation has come under fire from those who hold that there is no shortage of highly qualified and skilled workers in America and that the guest worker programme encourages the transfer of technology work to other countries. In fact, Senator Edward Kennedy (D), who has made it clear that he is not committed to the legislation, is reported to be involved in negotiations to ensure that American labour interests are protected.

Sen. Kennedy's involvement notwithstanding, the legislation is likely to be fiercely debated in diverse fora as off-shoring is a hot-button issue.

The US wing of the Institute of Electrical and Electronics Engineers (IEEE-USA) had issued a policy statement in March last in which it had said that US Government procurement rules should "restrict the off-shoring of work in any instance where there is not a clear long-term economic benefit to the nation or where the work supports technologies that are critical to our national economic or military security."

The IEEE-USA President, Mr. John Steadman, had added: "We must develop a coordinated national strategy to maintain US technological leadership and promote job growth in the United States... but it's going to be difficult to remain technologically competitive, if we continue off-shoring the jobs of our innovators at rates currently projected."

The concern of IEEE-USA is well founded.

According to a recent report prepared by researchers at the Center for Urban Economic Development at the University of Illinois at Chicago for WashTech, the technology workers advocacy group, the information technology industry in the US lost 403,300 jobs between March 2001 (when the American economy had gone into a recession) and April this year. Significantly, approximately half the jobs vanished overseas after the recession had officially been declared as ended.

The researchers, as also WashTech point out that the job losses were the direct consequence of various measures, including the shipping of work to low-cost countries and the use of H-1B visas, which can be used to import computer programmers and other skilled workers.

The numbers contained in the report may not reflect all the IT job lost as data for some sectors of the IT industry in several regions were not available to the researchers.

According to Mr Marcus Courtney, President of WashTech, jobs off-shored since 2000 have passed the 250,000 mark, going by a tally based on media reports.

Big business, however, strongly supports the shipping of jobs to countries such as India for obvious reasons. Publicly, its position is that the off-shoring of high-tech jobs to low-cost centres will make American companies more "competitive" and eventually create more jobs in the US. Business further argues that any initiative against off-shoring - the limitation of global trade in services, for instance - could result in a trade war and a decline in innovation in the US. The technology industry believes that the interests of American workers displaced by the off-shoring of jobs would be better served through measures such as a permanent tax credit for research and development and enhanced federal R&D funding for IT. Ironically, in this regard, business is in synch with bodies such as IEEE-USA, which also advocates increased federal investments in and a permanent tax credit for R&D. However, IEEE-USA stresses that "federal investments and tax credits for research and development should be limited to work performed in the US."

The political parties are divided on the issue along predictable lines. Thus, Mr N. Gregory Mankiw, chairman of President Bush's Council of Economic Advisers, in a recent report, has defended off-shoring, arguing that "when a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically". In contrast, the Democratic presidential candidate, Mr John Kerry has taken the position that federal contracts should be given to American workers where possible and that no tax credits should be given to companies which ship jobs out of the US.