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What Really Counts: America's Stake in the Great H-1B Debate
by Gary Endelman

Gary Endelman practices immigration law at BP Amoco Corporation. The opinions expressed in this column are purely personal and do not represent the views or beliefs of BP Amoco Corporation in any way.

Biography July 5, 2000 --  As Congress draws closer to the election year recess without a decision on the future of the H-1B cap America's position of leadership in the global digital economy is called into question. At its core this is about the direction that the American economy will take in the digital age and whether we will voluntarily surrender the high ground that we now occupy. It is hard to imagine when in recent history a more sweeping unilateral surrender has been contemplated. The stakes could not be higher. An exaggeration you say? Think about a few small facts: (1) the worldwide market for information and communication technology surpassed the $2 trillion mark in 1999 and will rise above the $3 trillion threshold in 4 years according to a recent study by the World Information Technology and Services Alliance; (2) the total value of Internet purchases in 1999 soared to $130 billion and will tower above $2.5 trillion by 2004; (3) international commercial investment in website creation came to $142 billion last year and business poured in an additional $140 billion in business infrastructure related to electronic commerce; (4) In the United States alone, venture capitalists pumped $32 billion into technology start-ups in 1999, nearly triple the figure from the previous year. 

What is the political class doing? Thinking about the past and deciding how much of the H-1B virus will be allowed to infect the body politic. Our leaders continue to treat the whole topic as a political issue without any economic dimension. They talk a lot about the "global economy," but act as if we lived solely in a domestic one. We want a seamless movement of trade and ideas across national boundaries but seem to believe that people must stay behind. Give us your money and your intellectual capital, but be sure to remain where you are! To the extent that Congress thinks about the economic implication of what it is doing, or failing to do, it looks not to the future but to a static present. How many US citizens should current H-1B employers be forced to hire wonder Lamar Smith and Phil Gramm? Rep. Jim Kolbe (R-AZ) wants to establish a blue ribbon commission on immigrant labor policy to study whether foreign workers, both legal and undocumented, are really needed in the labor market. How the economy is going to change in the next several decades and what we can do to align our immigration policy with these anticipated needs does not seem high on the legislative agenda.

If we are unable or unwilling to look at the future, the future will come to us. For those who think that America will always have a monopoly on the world's best talent, that they have nowhere else to go, that they will always come here in numbers that we want or need, consider the recent story that appeared in the Indian press about the need to curb the exodus of software professionals. Sit up and take notice of these select quotes:

 "India's software industry may soon face an acute workforce crisis if government and industry do not take immediate steps to stop the continuous outflow of skilled professionals to foreign countries. With software professionals hitting the trail westwards, the situation is all the more difficult. What's more, Germany's offer to absorb Indian IT professionals offers a new destination for them after the United States Singapore and the UK."

One state in India, Andhra Pradesh , accounts for some 23% of H-1B software professionals in the United States. In West Bengal, 50% of such professionals leave. Dewang Mehta, President of the National Association of Software and Service Companies (NASSCOM) says that "while there is no immediate shortage of skilled knowledge workers for the IT software and dotcom industry in India for at least the next two or three years, the domestic job market can become very tight if immediate steps are not taken." Atul Nishar, Chairman of APTECH Limited and Hexaware Infosystem Limited, says that Indian government estimates indicate that the Indian computer industry will face a shortfall of 1.8 million workers by 2008. That is why India has launched Operation Knowledge, a major initiative to strengthen all aspects of IT education throughout the subcontinent. Many Indian states have drawn up their own comprehensive plans for IT growth. A national task force has set a target of $50 billion for software exports and $10 billion for hardware exports by 2008. In Hyderabad alone, about 100 companies have been set up by Indian software professionals who have returned from the United States according to Malikarjun Rao, secretary of the Hyderabad Software Exporters Association. India wants and intends to recreate Silicon Valley at home. Are we ready for that? Americans who watch what OPEC is doing and are keen to read the tea leaves of Saudi Arabia's oil policies had better start paying attention to the IT revolution in India for that is where the future lies. The digital age cannot be mastered or even understood unless we who depend on it start to realize what our national economic priorities really are.

What is really harmful about the endless H-1B debate is that it distracts us from planning for the future and wastes our energies on attempting to comply with artificial restrictions that have no economic logic to sustain them. If India shuts down the talent pipeline, what is our response going to be? Those who think that this can never happen suffer from the same arrogance as Detroit did in the 1950s when first confronted with the German challenge or US defense planners in the 1930s who refused to believe that Japan could ever be a serious rival. If we repeat such indulgence, what will be the price of being asleep be this time? To talk about the need to restrict H-1B numbers in order to protect US jobs is an odd conversation at a time when, according to a recent report by the US Bureau of Labor Statistics, employment will rise by 20.3 million jobs, or 14% between 1998 and 2008, while, at the same time, the labor force is projected to swell by only 12%, leaving 6 million jobs open. Fears over losing US jobs to H-1B workers seem less than compelling when we realize that, based on a University of California study, Indian and Chinese workers started 3,000 companies and created almost 60,000 jobs in 1998.

If the opponents of raising the H-1B cap were serious about their concerns, and not using them as a smokescreen for nativist sentiments whose open expression now falls outside the bounds of political correctness, they would be willing to accept a one year H-1B without any extensions or numerical limits in exchange for a quadrupling of Employment-based visa numbers and a policy that allows such H-1B holders to apply for green cards without any further intermediate steps. The best protection for any US worker is not more bureaucratic red tape wrapped around the H-1B but the job mobility that comes from becoming a lawful permanent resident who is not dependent on any particular employer but goes where the market leads. The solution is there for those with the vision and the will to adopt it. It is time to tell the truth to the American people who deserve to know what is really at stake in the great H-1B debate.