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Kissing Cousins: H-1B, L-1 And How We Can Love Them Both Without Really Trying

by Gary Endelman

Gary Endelman If there has been any one surprise in the increasingly contentious national immigration debate, it is the extent to which the H-1B temporary worker visa and the L-1 intra-company transferee have morphed together in the popular consciousness as nativists attack both with little regard for difference or distinction. While the H-1B has long been a lightening rod for those who restrict migration, the experience is a new and unsettling one for the L-1. Created in 1970 to enable the seamless rotation of key experts and senior managers into and out of the United States as part of a carefully calibrated system of career development, the L-1 has long flown under the radar, largely immune from the hue and cry that surrounded its H-1B cousin. No longer.

At first glance, this is rather odd, since the two visas serve radically different purposes. The H-1B is a form of talent outreach, seeking to bring within the domestic workforce the best and brightest regardless of nationality. The L-1, by contrast, has always had an internal focus, prized by businesses who compete in the global marketplace and need the strategic deployment of existing employees for specific reasons over limited periods. Yet, the fact remains that virtually all pending proposals now seek to graft onto the L the same restrictions and obligations that have tied the H in knots over the last several years: a numerical cap; prevailing wage; college degree requirement; labor condition application and proof by dependent employers that qualified US workers cannot be found. It is ironic that the same critics who condemn the H as a failure and cry for its blood now want to impose the very same "flawed" scheme on the L. Why it would work better with the L than it has with the H is a Rosetta stone mystery beyond the ken of mortal man.

What has brought the H and L together is a bedrock belief by those globalization has left behind that both visas serve to take jobs away from American workers by facilitating their exodus to low-wage markets abroad and depressing the wages for those jobs that remain. This perception is fueled by the gut feeling that those employers most active in H and L sponsorship have no sense of national allegiance; stateless, they care more for the bottom line than for the nation that protects them and makes their prosperity possible. Pro-migration advocates in the corporate sector and the immigration bar have focused their money, time and talent on making the current system work more efficiently, assuming incorrectly that proof of greater efficiency would silence the howling of their enemies. In fact, a more smoothly functioning immigration system is the last thing that the immigrant-bashers want believing, as they do, that the current set of policy priorities has little, if any, place for the promotion of national sovereignty and protection of the national interest. Not until we who believe that immigration is good for America face up to the genuine fears of our critics, at least those whose passions have not degenerated into pure hatred of all things foreign, can an enduring consensus built on shared values emerge. The rejection of immigration inevitably leads to a rejection of the global economy itself and fosters the pernicious delusion that ideas and capital, but not people, can cross national boundaries. We cannot do business with the world if we tell its people to stay home. Nothing less than this is at stake.

American multi-nationals have NOT abandoned the USA. The US trade deficit is growing and now is roughly $500 billion. Does this not prove that large companies are deliberately sending jobs abroad? No. The trade deficit mainly reflects the fact that American economic growth has outpaced that elsewhere as well as the dollar's high exchange rate, particularly when compared with the artificially low level of the Chinese yuan. The end result is that the US exports less and imports more. Experts speculate that, as foreign economic performance improves and the dollar drops, the trade deficit will either stabilize or even decline. Recent data from the Commerce Department suggests that Fortune 500 companies are as firmly rooted in the American market as they were a quarter century ago. In 2002, American multi-nationals had 73.1% of their global employment in the USA, down slightly from 77.9% in 1977. Capital spending remains concentrated here. In 2002, American multi-nationals spent $467 billion on factories, offices and equipment; of that, 75% was in the United States as compared to 75.3% in 1977. Global production is highest here. In 2001, the latest year for which reliable figures are available, US multi-nationals based 77% of their production within the American market compared to 75.3% in 1977. It is simply a myth that huge conglomerates with corporate headquarters in the USA are stateless. While they may have, on occasion, global interests that do not mesh with trade or fiscal objectives as defined by the administration in power at any one time, ultimately their success or failure remains closely linked to the success or failure of the American economy. It is certainly true that these companies shut US plants and open foreign ones. Yes, foreign-job increases are more dramatic and the blaring headlines that announce them reflect that. However, what the headlines do not bother to explain is the fact that all such figures start from a much smaller base and that job growth for all major US employers remains greatest in the USA. From 1992-2002, US multi-nationals added 5 US jobs for every 3 foreign hires. How often has Lou Dobbs told us that?

People who have no problem with the concept that American laborers can be replaced by machines go crazy when Hs and Ls fill these same vacancies. They operate from the mistaken premise that jobs can be kept in the USA if Hs and Ls can be kept out. What they overlook is that a complete and immediate halt to all migration would do nothing to stop, or even slow down, the revolution in communications that makes international offshoring possible. Overseas cable costs have fallen by as much as 80% since 1999. With digitilization and high speed data networks, an Indian office park is next door. The lowering of the H-1B quota, or the total ban on both Hs and Ls, would have zero impact on the exit of IT jobs. "It does not make a difference for firms whose business model has people largely working offshore," Moksha Technologies Chairman Pawan Kumar told the Press Trust of India." It will make firms drive business where the technology workers are." Gautam Sinha, head of the Indian HR firm TVA InfoTech agrees. " In fact, lots of techies are coming back to India." The cutback in H-1B flow to America will only accelerate the return of IT expertise to the Indian sub-continent and make the Indian IT sector competitive with Silicon Valley that much sooner.

Those who call for an end to immigration do not seem nearly as interested in reversing the slow but steady decline in America's scientific pre-eminence. Our entire economy depends on this. The percent of American's graduating with baccalaureate degrees in science and engineering is less than 1/2 of the comparable percentage in China and Japan. The number of new doctorates in the sciences peaked in 1998 and then fell 5% the next year, a loss of more than 1, 300 new scientists. Foreign students, who find it increasingly hard to get visas for American universities, are opting to study in England, Western Europe, Canada, Australia, even China! Applications from foreign students to research universities are down by 25%. A minor exodus has already begun to erode one of the hidden strengths of American science: vast ranks of bright foreigners. In a significant, if silent, shift of demographics, experts have already spotted what amounts to a reverse brain drain. After peaking in the mid-1990's, the numbers of doctoral students from China, India and Taiwan with plans to stay in the United States has fallen slowly but steadily in recent years.One area of international competition involves patents. Americans still win large numbers of them, but the per cent is dropping as foreigners, epecially Asians, have become more active and, in some fields, have seized the innovation lead. The United States' share of its own industrial patents has fallen to the point where it now stands at 52%. A more concrete decline can be seen in published research. Physical Review, a top physics journal, tracked a reversal in which, over a span of only 20 years, papers published by American researchers plummeted from 61% in 1983 to just 29 % last year. China, noted Martin Blume, the Journal's editor, has surged past us, submitting more than 1000 papers a year.

While America dominated the Nobel Prizes in science for almost 30 years from the 1960's through the 1990's, we are no longer the unchallenged king of the hill. By the dawn of the new century, the Amerian share, while still certainly impressive in absolute terms, is now only about 51%. By the mid-1990's, Europe surpassed the United States as the world's largest producer of scientific literature. Four hundred foreign companies have set up research centers in China. GE, for example, does research there on medical scanners, research that used to be done in the United States. Companies are going to China not just because of low costs, though this is an undeniable attraction, but to take advantage of China's growing scientific excellence. In a recent report, the American Association for the Advancement of Science predicted that, in order to honor its stated commitment to cut the nation's budget deficit in the next five years, the Bush Administration would have to slash research funding at 21 of 24 federal agencies- all those that do or finance science will lose funding, except those involved in space and domestic or national security. America no longer has a lock on new ideas. " The rest of the world is catching up, " said John Jankowski, a senior analyst at the National Science Foundation, the federal agency that tracks science trends. " Scientific excellence is no longer the domain of just the U.S."

The fact that critics of the H-1B and L-1 are ignoring real threats to America's economic vitality while venting their angst on immigrants who cannot answer back, and employers largely afraid to, does not mean that changes in both visas would not be a good thing. Since these visas exist only to make US employers more competitive, any modifications should make both the H and the L faster, more nimble, and more transparent. Try these modest proposals on for size and, if they don't fit you, as is likely the case, let me know what you would like better:

The Blanket H: There is no reason why desperate employers have to pay a $1000 expedite fee to get timely service, especially since the existence of such a facilitation payment disadvantages start-up employers who naturally find such unanticipated overhead a disincentive to hiring foreign workers whose expertise they desperately need. These are the Intels of the future, the engines of job creation, whose development should be nurtured, not retarded by government backlogs and bureaucratic red tape. Why not allow H1B beneficiaires, once their prospective visa sponsors have satisfied their wage obligations and obtained a labor condition application certification from USDOL, to apply for the H1B visa at the US Consulate in their home country, much as large employers now do with their international transfers under the so-called Blanket L program that is explicitly sanctioned by USCIS regulations?

L-1 portability: Rather than extending the scope of the labor condition application to the L-1, why not give L-1 workers true protection by giving them the best possible weapon of all, namely the ability to look for a better job without sacrificing visa eligibility ? Are we interested in killing more trees by publishing yet another layer of byzantine federal micromanagent or are we ready to trust the market by letting dissatisfied L1s vote with their feet, as we now do with H-1Bs? Extend the concept of portability under the American Competitiveness for the 21St Century Act to L1s so that any L1 who is being cheated, lied to, or taken advantage of can port to any other employer who is L-1 eligible by operating in the USA and at least one other country. Any takers?

End Galloping Credentialitis! There may have been a time when earning a college degree was unusual enough to merit special immigration recognition but that is not the America we live in any longer. There is no reason why such a degree requirement is an essential prerequisite to H-1B approval. Instead, any H-1B petitioner should have to show that the international student it seeks to employ has specialized knowledge of benefit to the US economy. Whether this would be proprietary is irrelevant since it is the needs of the nation, not the needs of the individual employer, that should shape H1B adjudication. If America needs skilled plumbers, electricians or carpenters more than MBAs, which it does, or talented systems analysts with only a high school diploma but an expert grasp of a hot emerging technology, then these are the people who deserve one of those highly prized 65,000 H visa slots. If we are going to import the notion of portability into the L arena, why not send back the emissary of specialized knowledge as modified in return?

The restrictionists have done our side a huge favor by yoking the H with the L, a favor they never intended to grant, but one which may have enormous consequences down the road. Now is the time to take a few tiny steps down the path so that, when we think of the H and the L, it is not the burdens they share but the opportunities they present which dominates our national conversation. For those who shrink back from such a radical step and prefer the more cautious route of tinkering with what we are familiar with, I would gently remind them of the advice offered long ago by Ralph Waldo Emerson in his message to the American Scholar which seem oddly contemporary to modern ears: " Come, my friends, it is not too late to seek a newer world."

About The Author

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

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.