The Hindu Business Line : A snug fit, but for how long?

In May or June this year, the US Congress is likely to take up for consideration the renewal of H1B visa quotas that provide for the entry of skilled professional workers into the US. Will the cap stay snug or will it hurt?

OVER the past few weeks, the Indian software industry has been hogging the media attention. But unfortunately, for all the wrong reasons. The arrest of the i-flex Solutions employees in the Netherlands for alleged visa irregularities has definitely ruffled quite a few feathers in the entire Indian software industry. Both the Government and Nasscom, the apex association of the Indian software industry, have been working hastily to limit the potential damage.

But the biggest challenge is yet to come for the Indian software establishment. In May or June this year, the US Congress is likely to take up the debate over the renewal of H1B visa quotas which provide for the entry of skilled professional workers into the US. The annual H1B visa cap currently stands at 1,95,000 and is set to expire on September 30, 2003. A little more than half the H1B visa cap is issued to high-tech workers from countries such as India, China or the Philippines. This cap was raised in the year 2000 from 1,15,000, raised in turn from 65,000 in the year 1998. The upward revision was done when the information technology (IT) industry was booming in the US and associations such as the Information Technology Association of America (ITAA) projected an alarming shortage of skilled IT professionals for software and IT-related jobs in the US.

Face of protectionism?

But the last two years of IT slowdown in the US are showing signs of revealing an unpleasant face: a possible beginning of `protectionism' by policymakers in the US. Several industry associations and information technology unions in the US are clamouring for the reduction in the H1B visa quota from the current levels of 1,95,000 to the historical level of 65,000 (which was prevalent in the early nineties). The visa quota will slip back to 65,000, if the Congress simply takes no action on the issue.

This is precisely what the IEEE-USA (a unit of The Institute of Electrical and Electronic Engineers Inc created to promote the career and public policy interests of its members) is aiming to achieve through its concerted campaign for the reduction of the H1B visa quota. On March 10, the President of IEEE-USA set this process in motion by dashing off a letter to a member of the US House of Representatives. And over the past few months, several associations/technology unions have mounted a credible campaign on this issue.

The last two occasions when a review of H1B caps was taken up in the US Congress in 1998 and 2000, the H1B caps were actually raised and opposition for H1Bs was set aside without any significant debate. However, this clamour can no longer be dismissed as overzealous and misguided opposition by publicity mongers. This time around, the debate over H1B will be much more serious and credible because of these factors:

Skilled manpower shortages: According to the American Electronics Association, between January 1, 2001 and December 31, 2002, the US high technology services industry reduced nearly 1,44,600 high tech jobs in the communication and software and computer-related services in the US economy. This strongly suggests that the high-tech US economy is passing through the throes of rampant unemployment. Reiterating this position, the IEEE-USA has also reported that unemployment among American engineers and computer scientists has jumped from 65,000 to 114,000 in 2001 to 166,000 in 2002. At the same time, they have contended that the job openings for highly-skilled professionals were shrinking at an alarming rate.

Citing this glaring unemployment scenario, associations such as IEEE-USA have demanded that new positions being filled up by H1B visas are no longer justified.

But to defend its position, the ITAA, an organisation favouring the retention of H1B at the current levels of 1,95,000, has said that in 2002 (October-September), only 79,100 visas were issued (down from 1,63,600 in 2001). Moreover, even the extensions offered outside the H1B cap have dropped sharply to 2,15,000 in 2002 from 3,42,000 in 2001. It is these contentious positions between organisations that will be resolved through debate in the US Congress.

Growing pressure points: Several organisations such as the Washington Alliance of Technology Workers, Technical Employees of AFL-CIO, The Programmers Guild and other technology unions in the US are protesting against the current liberal regime of H1B visas. These unions feel that several abuses under the present visa framework are being ignored by the US policymakers because of intense lobbying by US corporations. Similarly, the worldwide Web (through Web sites such as www.nomoreh1b.com, www.zazona.com, www.h1bprotest.com) are also being used as an effective plank to marshall support for protests against H1Bs. These pressure groups, which can influence public policymaking, have been acquiring the required stature to make a difference to the working of the US political establishment.

Where to head from here?: The last two years of economic downturn have exposed the soft underbelly of the US services sector. This sector (of which high-tech services is an important component), which has been the growth engine of the US economic miracle in the nineties, appears quite shaky at the moment and has suffered significant damage on the employment front. When the US suffered massive job losses in the manufacturing sector in the last two decades, the country was able to shift its jobs and make a relatively smooth transition to the services sector. But as the services sector shows continued signs of weakness, there are doubts about where the US economy can head from here. And it is this question which may hog the attention of the US policymakers in the coming months.

* Year for Visa Caps: October 1 to September 30

Spelling it out

THE draft position statement on H1B visas of IEEE-USA is as follows:

The visa quota for H1B `Guest Workers' should be reduced from 195,000 to the originally authorised level of 65,000, when the temporary, higher, cap expires at the end of September 30,2003.

H1B visas should be limited to a period of no more than three years, and not be renewable thereafter.

The requirement that companies attempt to recruit US workers and not displace US workers in order to hire temporary foreign workers that currently applies only to `H1B-dependent' employers should be extended to apply to all employers of H1B visa holders. H1B visa holders will not be hired within six months of layoff of similarly qualified US workers.

As professionals, guest workers must be paid a prevailing wage that is not less than the median salary for US professional workers with similar qualifications.

Credential verification should be required for visa approval to confirm the required college degree in a related field, from a bona fide and accredited institution (i.e., `equivalent' work experience is not an acceptable substitute).

Guest workers must return to their country of origin within 60 days of layoff or upon expiration of the H1B visa.

Compliance audits of Labor Condition Applications (LCAs) should be conducted by the US Department of Labor (DOL) with funding derived from the visa application fees. All LCAs, related H1B visa approvals, and audit findings should be posted on the Internet.

Compliance should be enhanced by elimination of the requirement that a complaint be filed before an investigation into H1B practices can be conducted by the DOL.

H1B visa training funds should be redirected to support a program of high-skill training grants for displaced US degreed professional workers, similar to the National Science Foundation scholarship grant programs, in order to deliver training more effectively to those directly affected by the H1B program

Any trade negotiations (e.g., the World Trade Organisation's General Agreement on Trade in Services) on international labour mobility should be consistent with the above recommendations.

Source : Career and Workforce Policy Committee of the IEEE-USA

maverick@thehindu.co.in

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