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Chile and Singaporean Free Trade Act: An H-1B Cap That Makes Sense

by Gary Endelman

Gary Endelman Since everyone anticipates the H-1B cap falling back to 65,000, perhaps one may wonder what the economic rationale is for this precise level of migration. If there is one, it is America's best kept secret. If political considerations mandate the adoption of some ceiling, and since the H-1B is supposed to help the domestic economy, should this not be a cause for concern? Beyond that, the inherent difficulty of settling upon any number suggests that perhaps the focus of the debate should be elsewhere. All H-1Bs are not created equal. What is important is not how many H1B workers come, but what kind of H-1Bs come. If the economy needs certain skills in certain jobs, then it is these type of H1Bs that should be favored without any limit. Correspondingly, if the economy has a surplus of expertise in a designated area, then, until a shortage develops, no H-1Bs of this type should be allowed. Whatever the end result, any restriction on H-1B admissions should not be a political but an economic decision arising out of what the economy needs.

Only when we have a cap that puts the economic interests of America first will such a restriction serve a useful purpose. The number of H-1Bs from Venezuela need not be the same as the H-1B influx from Canada, nor should it be since America's commercial links with each such ally are fundamentally dissimilar. To argue, as some immigration advocates have, that this would result in some nations getting a disproportionate percentage of the overall H-1B visa allotment reflects an alien-centered view of the H -1B that cannot be reconciled with the protection of the American national interest. There is no entitlement to the H1B and access to this program should be earned through the extension of reciprocal benefits that are offered to the United States by those countries whose citizens and economies benefit from, indeed depend upon, its continued existence. The recent Free Trade Agreements signed with Chile and Singapore, which will have the effect of taking away some 6,800 H-1B visas, more than 10% of the total, and count against the H cap in the 1st and 7th years, make H-1B admissions from these countries depend on how many Americans in these same occupations are allowed to work there. Now, here is an interesting model, one that makes the H1B visa a tool for American economic penetration of key foreign markets. The cap on H1Bs from Chile and Singapore was set not by Washington alone, but by Washington in concert with its trading partners who together decided how much global mobility they were willing to allow.

What works for Chile and Singapore should work for other nations with whom we do business on a regular basis, such as Mexico, India and China. Congress may decide to base the level of H-1B admissions not on statistical equality, but, rather, on the extent to which the sending countries encourage or frustrate American investment in the same commercial sectors that their H-1B beneficiaries work in. So, for example, if remittances sent back by Indian software engineers from Silicon Valley are a vital source of support for the Indian economy, then the Indian authorities should be prepared to give something back in return and allow US companies to participate in the Indian technology boom on the same footing as an Indian business would enjoy. This provides Americans the same opportunity to penetrate the Indian economy that the US affords India when Indian H-1Bs are employed in the US economy. Nationalistic expressions of outrage at such requests are entirely understandable from an historical perspective. Case in point, most recently, the Mexican Government expressed indignation to hints that privatization of the lucrative Pemex market would be the Bush Administration's price for a massive new amnesty program for the undocumented. Yet, H-1B proponents, if they are honest with themselves, must realize that these are the kind of sentiments that neither we nor our allies can afford any longer. Allowing an H1B worker from India or Mexico the freedom to work in the United States in H-1B status is a conscious decision by Congress to share the fruits of our national sovereignty with others whose citizens have the talent to help us; our allies should be prepared to reciprocate and demonstrate a willingness to level the playing field and open their markets to American capital. The extent of H-1B admissions from any particular country would, as with Chile and Singapore, be the subject of bilateral negotations in which global mobility would become an asset to be maximized, not a problem to be controlled.

The problem with constant fluctuations in the H -1B cap is not primarily one of numbers, but of uncertainty. In this kind of institutionalized indecision, where the rules of the game change every few years, it is impossible for American employers of H-1B workers to engage in intelligent planning that seeks to maximize the benefit of their presence. Restrictions on where they can work, how often they can travel, what kinds of jobs they can perform- all these inject rigidity and artificiality into the economy that serves no purpose other than to empower those who police such activity. This kind of micromanagement does not create wealth, does not produce jobs, does not make US employers more competive nor increase their ability to expand here at home with good jobs going to Americans who need them. Beyond all this, it is sheer fallacy to look at the H-1B quota in isolation from the need to create a rational and simplified labor market control system. Doing so ignores the basic truth that employers do not recruit for 3 or 6 years; they are looking for permanent employees. It makes no sense to expand the H-1B quota without doing something to enable these same employers to retain the services of the very H-1B beneficiaries they have trained after their authorized stay is up. If we do nothing about labor certification, any improvements made in the H-1B arena will be wasted and frustrated employers will respond by taking the logical step of decreasing H-1B sponsorship, unwilling to waste time and money on a foreign worker who will not be around for the long haul.

Congress should set a new H-1B cap, one that is the product of consultation and negotation. Most importantly, any H-1B cap should be set on a country-by-country basis that varies as the facts and circumstances of our economic relationships change. If such a nation-based H-1B cap is adopted, two things would happen immediately. First, the need for an overall cap would disappear. Second, almost overnight, opposition to H-1B migration would dramatically decline as even all but the most partisan critics would realize that, for the first time, H-1B policy was nation-centered, not alien-centered, and sought not to help the H-1B beneficiary, but to enrich the United States. If we make it harder for H-1B beneficiaries to come, but easier for them to stay, then, at long last, America will have an H-1B cap that makes sense.

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.