The anti-foreign worker sentiment bubbling in the states has begun erupting at the national level. Two bills aimed at squeezing the L-1 visa and eliminating the H1-B programme were introduced in the US House of Representatives in an important pointer of where things are headed. The twin-pincer movement is a preview of what analysts warn could be a major political battle between anti-immigration and pro-business forces. The two new bills join another introduced in May which restricts the movement of L-1 visa holders. The country hardest hit by these volleys will be India if the bills become law since Indian professionals have been the biggest users of the two visas.
"A multi-headed hydra might be in the making," warns a source in the US Chamber of Commerce, as large mainstream businesses attempt to form a coalition and fight back. But as boardroom directors were sorting strategy and collecting figures, Republican Congressman Tom Tancredo quietly introduced H.R. 2688, a bill that seeks to eliminate the H1-B visa altogether.
It is a visa under which tens of thousands of Indian professionals have made the United States their home. Tancredo's office studiously avoided flashing the news of his latest legislative effort in what was seen as a curious move by analysts. He introduced the twelve-line bill which, if it becomes law, could redefine immigration, movement of professionals, the service industry and American competitiveness which has depended on foreign input.
But Tancredo says the H1-B visa has "outlived its usefulness" and there is no need to bring foreign professionals when there are scores of qualified unemployed Americans.
A day after Tancredo's stealth arrow, nine House members, most of them Democrats, led by Congresswoman Rosa DeLauro introduced the "L-1 Non-Immigration Reform Act" aimed at tightening the requirements. DeLauro claimed the bill would close the "loopholes in the law that allow large corporations to bring in foreign workers, pay them less, and replace good paying American jobs held by American citizens."
The repeated use of the term "American" is not a chance occurrence. The bill puts a cap of 35,000 on L-1 visas to be issued worldwide, an arbitrary figure randomly pulled and inserted where there was no limit. Additionally, the bill bans blanket petitions to hire L-1 workers, denies the visa to any company that has laid off a "an American worker" within the past six months or six months after filing the application, demands that L-1 holders be paid prevailing wages, and authorises the Labour Department to conduct surveys.
The latest bills add to Congressman John Mica's bill introduced May 19 which aims to curb the use of L-1, a visa he called "back door to cheap labour." His bill, while allowing companies to bring L-1 workers, will prevent them from being farmed out to other companies -- a phenomenon spotted and seized by critics and labour unions over the past few years.
All three bills are being considered by the Judiciary Committee and public hearings are expected in September, an aide in Mica's office says. A source at the US Chamber of Commerce thinks these first bills are a good barometer but are unlikely to go far in the process. Another maintains the "US industry will come to a standstill" if they curb L-1 visas as drastically as they are threatening.
But if the heavy weight Congressmen and senators get involved, the story could take a turn for the worse. "There is a very serious policy debate underway which is far from settled," warns Jeff Lande of the Information Technology Association of America, the premier IT industry lobbying organization. But he is confident that the "elimination of H1-B is not going to happen."
The number of H1-B visas to be issued will, however, be down to the original limit of 65,000 from 195,000 come October as per the law. The higher caps were allowed by the US Congress in the 1990s to meet the needs of the booming IT sector but this year the cap has not been utilized. Many multinational corporations realized it was easier and less onerous to get the L-1 visa for moving workers because of fewer requirements.
In some ways, the L-1 visa was better from the US point of view because it didn't allow people to "jump ship" and apply for a green card as one could with H1-B. But still a sustained and well-conducted campaign by labour unions and laid off computer professionals has made it an emotive issue for politicians.
The industry big wigs both in the US and in India have been slow to recognize the politics of it all. "If we don't get ahead of this now, it would be trouble," says a US source. He acknowledges that the business has to get its arguments and facts right and monitor the events assiduously. In the past, Indian IT groups have fumbled by stumbling into the debate uninformed and got burnt. "It is not a public relations battle as some seem to think but a political issue," points out an American industry analyst familiar with the battles. The debate around outsourcing, H1-B, L-1, unemployment, call centres is too far advanced for jumping in unprepared as some Indian organizations did recently for a win-win outcome.
As protectionist sentiment grows in the House, cloakroom talk is getting louder in the Senate too as all matters related to unemployment, immigration and displacement of US workers are crucial. Sources told Outlookindia.com that several senior Democratic senators with considerable political weight such as Ted Kennedy of Massachusetts, Dianne Feinstein of California and Chris Dodd of Connecticut are considering introducing bills on the use/abuse of visa regimes.
"There are accusations out there that L-1 is being misused by companies bringing cheap talent and displacing American workers," says Lande. Tata Consultancy Services, by applying for 5,000 L-1 visas, attracted attention and "blew the lid" even though arguably they did so after receiving good legal advice. The blanket application was seen by some as "misuse" even though advocates on the other side equally vehemently argue that it wasn't. "This is not a settled argument by any means," says one source familiar with the issue.
Nor will it settle anytime soon if unemployment keeps rising and the economy stays lifeless. The Department of Labour reported unemployment at 6.4 percent last month, triggering predictable reactions among politicians under siege from constituents and labour unions.
A well-organized Internet and ground campaign by the AFL-CIO, the largest labour union here, has targeted Democrats and vulnerable Republicans to unleash demands that walls be erected around Fortress USA and doors slammed shut, at least temporarily.
With the presidential election approaching, unemployment will most likely be a volatile campaign issue. Since the Democrats are bereft of other ideas to distinguish themselves from centrist Republicans, a return to "old labour" issues is likely.