Give me your huddled masses ... er, geniuses

Limits on importing high-tech labor may be hurting US businesses. Some

From farm to factory, immigrant labor has been a crucial part of America's economic development.

Yet the nation's transition to a high-tech-driven economy has prompted a shift in the type and role of foreign-born workers. These new workers are highly skilled, and their presence in the work force is testing the traditional rules and assumptions about immigration and labor.

When Congress resumes after Labor Day, it will wrestle anew with the technology's industry's latest bid for the right to hire more trained workers from abroad.

The issue first erupted last year, when a sizzling economy created a demand for more engineers and scientists than the technology industry said were available in the US. Persuaded, Congress nearly doubled to 115,000 the number of so-called H-1B visas allotted this year to such temporary workers. But by summer, the visas had again run out.

The problem's quick reoccurrence could well prompt a deeper debate this time around, say political and labor analysts. And the issue could gain intensity with an election in the air and each party assiduously courting the technology industry because of its rising role in American society.

Indeed, both Republicans and Democrats in Congress have already introduced four bills to raise the visa limit - including one from Republican presidential hopeful Sen. John McCain of Arizona. Yet the political dynamics are complicated. "You need pro-immigration Democrats and pro-business Republicans to pass this," says Stephen Moore of the libertarian Cato Institute in Washington.

Creating jobs

The traditional argument against imported labor is that it takes jobs from American workers. But a growing number of analysts say the traditional argument is inadequate to address the dynamics of the high-tech industry - in which foreign workers, in the role of entrepreneurs, end up actually creating jobs for Americans.

"The debate must be widened to reflect the new role of immigrant entrepreneurs as creators of jobs, wealth and global linkages," says UC, Berkeley Prof. AnnaLee Saxenian.

She has found that the role of Silicon Valley immigrants has changed markedly from the early 1980s to the late 1990s, with many more owning new companies, rather than simply working for existing enterprises.

The old notion that immigrants create a "brain drain" on their host countries is increasingly outmoded in the technology sector, says Ms. Saxenian. High-tech workers move back and forth between their native and adopted countries. "The brain drain may be giving way to an accelerating process of e-brain circulation."

There are two key causes for the new dynamic of immigration in the high-tech sector. First, because technology is as much science as business, education is at a premium. Because highly trained domestic scientists and engineers are in short supply, technology firms are recruiting an elite class of immigrant from abroad.

And second, because technology is driven by ideas and the barriers to starting a high-tech business are far lower than in older industries, immigrants are striking out on their own.

K.B. Chandrasekhar, for instance, was working in Silicon Valley in 1992 on a temporary H-1B visa and planning to return to India. But driven to do something "big," he founded Exodus Communications Inc., which maintains and supports Internet servers.

Founded in 1994, Exodus went public last year. It has a market value of about $5 billion and employs 1,200 people. Mr. Chandrasekhar returns to India regularly and is involved in developing the technology industry there.

Displacing jobs?

Though unusual, Chandrasekhar's success is not unique within the technology world. For many, it's an example of why the debate over H-1Bs, as a zero-sum game where immigrant jobs displace jobs for Americans, is off-base.

"This is a program for workers that doesn't take jobs, but creates jobs," says Cato's Mr. Moore.

Yet organized labor and certain other employee organizations remain opposed to expanding the technology industry's ability to hire abroad.

Paul Kostek, president of the Institute of Electrical and Electronics Engineers, USA, says hiring immigrants is just an easier and cheaper way to gain skilled labor than retraining American workers. He notes that according to Department of Labor statistics, growth of employment opportunities in the 1990s for engineers and scientists has not grown at an abnormally high rate. Citing that, he says there is no clear reason to increase the H-1B admissions ceiling.

Last year, although Congress ultimately boosted the ceiling, it also ordered the National Research Council to assess labor supply and demand in the technology industry. That research has just started. Opponents of an immediate H-1B increase argue further action should await results of that study.

No quick fixes

Regardless of what happens this year, many involved with the issue see no quick fixes. Daniel Larson, the Washington lobbyist for Dallas-based Texas Instruments, says even raising the visa cap "doesn't address the fundamental issues." Those, he says, concern the US education system and the bottlenecks to hiring skilled labor from overseas, whether on a temporary or permanent basis.

Indeed, some technology analysts are convinced the labor demand for skilled engineers and scientists will continue to grow for the foreseeable future, meaning short-term tinkering with the visa limit is no answer.

In search of a longer-lasting solution, Rep. Zoe Lofgren, a Democrat from Silicon Valley, has proposed a new high-tech visa category that would be unlimited as long as companies hired foreign nationals who graduate from American universities. Senator McCain's bill not only would increase the visa cap to 175,000, but also give the US Labor Secretary the power to raise the cap if worker shortages persist.

While both sides of the issue sharply disagree about how to deal with the technology industry's skilled worker needs, on one point, all sides seem to agree: The US educational system is not turning out enough skilled engineers and scientists.

There seems to be a consensus that the issue has deep causes, weighty consequences, and is not the short-term problem it appeared to be last year. As Moore puts it, "We're playing games when we just talk about this as a problem for a year or two."

(c) Copyright 1999. The Christian Science Publishing Society

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