Smoking adderall….

Friday, February 20, 2009
Commentary
Work visas stop offshoring of high-skill jobs
Robert Kennedy

Desperate economic times often lead to scapegoating and ultimately to bad public policy.

U.S. Sens. Charles Grassley and Richard Durbin have been painting a picture of greedy U.S. firms recruiting low-wage foreigners to undercut struggling Americans workers and then using these foreign workers to grease the departure of tech jobs to lower-wage countries.

In reality, nothing could be further from the truth.

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The H-1B visa program helps U.S. firms stay competitive with foreign rivals and slows the migration of high-skill jobs offshore. Reducing or eliminating it would be a blow to U.S. competitiveness and would harm all American workers.

The H-1B visa program allows U.S. firms with specific skill shortages to bring talented individuals from around the world to America to work on specific projects for short periods of time. The program applies only to "specialty occupations" (such as nursing, software engineering, faculty positions and scientific jobs). It is capped at 65,000 positions a year. This is less than one-twentieth of 1 percent (0.05 percent) of the 140 million positions in the work force.

The program explicitly requires employers to pay 100 percent of prevailing wages, eliminating cost as a motivation. Further, the application process asks sponsoring firms to show that they have searched for and cannot identify American workers with the skill set to fill the position. While this last item is not a requirement for approval, leaving it out is a sure way to have an application denied.

The reality facing large firms is that globalization has come to the services sector, meaning many activities can now be done anywhere in the world. This is inconvenient for workers and politicians. But denying reality won't change the competitive pressures bearing down on firms.

Most companies prefer to perform high-value processes close to their headquarters for cultural reasons and because it eases coordination. Further, many processes require a range of specialized skills to complete. A successful drug discovery research lab at a pharmaceutical firm requires chemists, biologists, lab technicians and genomics engineers, among others.

If a firm is missing one or two key skills, the entire process suffers. This is precisely the situation the H-1B visa program is designed to address. If no local worker can fill the position, the program allows firms to recruit a person with the missing skill, pay that person the prevailing local wage, and allow them join the existing operation in the United States. This makes all the other workers more productive and helps protect their jobs.

The Grassley/Durbin approach would make U.S.-based operations less competitive and increase pressure to move entire processes offshore.

This is why almost all economists who have examined the situation, as well as thoughtful politicians from across the political spectrum, advocate expanding the H-1B program. The market for talent has become global. The question facing firms and policymakers is: Do we want those talented people working in the United States, strengthening firms that are based here? Or do we want them working overseas, competing with American operations?

Robert Kennedy is executive director of the William Davidson Institute and is the Tom Lantos professor of business administration at the University of Michigan's Ross School of Business. He recently published "The Services Shift: Seizing the Ultimate Offshore Opportunity."