Globalization and Human Resource Management

April 29, 1998

Moderator: Demetrios Papademetriou, Senior Associate, International Migration Policy Program, Carnegie Endowment for International Peace

Panelists: Charles B. Keely, Herzberg Professor of International Migration at Georgetown University; Lynn Frendt Shotwell, Legal Counsel, American Council on International Personnel

Mr. Papademetriou welcomed Professor Keely and Ms. Shotwell to the Carnegie Endowment and thanked them for coming to discuss the current controversy over H1-B visas: Globalization and Human Resource Management: Nonimmigrant Visa Strategies and Behavior of U.S. Firms. Mr. Papademetriou commented that in the weekly list of immigration-related articles he receives, H-1B articles far outnumbered others during the past three or four months. Initially, Mr. Papademetriou was certain both sides of the immigration debate would concur on the value of increasing the annual number of H-1B visas; most of these workers are dependable and educated and create more jobs, for example. Mr. Papademetriou soon learned, however, that many believe H-1B workers take jobs away from Americans, depress wages, and increase age discrimination.

Professor Keely, who recently published his paper Globalization and Human Resource Management: Nonimmigrant Visa Strategies and Behavior of U.S. Firms, began by informing the audience that migration is a complex topic that goes beyond the H-1B issue. It is a mistake to discuss migration only in terms of an H-1B cap.

Professor Keely pointed out the prevalent assumption that any large country--such as the United States--should be self-sufficient in labor. This idea was enshrined by the birth in 1965 of labor certification, a process whereby employers must prove that no qualified Americans are available before the employers hire a foreigner to fill a job. Although labor self-sufficiency could be flexible, allowing the importation of workers during particular periods for specific purposes--The Bracero Program from the 1940s to the 1960s brought Mexican agricultural laborers, for example--the main idea remained the same: American jobs for Americans, German jobs for Germans, and so forth. In the 1970s, however, the advent of the L and E visas, used mainly to admit managerial and supervisory employees of global companies, began to challenge the concept of labor self-sufficiency. If a legitimate international labor market exists, and there is strong evidence to support this type of market in global firms, then policy makers must determine the optimum balance between facilitation of the market and protection of the domestic labor market. Professor Keely also noted that immigration law functions as an indirect subsidy to domestic labor and that immigration law is inconsistent with the American ideological fervor of reduced government. Of course, Professor Keely recognized the folly of comparing people and trade; nevertheless, one should acknowledge the inherent tension that results from the combination of global free trade and the restricted flow of labor. In addition, Professor Keely warned that the domestic market cannot be insulated against low wages by keeping out foreign labor.

Professor Keely stressed thinking about the concept of global firms. For instance, successful global firms require access to certain skills without delay. Since product cycles are becoming increasingly shorter, the significance of being the first to market cannot be overstated. Given the nature of global firms, Professor Keely doubts any state can be self-sufficient in research and development. In conclusion, Professor Keely emphasized the importance of including business representatives in immigration policy discussions.

Ms. Shotwell, legal counsel to the American Council on International Personnel (ACIP), an organization representing several Fortune 500 companies, expressed her clients' overall satisfaction with the current immigration system. While understanding the need for various visa categories, the business community also demands a fair, simple, and transparent immigration system. Canada, the European Union, and other regional entities are changing their immigration systems to make entry easier for skilled professionals, and the United States should follow suit. The most important immigration issue for the business community concerns employer enforcement provisions and how they will be implemented. Other issues of concern include the potential backup at the Canadian border; a general backlog of paperwork by the INS, especially with labor certification claims; and confusion about advertising regulations regarding the H-1B program.

According to Ms. Shotwell, misinformation about H-1B visas abounds. The H-1B cap will be reached shortly, and the business community is troubled by the uncertainty surrounding what will happen thereafter. Ms. Shotwell also expressed support for a change in the law that would allow spouses of L-, E-, and H-visa holders to work in the United States. She noted that many intracompany transferees are refusing temporary relocation to the United States because their spouses do not have permission to work.