Visa decline

The US Senate,in a rare moment of agreement,passed a bill just before its August recess. The 600 million border security bill will send extra men to the United States border with Mexico,where politically sensitive illegal immigration has proved difficult to control. That extra spending was supposed to come out of the countrys federal stimulus spending programme. But,instead,the money will come from raising the cost of work visa applications originating from a handful of foreign corporations by over 2,000,to around 2,250. Which companies? Those that,according to one of the bills sponsors,Democratic Senator Claire McCaskill of Missouri,exploit US visa programmes to import workers from abroad. Indeed,the bill itself specifically names four: Wipro,Infosys,Tata,and Satyam,which it says exploit visas in the H1-B and L categories to import foreign workers into the US.

The bills sponsors claim and their claim appears to be agreed with by the Obama administration,with full-throated backing from cabinet member Janet Napolitano,who called it a great package that these companies basically domestically outsource jobs in information technology to temporary workers from India. The bills other sponsor,New York Democrat Charles Schumer,called Infosys,in particular,a chop shop,like operations of dubious legality that re-jigger and disguise stolen cars. This isnt something that to be offended by. But it betrays a fundamental unwillingness to come to terms with how the modern world economy works,and even what the foundations of Americas continuing prosperity are. The US has evolved over two decades away from being a centre of manufacturing to being the worlds place for innovation and the conceptualisation of new technology. This is the source of most of its economys growth,and of its edge over its competitors.

But,as is now widely known,work of this sort,whether in fashion,in IT,or in bio-engineering,is surprisingly subject to cluster effects: you need to be close to others working like that,and so you get places like Silicon Valley. What this legislation demonstrates is that this basic fact has not been internalised. You dont want people staying out; you want people coming in,because they raise your own workers productivity. In the long run,such petty,short-sighted laws will hurt only the US,and dull its competitive edge.