Business & Finance
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3/6/2008
05:00 PM
Rob Preston
Rob Preston
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Down To Business: Rhetoric Can't Stop The Reality Of Global Business

If U.S. companies don't get their way with H-1B visas, they'll get even more aggressive offshore, no matter how much anyone complains about the unfair and unlevel playing field.

The rhetoric around free trade, offshore outsourcing, and IT labor is as thick as mud as the U.S. presidential primaries come to an end and U.S. employers prepare for the next H-1B visa contest.

Hillary Clinton, whose husband pushed through the North American Free Trade Agreement in the 1990s, is now a vocal opponent of that treaty, at least in NAFTA-averse states like Ohio. Barack Obama says he wants to renegotiate NAFTA, though he reportedly told Canadian officials something different. John McCain, taking the "free but fair" tack, says on his Web site that the U.S. must "reduce barriers to trade, level the global playing field" (whatever that means) "and build effective enforcement of global trading rules."

If it's hard to square each candidate's positions on trade and other business and economic issues, it's because they talk in such grandiose terms. Politicians as a species are pro-technology, pro-competition, pro-growth, pro-innovation, and pro-worker, even if the precise means to those ends aren't always clear or compatible.

On a related front, the government will start accepting petitions on April 1 for the 85,000 H-1B visas it allots each year. Last year, the limit was reached on day one and more than twice the limit by day two, so employers are now lobbying to get the cap raised so they can hire more foreign tech workers for fiscal 2009, starting on Oct. 1.

Compete America, whose members include Google, Microsoft, Oracle, Boeing, and Coca-Cola, argues that U.S. employers need access to tens of thousands of additional highly skilled professionals to fuel the nation's tech engine. Bill Gates is due to make a plea before Congress this week. Interestingly, all three major presidential candidates (for now, at least) are also on board with raising the cap.

Also ratcheting up the rhetoric are critics of the H-1B program, who argue that because tech wages are still relatively stable, there's no broad-based U.S. shortage of talented professionals. Tech employers, they say, are misrepresenting labor market conditions only to get access to cheaper labor.

Even if that's the case, this ship has sailed. As our story package from India lays out in detail, U.S. companies are looking abroad for tech talent, ideas, and innovations they can't always find at home, so if they don't get their way with H-1B visas, they'll get even more aggressive offshore. No domestic-content legislation, tax breaks for "patriotic" employers, or lockdowns on foreign workers can reverse the economic reality that is globalization, no matter how much anyone complains about the unfair and unlevel playing field.

In response to recent reader blog posts on InformationWeek.com that were critical of tech employer sourcing practices and open labor markets, one IT manager wrote: "You and your fellow malcontents are a big reason why we in management push for increases in H-1B and employment-based green cards. I wouldn't hire anyone with your attitude for any of my projects, and I don't think that any other managers would either. The world has changed; deal with it."

For another case in point on how the sourcing world has changed, look to the defense industry. The U.S. Air Force announced on Feb. 29 that it had awarded Northrop Grumman and its European partner, Airbus, a $40 billion contract to replace its air refueling tanker fleet, a deal that had been widely expected to go to national champion Boeing. An independent Lexington Institute analysis of the award rated the Northrop bid higher than Boeing's on most criteria, including mission capability, prior performance, and cost, yet U.S. unions, veterans, and politicians roundly criticized the award as un-American.

Isn't the American military and taxpayer entitled to the best product for their money? In the end, job creation is a byproduct of smart investments, technology and otherwise. It can't be the goal in itself.

Rob Preston,
VP and Editor in Chief
rpreston@techweb.com

To find out more about Rob Preston, please visit his page.

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