Shutdown May Continue to Impact U.S. Immigration

Though the government shutdown has come and gone, it’s too soon to judge the full extent of the damage. To be sure, the full faith and credit of the United States did not implode into “full-doubt-and-debit” status, but that’s not to say there aren’t some lingering side effects that may be with us for some time to come. The obvious ones are in the financial markets, where some governments are seeking to limit their exposure, even if only incrementally, to U.S. government securities – instruments that no longer seem as risk-free as everyone once assumed they’d always be. [See, e.g., India Trims Exposure to US Government Securities at $57 Billion, The Economic Times, 23.Oct.2013.]

The more subtle blowback from this episode may be harder to discern, but is nonetheless real, especially in areas like immigration. True, the temporary government shutdown did not completely still the pens, keyboards, and rubber stamps of the nation’s civil servants. The USCIS continued to operate, because it is funded largely by filing fees, and the U.S. State Department continued providing passport, visa, and critical services to U.S. citizens overseas. ICE continued to perform a variety of security-related functions, though it’s “non-essential” personnel were on furlough, including, oddly enough, the people who update its website – hardly a nonessential function in the modern information economy.

On the other hand, E-Verify was unavailable during the shutdown, and the U.S. Department of Labor (DOL) went into temporary hibernation, and did not accept or process requests for prevailing wage determinations – a prerequisite for most employer-sponsored green cards. [See Government Shut Down Delays PWDs and Impacts PERM Filings, MurthyDotCom, 11.Oct.2013.]

The fallout from the DOL’s closure wasn’t limited to those applying for employer-sponsored green cards; according to U.S. New & World Report, it also affected “… government contractors whose projects are on hold during the shutdown,” who had to decide whether to furlough or fire their foreign workers. [See Shutdown Puts Businesses, Foreign Workers in Limbo, by Alicia A. Caldwell, Associated Press, U.S. News & World Report, 11.Oct.2013.] All of these fall into the category of temporary setbacks and minor annoyances – unless you or your company was affected, in which case splitting headaches were the order of the day. Time is money, after all.

The danger here is that even a temporary government shutdown can have lingering effects. Aside from practical issues, like the time it takes to get the immigration system fully operational again, the hassle factor inherent in the shutdown – both for companies and for prospective employees – may drive some of them to seek greener pastures elsewhere. We often have noted that the United States is no longer the only attractive destination for the world’s best and brightest, and that other countries are aggressively marketing themselves as alternative destinations. The same holds true for large multinational corporations that have the resources to locate their operations wherever conditions are most favorable, and the incentive to hedge their international investments carefully.

Then there’s the matter of immigration reform, still unresolved at this late date, still a source of uncertainty for businesses that would like more flexibility to hire the best and brightest from around the world, and more certainty going forward. One example: Quartz.com reports that Infosys posted a smaller-than-expected increase in net profit for the quarter ending September 30th, stung by what it called the “U.S. immigration morass,” including a recent U.S. investigation of Infosys’ hiring and immigration practices here, but linked more globally to the myriad of business immigration problems that have yet to be resolved by Congress and the administration. [See Indian Outsourcing Giant Infosys Stung by U.S. Immigration Morass, by Adam Pasick, Quartz.com, 11.Oct.2013.] As Quartz.com points out:

“The H1B visas that companies like Infosys rely on have become a contentious issue in the U.S. immigration debate. With no sign that Washington will be able to tackle immigration any time soon, Infosys and other IT outsourcing companies have recently been building up their operations in Mexico instead.”

Do we really want the next Silicon Valley to be in Mexico? At this point, it is irrelevant whether the lack of resolution on large-scale immigration reform is intended to drive away the world’s best and brightest, or is merely an inadvertent byproduct of Congressional dithering. What is clear is that, taken together, the shutdown and the interminable squabble over CIR have not done us any favors. Just when we should be rolling out the red carpet to welcome the world’s most talented scientists, engineers, inventors, and entrepreneurs, we seem to be rolling up the welcome mat. This has to change, and fast!

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