By livemint team
New Delhi: As USA loses its cost-competitiveness and faces prospects of acute human resource crunch due to an ageing population, it is time the US Government took a call and relaxed laws treating immigration as an “opportunity and not threat”, significant words by commerce secretary, Mr Carlos Gutierrez.
With the US facing an acute shortage of skilled labour, the White House should relax immigration norms to facilitate inflow of skilled labour from countries like India, industry body Assocham said today.
The chamber asked the US to facilitate changes in the WTO agreements as to allowing free movement of natural persons (mode 4) under the General Agreement on Trade in Services (GATS).
“While Mode 4 is not encouraged on fears of employment and immigration, rich countries like the US would soon need to amend their domestic laws allowing entry to quality labour from overseas to meet its economic needs,” Assocham President Venugopal Dhoot said.
With an ageing population, industrialized nations have started realizing the need for flexible laws as it is affecting the cost competitiveness of these nations. Ironically, US is facing the backlash of its own protective policies. With rising demands for technically skilled professionals and rapid aging of their population, they might just be left with no other choice but to introduce migration reforms.
Findings of a study on “Migration between India and US”:
* India is among the largest provider of skilled labour to US economy
* In 2000, 95% Indian migrants (981,930) had a bachelors or masters degree, as compared to 55.5% (5.92 lakh) Chinese emigrants and 5% (3.29 lakh) and 48.5% (3 lakh) from Mexico and Philippines.
* In US, number of people in the prime working years (age 25-54) is expected to increase by a mere 0.3% in the next seven years.
* By 2010, 77 mn baby boomers will begin to retire and by 2030, one-fifth of US population would consist of senior citizens.
* Out of 9.7% increase in its total population, net immigration and rest contribute 4% by natural increase.
* India has a young demographic profile as 62% of total 1.1 bn population falls in the working age group of 15-64 years. Estimates project that this group would constitute 65-68% of India’s population between year 2011 to 2026.
* Job growth in US is fuelled by immigrants as they fill an increasing share of overall employment, taking jobs in labour-scarce regions, and filling all types of jobs since native workers often shun low-skilled labour category.
Against this backdrop the problem of cap on issue of visas coupled with procedural and legal hurdles has hampered the free flow of human capital and harmed both US and Indian economies. For six of the last eight years, number of H-1B visas authorized each year has fallen short of US employers’ demand, with annual cap typically being filled within the first few months or weeks of the fiscal year.
The Doha mandate aims for liberalization of international trade in services but movement of human capital has been missing from the WTO agreements.