IMMIGRATION POLICY AND THE COST OF DOING BUSINESS.

Immigration policy creates deep and passionate opinions. One side argues that immigration takes jobs from non-immigrant Americans, and the other claims the need for immigrant labor to fuel a strong economy. The issue only becomes more divisive when you realize that immigration policy can ultimately increase a corporation's cost of doing business.

Early this summer, President Bush proposed to Congress that it grant legal status to the estimated six million to nine million illegal immigrants living in the U.S. The President's proposal has met fierce opposition from several Congressional leaders from his own party, and indeed, his own state of Texas. The House Judiciary Chairman, James Sensenbrenner (R-Wis.), and House Immigration Subcommittee Chairman, George Gekas (R-Pa.), said they can't support the President's proposed immigration policy without serious reform of the Immigration and Naturalization Service (INS). Additionally, Texas Republican Sen. Phil Gramm has expressed concern that such an immigration policy only rewards lawlessness and effectively punishes those who came to the U.S. legally.

The President's immigration proposal has given rise to some interesting business and labor coalitions. For instance, there is the Essential Worker Immigrant Coalition (EWIC), which has publicly supported a large majority of Bush's plan:

* In the short term, an effective category for temporary and seasonal employees, like the existing H-2B visa.

* An employment-based visa that could be converted to permanent residency.

* An employment-based permanent residency for essential workers granted through a straightforward and easily completed application process.

* The establishment of a one-time mechanism to allow undocumented workers in the U.S. to convert to legal status -- a conditional, employment-based status leading to permanent status.

* Permanent resident status tied to employability, though not on a an employer-specific basis.

* Repeal of employer sanctions (Immigration Reform and Control Act of 1986), paired with an updated legal immigration system to reduce undocumented immigration.

Apart from these proposed changes, today's immigration law allows highly skilled and specially trained workers to apply for one of 65,000 H-1B visas through a sponsoring employer. These allow workers to live and work legally in the U.S. for a period of six years; after that, the visa holder is required to return to his or her native country, or begin the lengthy process of applying for permanent status.

High-technology companies seeking to fill highly skilled jobs in software programming and computer engineering most often use H-1B visas. Unfortunately, many high-tech companies hard hit by the dot-com implosion are downsizing, forcing those laid-off H-1B immigrant workers to face deportation if they have not already applied for permanent status. This threatens to shrink the supply of highly skilled labor in the U.S. once the economy rebounds, so the business community should have an interest in finding ways to keep such workers in the country.

In fact, some states have tried to actively recruit skilled immigrant populations. Consider Iowa, faced with a rapidly growing elderly population and a steady decline in younger people. Iowa Gov. Tom Vilsack designated several locales as model cities to recruit 31,000 foreign workers to help ease the state's labor shortages -- especially in the health care field. The popular Democratic governor saw his plans backfire in a wave of public criticism. These anti-immigrant sentiments have been fueled by unproven fears of higher crime rates and higher unemployment rates for non-immigrant workers.

Whether immigration policy will change this fall or even during the rest of the Bush Administration remains to be seen, but the changing composition of the U.S. workforce is causing corporations, state governments and Congress to take a closer look at immigration policy. Corporations need to become more aware of the effect immigration policy has on their bottom line. Regardless of the continuing debate on Capitol Hill, in state houses and in corporate boardrooms, the economic repercussions that had immigration policy can have on the cost of doing business is not yet fully understood.