Diaspora: Economic Recession

OTHER STORIES RELATED TO ECONOMIC RECESSION Blow Across the Atlantic

In San Jose, California, a thriving taxi company owned by 27-year-old Aman Singh recently had some interesting callers. They were Indian software programmers on coveted H1-B visas, which allowed them to live and work in the US and eventually apply for greencards. No, they were not looking for a fare-they were calling to check whether Singh had taxi driver jobs on offer for them. The techies who had moved to the US seeking good lifestyles, high-paying jobs and a certain status must have been desperate to take that step.

SEEKERS: A series of job fairs in New York and other cities in recent months drew large numbers-many of them immigrants

In a recent article on the diminishing fortunes of technology workers in the Silicon Valley, Business Week chronicled the interesting tale of Singh, whose thriving cab business in Sunnyvale took a hit as the post 9/11 drop-off in air travel idled half his 30 cabs. Singh obviously had nothing to offer the pleading techies. He also had to call in the police when a group of white men began to menace one of his turban-wearing Sikh drivers.

Across the US, there are a number of Indian immigrants who are sharing an anxiety similar to what the Valley techies were going through. In Atlanta, Bharat Shah lost his job but held on to his H1-B visa without pay and sustained himself doing time in the desi stores that pepper the city. In New York, Neerav Joshipura was a passive onlooker as his employers slowly whittled down their staff strength to half by the middle of 2001. For South Asians in America and across Europe, the recession has hit home.

"College-educated workers are the worst hit." Amar Bhide, Professor

The downturn in the US economy comes after a 10-year period of unbridled economic prosperity, which was also a period of sustained rise in the number of immigrant job takers. In the hire-and-fire regime of the US, it is the immigrants who are now facing the job layoffs. And the high-profile Indian community is feeling the pinch as from naming their own meal ticket, many of the top earners of yesterday are virtually reduced to begging for a meal.

Even as policy planners are still speculating about whether the economy has plateaued out or has time to go before it scrapes the bottom, the job layoff figures are alarming: 1.9 million workers were laid off in 2001-40 per cent of them after the 9/11 outrage. That number is more than three times the 613,960 job cuts in 2000.

Diaspora: Economic Recession

Body Blow Indian immigrants are amongst the most impacted in the jobs lost over the past year. Retrenchment figures for the US: > 1.9 million jobs were cut in 2001-over three times the 2000 figure of 613,960. > The telecommunications sector axed 317,777 jobs in 2001-more than any other industry and nine times the 34,903 layoffs in 2000. > The computer sector slashed 168,395 jobs. > The manufacturing sector cut 153,952 jobs. > The electronics sector slashed 153,432 jobs. > Job layoffs in the automotive segment were133,686. Figures by Challenger, Gray and Christmas

In spite of the startling figures, John Challenger, CEO of Challenger, Gray & Christmas, retains his optimism. "It may seem as if the light at the end of the economic recovery tunnel keeps getting farther away, but our research has shown that there are opportunities for the growing number of Americans who suddenly find themselves unemployed," he says.

Unlike their American counterparts, however, displaced immigrant personnel stand a dim chance of exploiting the kind of employment opportunities-especially in defence-that Challenger alludes to.

According to figures released by Challenger, Gray & Christmas-an outplacement firm that tracks monthly layoffs by Internet companies as well as job cuts in the overall economy-the telecom sector lost 317,777 jobs last year. That is nine times more than the 34,903 layoffs in 2000.

The telecommunications industry had 88 per cent more job cuts than the computer sector that witnessed 168,395 layoffs. Other industries that experienced five-figure job cuts included industrial goods, automotive, financial, food, leisure and retail.

GRIP ON HOPE: Desis lined up with the rest at a recent job fair in New York

Says Amar Bhide, the Glaubinger Professor of Business at the Columbia School of Business in New York: "This has been an unusual recession, both in terms of the macro economic precursors and those affected."

In a typical recession, it is generally the high school educated and those without college education who bear the brunt of unemployment. This is perhaps the first time that the college educated workforce has shown a higher increase in unemployment. "To the degree that Indians tend to be part of this kind of workforce they have a greater inclination of being more affected," adds Bhide.

"My senior colleague now does the job his junior did." Neerav Joshipura, Software Expert

Including the month of October, dotcom job cuts for 2001 totalled 95,621. It was 335 per cent more than the corresponding period a year ago when Internet companies laid off 21,966 workers. Telecommunication, and not transportation or aerospace, was the largest job-cutting sector in October with 42,347 retrenchments announced, leading Bhide to dub this as the "white collar recession".

Significantly, these are the very sectors that absorbed the wave of Indian immigrants that arrived here in the 1990s. "The impact of dotcom shutdowns has been incredible. And most of this has affected the generation-X people (teens to those in the 20s)," he adds.

Diaspora: Economic Recession

DOUBLE IMPACT How the 9/11 outrage impacted the job scenario: > Of the record total, 40 per cent of the job cuts came after September 11. > Including October, dotcom job cuts for 2001 total 95,621. That is 335 per cent more than the January to October period in the previous year when Internet companies laid off 21,966 workers. > Telecommunication, not transportation or aerospace, announced the largest number of job cuts in October: 42,347. Figures by Challenger, Gray and Christmas

While data detailing the impact on Indian immigrants is difficult to come by, proxy variables spell out their misery in adequate detail. Statistics released by the US Immigration and Naturalisation Service (ins) reveal that companies utilised only 163,000 of the annual cap of 195,000 H1-B visas for 2001. Compare this with previous years in which entire quotas would be filled and there would be a line-up for the next year's quotas. The demand was so high that a few years ago, industry was actually lobbying the government to increase the cap on the H1-B visa quotas.

Now, however, the demand for skilled technology workers has slumped. The Information Technology Association of America (ITAA) estimates that the US employs 10.4 million workers, and that the demand for new workers has decreased from an initial projection of 1.6 million to about 900,000 workers.

A survey conducted by Techies.com reveals the emergence of considerable hostility against foreign technology workers. Of those surveyed, 85 per cent feared losing their jobs to non-citizens and 60 per cent worried that an influx of foreign tech workers would pull down payscales. And this, despite the fact that US laws require H1-B workers to be paid at least the median wage in their given job category when hired through the programme.

New York-based, Neerav Joshipura, 34, was lucky to survive on his employment terms. The software expert who was brought in by India-based I-Flex to do software jobs at Citibank, says that in the past one year, he has seen opportunities and projects there being whittled down. That eventually led to a pruning of the overseas staff by nearly 50 per cent. "Even in last February, we were quoting $600 per day when firms were willing to go up to only $375. Four months down the line, we were willing to meet their offer. When I went home for Diwali this time, I was mentally prepared not to come back."

Joshipura, an L-1 visa holder (visa for a highly skilled worker which does not allow a change of employer), was much better off than his colleagues who were holding H1-B visas.

"My cousin with 20 years of experience in software programming is facing a very tough time. After running a branch office on the East coast, he is now being asked to work from home," offers Joshipura. And his cousin's wife has had to take up a job to help out. He adds that a senior colleague of his accepted downsizing to stay on with the company, doing the job that his junior used to do.

Atlanta-based Bharat Shah was not so lucky. Shah, 28, was laid off with a one-month severance package. He was approached by body shoppers who were willing to transfer the H1-B visa in their name for a fee of $2,500. A desperate Shah accepted, hoping he would be able to find himself a job. Three months down the line, the MS in computer science from a university in the US is now doing time in Indian grocery shops even as the body shopper retains his H1-B visa. Worse still, he has fallen foul of the INS rules and could find himself in deeper trouble if discovered.

"There are all kinds of things happening out there," says Sachin Vora, a software engineer working in Boston with Nortel Networks-a company which has seen the most savage layoffs in recent times. "Some people have switched back to F-1 (student visas) by enrolling in PhDs or masters in another discipline. Others are considering the possibility of marrying as they are still single and that then maybe they can stay on. Some are considering moving to Europe," says Vora.

There are companies that have put in place pay cuts and compulsory vacations to reduce overhead costs, he points out. "The layoff numbers are therefore understated," he adds.

Yet not many are willing to buy that racial profiling has risen in recent months. "Yes, employment is very difficult. The job market is down and everyone is laying off staff. But I have not heard of anything like racial profiling after September 11," says Lata Krishnan, San Francisco-based president of the American Indian Federation and former cofounder of SMART Modular Technologies.

The employment norms which are unique to the US make it easy for employers to go through the process of retrenchment. Funnily, there are few critics of the US style of functioning. "The chances of being fired from the job is as high as the choice an employee has to look for a new job. The spirit is very entrepreneurial in this country. This concept took root in the 1980s and has actually fostered a lot of innovations in business," argues Akhtar Badshah, who manages Digital Partners, a Seattle-based non-profit organisation that is trying to bridge the digital divide in India.

The deteriorating state of the economy has predictably led to a hike in criminal activity in the country. Desis, especially in the vicinity of Silicon Valley, offer obvious targets. The Bureau of Labour Statistics reports that the national house-hold average income is $30,784. But for the Bay Area where nearly a third of the population is Asian the average income is $60,580-double the national average.

While the South Asian community has suffered due to the September 11 attacks, economic hardship, fear of backlash, bias and emotional impact have been identified as some of the most pressing concerns. In the absence of any workers' unions, Asian organisations are gearing up with social activities to help the community out of the doldrums. "The New York Asian Women's Center will hire a new case worker to conduct outreach and coordinate various community relief efforts and services in the Bangladeshi, Indian, Pakistani and Indo-Caribbean communities," says an official of the Asian American Federation.

There promises to be a lot more on the immigrant's mind in 2002, and perhaps a lot less in his pocket.

(Names have been changed to protect identity.)