Why H-1B Visas are Bad for America (Big Business Scam Alert!)

FrontPage Magazine ^ | Robert Locke

[JoeMomma]

Robert Locke

Robert Reich: Consistent Liberal

Why H-1B Visas are Bad for America By Robert Locke FrontPageMagazine.com | January 24, 2001 email this article to a friend

AMERICA'S GENEROUS IMMIGRATION LAWS are increasingly being corrupted and taken advantage of by self-aware economic interests. Take, for example, the H1-B visa program for technical workers, which was recently expanded to 200,000 people per year by the Clinton administration. H1-B allows corporations to bring in cheap foreign technical labor in the computer industry and elsewhere. This is shrinking opportunities for American citizens, driving down their wages, and stunting the production of homegrown talent.

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Industry likes to tell the public that they need to bring in foreign workers because of a so-called "labor shortage." But the very concept of a labor shortage is a sophistry that has no place in free-market economics. Economics teaches that in a free market there are never shortages of anything, only things whose price, as set by supply and demand, is higher than some person wishes to pay. There is not a technical job in America that could not be filled with an American citizen if the employer were willing to pay the right price. The fact that the company in question "cannot fill" the position is merely a function of their desire to set an arbitrary price that they feel like paying. This is not the way of the market, and frankly it is a form of corporate decadence for them to go running to the government for a subsidy in the form of cheap foreign workers.

The emerging pattern in American society has a sinister resemblance to the decadent sheikdoms of the Gulf, which can't pump their own oil without massive foreign labor: Americans handle the financial and marketing side of things while we let foreigners do the engineering and the hard stuff. The national-security implications alone are chilling.

Furthermore, because we have this supply of foreign labor, we let our own technical education system slide, and we never liked math that much in the first place. Frankly, until American industry is served notice that it will have to supply its future technical needs from our own people, it has absolutely no incentive to care. Former Labor Secretary Robert Reich stated "The H-1b program "has become a major means of circumventing the costs of paying skilled American workers of the costs of training them." (Those who blanche politically at taking the word of a liberal like Reich should in fact rejoice at the sight of the opposition being hoisted on its own petard by one of its very few intellectually consistent members.)

H1-B helps promote age and other forms of discrimination by giving companies a ready supply of foreigners who don't have any uppity American ideas about their rights and who can be silenced by threatening to send them back where they came from. Because even companies that don't employ H1-B workers can threaten to do so, H1-B has a chilling effect on industry as a whole.

Though the H-1b has been sold as providing companies access to the "world's best and brightest", reality differs from the sales pitch. The law states the alien must have "a bachelors degree or equivalent". Hardly indicative of the world's best and brightest. Experience shows that the people imported are, in general terms, no better or no worse than domestic workers. Nobody objects to bringing in Nobel-calibre scientists and the like, but this is a tiny number of people, not 200,000 per year.

There are entire companies in America now where native-born Americans are not welcome. Some of them are even growing fat on defense contracts. H-1b visa holders are often "benched" when imported by a contract engineering house or "body shop". They will be brought in and benched until the contract firm has a job opening they can fill. Often they are not paid until they actually go to work at a client firm of the contract house. They may be provided a place to stay, and a small amount of spending money until they get on the payroll.

The final idiocy of the recent raising of the H1-B quota to 200,000 per year is that it was done just as we are almost certainly overdue for a recession. People tend to assume that all technology workers are rich dot-com entrepreneurs; in fact, 95% of them are ordinary middle-class Americans.

The Labor Department has nominal regulations on the books to protect American citizens, but these have so many loopholes as to be ineffective. For example, although Labor Dept. regulations require companies to pay at least 95% of the prevailing wage, companies are free to use biased data in establishing what this wage is. The survey data is always suspect because it is provided by the very companies who will benefit from the results. They spin the data by grouping employees into inappropriate categories, by selective reporting, and by outright dishonesty. Companies who do not use foreign labor are reluctant to answer the survey as it entails some cost and time which could be spent on more productive corporate endeavors. Furthermore, because H1-B workers depress wages, their prevailing wage tends to become a self-fulfilling prophecy. No one ever checks the results of the survey.

Industry likes to claim that it needs H1-B workers "to be competitive in the global economy." However, they can't get even Clinton's Labor Department, which has overseen this massive giveaway program, to buy their line. Department of Labor Office of Inspector General Final Report. Report Number: 06-96-002-03-321 Titled "The Department of Labor's Foreign Labor Certification Programs: The System Is Broken and Needs To Be Fixed" dated 1/24/97, states "In our opinion, not all types of jobs being filled by H-1B aliens necessarily represent jobs that would enhance U.S. employers' abilities to compete in a global economy."

Congress has repeatedly agreed, year by year, to expand the number of H1-B visas, always in exchange for provisions designed to protect American citizens. But this congressional intent is being frustrated.

Charles C. Masten, Inspector General, H-1B Labor Condition Application (LCA) program made the following comments. "Audit findings in a recently issued OIG report found that both programs fail to adequately protect American jobs or wages, as intended by Congress.  The audit discovered that the Department's role amounts to little more than a paper shuffle for the PLC program and a "rubber stamping" for LCA program applications….The OIG also found that the labor market test, which is designed to ensure that there are no qualified U.S. workers available to fill the positions for which the application has been filed, is perfunctory at best… Despite annual expenditures of approximately $50 million on DOL's foreign labor certification programs, the OIG found that DOL's role in the PLC and LCA programs did little to add value to the process of protecting U.S. workers' jobs and wages."

America's high-paying technical jobs are one of its most precious assets and they should not be squandered on foreigners.  America has been the most competitive nation on earth for years without importing mass foreign technical labor.  We are sending a message to our young people not to take technical careers, where they will be forced to compete against cheap foreigners, and making ourselves dependent on people with no intrinsic loyalty to us.  The entire H1-B program should be abolished, and the few authentic geniuses out there should be brought in under other, existing programs."

 

You can e-mail Robert Locke at lockerobert@hotmail.com.

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[Dat]

You guys are sounding like Naderists more each day. A "living wage" of $60 000/ year? Greedy corporations? This is conservatism? I think not.

[Reaganwuzthebest]

If you're a family with two or three kids, a car, possibly two, a home is $60,000 a year, which after taxes is about 35,000-$40,000 a middle-class income?

I've got nothing against corporate heads making good money, it's their business and they're entitled to a decent salary. That's why I support the conservative position of less taxes and regulations so businesses can prosper and reinvest in better equipment and more employees.

But does that mean I should support Congress allowing corporations to fire Americans and replace them with foreigners so that executive can get a 2 million dollar bonus at Christmas time? I think not.

These businesses better wake up and realize that putting their own citizens out of work to imported indentured slaves in the long run is not in their interest. They need us as much as we need them.

[koba]

You claim that H-1bs are indentured slaves. All the H-1bs I know in the computer field make $60,000/year. Remeber that the average salary in America is under $30,000/year. Half of the H-1bs stay in America as they will get their green card, and then five years later, can become citizens. If this program is slavery then this kind of slavery is very attractive for many of the slaves.

[Reaganwuzthebest]

It's slavery to us in the sense the H-1B holders are tied to that business for however long they hold the visa. They are technically not free to move about. Also, they can't complain about working conditions or an a$$ whole boss otherwise it's back home you go. And what benefits are they getting? Are they receiving medical and vacation time? There are a variety of reasons business wants this program, it's all to their advantage, not the American workers.

[koba]

There is a lot of variance in the benefits (or lack of them) in what H-1bs receive. Some do get benefits but I'm sure many don't. They are "bound" to their employer during the 6-year period but then 50% will get their green card and will become "free." Also don't forget that druing the H-1b period many of them are making good money ($60,000/year) so they are relatively happy. Even if they go back to their country of origin, from their post of view they have succeeded. If they can save $100,000 in their working life here they can go back to their native lands and live very well. As far as the H-1bs are concerned, the program works.

[Reaganwuzthebest]

I'm very happy for the foreigners that it's a better life for them. I'm sure it is compared to where they're coming from. But this isn't their country, it's ours. And it's not some corporate hack's or Congress's to give away. If Americans are being laid off in droves while foreigners enjoy the good life (compared to what they had), then we've got a problem. Some in Congress, like Tom Tancredo understand that, and hopefully will rectify the situation very soon with legislation now pending.

[Cato]

More evidence of America going towards a service economy will feeding on cheap labor...

You sir TOTALLY MISSED the point of this article.

Read it again.

CATO

[koba]

Yeah...that's the real H-1b debate. Is there a real shortage of engineering/computer talent in this country or is this just a program to get cheaper compliant labor? Depending on who you talk to, you're going to get different answers about this.

[Reaganwuzthebest]

Do you work in the computer industry? As I mentioned in a previous post, I started out to be a computer programmer, but because of the fact of H-1B and that I'm not 20 anymore I backed off and went into something else computer related. It's my opinion this program is discouraging other Americans from taking it up as well. If that's the case, it could have a detrimental effect on national security since foreigners have less allegiance to the US.

[koba]

No. I buy and run businesses like gas stations, convienience stores, liquor stores etc. Some people in my family are in the engineering/computer field. Some of my people have come over on H-1bs and now they are in the process of gettting their green cards. I'm thinking of going to law school, but it costs $100,000 and lawyers tend to make less than a good gas station. I'll hopefully end up with a gas station in about 6 months or so.

[JoeMomma]

This is conservatism? I think not.

I guess your version of conservatism includes corporate welfare, like the H-1B visa program. By the way, corporate welfare is not conservative.

BTW ... Buchanan opposes H-1B too.

[JoeMomma]

Actually, my company is one of the good ones who put Americans first and we trumpet that fact to our customers.

I didn't hire the 50-something on my staff, but our clients are delighted with him and that's enough for me to keep him around. My boss and his boss agree. You have this false notion that training is a huge time-waster. It isn't. My mainframe guy picked up Linux and a couple of web languages quickly, and he's a profitable employee and his clients are very happy with him.

You see, there's a certain morale boost in investing in your employees. Employees with high morale and the tools to do their jobs are more productive employees. One of the reasons I got my promotion is because my management method works. You don't earn loyalty from your employees by threatening to replace them with a cheaper H-1B at any moment.

I know that people aren't productive if they are constantly worried that an H-1B could replace them with the same skills for less money. I'm aware of the general distrust of employers and corporations and the fact that loyalty is a two-way street. Companies can't expect loyalty and give none in return.

Keep employees happy and expect results from them (but not indentured servitude from them). It works. Only immoral companies would fire a good American employee for an H-1B.

[JoeMomma]

Yeah...that's the real H-1b debate. Is there a real shortage of engineering/computer talent in this country or is this just a program to get cheaper compliant labor? Depending on who you talk to, you're going to get different answers about this.

True. But the only ones complaining about the labor shortage are trade groups like ITAA, who have a vested interest in cheap labor. I've seen very few independent studies, and all of the indy studies I've read concluded that H-1B is a ploy for cheap labor. The indy studies came from conservative and liberal organizations.

The only pro-H-1B study came from ITAA -- a corporate lobbying group who has a vested interest in getting cheap labor.

[blueriver]

It is easy for you to say this because you are not loosing your career at the whim of government legislation. I am sure the doctors in this country would not appreciate if the government let in millions of foreign doctors and drove down the price of an office visit.

[Dave S]

It is easy for you to say this because you are not loosing your career at the whim of government legislation. I am sure the doctors in this country would not appreciate if the government let in millions of foreign doctors and drove down the price of an office visit.

Explain to me why an American business would prefer to hire someone from India or Pakistan to do their programming, fly them and their families here, if they could hire someone who already lives here that they can understand and communicate with at the same price.

[brat]

C's=Capitalists! We have so many here. What bothers me is that they have ZERO human compassion.

[Dat]

How is it "corporate welfare"? That is just a left-wing buzzword used against companies they do not like.

[JoeMomma]

How is it "corporate welfare"?

ummmm ... because it is funded by taxpayers solely for corporate benefit? It's especially insulting that it's used to unemploy American taxpayers to satisfy corporations' desire for cheap labor.

That is just a left-wing buzzword used against companies they do not like.

Corporate welfare is government/public assistance to corporations for the sole benefit of corporations. REAL conservatives use the term corporate welfare too -- Tom Tancredo, PAt Buchanan, Bob Barr, Tim Hutchinson, etc.

Corporate welfare is as offensive as individual welfare and should be stopped in a truly conservative environment. REAL conservatives oppose corporate welfare.

[Poohbah]

If India is such a smart country with so many brilliant programmers out-programming us, then why is their country a third world hell hole? Because they don't require of their companies what we do here, a fair wage for a day's work.

BZZZT! You got that answer wrong.

India is one of the most protectionist nations in the world. They also have, on occasion, nationalized foreign companies that were too prosperous for the taste of the Congress Party, and THAT, good sir, is a sure-fire ticket for convincing foreign capital to not bother with your company.

[Poohbah]

Replace "company" at the end of my last post with "country."