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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[WRhine]

More on the H-1B scam -- corporate welfare designed to displace American workers at taxpayers expense ...

I agree. Thanks for posting this article.

[sinkspur]

H1-Bs are on the way out.

The next wave is companies simply outsourcing projects, and then entire departments, offshore. India, Malaysia, the Phillipines, South Africa are all prime sources of IT talent.

I'm selling these resources, and they're ready to go.

And companies are talking to us, seriously.

[Dave S]

It's insulting to the intelligence that there's a supposed shortage in the tech fields, layoffs are widespread in the tech fields, and yet companies lobby for MORE H-1B's in a recessionary period.

Are these people being layed off skilled in the languages that the companies want? If someone is skilled in doing web pages and the company needs someone to write in C, I dont think there is a fit.

Rather than depressing salaries in the field, H-1B may be bringing them down to what the market would have been if there werent these artificial shortages caused by borders.

[Torie]

Are we headed back to a subsistence economy here in the US sink? Should I buy a farm? Who will be able to afford lawyers when all our jobs go overseas except those derived from mother earth?

[sinkspur]

All our jobs are not going overseas.

Programming is going overseas. Project managers, systems analysts, trainers, will always be staffed here.

But line-by-line coders are a commodity. The low bidder, here or offshore, will always win.

[koba]

I went to Hyderabad, India, and saw the high-tech center there. Bill Gates is donating $20 million more to improve it. Microsoft, Oracle, and many other big companies are already there. A large amount of medical transcription is done there, and it has become a major industry in Hyderabad. The information is sent to India, processed there, and sent back to America. The companies are making serious efforts to send more and more work there, just as the manufacturing industry here made serious efforts to leave the U.S. and go someplace else, like Mexico.

[Torie]

That's a relief. I don't think popular culture producers, or the finance industry, or almost everything else that is high value added is going overseas either. The key is high value added. That is what drives higher per capita incomes. Mass produced textiles don't. Cheers.

[Reaganwuzthebest]

popular culture producers...

More and more of that is going out of the country too. Hollywood is taking production to other countries like Canada and Mexico for cheaper workers and costs. And...the ever popular cartoons like the Simpsons are not drawn here anymore either. That's being contracted out to the Phillipines and other countries in Asia.

[Torie]

The creative stuff is still all in Hollywood (writing, special effects, creative ideas, actors, producers, etc). Where stuff is shot is an increasingly smaller share of the pie.

[nunya bidness]

Who will be able to afford lawyers when all our jobs go overseas except those derived from mother earth?

Plumbers.

[WRhine]

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.

This is the emerging pattern and it does not portend good things for the future. Hey, I'm all for cutting regulation and taxes on business (like no taxes at all on business) but I don't think our government should be in the foreign recruitment business when the welfare of its citizens should be its primary goal. After all isn’t this what we pay taxes for?

[UnBlinkingEye]

Let us hoist Allman_Brothers_Rule on her own petard:

To: UnBlinkingEye; JoeMomma; First_Salute

I am white, and I own an IT business, amongst others. I hire the best people in front of me, always. Part of being the best includes "interpersonal skills," which frankly means "whites only."

I know hundreds of other IT business owners; some of their companies are big, and some are small. They all feel exactly the same way. All would rather hire a white guy, even if seriously stupid, dumb, or underqualified, as opposed to an Indian guy who is brilliant and well educated. They (including me) will even invest the money to train the dumb white guy, sometimes spending months throwing money down the drain, while they would not even shed one single dime to train an Indian guy.

My point is this: Quit whining, you are spoiled and fat, and probably dumber than a bunch of rocks, because if you can't even beat an Indian H-1B VISA guy, you are probably too dumb to work anywhere within the United States in Information Technology.

Maybe you should go to France or Britain, where their IT industry is "booming." NOT.

In closing, get a clue, because it is the Indians that have built, are currently building, and will (hopefully) continue to build the greatest IT powerhouse in the United States that the world has ever known. Although I agree that there should be strict limitations on the amounts of Indian H-1B VISAs entering the country, I am not totally against them either. If we lose them, you had better start learning how to shuck corn or make wine like the French. Join the 21st Century, please. This is America.

6 posted on 1/22/02 6:34 PM Pacific by Allman_Brothers_Rule [ Post Reply | Private Reply | To 4 | View Replies | Report Abuse ]

ABR unplugged.

[sinkspur]

Dell, GE and IBM have opened call centers in India.

My little company is working with Indian nationals who will guarantee answering times, call times, and a revenue enhancement, along with dialect suppression and 95% college-degreed customer service representatives.

The Indians are impressive, hard-working people. The biggest problem, as this article indicates, is working with the Indian government. We have an Indian national running our outsourcing business, and he's wired into the Indian government at all levels.

Lots of palms to grease.

[WRhine]

Rather than depressing salaries in the field, H-1B may be bringing them down to what the market would have been if there werent these artificial shortages caused by borders.

Oh yes those awful borders. Maybe we should invite the whole world to the U.S. China, among other nations of course, would love this. They could do what they can't do militarily. Send in a billion of their own, set up their colonies like the Mexicans and just take over by their sheer numbers. You neo-cons never think past abstract platitudes that have no bearing in reality.

[koba]

That pattern has been going on for thirty years, it is just increasing now. Go to most aerospace and computer companies and 30-50% of the engineers and programmers who work there will be people who were born outside of the U.S. Many of the older American engineers are heading towards retirement, so these numbers will probably increase. In the colleges, 60% of the young (under 40) professors in engineering and computer science were not born in the U.S.

[Torie]

The trick for the welfare of a nation is to get the productivity of the people up to a level where it will pay for the cost of the government corruption. When that happens, the middle class takes off, and you know what the middle class thinks of government policies that reduce its standard of living. The pressure for something akin to more efficient government kicks in. It is happening in so many places. It is one primary reason why I am an optimist.