Not only have tech giants like Apple and Google engaged in what a federal court called an “overarching conspiracy” to prevent wage competition, but Silicon Valley firms also abuse H-1B visas to bring in immigrant competition at lower wages, a practice that’s now spreading to other industries. (In Los Angeles, Southern California Edison is firing workers and replacing them with immigrants now).
The outsourcing firms are controversial because they are exempt from the federal requirement that they not displace American workers if they pay H-1B visa holders at least $60,000 a year. That threshold still falls below the market rate for American tech workers.
American tech companies who use workers hired by these firms benefit from the cheaper labor, as well as the automatic loyalty engendered among workers who would otherwise lose their legal status.
The H-1B visas last for three years, and can be renewed once. But workers applying for green cards can renew their visas indefinitely. There is currently a decade-long backlog of Indian green card applicants. Given the tremendous delay, companies have an incentive to hire workers from India, who critics say end up in a system of de facto “indentured servitude.”
“It’s not because Indians are smarter. These companies want more control over their employees. An immigrant worker has few rights and is now stuck with the employer for many years,” said Aman Kapoor, president of Immigration Voice, a nonprofit advocating on behalf of high-skilled foreign workers concerned about the green card backlogs.
Kapoor calls the H-1B visa program a federally sanctioned “long-term employee retention insurance program” because green card applicants cannot change jobs while their applications are pending or they have to re-start their applications.
“If an employee is not going anywhere, the employer will not give salary increases,” he said. As a result, “American workers are discriminated against in the job market and immigrant workers are exploited.”
10:20 PM EDT
This is cheap labor. That is all there is to it. It is also shabby labor. India might say they are training these people to take, er..do our jobs, but their work ethic and their lack of creative thinking make them a less than ideal substitute for the people whose jobs they are taking.
I was asked to go to India and train my replacement. How is that fair Orin Hatch?
I know too many people in the tech industry that are looking for work and are very qualified to do the jobs. If it weren’t for the H1B visas, they, and I, would be working right now.
10:09 PM EDT
All those good American jobs going to foreigners. Almost every other country on this planet has laws insuring their natural born citizens get the jobs first. The only way a job can be given to someone other than a natural born citizen is if there’s no one available to fill the job.
9:59 PM EDT [Edited]
What is really hurting us is non-US citizen workers in the U.S. There are 11 million illegals. 2.5 million H1Bs – temporary contract workers in nursing, engineering and finance – who can stay up to 6 years. Unlimited L1s coming in for every occupation from overseas who also can stay up to 6 years. Additionally, 1 million legal immigrants come in each year. Unfortunately, the U.S. only produced 2.2 million new jobs last year.
What this means, is that foreign workers, who do not need to be paid benefits by the U.S. companies, are replacing the U.S. worker. The U.S. corporations have declared war on the U.S. worker, and with 41.5% totally on welfare or on welfare subsidies, they are driving this nation into bankruptcy.
9:48 PM EDT
Wow…Just wow. The American Tech worker is being screwed royally. It’s a combination of our gov’t and corporations (but what’s the difference these days). I work in tech and have seen the abuses as well. Sad state of affairs for Americans.
9:51 PM EDT [Edited]
San Francisco Bay Area engineers are now 65% foreign contractors. Is that right? I know two Berkeley engineers that graduated and couldn’t even get a job in Northern California. Both students went into other fields – law and forestry. So, STEM is dead end in California for our youth.
9:34 PM EDT
So 85,000 American workers have lost their jobs or will never be able to get a job.聽
Maybe they should renounce their citizenship, move to S. Korea, then apply for an H1B as a foreign national.
9:27 PM EDT
I have worked with many of these H1B software devs from India. Almost all of them work for big US companies, they stay for one year and then go to the next company until their visa runs out, then they return to India, permanently taking US jobs because now they know how our system works and how to work for US companies and they can do the same job remotely now. Big US companies are destroying our tech labor force, driving down salaries with this short-term thinking – their bad behavior must be stopped.
9:17 PM EDT
It’s amazing that both parties have let this crap go on for decades.
9:13 PM EDT
I’ve worked in the Tech field for 30 years, so I’ve seen it first hand…Including training the H1B to take over your job. Not only that, but once the H1B is in the job, they will only hire other H1Bs. The whole thing is a scam for cheap labor.
9:05 PM EDT [Edited]
They also have to have a 4 year degree. Which in India is a total joke (see: cheating and lack of accrediation in Indian “colleges”. But the fun trick is since you require a 4 year degree for the position a US citizen who might be totally qualified without a degree is automatically excluded from consideration. Ergo no more junior level IT people from the US.
That little bit deserves its own article WaPo.
9:04 PM EDT
It is sad that the H-1B system was used to displaced thousands of Americans over the years, The rich and greedy hi-tech industry with able support from both parties like Orrin Hatch (R) , Chuck Schumer (D), gamed the system using fake scams like “STEM crisis:, “Y2K crisis”. Everyone knows the fake scams now! Hundreds of low-quality low-cost workers replaced Americans and the politicians did NOTHING! If one country gets 70% of the visas, it is NOT about the best and brightest anymore! Applaud Trump for this whatever his other huge and significant faults…
Mark Zuckerberg’s Cynical Ploy to Get Cheap Foreign Labor
In his initial foray into rent-seeking through immigration policy, a PAC dubbed FWD.us, Zuckerberg was more forthright about his motivations. Established in the spring of 2013, in the middle of the Senate debate over Marco Rubio’s Gang of Eight bill, the PAC said it was “mobilizing the tech community in support of policies that keep the American Dream achievable in the 21st century, starting with comprehensive immigration reform.” Amid the boilerplate, the goal was plain: Give the tech industry easier access to cheap foreign labor. The list of supporters is a who’s who of Big Tech: Bill Gates, Steve Ballmer, Eric Schmidt, Max Levchin, Sean Parker, Drew Houston, Mark Pinkus, John Doerr, Reid Hoffman, and so on.
I’m in IT and I’ve been directly involved with offshoring with multiple companies. These kids from India and other countries are not smarter or better educated. Its the direct opposite. 90% of the time they are less educated with less experience and were only hired because of their pay. They force whatever Americans are left at the company to do both their own work and the work of their new coworkers because they simply don’t have the skills to do the job. The language barrier is incredible and greatly effects business. Both sides of the isle have betrayed us for over a decade.Marco Rubio’s campaign was so ignorant it actually came out in a statement that the workers were needed because Americans didn’t have the skills. Anyone who says that no matter what their politics are is either a liar or is being paid off. I have seen employees of 10,15 20 years “train” their college aged replacement. One thing they also don’t want you to know. At least in India I have heard directly from residents there that the colleges push kids through regardless if they are qualified or not because the IT companies give the so called colleges payoffs for worker names that that peddle here in the US. Most of these companies are now India owned and the amount of fraud especially when claiming skillets is off the chart. You cannot believe a word of the so called skillsets they claim in their workers. The American companies are just as complicit covering up this fact when the new employees cannot do the job. Its a complete and total fabrication and our representatives could not be more complicit in it.
As Floridians Are Displaced, Rubio Demands More Foreign Workers
Zach Smith 2 hours ago
They ought to just set a maximum US wage at $60,000 and be done with it.
If you want to see the effect of these absurd laws, go look at biomedical research. Biomedical science is the highest demand field of all for advanced education, graduating 5x more PhDs than computer science. Yet you see American graduate schools full of foreigners, most of whom already have a foreign masters or doctorate that is really only equivalent to a US bachelors if that. 800,000 Americans applied for 300,000 graduate school slots last year. We already have a 3-fold surplus. But almost 800,000 foreigners also applied, and at the end of the day the graduate schools extended 250,000 offers to foreigners while hundreds of thousands of Americans were passed over.
As you might guess, the wages for these students are horrific. The NIH minimum salary is only $10.50 per hour full time equivalent. Obama signed an executive order that every employee of a federal contractor (even high school dropouts washing dishes) must be paid at least $10.10 an hour. In other words, if you are an American who earned a Bachlors degree or a Masters who gets into a PhD program, those degrees are worth a whopping 40 cents an hour. If you don’t like it, take your science degrees and go drive a car for Uber or work as a barista at Starbucks because there are plenty of foreigners begging to take the slot.
According to a 2008 Nature article, a PhD student in China makes less than $50 per MONTH, which is lower than the Chinese minimum wage in the big cities. Our absurd immigration loopholes are bringing global wages to America, and Americans who attempt to swim against that tide are in for a lifetime of unnecessary hardship, low pay, and disappointment.
Zach Smith 1 hour ago
If Facebook wants to relocate to India tomorrow, there is nothing anyone can do to stop them. If they want Indian workers for global wages, they can be my guest and leave. But we should not use their threats as an excuse to let them bring global wages here to depress American wages and displace American workers.
I’m in Biomedical research, and the big money comes from government grants. This isn’t just a “free market”, these are US taxpayer dollars and they should go to American scientists. Instead, 2/3 of Americans who get a STEM college degree can’t find jobs and end up working in other fields. Those foolish enough to push through and get a Masters or PhD are surrounded on all sides by foreigners who flood the schools, flood the labs, flood the jobs.
I spent the last 2 years on a desperate job search. I was lucky because I had my own grant funding so I knew I had 2 years of job security to look for the next position. The first year of applying I didn’t get a single interview. One employer sent a note saying they had over 250 highly qualified applicants. Another told me to my face they had over 350 highly qualified applicants. You have Americans trying to find work, and facing a job market where every spot get hundreds of applicants. Meanwhile, the University where I worked had over 80 foreign scientists on H1-B and other visas. A friend of mine couldn’t find work, moved away to La Jolla for 18 months, his position closed down and he moved back here to take a 1 year position, only to have that end abruptly. He moved half-way across the country again, because he couldn’t find any local work.
Again, these are research jobs that are funded by US taxpayers. Americans are crisscrossing the country desperately trying to find any work, while we have dozens or hundreds of foreigners on staff or in graduate schools doing the benchwork at every research institute in the country.
This is a self-inflicted wound. If they passed Ted Cruz’ bill requiring all these foreigners to make $110,000 or more per year, there would be a loud sucking sound as all these foreigners were sent home and qualified Americans were magically found to do the work for a living wage.
Corporate lobbyists have convinced legislators of both parties that America needs more guest workers in high-tech jobs. Leading the charge in Congress to do their bidding is Utah Sen. Orrin Hatch, who has introduced legislation to double or triple the number of non-immigrant tech workers who can be hired annually on H-1B visas. But his proposal won’t fix the H-1B program’s flaws, which allow American and foreign workers alike to be exploited and underpaid.
A program that brings skilled, smart people from abroad to work in the United States can be a very good thing — but only if it’s done fairly, and after giving U.S. workers a chance to be hired. Sen. Ben Nelson, D-Fla., wrote recently that the H-1B program “was created to help fill jobs when there were labor shortages, not to take jobs away from anyone.” The reality is that employers aren’t required to search for or offer jobs to U.S. workers first, and the H-1B program has been used repeatedly by corporations to fire and replace skilled and educated U.S. workers with cheaper, indentured, temporary foreign workers. This is done to increase corporate profits, but it’s at the expense of the livelihoods of thousands of American workers.
Thanks to reporting from The New York Times, The Los Angeles Times and Computerworld, the American public is getting a glimpse of the H-1B’s primary purpose. Recent, egregious examples took place at Disney and Southern California Edison (SCE) — two companies that earned billions in profits last year — where hundreds of information technology workers were laid off and replaced with H-1Bs. But first, the U.S. employees were required to train the H-1B workers who would soon be sitting at their desks, doing their jobs.
H-1B rules allow employers to displace and replace U.S. workers with foreign tech workers. The only restriction applies to companies where more than 15 percent of the workforce are H-1Bs: They are permitted to replace U.S. workers only if the H-1B holds a master’s degree or is paid over $60,000. Hatch recently suggested increasing this displacement exemption to $95,000, rather than prohibiting displacement altogether. Hatch’s proposal falls short, because companies will still be allowed to replace workers, as well as vastly underpay H-1Bs compared to U.S. workers in the same occupation and geographic region.
While employers must pay H-1B workers the legally defined local “prevailing wage” — a rule intended to prevent undermining U.S. wage standards — employers have the option of paying the Level 1 “entry-level” wage, or the Level 2 wage, both of which are well below the average wage local employers pay for workers in similar jobs. In theory, the wage level must correspond to the H-1B worker’s education and experience, but in practice, the employer gets to choose, and the government isn’t checking. Unsurprisingly, the Government Accountability Office reported that 83 percent of H-1Bs are certified to be paid below-average wages (Level 1 or 2).
How do corporations benefit from this? Major savings: Many of the workers laid off at Disney and SCE earned $100,000 a year or more. Government data indicate the H-1B workers replacing them earn around $60,000.
The companies that usually do the actual replacement — offshore outsourcing firms like HCL, Infosys and Tata — are the top recipients of H-1B visas, and get about half the allotted visas every year. Their business model is based on replacing U.S. workers and shifting jobs overseas. Their clients that replaced U.S. employees with guest workers include companies like Fossil, Pfizer, Northeast Utilities, Harley Davidson and Cargill.
Instead of expanding the H-1B program, Hatch should work to fix it, to prevent the kinds of abuses that occurred at Disney. The law should be changed so that it’s illegal to replace U.S. workers with H-1Bs. Employers should be required to recruit and hire qualified U.S. workers before hiring an H-1B, and be required to pay their H-1B workers no less than the true local average wage for the jobs they fill. Requiring a higher wage would be even better, because it would ensure that employers use the H-1B only when they can’t find local talent, and to hire highly skilled individuals that complement and add value to the workforce, rather than as a way to cut labor costs.
Daniel Costa is the director of immigration law and policy research at the Economic Policy Institute.
JustWondering New York 17 hours ago
This is a program that has evolved from a needed staffing augmentation vehicle during Y2K to become simply a method to depress wages. If you think Disney is an example, take a look at this State’s new centralized IT organization and the HBITS contracting process. Currently, the vast majority of consultants hired are H1-B’s. The wages they are being paid are, for IT, outrageously low. The companies that broker those workers are making enormous profits. The end result is a broad based displacement of American workers. The quality of the average worker has been largely mediocre. I’ve seen amazingly good ones too, but what’s the cost of that to the American workforce. What’s the next group that will be hit by a variation of the H1-B program? This is very much like an economic version of Martin Niemoller’s poem – “First they came for the socialists”. The H1-B program needs to be stopped and stopped soon before the next whole class of good paying jobs is simply given away.
James Gaston Vancouver Island 9 hours ago
An American company should be required to pay H-1Bs an equivalent wage as that paid to an American plus an additional 25% surcharge to be used for training American workers.
emm305 SC 9 hours ago
End the H1B program.In my state, we have a technical college system that trains workers for companies like BMW and Boeing and many, many others over the decades when they came into. These tech colleges also provide the Cisco and Microsoft training certification programs (or used to).End the H1B program.
Marc Jordan NYC 9 hours ago
As an American I am very familiar with this subject since I’ve been a
software developer for decades and have seen and been displaced by such workers.What is not mentioned in many of these articles is that when Indians (or Chinese) are sent here, their companies put them up in what we would consider to be flop houses, where a two bedroom apartment may house 8 people. They are given allowances for food and transportation and what little money they earn here (sometimes a little more than minimum wage) is typically sent back home. Another misconception is that they are good at what they do and that their English language skills are on-par, which can’t be further from the truth. In my experience their computer code is substandard and their English is very difficult to understand and not a dialect used in the United States. The worst part of this are those American workers who have to interact with them. They often get frustrated and need someone to act as a go-between because of language and cultural barriers,
not to mention their lack of understanding of how American business is carried out.Call it sour grapes, but those of us who have worked side-by-side with them know what I am talking about.Meanwhile, thousands of American’s continue to lose their jobs to these abusers of the system. Is it any wonder that the middle-class is rapidly disappearing here? And for what, so some company can increase their bottom line?
ALALEXANDER HARRISON 414 EAST 78TH STREET, NYC NY 10075 9 hours ago
Arguments put forth by NATIVE NEW YORKER for allowing more rather than fewer immigrants with H-1B visas strike me as specious, condescending and tainted with cultural arrogance. First, there is no shortage of American engineers that justifies the high number of these visas being given to Indian programmers or programmers from any foreign country. Hundreds of thousands of American engineers and computer programmers have been given the heave ho, including those from Disney, and to add insult to injury, forced to retrain their successors, who are mainly from the sub continent. Those displaced by Disney and other companies, many of whom r at mid career, will have a hard time finding equivalent positions with the same benefits. As far as NATIVE NEW YORKER’s remark that those immigrants from the sub continent are harder working than their American counterparts, that is a remark open to question. NATIVE NEW YORKER also makes the dubious point that if we let “illegals” into the country, then why hold back on those from the subcontinent? The term, “illegal” has always offended me, since many of those termed “illegal” are hard working and discreet. Moreover, many of the “illegals” as NATIVE NEW YORKER calls them, are willing to do the kind of work that Americans are reluctant to do. Not so with the holders of H-1B visas, whose presence has resulted in more unemployment for American citizens, not just in the area of I.t., but in academe as well.
1:11 AM EDT [Edited]
Free trade is not free. Free trade is an example of Herr Goering’s famous statement that if you tell a lie often enough it becomes true. Free trade and odious free trade agreements benefit large manufacturers, many of whom have moved away from America to take advantage of lower wages abroad. It is incredible to think America has facilitated the exit of its own manufacturers who turn around and sell back to us stuff once made in America. Free trade implies that eventually Americans will have to work for Chinese wages. President Obama’s plan to create the Trans-Pacific Partnership is just another step toward completely divesting the American worker. According to “Plant Closing News,” in 2012 alone more than 15,000 manufacturing businesses in the USA have closed. The machinery has been sold off abroad. But how does one recycle the workers? A man works at a job for 20 years and is then thrown to the dogs. He has to go on the dole and then we hate him because he is unemployed. There was a time when an American worker could be part of the middle class. He could have a home, a car, send his kids to college and his wife could say home and raise the kids. No more. As we progress into “free trade,” the American worker has slid into the lower class, constantly struggling to stay afloat. Auto workers now make LESS than their counterparts made a decade ago. Is this the America we want? Already 1% of the people own 99% of the wealth. Is even that not enough for them? How much more do they want?