H1B visas and the American worker. Or, why should Americans have good jobs.

Op-ed: Hatch should fix H1-B visa program instead of expand it

BY DANIEL COSTA

PUBLISHED: JUNE 13, 2015 03:12PM
UPDATED: JUNE 13, 2015 03:12PM 

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Daniel Costa

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.