Ugly things happening in the job market....

Work in BigTech for Hire: Americans Need Not Apply

by IAN SMITH August 24, 2015 

A post-graduate student-visa program is just another scheme to displace American technology workers. American technology workers won a big victory in the federal courts this month. The D.C. District Court ruled that a STEM-related visa program created by the Department of Homeland Security was potentially damaging to the domestic labor market and also in violation of federal rule-making procedure. For the plaintiffs in the case, the Washington Alliance of Technology Workers, however, the fight against BigTech lobbyists and Homeland Security has only just begun. DHS’s so-called Optional Practical Training (OPT) program allows foreign nationals to live and work in the U.S. on a student visa even after graduation. In a rule promulgated by DHS in 2008, foreigners graduating in a STEM field at a U.S. school had these authorizations extended to nearly two and a half years after their graduation. U.S. employers love this because, on top of the longer work period, they have a greater chance to transition them into the H-1B program, a “professional specialty worker” visa that can last up to an additional six years. Also, employers receive a tax benefit for hiring OPT participants over Americans, as they do not have to pay Medicare and Social Security taxes for aliens on student visas. 

Plaintiffs’ counsel, the Immigration Reform Law Institute (which I work for), argued in court that the OPT extension, created not by statute but entirely by DHS, was really just a way to circumvent the existing H-1B cap of 65,000 annual visa grants set down by Congress years before. Helpfully for us, DHS had already admitted that this was the purpose for the extension. As it explained in the agency rule creating the extension, “the H-1B category is greatly oversubscribed,” which, as a result, has “adversely affected the ability of US employers to recruit and retain skilled workers.” With the H-1B cap having been held up by Congress over the last few years, DHS did the next best thing. As H-1B guru Norm Matloff describes in a blog post discussing our case, the agency simply went ahead and created “a de facto expansion of H-1B.” Let me digress for a moment on the H-1B lottery and the “oversubscription” issue. Unlike other visas, the fees for H-1B applications are refundable; there is no penalty for oversubscribing. As a consequence, heavy H-1B users, such as the outsourcing firms that supply BigTech companies as well as BigTech companies themselves, always apply for more visas than they really want in order to get close to their target. David North at the Center for Immigration Studies explains the process here. So when you hear in the press and elsewhere that “petitions have outstripped slots yet again by two-to-one,” the numbers are merely a reflection of companies’ trying to game the lottery system. 

As Matloff explains, OPT is “just as harmful as H-1B.” The two programs are now similar in size, and the benefits to BigTech are also similar. Like H-1B holders, OPTs are younger than most American technology workers, and therefore cheaper. Citing the “prevailing wage” rules that technically exist for H-1Bs, Matloff notes that “the legal wage floors for H-1Bs depend on experience” (the worker’s age, in other words), “so hiring young H-1Bs in lieu of older Americans is legal.” As he says with cases such as SoCal Edison and Disney, “age was the key factor underlying the wage savings accrued by hiring H-1Bs.” See this link for information on a similar suit against Google based on age discrimination (which the company has since settled). The OPT program, like H-1B, allows BigTech firms to flood the labor market, creating artificial competition and pressuring the standard of living we’ve earned through decades of hard-fought reforms. In the case of OPTs, however, this “wage floor” isn’t even available; being recent graduates, they’re all young (and cheap). Further, OPT participants are even cheaper to employ because, as stated earlier, aliens on student visas are exempted from Social Security and Medicare. Fundamentally, the OPT program, like H-1B, allows BigTech firms to flood the labor market, creating artificial competition and pressuring the standard of living we’ve earned through decades of hard-fought democratic and labor reforms. The cost savings, meanwhile, get siphoned up by private technology firms, many of which grew out of taxpayer-funded military programs. Thankfully, much of this wasn’t lost on the judge. DHS had asserted that our plaintiffs didn’t have standing to sue because (a) they couldn’t prove an OPT participant actually took one of their jobs (an impossible and unfair demand) and, in the alternative, (b) the plaintiffs were currently employed and so couldn’t show any injury — all are employed, mostly in contract positions. The judge knocked down both arguments by pointing out that “an influx of OPT computer programmers would increase the labor supply, which is likely to depress plaintiff’s members’ wages and threaten their job security, even if they remain employed” (emphasis added).

More concrete evidence was also offered. Plaintiffs showed examples of job advertisements where only OPT participants were requested to apply. As Matloff likes to note, these companies are not just using H-1Bs and OPT participants to replace American workers, as in the SoCal Edison and Disney cases; they’re also hiring them instead of American workers. And many times, it isn’t “highly skilled” types that are being imported but simply “ordinary people, doing ordinary work.” The benefits of circumventing the H-1B program are apparently big. Arguing that DHS’s chosen 29-month extension period was an arbitrary and therefore invalid decision, plaintiffs showed the court that industry lobbyists CompeteAmerica, lobbyists from Microsoft and the Chamber of Commerce, and others had all been in contact with DHS requesting the same 29-month extension. And showing just how eager it was to comply, DHS implemented the rule without going through the statutorily mandated notice-and-comment period, a window of time in which the public can criticize agency action. 


DHS tried to argue in court that skipping the process was necessitated by a looming “fiscal emergency” in the U.S. economy that could be ameliorated only by letting “tens of thousands of OPT workers” join the tech industry. Whose economic analysis did DHS cite to back this up? Studies from the technology industry itself. Ultimately, although the court knocked down the OPT extension on procedural grounds, the victory is only temporary. DHS can open up the rule to notice-and-comment and try again. MORE IMMIGRATION DID FACEBOOK INTENTIONALLY BLOCK POSTS FROM CONSERVATIVE IMMIGRATION THINK TANK? ON IMMIGRATION, SANTORUM ADDS SUBSTANCE WE CAN APPLY THE 14TH AMENDMENT WHILE ALSO REFORMING BIRTHRIGHT CITIZENSHIP Further, the judge rejected our argument that the program violates the law on other, more substantive (and less procedural) grounds. According to congressionally made statute (Immigration and Naturalization Act § 1101(a)(15)(F)(i)), student visas cannot be allocated for working purposes and may be allocated only to “bona fide students . . . solely for the purpose of pursuing such a course of study . . . at an established . . . academic institution” (emphasis added). But again, OPT, entirely a DHS creation, purports to let student-visa holders join the workforce. By ignoring the stipulations of Congress, the program exceeds DHS’s statutory authority. By giving DHS the authority to redefine what a “student” is, the court is allowing the agency to set the duration and conditions of a student’s stay, potentially letting them occupy the labor market for years upon years. Good for the foreign “student,” good for the trillion-dollar tech industry, but bad for the American worker. — 


Ian Smith is an attorney who works for the Immigration Reform Law Institute.