Opinion

President Trump, Don't Import Guest-workers in a Recession

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Posted: Apr 17, 2020 12:01 AM
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President Trump, Don't Import Guest-workers in a Recession

Source: AP Photo/Alex Brandon

America's economy is in freefall. More than 20 million people have filed unemployment claims in recent weeks. And the worst is yet to come. Unemployment could reach 30 percent in the second quarter, according to the head of the Federal Reserve Bank of St. Louis.

Yet America's immigration policy is running on autopilot. U.S. Citizenship and Immigration Services is scheduled to start doling out 85,000 "H-1B" guest-worker visas this month. Most of these aren't for foreign doctors or nurses either -- the visas will largely go to computer programmers and IT technicians.

There's zero reason to import foreign laborers while millions of Americans are losing their jobs. President Trump could protect American workers by canceling this year's H-1B lottery -- but it looks like it’s going to proceed as usual.

Even in good times, the H-1B program was rife with abuse. Congress created it in 1990 with the idea to allow businesses to import foreign workers for highly specialized jobs that couldn't be filled domestically. But the legislation was written in such a way that the program could be used to displace qualified Americans with lower-wage guest workers.

Corporations took advantage of this source of cheap labor. Fully 80 percent of H-1B workers earn less than their American peers in similar jobs.  

That's hardly surprising. Foreigners, often desperate to work in this country, have little leverage during salary negotiations and are usually willing to accept significantly lower compensation. Most of them lack truly unique skill-sets. According to the Government Accountability Office, the majority of H-1B visa holders work entry-level jobs. One in four H-1B job postings doesn't even require a bachelor's degree.

The program has ballooned in recent years. There are now roughly 900,000 H-1B workers in the United States. They account for one in every eight tech workers. And their visas can be extended up to six years.

All this competition depresses Americans' income. Wages for American computer scientists, for instance, would have been up to 5 percent higher in 2001 had the H-1B program had never been created, according to researchers at the University of Michigan and the University of California, San Diego.

In many cases, corporations haven't merely hired H-1B workers in lieu of Americans -- they've actually laid off high-performing citizens and then hired cheaper foreigners.

Often, they'll do so indirectly via an outsourcing firm. In 2018, Verizon inked a $700 million contract with Infosys, an Indian firm that specializes in offshoring IT services. Verizon employees warned the deal with Infosys -- which applied for a stunning 11,000 H-1Bs visas in 2019 alone -- would lead to the loss of thousands of jobs.  
Similarly, AT&T hired Accenture, another outsourcing firm and heavy H-1B user, to offshore a reported 3,000 finance jobs last year.  

Disney did the dirty work itself, infamously forcing 250 American workers to train their foreign H-1B replacements in 2014 before laying them off.

Many American college graduates -- even STEM degree holders -- struggled to find good jobs even before the coronavirus struck. Only half of STEM graduates actually take jobs in STEM fields after graduation. That's due in part to our immigration system. "Annual inflows of guest workers amount to one-third to one-half the number of all new IT job holders," according to a damning report from the Economic Policy Institute.

President Trump has long talked about the need for secure borders and reliable domestic supply chains -- and the coronavirus crisis has proved him right. So it'd make no sense for his administration to grant tens of thousands of guest-worker visas to multinational corporations next week. Such a move would merely encourage more layoffs and offshoring at the worst possible time.

Ryan Girdusky is the author of the upcoming "They're Not Listening, How the Elites Created the National Populist Revolution."

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