The Curious Case of Vanishing U.S. Jobs

BUSINESS COMMENTARY

The unemployment rate in the United States still hovers around 9.1 percent, yet the U.S. federal government still allows companies to bring in foreign workers under its foreign worker programs with the excuse that local talent is not available.

The most debated programs are the H-1B, H-2B, L-1, OPT, J-1, and B-1 visas, under which a U.S. company can employ a foreign worker for up to six years. Each visa designation addresses a different need, with the H-2B visa allowing a company to bring in a foreign worker who lacks the qualification for a specific job but can be trained within a reasonable time.

During good economic times these programs helped people come to the Unites States, but over the years, and especially during the recent economic downturn, these programs stop Americans from getting jobs because they are lost to foreign workers that entered the country on the above foreign worker programs, according to a 2011 report by the Government Accountability Office (GAO).

“The total number of H-1B workers in the United States at any one time—and information about the length of their stay is unknown, because (1) data systems among the various agencies that process such individuals are not linked so individuals cannot be readily tracked, and (2) H-1B workers are not assigned a unique identifier that would allow for tracking them over time,” said the 2011 GAO report.

The H-1B visa is capped at 65,000 jobs annually, which is less than 1 percent of the total July 2011 U.S. unemployment numbers of 13.9 million people, but it adds up year after year. Also, the foreign worker may stay in the United States six years, and may even be eligible for a permanent residency and U.S. citizenship down the road. Then the individual brings in brothers, sisters, and families that can take jobs from qualified Americans.

“Loopholes in these programs have made it too easy to bring in cheaper foreign workers with ordinary skills, who directly substitute for, rather than complement, workers already in America. They are clearly displacing American workers and denying them both current and future opportunities,” testified Ronil Hira, professor at Rochester Institute of Technology, before a U.S. Senate subcommittee hearing in July.

Proponents of the H-1B visa saga roll out a slew of reasons why U.S. foreign workers programs should be kept alive, while opponents address the program’s problems that become more prominent during hard economic times.

The 2011 GAO report suggested that lax oversight and statutory changes are undermining the original intent and value of the foreign guest worker program. Besides, it has become easy to perpetrate fraud.

“A recent Department of Homeland Security study reported that 21 percent of the H-1B petitions they examined involved fraud or technical violations,” said the GAO report.

Over the past years, the programs have been watered down significantly and it gives an unintended competitive advantage to companies that outsource well-paying and high-tech jobs to foreign shores.

“For at least the past five years the employers receiving the most H-1B and L-1 visas are using them to offshore tens of thousands of high-wage, high-skilled American jobs,” testified Hira.

Scrutinizing Numbers

“The top three India-based offshore outsourcing firms, Tata Consultancy Services, Infosys Ltd., and Wipro Ltd., added a stunning 57,000 net new employees last year alone [2010],” said Hira.

The outsourcing industry increases its workforce by the thousands year after year with American workers being on the losing end most of the time.

Infosys Ltd. brought into the United States 10,002 workers on the H-1B and L-1 visa between 2007 and 2009. Wipro Ltd. used the H-1B and L1 visa for 7,878 of its workforce.

“The H-1B and L-1 visa programs do not require any labor market test. … Employers are not required to show that qualified American workers are unavailable. … Employers can and do bypass American workers when recruiting for open positions and even replace outright existing American workers with H-1B or L-1 guest workers,” testified Hira.

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