America Cannot Afford The High Cost of Cheap Labor

Published on September 21st, 2011

There is a famous saying, "There is no such thing as a free lunch!"

The point is that nothing is truly free- when someone else eats for free, someone else has to pay the bill.

Corporations understandably want to reduce operating costs to increase profits.  The problem is that unscrupulous employers will do anything and everything to reduce their operating costs.  Before the labor movement, child labor was common and factories and other worksites were filthy and unsafe places to work.

Today companies that want to lower operating costs and avoid various regulations and requirements will often move their manufacturing plants to China and other countries where they face far fewer regulations and workers who are willing to work for lower wages with far fewer benefits.

Alternatively, those companies that decide to maintain facilities in the United States but still want to reduce labor costs and avoid many of the various environmental, safety and labor standards, will resort to hiring foreign workers.  At the lower end of the labor market, such unscrupulous employers seek to hire illegal aliens who are coerced into settling for substandard wages under substandard conditions and are not likely to complain about dangers created by their employers who blatantly ignore health, safety and environmental regulations and standards.

Our nation pays in many ways for these hiring practices including the fact that foreign workers employed in the United States send tens of billions of dollars in remittances to their families in their home countries.  These are wages that are not earned by American workers and the money is not spent or invested in the United States.

At the upper end, companies seek to employ foreign workers through the use of H-1B and other "temporary" work visas.  The problem for employers who seek to hire high tech workers is that often there is no shortage of amply qualified American or lawful immigrant professionals who would gladly take those jobs, so these employers work with law firms that have developed strategies to be legal "artful dodgers."  The employer is thus able to hire workers for greatly reduced wages and few if any fringe benefits and the lawyers are paid their fees.

However, as I said at the outset, there is no such thing as a free lunch.  The first group to pick up the tab is the displaced American workers who are unemployed or underemployed and are drowning in debt.

An even bigger group of people who are getting stuck with the tab are the citizens of our nation.  There are a few reports that you need to take time to review.

First of all, I ask that you consider the frustrating news article that appeared in "The Hill" on September 9, 2011 and was entitled: "Senators press IRS for answers on tax credits, unauthorized workers"

The Inspector General of the Internal Revenue Service issued a report that prompted the response by those senators noted above and was entitled: TIGTA Report: Unauthorized Workers Received $4.2 Billion in Refundable Tax Credits Last Year

The summary of that reports begins as follows:

WASHINGTON – Individuals who are not authorized to work in the United States received billions of dollars from the Internal Revenue Service (IRS) last year in a refundable tax credit based on earned income called the Additional Child Tax Credit (ACTC), according to a new study released today.

The study, conducted by the Treasury Inspector General for Tax Administration (TIGTA), found that claims for this credit by these individuals have escalated sharply from $924 million in 2005 to $4.2 billion in 2010.

This is a luncheon tab of such proportions that it should give every struggling American family a serious case of indigestion!

Next I ask you to consider that another report, this one issued by the Inspector General of the Social Security Administration on September 7. 2011 contained more infuriating news.  It reported on how thousands of aliens who had been admitted into the United States, under the aegis of the H-1B Visa Program, purportedly to do high tech jobs apparently were not employed by the employers who had filed for their visas.

This report was entitled: H-1B Workers’ Use of Social Security Numbers (A-08-11-11114)

Here is an excerpt from the report that sums up the problem:

"Based on the results of our review, we estimate about 7,131 (18 percent) of the 38,546 H-1B workers to whom SSA assigned an SSN in 2007 may have used their SSNs for purposes other than to work for their approved employer. This estimate includes about 4,433 (11 percent) H-1B workers who had posted wages during our audit period from an employer other than their DHS-approved employer. This estimate also includes about 2,698 (7 percent) H-1B workers who had no posted wages from 2007 through 2009.


"To enhance SSN integrity, we believe SSA should contact DHS to offer to establish a data match agreement to assist DHS’ efforts to identify and reduce the number of H-1B workers who may use their SSNs for purposes other than to work for their approved employer."


There is no integrity to the immigration system and no integrity to the process by which visas are issued to aliens.  In addition to the obvious national security implications these failings have to our nation, our nation and our citizens are paying a huge economic price where jobs, our nation's burgeoning deficit and other such issues are concerned.

Aliens who are admitted under the aegis of a work visa program who fail to work at the jobs for which they were admitted into the United States are illegally present.  Back when I was an INS Special Agent, such aliens would have been routinely arrested and deported from the United States.

Today, any alien who can make his (her) way into the interior of the United States is all but guaranteed to be not only not arrested but to be likely granted employment authorization!

In essence, the President and the leadership at DHS have, in making it clear that illegal aliens will not be arrested for simply violating our nation's borders and immigration laws have, in a very real sense, fired the starter's pistol.  As a consequence it must be expected that aliens from around the world who aspire to come to the United States for all sorts of purposes ranging from seeking illegal employment to goals that involved far more nefarious objectives, have heard the "shot heard 'round the world" are off and running and heading to the United States!  To them our borders are the "finish line!"

You must consider these issues when you hear the candidates for public office, especially the Presidency, declare how they would create new jobs.  The real issue is who will liberate jobs being held by aliens whose presence in our country represents a violation of our laws- laws that for far too long have been ignored by politicians from both sides of the political aisle.

America and Americans can no longer afford what has, for decades, passed for "business as usual!"

You are donating to :

How much would you like to donate?
$10 $20 $30
Would you like to make regular donations? I would like to make donation(s)
How many times would you like this to recur? (including this payment) *
Name *
Last Name *
Email *
Additional Note