Americans' wages stagnant at 1988 levels

Published on September 25th, 2014

Joe Guzzardi
September 25, 2014
As seen in:
The Waxahachie Daily Light (Texas)
The Franklin Banner-Tribune
Rightwing News
Baxter Bulletin
The Daily Review

For nearly two years, multibillionaire Mark Zuckerberg has been one of the most vocal comprehensive immigration reform leaders. Zuckerberg, whose net worth Forbes estimates at $33 billion and who on a single day last week saw his fortune increase by $1.6 billion thanks to a Facebook stock surge, is a ceaseless advocate for more foreign-born labor. Since Silicon Valley IT giants Microsoft and Cisco have fired thousands in recent months, Wall Street analysts wonder why, with so much experienced and talented personnel available, Zuckerberg couldn’t hire some of them.

One reason is that hiring overseas workers who come to the U.S. on an H-1B visa has the advantages of a lower pay scale. Also because employers control their new employees’ visas, a form of modern day indentured servitude, they have leverage over their job performances. If the employer terminates an H-1B visa holder, the employee could be deported. Therefore, no matter how much work the employer piles on or regardless of the unreasonable number of weekly hours he may demand, the employee either complies or the federal government may send him home. When they get their marching orders, few H-1Bs balk.

As for visa workers’ wages, employers admitted to the General Accounting Office that they pay less to H-1Bs than to Americans. An in-depth GAO study found that 54 percent of H-1B applications were for the lowest wage level and offered employers as much as a 60 percent discount compared to the American pay scale. A similar visa, the L which provides for international intra-company personnel transfers, has no salary floor. An employee who comes from abroad to work in the U.S. can be paid the existing wage in his native country. For example, an Indian transferred to New York could be paid the salary in India for engineers, about $12,000 a year.

Importing more immigrant workers when more than 92 million Americans aren’t participating in the labor market is indefensible.  The elite, mostly corporate America, but also universities and hospitals, profit immensely. For the average American, however, the tens of thousands of visas issued annually since the early 1990s have taken their toll. Originally intended to be only temporary, the H-1B is today integrally woven into the corporate fabric.

The fallout for Americans has been dire. Last week, the U.S. Census Bureau issued its annual income and poverty reports. U.S. household median income remains the same as it was in 1988: $52,000. Wage stagnation dates back to at least a decade before the financial crisis hit six years ago. The weak economic recovery hasn’t translated into higher incomes for typical American families. Adjusting for inflation, U.S. median household income is 8 percent lower than it was before the recession, and 9 percent lower than in 1999. Since the end of the Reagan administration, Americans’ earnings have gone backwards. Most economists agree that it will be difficult if not impossible to regain this lost ground.

The median Chief Executive Officer salary in 2013, however, was $763,000. Of the top-paid 50 CEO’s, 44 earned a median increase of 22 percent from last year and two executives got raises in excess of 400 percent.  Zuckerberg’s personal wealth is so vast that he’s joined some of his fellow billionaires in accepting only $1 a year in actual salary. The ready availability of cheap labor harms American workers and helps enrich CEOs. Nothing will change until Congress passes legislation that protects Americans.

A new IT worker survey indicates that nearly 30 percent of technical professionals predict they will be laid off and looking for new jobs in 2015. Their message to elites: Hire American.

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