By Joe Guzzardi
January 27, 2016
Two Walt Disney World workers laid off last year have filed separate lawsuits in a Tampa federal court against their former employer and two global consulting companies, HCL and Cognizant. The consultants provided foreign national workers to Disney. Adding to the emotional distress of being fired, Leo Perrero and Dena Moore were forced to train their Indian H-1B visa replacements or risk losing their severance. As Perrero told the New York Times: “It was so humiliating to train someone else to take over your job. I still can’t grasp it.”
Perrero and Moore were experienced Disney employees who had received outstanding performance reviews, but after being fired were unable to find other jobs within the huge entertainment company. Only two of the 250 Disney fired were rehired within Disney. Some observers concluded that Disney blackballed them.
In recent years, theme park, cruise ship and retail merchandising have pushed Disney’s soaring profits into the multi-billions which makes its decision to displace American workers with cheaper foreign labor all the more difficult to justify. In its first 2015 fiscal quarter, Disney recorded more record-breaking profits with revenue up 9 percent to nearly $13.4 billion while net income rose 19 percent to about $2.2 billion.
Disney’s riches won’t end any time soon. In February, Disney raised its Florida theme park admission tickets for those 10 or older to $105. Bob Iger, Disney Chief Executive Officer whose estimated net worth is more than $100 million, announced that based on Star Wars: the Force Awakens early $1.9 billion revenue in less than two months, similar movies will continue, as Iger put it, “forever.”
Replacing Americans with lower-cost foreign workers has been a common corporate practice since Congress approved the H-1B visa in the early 1990s. According to the legislation, the H-1B is a non-immigrant temporary visa that prohibits it from displacing American workers. But the visa has been widely abused, especially in the last decade, and giants like Disney, Toys “R” Us, and Southern California Edison commonly rely on H-1B workers for permanent staffing. The current H-1B cap is 85,000 annually—in other words, 85,000 jobs that American have been shut out of.
Now that the H-1B’s role in undermining American workers is public information, presidential candidates have taken various and rapidly shifting positions on whether to increase H-1B visa caps. Since the New York Times published several unflattering stories about Disney, some front runners have toned down their platform for significant H-1B increases.
On Capitol Hill, the visa and its related scandals are getting closer scrutiny. In November, Senate Judiciary Chair Chuck Grassley (R-Iowa) along with assistant Democratic leader Dick Durbin (D-Illinois) introduced a bill to close loopholes, and “end abuses” that have harmed Americans. Last year, the Justice Department won convictions that carry fines of a maximum 20 year jail sentence and $250,000 for visa fraud, wire fraud and harboring illegal immigrants against two Indian-American brothers.
In today’s tight labor market, the H-1B has no place at the table. A study compiled by University of California, Notre Dame, and U.S. Treasury economists and presented at Harvard University found that the continuous admission of H-1B visa employees “substantially crowds[s] out employment of other workers, [and] leads to lower average employee wages while rising firm profits.”
Congress should cut back, for at least ten years, the H-1B visas issued to 15,000 annually. A lower cap would help guarantee that only the most exceptional are admitted. During the decade-long trial period, Congress could measure whether the IT industry really needs all those low cost guest workers it constantly lobbies for.
Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. Contact him at [email protected]