By Joe Guzzardi
May 16, 2016
For years, the print journalism industry has lost readers and subscribers as people have moved to 24-hour televised news broadcasts, and the Internet. An entire generation has never read a newspaper. During the last decade, the loss of readership has forced large news conglomerates to cut costs as they laid off reporters and support staff. The Catch-22: reducing overhead produces a less satisfactory end product which means that increasingly fewer people bother with newspapers and magazines. Only 23 percent of Americans read newspapers, down from 41 percent a decade ago.
The McClatchy Company, a chain that owns about 30 major newspapers including influential dailies in the state capitol cities of Sacramento, CA, Raleigh, NC, and Columbia, SC announced that it would soon move between 120 and 150 information technology jobs to India. McClatchy recently signed a contract with India-based IT provider Wipro which, according to its website, generated $7.7 billion in revenues for its last fiscal year.
Despite the negative publicity generated by similar American worker displacement personnel moves at Disney, Abbott Labs, and Southern California Edison, the McClatchy employees, some with 20 years of service, will be forced to train their replacements in what’s brazenly called a “knowledge transfer process.” In his letter to the employees, McClatchy Chief Executive Officer Patrick Talamantes, whose total annual compensation is about $1.6 million, acknowledged that his decision is “regrettable,” but “necessary.”
By “necessary,” Talamantes means that the H-1Bs represent cost savings too great to ignore. According to the Economic Policy Institute, most employers save an average of 50 percent in salaries paid when they hire H-1B visa workers or offshore high wage jobs. But the visa’s regulations rig the game against American tech workers. H-1B visa legislation requires that firms take good faith measures to recruit U.S. workers, not displace them. But if IT employers pay more than $60,000 to an H-1B, significantly less than an American with comparable skills would earn, the non-displacement provision is waived.
The long-term fall out of lost middle-class jobs has consequences well beyond the 120-150 unemployed Americans that McClatchy fired; it represents the new business model: under the guise of streamlining, get rid of experienced employees and replace them with cheaper substitutes. Lost jobs shipped overseas explains the middle-class’ erosion and puts U.S. economic recovery further out of reach.
Corporate America has, or should have, a collective responsibility to provide for the well-being of its employees as well as for future generations. About four in five university students who will graduate in engineering and technology within the next few weeks don’t have jobs waiting for them. Many leading academic researchers from respected think tanks like the National Bureau of Economic Research, the RAND Corporation, and the Urban Institute have not found any evidence indicating widespread tech shortages or hiring difficulties in science and engineering occupations.
Yet every year, year after year, and regardless of actual labor market conditions, 65,000 H-1B visas are distributed. To fathom the degree of ongoing American job displacement that 65,000 annual H-1B represents, substitute the word “jobs” for “visas.” The much abused H-1B visa should be ended immediately, and the hiring emphasis should return to where it belongs—employ Americans.
Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. Contact him at [email protected]