By Joe Guzzardi
June 3, 2015
Two recent H-1B scandals at Southern California Edison (SCE) and Disney that centered on the controversial visa brought demands from Senators Dick Durbin (D-IL.) and Jeff Sessions, among others, for a congressional investigation. The concern is that employers have abused the visa, and thereby put American IT workers at a disadvantage.
Two months ago, SCE fired about 500 American engineers and forced them to train their foreign-born replacements. Last year, Walt Disney Parks and Resorts summarily fired its American IT employees to make room for H-1B visa holders under the guise of global reorganization.
Speaking on the condition of anonymity, the displaced SCE and Disney Americans were unanimous in their opinion that cost-cutting was the major motivator behind their dismissal. Well-paid, long-standing employees with outstanding personnel reviews got the gate to make room for less experienced, lower paid overseas workers.
Last month, a French software engineer, Théo Négri, released his analysis of the Labor Condition Applications that prospective employers must file with U.S. Department of Labor when they seek to bring in an overseas worker on an H-1B visa or a related work visa. Négri’s findings are eye-opening.
Countless non-partisan studies have proven and the market has affirmed through the firing of thousands of Silicon Valley employees from Microsoft, Dell and Cisco as well as others that there is no IT worker shortage. Négri found that, according to visa application data, salaries at Facebook and Google, where earnings for the same position had been growing $10,000 to $15,000 a year, increased less than $2,000 in 2014. Tight labor markets means wages rise, a phenomena that’s non-existent in high tech.
Stagnant IT wages are no surprise. Pay for application software developers, a high demand specialty, have risen just 8.9 percent over a five year period compared with a 12.5 percent increase for all the economy’s other occupations.
The bombshell from Négri’s report is that several of the technology companies with the largest number of H-1B visa applications including giants Infosys and IBM hire few software engineers. Instead, Silicon Valley employs so called “technology leads” or consultants as part of their never-ending mission to cut overhead and avoid paying at the top end of the scale.
Adding consultants instead of software engineers is corporate sleight of hand that enables low-end salaries. The federal laws governing the H-1B require that immigrants be paid the prevailing wage. But if the job title is “consultant,” the salary might be $80,000, a savings of about $60,000 from the engineer’s $140,000.
The dismissive, unethical behavior toward American tech workers continues. Iowa, for example, spent $50 million to lure IBM to the state. Shortly after IBM became established in Dubuque and Columbia, with Iowans welcoming them, the firings began. IBM called them “resource actions.”
Even Iowa’s influential Senate Judiciary Chair Chuck Grassley can’t reverse the anti-American worker trend. When Grassley asked IBM if they were “making a good faith effort to hire Americans,” the company didn’t respond.
Forces more powerful than the U.S. Senate perpetuate the cycle, namely the corporate bottom line. An abundant cheap labor supply is exactly what former Federal Reserve Chairman Alan Greenspan advocated for in 2007 when he encouraged importing more educated foreign-born workers to “suppress” U.S. wages—his words—which he considered too high.
Congress has the simple solution at its fingertips. Most legal forms of immigration including the fraud-ridden H-1 B should be halted until the job market has stabilized and Americans return to near full employment.
Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. Contact him at [email protected]