Foreign workers and the new Reagan Democrats

The GOP presidential candidates have a unique opening involving immigration policy to take the lead on the issue of the “wage gap” and at the same time have a message that resonates with millions of middle-class Democrats.

At issue is the use of workers with H-1B visas.  Lots of very profitable Silicon Valley tech firms have been lobbying candidates on both sides of the aisle to open the floodgates.  In an opinion piece on The Hill’s Congress Blog, Ron Hira of Howard University tells the tale of Southern California Edison workers whose new assignment is to train their foreign replacements.  The technique is tidied up for political correctness’s sake with the name “knowledge transfer.”  Additionally, he claims it’s a big moneymaker.

Why do companies replace Americans with foreign guest workers?  The SCE workers rightly believe that the motivation is “pure greed.”  According to a recent consulting report commissioned by SCE, the typical SCE IT worker is earning $110,000, while government records show that Tata pays its H-1B workers $66,000 and Infosys pays $71,000.  The savings go beyond just wages.  H-1B workers have very limited bargaining power, since the employers control their work permits.  It should come as no surprise that H-1B workers are easily exploited.  Those significant cost savings far outweigh the one-time H-1B legal and administrative fees of about $5,000 per worker.

In practice, the H-1B visa has been used for years to undercut American workers with lower-wage and often lesser-skilled workers brought in from overseas.  How does this happen?  Congress sets the wage floors for H-1Bs, and has set it far below market wages.  The Department of Labor has chosen not to investigate the rampant abuse of the program.  As a result, over the past decade, outsourcers like Tata Consultancy Services and Infosys have become the dominant users.  Just over the past four years, Tata and Infosys received more than 33,000 new H-1B visas.  That's 33,000 jobs lost due to those two companies alone.  They use the program to replace American workers domestically while using their H-1B workforce stationed in America to facilitate the transfer of work and jobs to India.  These are not immigrants in waiting – the firms sponsor virtually none of their H-1B workers for permanent residence (Green Cards).  Instead of a way to fill skills gaps, the H-1B program has become a way to suppress wages and pad profits.

Presidential aspirants should be up to speed on this.  H-1B visa reform would probably resonate pretty well throughout many Democratic counties in California and other blue states.  These might be called the “new Reagan Democrats.”  Add to that repeal of the FCC’s Title II assault on the internet, for which many of its proponents are now having second thoughts, and the GOP could possibly gain traction in the tech crowd.

A good conservative could go even farther.  Let’s suggest that cash-rich tech behemoths such as Apple, Microsoft, and Cisco use some of that cash and create their own schools and train their own engineers.  Government would do its part by waiving rules and providing accreditation.  The tech companies could remake education, as they have so many industries.

About the only losers would be the army of highly paid lobbyists and rabble-rousers for the immigration industry.