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Of Immigration and Indenturement
The Magic Kingdom and the H-1B

ComputerWorld recently published an account that gets at an important aspect of the immigration debate that doesn’t often take center stage: the H-1B and L-1 visa program for high-skilled immigrants. At issue is the allegation that Disney fired anywhere between 135 and “several hundred” of its IT staff and replaced them with workers mainly from India, many of whom were presumed to be on H-1B’s. The article goes on to note that Disney is at the forefront of a movement to raise the cap on the number of these visas issued each year:

Disney CEO Bob Iger is one of eight co-chairs of the Partnership for a New American Economy, a leading group advocating for an increase in the H-1B visa cap. Last Friday, this partnership was a sponsor of an H-1B briefing at the U.S. Capitol for congressional staffers. The briefing was closed to the press.

One of the briefing documents handed out at the congressional forum made this claim: “H-1B workers complement – instead of displace – U.S. Workers.” It explains that as employers use foreign workers to fill “more technical and low-level jobs, firms are able to expand” and allow U.S. workers “to assume managerial and leadership positions.”

For the sponsoring company, what could be better? Management gets the compliant, lower-cost foreign labor often associated with outsourcing without having to deal with the hassles of unreliable remote monitoring or the overhead of having to open a satellite office in Bangalore.

But for foreign workers, there’s a catch: the employee is tied to the company that sponsors the visa. She cannot switch jobs, quit to found a startup, or indeed leave in protest of lower pay or dissatisfaction without forfeiting her immigration status. Moreover, upon termination, she is required to leave the country (unless, as is unlikely, she is able to find a second, established employer here in the U.S. to sponsor her directly).

A healthy U.S. immigration policy, as opposed to what we currently have, would encourage responsible levels of legal immigration, ideally adjustable to prevailing economic conditions, and have a high priority for skilled workers. It would also keep illegal immigration as low as is possible.

In addition, what a healthy immigration policy must not do—at either the low- or high-skilled level—is displace American jobs purely for corporate profit while at the same time creating an entire class of workers who do not enjoy the full rights of citizenship. The H-1B program as currently constituted, unfortunately, seems to do both those things. High-skilled Americans either lose their jobs or have their wages depressed, and America doesn’t get many of the usual benefits of allowing talented immigrants into our country through traditional means: the innovation, entrepreneurship, and drive that it adds to our culture and economy.

The H-1B workers at Disney might be more white-collar than the indocumentados on a California fruit farm. Likewise, the laid-off IT staff might be less down on its luck than inner-city African Americans no longer able to find first jobs in construction. But the pattern—and the problem—are unfortunately similar.

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  • Corlyss

    “This insidious move is great for Disney, but not so great for America . . . ”
    What? How do you square that with the continuous complaint that America can’t produce enough technical people so the H1B visa is necessary? How’s about those laid off go get some of those jobs the H1B is needed to satisfy?

    • Kevin

      In part Americans don’t pursue STEM degrees because foreigners brought in under the H1-B program depress wages for these positions.

      • Corlyss

        You can’t be serious, Kevin. Americans educators have had a hard time pushing students into STEM since before 1957. H1B program didn’t exist before 1990! If the pitifully few 65,000 H1B visas/per annum is the extent of the need here, we wouldn’t be the world’s tech leader.

        • Kevin

          Its certainly not the only reason for depressed US enrollment but lowered wages and career earnings for American STEM for graduates a significant factor. Without the constant influx of foreign labor driving down wages, earning and employment in these fields would be much higher.

          Also, it’s actually a hell of a lot more than 65,000 H1-Bs. It starts with diversion of science and engineering slots and graduate support in US universities to foreigners. Then you have up to 29 months if OPT employment post graduation, during which many are picked up in H1-B programs but others are diverted into other immigration categories – for example green cards via marriage. You also have multinationals using “temporary” programs to rotate in foreign tech workers, in some notorious cases at below minimum wages.

          The other issue us that employers want 25 year old foreigners, not 50 year old Americans who will have higher salary demands and benefits as well as the freedom to switch employers.

          The Disney case is particularly egregious as the law is supposed to require that there be no Americans able to fill the position (and the Feds are supposed to enforce this) and that those fired are hired at the prevailing wage for that job description. In this case everyone involved ought to be sent to federal prison for perjury as they would have been required to certify there were no American who could hold the position, that they advertised and recruited to find those Americans and that the wages paid are those which would be paid to an American who coukd do the job.

          • Corlyss

            I did some checking after our dialog and found a GAO report (one of the few institutions inside or outside of government that is trustworthy) that alludes to problems with the way the law is written that fail to protect workers in the way the law was contemplated to work. They didn’t go into the detail that you did, something I would have liked to see, but I get the idea that the law needs reform. I appreciate your detailed response based on your own experience. It made me curious enough to do my own research to find an unbiased source on the subject, which I believe GAO to be. Personally I’d rather see it eliminated and businesses have the ability to do what is in the best interest of the co., but I have no hope of such reforms ever happening.
            I think that people who try to protect workers from any change that doesn’t increase their wages underestimate the adaptability of the American worker. Another couple of administrations like this one and an equally ignorant Congress populated by Republicans who don’t want to appear to be mean is going to destroy American ingenuity and initiative, if indeed they have not already done so.

          • billsv

            YES, YES, YES prosecute these employers.

    • vepxistqaosani

      I can’t quite tell if you’re serious or not. In either case, the
      “continuous complaint” is a lie. The truthful version is “America can’t
      produce enough technical people willing to work at the wages employers
      can get away with paying H1B visa holders (not to mention the foreign
      nationals employed by outsourcing firms).”

      There is a legal
      requirement that H1B holders must be paid the same salary as an
      equivalent American citizen. But, oddly, (a) that never happens and (b)
      corporations are never investigated, much less prosecuted, for violating
      that provision of the law.

      • Corlyss

        So you’re saying basically hi-tech jobs are like pickin’ fruit – Americans won’t do the jobs cuz they don’t pay enough? Pardon my skepticism.

    • fastrackn1

      It seems that the problem according to this article is that Disney ‘fired’ the workers and replaced them with Indian workers, not that they couldn’t find enough workers. It seems very suspicious on the surface. Disney gets cheaper labor and has an indentured servitude type of relationship with the workers because the employees are “tied to the company that sponsors the visas”, and the other reasons stated above.
      Now these corporate parasites are trying to lobby congress to raise the visa limit under the guise of trying to benefit the American worker…BS. We do need to continue the immigration ‘brain drain’ policy that we always have had, but I don’t trust any corporation’s motives. All they care about is the bottom line and the price of their shares….

    • Larry J

      If there really was a shortage of American STEM workers, simple supply and demand would cause rising wages which in turn would encourage people to enter the workforce. It isn’t happening because employers have been outsourcing those jobs for many years.

      • Corlyss

        You don’t make any allowance for the possibility that the gigantic government presence in industries that utilize STEM employees works somehow to interfere with normal operation of supply and demand?

        • Larry J

          Go talk to some career engineers and then report what they tell you.

  • Chance Boudreaux

    Hope N Chains!

    • Chuck Pelto

      RE: Hope N Chains

      Indeed.

      The Progressive-Liberal elite LOVE their slaves.

      Too bad their voters don’t realize THEY are the slaves.

    • robohobo60

      No, no.

      “Rope & Chains”

  • Cellec

    On any given day, Disney employs about 160,000 – 170,000 people, worldwide. 95% of those workers, even IT professionals are temps.

    • Rick Caird

      Are you claiming that is justification for eliminating US workers in favor of H1- B immigrants? Gee, I wonder what Jeb Bush thinks of this.

      • Cellec

        Quite the contrary. I’m saying Disney’s attitude towards the vast majority of it’s workers, including IT workers, is very stand-offish. If they don’t have to give you benefits, train you, etc., then they don’t want to. Hence their zeal for H1-Bs.

  • Chuck Pelto

    RE: Too Funny

    And I’ll wager that the former employees of Disney and their ilk voted for Obama and other Progressive-Liberals Democrats.

    In money matters of business and government, Progressives don’t do the math. If they did, they wouldn’t vote Progressive.

  • http://whenfallsthecoliseum.com/author/kwatson/ megapotamus

    It’s all fun ‘n games until they put YOU out. Forward.

  • FriendlyGoat

    The only thing which pushes up wages is a shortage of qualified people to hire for specific jobs. The “business community” will ALWAYS be on the side of any policy which prevents shortages of any qualified people to be hired—-whether these involve illegal immigrants or legal “guest workers” on visa schemes. Citizens have nothing whatsoever to work with but their government for LIMITING the numbers of outsiders coming in. Wise citizens would be more concerned about legalized higher-skilled guest workers than about the illegal immigration. But, working-class white men supporting the GOP can be duped into believing their wage/job problems will be solved by controlling the border. That’s why working-class white men supporting the GOP are not very wise about their own situations. Some of the laid-off people at Disney could probably provide clarification of what matters most.

    • http://whenfallsthecoliseum.com/author/kwatson/ megapotamus

      As you clearly do not know Obama and the Democrats are full speed ahead not just on H1-B expansion but all forms of open borders. Yes, sadly the Reps mostly me-too on this but there are at least a third or more Reps who favor border control and visa enforcement. There is not a single Democrat you could name that does likewise. If you don’t know that you don’t know much. Sadly this is one area of firm bipartisan majorities in the political sphere while it seems there is firm support for enforcement outside of it. Curious, yes? But if you think Democrats are the solution you are part of the problem Quite a big part, wise man. Forward.

      • FriendlyGoat

        I do know that Democrats at the presidential level are expected to “cooperate” BIG TIME with the business community—–and they do.
        Clinton did. Obama too.

        It’s not quite the same thing as Republicans telling people we’re going to get rid of all those immigrants WHILE planning expanded guest worker programs to be enacted if/when they get the chance. Most American workers are better off with illegals in the country than they would be with more legalized guest workers.

        • richard40

          So why dont you recommend your fellow dems accept some repub demands to crack down on illegals, in exchange for repubs to agree to less legal immigration programs as well. If dem elected officials started proposing that, repubs would definitely follow, because they know their base would want it.

          • FriendlyGoat

            Why don’t you ask Republicans to adequately harass with BIG fines the employers who hire the illegal immigrants? We have GOP people who want to deport workers but not too many who want to fine their employers silly for hiring them.

    • Handover

      None of the politicians of either party give a ratsass what you or I think. They are beholden to the big money and have sold out America. Government doesn’t work anymore. It has been taken over by self-interested crony capitalists who enjoy getting the government to screw over the next guy or competition.

      • FriendlyGoat

        I agree. I always just believe that Democrats are useful for causing slightly less of it to happen than a full slate of Republicans.

        When corporations donate a lot of money to get, say, Jeb Bush and control of both houses of Congress and the Supreme Court, they are going to expect a financial return. And they WILL get it in today’s environment. People either have some liberals to moderate the action, or people don’t.

        • Handover

          Which party do you think that Bill Gates, Mark Zuckerburg, Jeff Bezos and countless others support? The Democrats are just as guilty as the Republicans with this H1B stuff and especially open borders stuff. And the Democrat Party has been co-opted by radical marxists who don’t even follow our Constitution any longer. The creampuff Republicans like it that way too.

          • FriendlyGoat

            You won’t find me excusing the sold-out Democrats, because I do understand NOBODY GETS ELECTED without some sell-out. That’s just reality. But, no, it’s not “just as good” to elect all conservatives. I’m for every liberal we can possibly elect, even though I do know some of them are required to be squishy.

          • richard40

            Except right now repubs are better on immigration than dems, and most of the drive to lessen immigration is coming from the repub side. So at the moment, repubs are not just as good, they are much better, although the establishment repubs are still bad.

          • FriendlyGoat

            The business community tends to get more of what it wants from Republicans. There is NO REASON ON EARTH to think that Republicans are “better on immigration” with respect to how it affects jobs and wages for working people.

        • richard40

          Actually I have noticed far more repubs who are skeptical of loosened immigration lately than the dems are. So if you want less immigration, to boost wages, and you do not see that happening, you may want to ask the dems why not first.

  • InklingBooks

    Spot on! This is almost certainly one of the primary reasons why Silicon Valley and Hollywood have been pouring money and their celebrity status into the Democratic party, particularly the Obama, Chicago-machine, ‘pay to play’ wing. I wonder if Silicon Valley and Hollywood been paying off Bill and Hillary too. If not, we may here from them soon. They’ll pretend to care.

    A friend of mine works for Google and likes to remark on the high wages she gets. I’ve restrained myself from telling her that those high wages may not be as secure as she assumes. For Google executives, they’re reason enough to import workers who’ll work for far less and won’t be able to quit.

  • billsv

    I know some IT workers who have been displaced. The average wage of IT workers have been reduced about 25% from around $90K to the mid $60. There are plenty of available US IT workers. Both Scott Walker and Jeff Sessions are correct. As far as I am concerned the H1B program should be eliminated. It has been abused long enough.

  • itellu3times

    Let’s be blunt, a “healthy immigration process” would shut down the H-1B program entirely, it has been lies, fraud, and an imposition on American workers since it began. It is even a bad idea for the companies who most love it, but they so love having a complaint work force they pay extra to get it, even if it puts all their Americans out of work.

    • http://chicagoboyz.net/ TMLutas

      The fly in the ointment is that we are not graduating enough doctors due to government regulation and so we have to import a number of them as H1B in order to make up the difference.

      • Handover

        Regulations can be changed.

        • http://chicagoboyz.net/ TMLutas

          Well, sure regulations can be changed and I’d encourage those regulations to be changed even though it’d be acting against interest for me personally (wife is an MD).

          The problem is one of sequencing/transition/implementation but because people’s lives are on the line with this, you want to take due care not to screw it up. Closing the H1B door is something you do after you’ve assured your supply chain of doctors isn’t going to be choked off by the corporatist stuff the AMA has loaded up in the state processes that certify residency programs.

          If you haven’t got that nailed down, you’re either going to shortchange rural areas of competent medical care or you calve off the MD use case into its own special visa temporarily while you take care of the supply problems elsewhere in the chain. It’s not like the supply chain issue isn’t solvable. It is and it’s not really that difficult conceptually. You just have to give evidence that you’re aware of it or you’re going to freak out all the people who know that little booby trap exists in the system and turn them into opponents when it doesn’t have to be that way.

      • richard40

        Dont import them as h1b serfs, junk that whole program, instead give a much smaller number of permanent tech skill green cards. That way we are getting citizens, not serfs who can be forced to leave if they dont meet every whim of their employer.

        • http://chicagoboyz.net/ TMLutas

          Congratulations, we agree. I don’t care what bureaucratic forms are used to get these doctors so we’ve got national coverage that’s adequate for the population but if you’re going to cut off one pathway, you’d better do the calculations to make sure the numbers don’t get radically smaller and our health care suffers for it. A carefully thought through change in immigration policy is better than a simplistic one that just gets rid of H1s entirely.

          • richard40

            In the case of doctors I see no reason to restrict immigration there at all, just routinely give immigration preference to qualified doctors who speak English, since we do have a doctor shortage. The only restriction you might put on it is require them to serve in an underserved community for 5 yrs, so they sort of earn their visa. I am more skeptical of IT visas, because I hear too many stories about qualified US IT workers getting replaced by a bunch of low cost immigrants, which is why I prefered a smallernumber of permanent immigrants, so we are not importing temporary serfs, as H1b is doing. IT does not look like a market with a labor shortage to me, but a bunch of greedy employers.

            The irony is I used to be very pro immigration, because I am very pro free market, but that was during the 90’s when we were close to full employment. When we have chronic underemployment, like we do now, it is not the time for high immigration, especially low skilled and low wage immigration. When I start seeing wages rise again, then it will be the time to open up immigration more, because eventually we will need more workers to replace retiring boomers.

          • http://chicagoboyz.net/ TMLutas

            Look up the process. It’s not that simple. A doctor from abroad has to go through a US residency to gain their permanent medical license. H1s and J1s are how the current system forces immigrant doctors into underserved areas.

          • richard40

            Never heard of J1. Good point that they may need a residency first, but residents perform medical service as well, and are also useful. How about letting them subtract the residency from the 5 yrs. But I think my point still stands that I see no reason to restrict English speaking foreign MD’s at all, allow unlimited immigration for them, provided they agree to serve in underserved areas for while after they get liscensed, at least until we no longer have doctor shortages.

    • Handover

      A healthy immigration process would be to shut down the process until every American has had a chance to get any jobs out there first and foremost.

    • richard40

      Shut down h1b entirely, and replace it with a smaller number (say 20%) of technical slot green cards. That way we are getting citizens, instead of expendible serfs.

      • itellu3times

        There are already several other visa categories for that and some of them have no limits, but probably should.

  • mgoodfel

    These Indian IT workers exist, and none of your ranting is going to change that. Computers are cheap, networks are cheap, and international calls via Skype are cheap. If you refuse to hire these people here, the response isn’t to hire Americans at twice the price. Instead, Disney will just outsource the entire function to some company in India. Or create their own branch there to do IT worldwide.

    The only real reason to hire software people on an H-1B visa is that some managers just can’t stand not being able to walk the halls and see people typing. They have no idea what work is actually being done (Dilbert Boss), but they need to see people working to feel in control. The solution is to fire those managers too.

    • vepxistqaosani

      Yes, but they are nowhere near as competent as the domestic variety. I know; I’ve worked with both. However, they’re cheap enough that one can throw a dozen Filipinos at a problem for less than you’d pay one American. And they’ll solve your problem, even if it simply means, say, brute-force revision of data rather than a programmatic fix to the database.

  • Ralph_Gizzip

    Isn’t Bob Iger a major donor to Democrats? Funny how that works.

  • Banal Resentive

    Fear and greed are the main motivators of those in
    power. And if fear and greed don´t counteract each other, you get
    problems…like now. The only fear US executives have is that they
    won´t make their short term earnings goals, and that works WITH, not
    against, greed. Perhaps American workers need to take some lessons from
    disgruntled Muslims versus cartoonists mocking Mohammed. I´d say
    Muslims have been pretty successful in their suppression efforts. If
    executives feared for their skins when considering mass replacement of
    Americans with H1B workers, I bet most of these jobs would remain filled
    with Americans!

  • Steve Gregg

    Back in the ’90s I got hired in the interview by an IT firm in Dallas. Once I started, I discovered that every worker there was a foreigner, mostly Chinese and Indian, except for a couple of the sys admins. I didn’t understand the significance of that. I was working there about three months when a Vietnamese kid showed up to do my job. That night, at about 8 pm, mu contracting firm called me to tell me not to come back the next day. They packed up my office stuff and I picked it up at their office. It was pretty cold.

    When it was all over, I realized that I had been hired just to fill in until they could find a cheap H1B worker to do the job. At the time, turnover of IT workers in the Dallas-Fort Worth area was about every 18 months, while H1B workers were tied to their jobs for three years. If they quit without a new sponsor, which was difficult to acquire, then it was back to Asia. They worked for a discount from the market rate in exchange for acquiring the right to become a resident alien or green card, allowing them to stay permanently. So, residency was part of their payment, which is why they worked cheap.

  • richard40

    We should junk the h1b program, and replace it with a much smaller increase of visas for those with the same technical skills (say 20%). To decide what the required technical skills are, give each company a set number of technical visa requests, based on how many new IT workers they presently intend to hire, so that they submit for specific names (presumably people they are already interested in hiring). Note that the slots will only be a fraction of their new hires, so they must still hire more US workers. Give out about 2 times the number of requests as visa slots, and prioritize those that are requested by multiple companies first. A company could also use multiple requests on one immigrant to up their likelihood of making the cut if they want them badly. They do not come here as h1b serfs, but with full green cards. The new immigrants can either work for the company that requested them (which they may still want to do, since a job offer is on the table, and they may be grateful to the company that sponsored them), or shop around (if the sponsoring company tries to treat them like cheap labor). Since they are are permanent immigrants, instead of low cost serfs, there is no reason for any company to go to immigrants just because they work cheap, since being permanent residents they dont have to. And since they can stay here permanently, they can form new companies as well. This reduces the number of new immigrants for the near term, but since they can stay, and become citizens, they have every incentive to assimilate into our culture, and add their skills to our economy permanently, thereby making each one more effective long term. And since they are here for the long term, having only 20% as many is still good for solving any long term shortages. And since technical slots are still available, US companies can still get the best and brightest to come here, not because they can get them for lower cost, but because they really have unique skills.

  • Ofer Imanuel

    Correction: you can switch jobs when on H1B. The process is called H1B Transfer. Quite a few companies will not sponsor an H1B, but will take H1B transferees,
    The biggest risk for someone on H1B is if he gets laid off. Then he has to find someone to transfer to within 30 days.
    The other issue is green card sponsorship.

  • Azar A

    It should be illegal for greedy US traitor companies to hire OPT and H1B visa foreigners over Americans. Right now American IT works are starving while the leeches from overseas are taking advantage of the US work visa programs. Available jobs should be well publicized and US citizens should be hired first even if some training has to be provided. Everybody knows that these desperate people from overseas have false credentials and degrees and experience in more than half of the applications and that no US department is available at the present time to verify the authenticity of foreign degrees and experience as well as resumes of students seeking to work on OPT.

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