When faced with a labor storage, U.S. businesses have two choices: 1) hire illegal workers or 2) send the jobs overseas. Both are detrimental to U.S. workers and the health of the economy. Illegal workers are often underpaid and do not consistently pay taxes. Jobs that could have been filled on shore are instead shipped overseas because of bureaucratic limits. Those lost wages result in a direct reduction of U.S. gross national product, housing starts, and consumer spending.
In the late 1990s we saw thousands of “commodity” technology jobs go overseas. To many observers, it seemed an acceptable trade-off in a fast-growing economy since there clearly was a labor shortage for these jobs in the U.S., and the higher-paying, higher-skilled jobs were staying on shore. Over time, however, as programmer jobs moved offshore, when it came time to replace their supervisors, it made more sense to hire them offshore, too. Soon, more higher-level jobs—manager, tech leader, chief technology officer—went overseas.
Increasing the number of work visas such as the H-1Bs, however, makes a better alternative. They’re for college-educated professionals, with the primary focus on information technology and are limited to a maximum of 65,000 per year, according to U.S. Immigration Support, with costs of approximately $3,000 per year (for government and legal processing costs). The H-1B visas can bring the best and brightest minds to the U.S. Instead, U.S. policies have allowed one sector, companies that outsource jobs to India, to hold approximately 80% of the H-1B visas, which results in a lack of diversity among H-1B visa workers.
Meanwhile the U.S. government has strict limits not only on H-1Bs but also on H-2Bs, for such jobs as migrant farm workers and construction workers—yet there are an unlimited number of work visas available for bagel bakers. While no government can determine the number and type of immigrant workers that will be required, the market can and does very effectively. The market should be allowed to determine the types and numbers of work visas, creating more staffing options while keeping more jobs on U.S. shores and contributing to the U.S. economy.
Under a free-market economy where U.S. citizenship means anything, when faced with a labor shortage U.S. businesses have two choices: 1) offer a higher salary or 2) hire less-skilled workers and train them. Either option would bolster the U.S. economy by strengthening the middle class and income tax base.
A flood of immigrant workers—legal or illegal—upsets the labor market’s natural supply and demand, drives down wages, and displaces qualified Americans from their careers. Low-skilled immigrants deprive teens of entry-level jobs, fueling 15% unemployment plus crime and gang activity.
Between 2001 and 2003, Congress tripled the H-1B quota, giving corporations virtually unlimited access to foreign workers. Rather than stimulating the economy, it caused U.S. tech unemployment to soar upward of 20% by 2004 in Silicon Valley and other areas. Yet in December, 2002, Hewlett-Packard Services (HPQ) chief Ann Livermore declared: “We’re trying to move everything we can offshore.”
And in June, 2003, Microsoft (MSFT) Senior Vice-President Brian Valentine called on employees to “pick something to move offshore today” in his “Thinking about India” presentation.
Microsoft and Google (GOOG) receive thousands of résumés from skilled U.S. citizens per week. Their challenge is not the availably of qualified Americans, but rather how to manage the 100,000 résumés filed in their human resources department.
Visa cost is insignificant compared with wage savings, and many employers pass the legal costs back to the sponsored employees. Incredibly, since the largest H-1B users are overseas consulting firms, non-U.S. entities are literally sponsoring each other for U.S. citizenship.
With 1 billion people desiring to immigrate, a “market-based” immigration system of “admitting anyone with a job offer” would be chaos.
According to a National Science Board report, the H-1B program actually admits 85,000 foreign workers (of which 20,000 are exclusively for non-American graduates of U.S. colleges with a master’s degree or higher) each year—regardless of whether qualified Americans are available—and the L-1 visa allows multinational corporations to bring an unlimited number of less-skilled workers to the U.S. while still paying them their foreign wage scale.
Accordingly, work visas should be limited to those of truly exceptional skill or when no Americans can be found to fill a position—at any wage. The free market would fill the remaining positions.Opinions and conclusions expressed in the BusinessWeek.com Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.
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