Back in 1950, almost 31 percent of working Americans had manufacturing jobs. Now the figure is below 10 percent. Many analysts put the blame on American companies that sent such jobs to low- and slave-wage nations during the offshoring wave that picked up momentum in the 1980s and hasn’t stopped. Controversy rages.
There is plenty of bitterness, too, about the H-1B visa program that flows the other way: well-educated foreigners come to the United States and take good jobs, largely in high tech. Congress set up the program in 1990, although its roots go as far back as 1952. Under H-1B, foreigners with at least a bachelor’s degree take jobs in a variety of fields including biotech and law. Their three-year stay can be extended to six, and longer under some circumstances. Originally, H-1B visas were to be limited to 65,000 a year; that number was extended to 195,000 for 2001–2003. In 2008, 276,000 visas were issued.
The rationale is that there is a shortage of trained Americans for such employment. Nonsense, howl American engineers. The importation of foreign workers is just one more method to keep wages down and profits up, they claim. The United States Department of Labor is supposed to make sure that foreign workers do not displace Americans or adversely affect their wages. But American tech workers say the department is failing at both tasks.
The late Nobel Prize–winning economist Milton Friedman called H-1B a corporate subsidy. “It’s corporate welfare,” says Norman Matloff, professor of computer science at the University of California Davis. The H-1B program “is fundamentally about cheap labor,” he says. Foreign workers are often paid less than their American counterparts. “Most H-1Bs are under 30, and since younger workers are cheaper than older ones in both wages and health care costs, employers use the H-1B program to avoid hiring older [those over 35 years of age] Americans,” Matloff says on his website.
San Diego–based telecom Qualcomm, the biggest local tech employer (except hospitals), is the eighth-largest American corporate user of this program, according to the publications Bloomberg Businessweek, Computerworld, and InformationWeek. The others, in order, are prominent techs, accounting firms, and consulting firms: Microsoft, IBM, Oracle, Intel, Ernst & Young, UST Global, and Deloitte Consulting.
“Qualcomm is in the forefront of lobbying in favor of H-1B,” says Matloff. “It’s in the vanguard, one of the most vociferous lobbyists for it.”
I asked Qualcomm a number of questions, such as: Is there a shortage of tech engineers, particularly software engineers, that makes H-1B necessary? What percentage of Qualcomm’s workforce comes from the H-1B program? How much does Qualcomm spend lobbying for H-1B? Are those who come to the United States underpaid and thus contributing to a decline in wages for American engineers?
After several days of cogitation, the company would only say, “Qualcomm utilizes the H-1B program as necessary to recruit and retain the best talent in the world. We support bipartisan, sensible reform of the employment-based immigration system so that U.S. employers continue to have access to the talent they need to innovate, create American jobs and grow the U.S. economy.” Qualcomm is a member of Compete America, which pushes for the H-1B program. Qualcomm sent me some of Compete America’s literature, along with arguments compiled by another advocacy group, the National Foundation for American Policy.
In an interview with Wired.com in 2008, Qualcomm chief executive Paul Jacobs estimated that 60 percent of the university graduates the company hires are born abroad.
In January, the U.S. Government Accountability Office completed a study of the H-1B program. Congress had asked the agency to see if H-1B helped corporate innovation or harmed American workers. The agency concluded that the number of H-1B workers at any given time is unknowable because of flaws in the tracking system. The agency found a small percentage of instances in which the foreign worker was being paid less than the prevailing wage. The Department of Labor gives only a cursory look at H-1B applications, the study found. And there is no legal provision for holding employers accountable when they hire foreign workers through staffing companies. Generally, the report’s findings represented classic bureaucratic waffling.
The most interesting finding was that 46.9 percent of the workers come from India and 8.9 percent from China.
The National Foundation for American Policy proclaimed that the study undermined the assertion that companies hire H-1B professionals only because they will work cheaply. Adjusted for age, the foreign workers earn the same or more than their American counterparts, according to the foundation, citing the study. Matloff, however, cites two congressional studies and academic reports showing that H-1B workers are often paid less than Americans.
Senators Charles Grassley, R-Iowa, and Dick Durbin, D-Illinois, have cosponsored a bill seeking to end alleged loopholes in the program. Citing long-running “fraud and abuse” in the H-1B program, Grassley says, “It’s time we get the program back to its original intent where employers use H-1B visas only to shore up employment in areas where there is a lack of qualified American workers.” The proposed law would tighten up enforcement in several areas.
One former Qualcomm employee says he was in a group of 30 engineers, 20 of whom were Indian nationals, mostly H-1Bs. “I don’t think I am being racist, but it was tough to fit into a group that had their own culture and social dynamic,” he says, quoting a fellow worker who called the system “modern-day indentured servitude.” Other critics have used the same language. This ex-employee says he has “a soft spot for immigration” because his parents came from foreign countries. However, “companies take advantage of this [H-1B] process to fill their workforce with people who can’t easily change jobs and work hard and keep their mouths shut, since they’re afraid of losing their jobs and status.”
Another former employee who reapplied during the recent downturn claims that 80 percent of Qualcomm engineers are foreigners brought in during the past ten years — mostly from India. He claims that he had a job interview with a manager who was an Indian national. The former employee was told he was “too senior” with too much job experience, he says, and the interview was aborted. I asked Qualcomm about that, but it was one of the many questions that went unanswered. “I grew up being antiunion and a conservative Republican, but nowadays I’m seeing global labor being exploited by large companies to such an extent that I feel that labor protections are needed,” says this engineer.
Sorrento Valley, where Qualcomm is located, has picked up the sobriquet “Little Calcutta.” That smacks of xenophobia, but at some point, it seems, the company may have to give more information on its H-1B program to American engineers.