Sunday, May 20, 2007

Center For Immigration Studies Report Shows The H-1B Program Used Primarily To Import Low-Wage Workers Into The United States

Back in January 2007, I discussed how H-1B workers were being imported into the United States not necessarily to augment the American labor force, but in some cases, to actually supplant American workers. I also demonstrated how many of these H-1B immigrants not only have no concern about America, but are actually contemptuous towards Americans.

Now the Center for Immigration Studies has released a report debunking yet another myth about H-1B workers. These workers had been sold to the public as being "high-skilled workers" filling "critical vacancies" in the technology sector. However, using Department of Labor data, the report, entitled "Low Salaries for Low Skills: Wages and Skill Levels for H-1B Computer Workers (2005)", echoes previous studies showing that the H-1B program is primarily used to import low-wage workers. This new report examines the most recently available wage data on the H-1B program and finds that the trend of low prevailing wage claims and low wages continues. In addition, while industry spokesmen say these workers bring needed skills to our economy, on the H-1B Labor Condition Applications (LCAs) filed with the Department of Labor, employers classify most of their H-1B workers as being relatively low-skilled for the jobs they are filling, in order to make it minimize the appearance of a wage gap. This report compares prevailing wage claims and wages employers reported for H-1B workers in computer programming occupations in FY 2005 to wages for U.S. workers in the same occupation. Although the H-1B program stipulates that employers must pay H-1B workers at least the prevailing wage for their occupation and location, the results of this report clearly demonstrate that the regulation does not produce that result.

The findings in this report clearly demonstrate that the legal definition of the prevailing wage requirement does not ensure H-1B workers are paid the actual market prevailing wage. Employer prevailing wage claims and reported wages for H-1B workers are significantly less than those for U.S. workers in the same occupation and location. This suggests that, regardless of the program’s original intent, the H-1B program now operates mainly to supply U.S. employers with cheap workers instead of essential skilled workers. Here are the key findings:

1). Very few H-1B workers are "highly-skilled." Employers who used the Department of Labor’s skill-based prevailing wage system classified most workers (56 percent) as being at the lowest skill level (Level I) as did most State Employment Security Agency (SESA) wage determinations (57 percent). This suggests that most H-1B computer workers are low-skilled workers who make no special contribution to the American economy, or that employers are deliberately understating workers’ skills in order to justify paying them lower salaries.

2). According to the applications filed in 2005, it appears that employers may be significantly understating what U.S. computer workers are earning in order to justify paying low wages to H-1B guestworkers in those occupations. In FY 2005, H-1B employer prevailing wage claims averaged $16,000 below the median wage for U.S. computer workers in the same location and occupation.

3). 90 percent of H-1B employer prevailing wage claims for programming occupations were below the median U.S. wage for the same occupation and location, with 62 percent of the wage claims in the bottom 25th percentile of U.S. wages.

4). While higher than the prevailing wage claims, the actual wages reported for H-1B workers were significantly less than those of their American counterparts. Wages for H-1B workers averaged $12,000 below the median wage for U.S. workers in the same occupation and location.

5). The reported wages for 84 percent of H-1B workers were below the median U.S. wage; 51 percent were in the bottom 25th percentile of U.S. wages.

6). Many employers make prevailing wage claims using wage sources that are not valid under the law. The Department of Labor routinely approves prevailing wage claims based on these invalid sources.

Here's how employers use "flexible" job classification in order to make the wage gap look smaller. For example, classifying "Programmer/Analysts" as "Programmers" rather than "Systems Analysts" reduces the average H-1B to U.S. wage difference by about $4,000. The Department of Labor rarely, if ever, questions this practice.

The Center for Immigration Studies seems to believe that the problem lies primarily with flawed prevailing wage provisions and weak enforcement rather than with the premise of H-1B immigration itself. They conclude their report by recommending a number of policy changes to correct the flawed prevailing wage provisions of the H-1B program:

1). Limit the number of H-1B visas that an employer can obtain each year based on the size of its U.S. workforce.

2). Require employers to have a bona fide business office. Applications from residences and drop boxes should not be not be approved. [Ed. Note: This is eyewash, and could actually discriminate against home-based businesses as well as businesses in communities where formal street addresses are not assigned. The Alaskan community of Girdwood, 36 road miles south of Anchorage and the home of the Alyeska ski resort, falls into this category.]

3). Compel employers to use a standard wage source produced by the federal government when making prevailing wage claims for Labor Condition Applications (LCA). This report has shown that employer prevailing wage claims are much lower than the actual prevailing wages, and that some employers make mistakes or deliberately provide bogus prevailing wage claims.

4). Oblige employers to pay H-1B workers at the 75th percentile of the pay scale, rather than at the prevailing wage. This would provide a strong incentive for employers to use the H-1B program for highly-skilled and needed workers.

5). Require employers to enter a Standard Occupation Code (SOC) for each employee on the application. Most employers are already looking this information up in order to get OES prevailing wages, so it would require little effort to put this information on the LCA.

6). In order to better monitor the H-1B program, USCIS should make wage and employer information available for those H-1B visas actually issued.

7). Remove the restrictions on the LCA approval process to allow the DoL to verify the content of LCAs.

8). Remove all restrictions on enforcement. Specifically, eliminate the requirement that the Secretary of Labor approve investigations and allow random audits of employers. [Ed. Note: Specifically, this will decrease bureaucracy by delegating approval authority for investigations down to a lower level. This is probably the most important recommendation of all - the best laws in the world are worthless without fair, firm, and flexible enforcement.]

Unfortunately, the Center for Immigration Studies ignored the most important recommendation of all - to change the law so that H-1B immigrants cannot be allowed to take existing jobs in the United States. In my previous post in January, I documented the experiences of a group of American workers in Silicon Valley who were actually replaced by H-1B immigrants, and, in order to get severance pay, the American workers were required to train their foreign replacements. The list of "Obligations for H-1B Dependent Employers" grants implicit authority to fire incumbent workers after 90 days:

For so-called H1B-dependent employers (defined below), there are additional promises or "attestations" that must be made on the LCA: that no U.S. workers in similar positions have been or will be displaced within 90 days; that if the worker will be placed at another employer site, the petitioner has inquired of that other employer and found that no U.S. worker has been or will be displaced within 90 days (if this displacement does take place, the petitioning employer could be held liable); AND that the company has recruited for a U.S. worker to fill the position and has offered the position to any such worker who is as qualified as (or more qualified than) the H-1 beneficiary. These requirements will go into effect after the final regulations and a new version of the LCA, which is yet to be published, are issued.

To allow foreign workers to emigrate to America and actually take existing jobs from Ameericans is a form of reverse colonialism, even more insidious that the "reconquista" of the American Southwest by Latin Americans (mostly Mexicans). This practice needs to be stopped altogether. It can be phased out in stages - but the first change must be to ban employers from terminating existing workers to make room for H-1B workers. This can be done NOW.

The Center for Immigration Studies is an independent, non-partisan, non-profit research organization founded in 1985. It is the nation's only think tank devoted exclusively to research and policy analysis of the economic, social, demographic, fiscal, and other impacts of immigration on the United States. It's mission is to expand the base of public knowledge and understanding of the need for an immigration policy that gives first concern to the broad national interest. The Center is animated by a pro-immigrant, low-immigration vision which seeks fewer immigrants but a warmer welcome for those admitted.

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