Calls for the truth on overseas workers

A politician recently stood before the House and explained that national workers were losing out to imported fast track visa workers because the whole programme was a 'fraud'. However, the politician was addressing the House of Representatives with a view that will be shared by many on this side of the Atlantic.

He claimed that big companies had lobbied for the measure to bring in cheap labour, rules were bent, broken and abused, massive numbers of domestic IT workers were unemployed, a skills shortage in IT did not exist and queried if it ever had been to the level some big companies had claimed, and demanded that if the truth was that the home grown working population is going to have to take less money to secure work in their own country, then the Government should come out and say that, rather than hiding behind claims that imported labour is needed to meet skill shortages.

The sentiments might ring true with many freelancers in the UK who are finding it increasingly difficult to compete with cheaper, imported labour, but the comments came from Representative Tom Tancredo who participated in a debate about immigration issues in the USA where the fast track visa issue is much higher on the political barometer than it is in the UK. Republican Mr Tancredo is currently trying to introduce measures which would repeal the H-1B programme.

H-1Bs are the US procedure to bring overseas workers into America - and are as contentious in the US as the fast track visas are in the UK. The problems are similar in that there are claims that overseas workers are brought in at considerably lower levels of pay than US workers amid allegations that the system, which is aimed at meeting a skills shortage, particularly in IT, is being abused.

Mr Tancredo began his speech by explaining in his view how H-1Bs came about in the mid 1990s when big business lobbied Congress to be able to bring in overseas labour to meet skills shortages. Over time the ceiling on the number of workers allowed in by this route was increased; the protection for USA workers was eroded; and there seemed to be increasing evidence that large companies were using H-1B workers, not to meet skill shortage, but to cut wage bills.

He continued by claiming that even if there had been a skills shortage in IT then, that was not the case now, as the bursting of the dot-com bubble had hit the computer industry harder than most and there were massive numbers of American IT workers currently unemployed.

He criticised the 'loop holes' and 'extensions' which had allowed the cap, currently set at 195,000, to increase so that in 2002 the actual figure of people entering the USA via this route was 294,000, making an estimated total of 600,000 people currently working in the USA on H-1Bs. He also claimed that there is evidence to show that contrary to the intention, H-1Bs are used to replace US workers on pay below the 'going' rate.

He also cited evidence that documents, including qualifications, were frequently and routinely falsified and that a study of the H-1B visa application from the American Consulate in India found that 45 per cent of the work experience claims were fraudulent.

Mr Tancredo concluded by telling the House: "Maybe it is something that we cannot avoid that we will be forced, that all American workers will be forced to lower their wages, lower their standard of living to meet the competitors around the world who are competing for these jobs. If that is it, I want somebody who believes that to stand up and tell the American people that is where we are going and they will have to take less money for what they are doing, what they want to do for the rest of their lives, the jobs they are involved in, or become underemployed or unemployed. Maybe they have to sell their homes and get a smaller house and their whole standard of living has to change because of this whole new world economy.

"If that is the case, and I do not believe it is, but if that is what we believe to be the case, tell the American people that is what we are doing. Do not hide it under these things called temporary worker visas that are necessary because of the great demand that exists for these jobs and the low supply of labor in the United States to fill that demand, because that is absolutely and clearly a sham. It is a lie that is untrue, and we should not continue to perpetrate that lie."

Computer industry academic expert, Dr. Norman Matloff of the University of California, described these remarks as 'was one of the most remarkable statements I've ever seen a politician make.'

Dr Matloff, himself a vocal critic of problems in the US associated with H-1Bs, said: "In other words, President Bush or Secretary of Labour Chao should either (a) say that we will stop allowing H-1Bs to fill tech jobs while American tech workers can't find work in the field, or (b) say yes, Americans should give up the odd notion that tech jobs are available to them. Seems like a reasonable request to me."

Extracts from Mr Tancredo's Speech to the House of Representatives

History

"I want to spend a little time, the remaining time I have, as a matter of fact, on the discussion of one specific aspect of immigration and that is the toll that massive immigration is taking on the jobs of

Americans, both low-skilled, low-wage jobs and high-skilled, high-wage jobs, spending a little time on the latter, H1B visas in particular.

"H1B visas, I will be using that term quite a bit, and let me explain what that means. An H1B visa is simply a category of visa that we hand out to people all over the world so that they can come to the United

States for a specific purpose. In this case, the H1B visas were created specifically for sort of high-tech or white collar workers who were ostensibly needed in the United States because that industry was growing, as you recall, the bubble was expanding dramatically and everybody and their brother was making money at it; and there was a lot of employment and many of the firms came to us, many of the very high-tech firms came to this Congress and said, we have to have more people. We cannot fill the jobs we have here in the computer sciences, computer technology, high-tech jobs; we cannot fill them with people coming out of our colleges because there just are not enough.

"There are not enough of them so we need to go outside the country and bring people in here for a certain period of time until we can actually fill the job with an American citizen, and so Congress responded and created something called the H-1B visa. It was expanded in 1999 when the Congress raised the cap to 195,000 a year from its previous level of about 65,000.

"In 2000, Congress enacted the American Competitiveness and Workforce

Improvement Act which expanded the program again, contained few protections for American workers. Congress was persuaded at the time that there was a critical shortage of computer scientists, software engineers and programmers.

"Even if that were true and I would tell my colleagues that now we are finding out that maybe that was not as accurate as we had hoped, maybe some of the testimony that was provided by companies like Sun

Microsystems when they testified to the Senate and said that they really needed these people and that they would never displace American workers, apparently it sort of I guess was not true. They are now saying, no, that they did, in fact, replace American workers and did so because essentially foreign workers will work for less."

Current situation

"Whatever was the case in 1998, 1996 in terms of the need for this particular program, no shortage exists today in the program. No program shortage exists in terms of the supply of labor for the high-tech industries in America, does not exist. It is not there. No one can suggest that there are no American workers today who are seeking jobs in the high-tech field because we know that that is not true.

"We know that as a matter of fact that the area that has been hit hardest by the drop in the dot com bubble, the burst of that dot com bubble I should say, where unemployment ranges maybe 7 to 7.5 percent, there is massive unemployment and underemployment of American workers in the computer field.

"The number of H-1B visas is supposedly limited by a cap, but that cap is often exceeded through loopholes and extensions, and beginning in

2000, all universities and nonprofits were exempted from the cap. In

1998, the cap was supposed to be 65,000. Do my colleagues know how many actually came in? Two hundred and five thousand. In 1999, the cap was 115,000. Do my colleagues know how many we took in? Two hundred and thirty-four thousand.

"In the year 2000, the cap was 115,000. We took in 294,000. In 2001, the cap was 107,000. We took in 384,000. In 2002, when the cap went to

195,000, we took in 294,100. In 2000, Congress added an exemption for universities and nonprofits. As I say, in the 2 years of 2001 and

2002, 342,000 H-1B visas were issued in this category. If we add to this number the number of visas already issued not yet up for renewal, it is clear that there are well over 600,000 H-1B visa holders employed in 2002.

"There are a number of problems with the program as it has been operated since it was expanded in 1998. Do we need the program? Is the program based on valid analysis of real labor market conditions? I would say it is not adequately tied to demonstrated labor shortages in the fields of computer science and technology. In fact, in 1996, the

Department of Labor's Inspector General found that the program does not protect workers' jobs. It allows aliens to immigrate based on attachment to a specific job and then shops their services in competition with equally or more qualified workers without regard to the prevailing wage.

"All of these things they are supposed to not be able to do. They are not supposed to be able to dislocate any American worker. They are not supposed to be able to pay anything less than the going wage, but in fact, it has happened continuously and indiscriminately.

"The Department of Labor's certification program does not meet its intent of excluding foreign workers when qualified, willing, U.S.

workers are available. In 2000, a report by the National Research

Council concluded that there is no analytical base on which to set the proper level of H-1B visas and that decisions to increase or reduce the cap on such visas are fundamentally political.

No skill shortage

"Continuing cries of shortages come from high-tech industry lobbyists, yet academic and government studies fail to find evidence of any shortage. A National Research Council report in 2001 concluded that the H-1B visas have an adverse impact on wage levels. According to estimates among professionals in the field, there are at least 800,000 unemployed and underemployed computer technicians and programmers in the United States of America. Could it be that there is a relationship between this number and the 1,300,000 plus H-1B visas now in this country?

"The U.S. Bureau of Labor Statistics report that unemployment among electronics engineers has soared to 7 percent. Among computer hardware engineers the rate is 6.5 percent. The Institute of Electrical and

Electronics Engineers says that these employees lost 241,000 jobs over the past 2 years, and computer scientists and systems analysts lost

175,000 jobs.

"One of the Nation's leading academic experts on the computer science industry, Dr. Norman Matloff of the University of California at Davis, has demonstrated that there is no shortage of U.S. workers to fill these jobs. A UCLA study cited by Dr. Matloff shows that H-1B workers are paid 30 percent less than comparable Americans, and a Cornell

University Study found that this difference is 20 to 30 percent.

"Remember, this was started out to be a temporary program. It was supposed to be a response to a temporary labor shortage in the computer science industry. Yet, by its structure, it has become a way for foreign workers to enter our labor market and then take up permanent residence.

"The 3-year term of the H-1B visa can be renewed for a second 3-year term for a total of 6 years. After 3 years, the worker can begin his petition for a change in status to permanent resident, and hundreds of thousands have done that. A 6-year term is not a temporary visa, and it ought to be changed to a single 2-year term that is not renewable.

In fact, this whole program ought to be abolished. There is no need for it, and you cannot prove it.

"We have to ask ourselves, are there adequate worker protections in the

H-1B visa program? All right. The present program pays lip service to worker protection, but in reality an independent study by the

Department of Labor's own Inspector General has shown that these protections are a sham.

"The Institute of Electrical and Electronic Engineers believes that so-called safeguards to prevent employers from laying off workers and hiring H-1B employees are ineffective and limited to the employers'

actions over a 90-day period prior to the hiring of H-1Bs. This 90-day rule is easily evaded and must be expanded to 6 months if the program is retained. Also, H-1B workers who are laid off must be required to return to their country of origin within 60-days.

"A General Accounting Office report found that the training funds appropriated and aimed at helping displaced U.S. workers are misused and benefit comparatively few U.S. workers.

Fraudulent

"Lastly, are the qualifications and experiences of H-1B visa workers frequently fraudulent? That is a great question. Accusations that H-1B visa applicants often falsify their educational background and experience were verified by the State Department's Inspector General.

Documents are frequently and routinely falsified.

"A yearlong study of the H-1B visa application from the American

Consulate in India found that 45 percent of the work experience claims were fraudulent. There are places in India that they call body shops.

These are simply companies that are set up for the purpose of creating these false documents, false degrees and diplomas and attaching them to the H-1B workers, sending them on. Once that worker gets here, it really does not matter because no one really comments on it, and they become part of our labor pool.

"The Department of Labor Inspector General has averaged 14 indictments and 11 convictions in the labor certification program each year since

1996; and believe me, that is the tiniest tip of the iceberg. The program could be amended and reformed and its major abuses corrected, but the simple fact is we do not need the program at all. It should be repealed, and I have introduced a bill to do just that.

"We could reduce the cap to 25,000 or 35,000; but the truth is we do not even need 10,000 new H-1B visas when we have unemployment of 7 percent among software engineers.

"That is why I have introduced H.R. 2688 to repeal the H-1B program. It is now in the Committee of the Judiciary, and I ask for Members'

support of this measure. I also have to say that this is just an example of something that I think needs to be discussed on this floor, and the American people have to understand and we need to tell them about it. That is the fact that we have embarked, both the Congress of the United States and the administration, and this is not new, this has been a long time in coming, we have embarked upon a cheap labor program. We have decided that it is in the best interests of someone, certainly the corporations, especially the high-tech corporations, to do what is necessary to reduce the wage rates of American workers who were employed in that industry.

"We have testimony, we have hundreds and hundreds of examples, we have tons of empirical evidence to show that the whole H-1B program is a fraud and that the idea that it came as a result of some need that still exists is ludicrous. So why are we still doing it? Why do we allow the 1 million or more H-1B visa holders who are living here essentially illegally, why do we allow them to stay? One reason, Mr.

Speaker. It is because the high-tech corporations of this country have opposed it. They have put a great deal of their money into lobbying against any reversal of this program and of the whole philosophy of cheap labor."

A lie

"Maybe it is something that we cannot avoid that we will be forced, that all American workers will be forced to lower their wages, lower their standard of living to meet the competitors around the word who are competing for these jobs. If that is it, I want somebody who believes that to stand up and tell the American people that is where we are going and they will have to take less money for what they are doing, what they want to do for the rest of their lives, the jobs they are involved in, or become underemployed or unemployed. Maybe they have to sell their homes and get a smaller house and their whole standard of living has to change because of this whole new world economy.

"If that is the case, and I do not believe it is, but if that is what we believe to be the case, tell the American people that is what we are doing. Do not hide it under these things called temporary worker visas that are necessary because of the great demand that exists for these jobs and the low supply of labor in the United States to fill that demand, because that is absolutely and clearly a sham. It is a lie that is untrue, and we should not continue to perpetrate that lie."