The H-1B visa issue revisited

The real advantage of foreign workers over U.S. citizens may be nothing more than cheap labor

Two weeks ago my column, based on an interview with Frida Glucoft, an immigration lawyer at Mitchell Silberberg & Krupp, discussed changes in H-1B visa and green-card regulations and their repercussions. Although I didn’t intend it to be one-sided, after reading through a veritable deluge of e-mail, I have come to the conclusion that my column did not in fact present the whole story about hiring non-U.S. citizens for high-tech positions in the United States.

According to Department of Labor regulations, workers hired under an H-1B visa must be paid a salary comparable to what an American worker would receive for the same or similar job. But if that’s the case, why would any company choose to hire a foreign national over a U.S. citizen?

I put that question to Norman Matloff, professor of computer science at the University of California at Davis. “It boils down to cheap labor,” he says.

Matloff says that there are many ways to underpay H-1B workers. One is to not recognize a particular skill set. For example, if wireless communications are hot, the employer might have to pay more for a U.S. worker with those skills. Instead, the employer can hire H-1B employees and calculate their wages based on those of generic workers. “You get an expert for the cost of a regular programmer,” Matloff says.

Also, the law is defined in such a way that wages are tied to jobs instead of workers. The implication is that you can get an employee with an advanced degree for the price of a B.S., provided your job description says your minimum requirement is a bachelor’s degree.

Another savings comes from hiring younger workers, who traditionally cost less than older ones.

“If they run out of younger Americans to hire, then they turn to the younger H-1Bs,” Matloff says. “In essence, the H-1B program is fueling rampant age discrimination.”

Finally, Matloff tells me “ethnic hiring” is a fact of life. Russians hire Russians, he says, and Chinese hire Chinese -- if for no other reason than that they understand the language and the culture of the people with whom they’ll be working.

Matloff also believes employers favor employees working on visas because they are fairly immobile. An employee who’s been sponsored for a green card won’t be so quick to jump ship to a better position somewhere else, if it means starting the green-card application process over again.

Kim Berry, president of the Programmers Guild, says there are other ways of getting around paying foreign workers the same as U.S. workers. For example, the Department of Labor relies on the attestations of employers to certify that American workers were not laid off to hire foreign workers and that foreign workers are paid the prevailing wage. In addition, employers can choose from a variety of studies to determine what the prevailing wage really is.

A special report in InfoWorld sister publication Computerworld, written by Patrick Thibodeau, found that H-1B wages have continued downward since 2003, whereas salaries of U.S. workers have increased. Thibodeau’s conclusion was reached by comparing H-1B data with surveys of approximately 46,000 IT professionals.

The question is, Do U.S. companies actually prefer to hire foreign nationals over American workers as a form of cheap labor? This is a topic that deserves a long, hard look, something I intend to do in an online report.

Copyright © 2005 IDG Communications, Inc.

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