The big argument for the tax cut Congress just passed is that it
will create much-needed jobs. But one big question remains: will
those jobs be created for Americans, or will corporations simply hire
more job-seekers from India and China?
It's time for Congress to call a halt to the scandal of the way
big corporations hire foreigners at the same time they are laying off
their American employees. The hiring of hundreds of thousands of
foreigners is why the New York Times proclaimed on its front page the
bad news that this year's "Graduates Are Lowering Their Sights in
Today's Stagnant Job Market."
Remember how, when U.S. corporations built hundreds of plants in
Third World countries, we were told not to worry about losing blue-
collar manufacturing jobs because we were keeping the service jobs?
Well, now the high-paying white-collar service jobs are going overseas,
too, particularly jobs for engineers and computer specialists.
Follow the money. The big corporations hire Indians and Chinese
for less than half the wages, work them long hours without overtime
pay, and treat them like indentured servants unable to quit for a
better job. The corporations partner with the U.S. government by
making political contributions to assure the passage of legislation
that legalizes the importation of foreign cheap labor.
This racket started when Section 1706 was slipped into the Tax
Reform Act of 1986. This uniquely discriminatory section required
anyone who is an "engineer, designer, computer programmer, systems
analyst or other similarly skilled worker" to be classified by Internal
Revenue as an employee rather than as an independent contractor, which
hundreds of thousands were at that time.
This change in the law plus aggressive IRS enforcement resulted in
the creation of large consulting or contracting firms that hire such
persons as their own employees and then contract to sell computer
services to big corporations. These "gatekeeper" firms and computer
corporations soon began to exploit H-1B and L-1 visas by employing
foreigners while dumping American engineers and programmers out on the
H-1B visas were created in 1990 to allow corporations to import up
to 65,000 foreign skilled workers to fill alleged labor shortages, a
claim that was always a fiction and now is nonsense. L-1 visas were
created to allow inter-office transfers of key managers, executives or
persons with specialized knowledge, but there are no numerical limits
and no safeguards against abuse.
The corporations had such clout with the politicians that they got
the number of allowable H-1B visas increased in 2000 to 195,000 (even
while the industry was hiring only 2 percent of software applicants).
In a striking example of stealth politics, on October 3, 2000, the
House leadership announced there would be no further votes that
evening, and then passed the H-1B increase, after most Members had
departed, by a voice vote with only about 40 out of 435 Members
Republican Congressional Campaign Committee Chairman Rep. Tom
Davis (R-VA) candidly commented, "This is not a popular bill with the
public.... This is a very important issue for the high-tech executives
who give the money." Senator Robert Bennett (R-UT) admitted, "There
were, in fact, a whole lot of folks against it, but because they are
tapping the high-tech community for campaign contributions, they don't
want to admit that in public."
By 2001, corporations and contracting firms were employing at
least 384,191 H-1Bers without any demonstration of a labor shortage,
plus at least 328,480 L-1ers masquerading as "intracompany
transferees." In a bitter postscript to the careers of laid-off
Americans, they were often required to train their foreign cheap-labor
The NBC station in Hartford exposed why Connecticut now has 20,000
white-collar unemployed computer service workers but 70,253 employed
aliens. The giant insurance company Cigna fired its local workers,
turned its technology jobs over to the Indian firm, Satyam, under a
"closed-loop process providing Satyam with the right of first refusal
for all consultants requests."
This Cigna agreement denies U.S. citizens even the chance to
compete. Where are the conservatives who argued for years against the
closed union shop?
The Siemens company in Florida contracted to have its U.S.
employees replaced by foreigners brought in by Tata Consultancy
Services, one of India's largest consulting firms. When Tata used L-1
visas to bring in Indians at one third the salary of the Americans laid
off, the Siemens spokesman shrugged off complaints saying, "They don't
work for us. They work for Tata."
What to do? Congress should (1) reject all attempts to extend the
current high number of H-1B visas and allow the limit to revert to
65,000; (2) require employers to show a good-faith effort to hire
Americans before applying for visas; (3) require employers to lay off
non-citizens before laying off U.S. citizens; (4) restrict L-1 visas
to jobs paying $100,000 a year and prohibit transfers between
companies; and (5) forbid government agencies from hiring non-citizens
or from contracting with outside firms that hire non-citizens.
Phyllis Schlafly is the author of "Feminist Fantasies" (Spence
Pub. Co., 2003)