H1B Abuse Affecting American Workers

[jseklund]

I am a rare republican who believes that outsourcing "American" jobs is actually a good thing.

What! A good thing for who? Certainly not the thousands of skilled and professional middle class workers who lost their jobs including myself. But it's a good thing for corporate executive.

Newood2- I agree with your point in the extremely near future. But I'm a big picture guy. First of- those "skilled american workers" are only where they are because of the open market, and the innovation of the leaders in business. I hate to tell you, but if it weren't for Henry Ford coming up with the idea for an affordable car for the masses- those "skilled auto workers" (as an example) would not exist. However, things move forward- there's sadly no fighting it- and others catch on quickly and compete. If those skilled american workers are so skilled- then why aren't we paying them to do the job? I know that I prefer skilled labor over unskilled labor. I would bet you do too. But I am only willing to pay so much for that skill as I also prefer value. I shy away from using contractors as an example, because they deal in illegal immigrants when you go down that road for comparison (which I'm completely against). Maybe a good example is this- if you had to buy an American made box wrench for $65 or a Japanese made Box Wrench for $10- which would you buy? Don't try to tell me this dilema has never crossed your path, and that you've never gone with the less expensive product. We both know that the American metal MAY be better. The workmanship MAY be cleaner, but it's a wrench. And it will get the job done for us at 1/6th the price. Why do you think the labor you sell to an employer works any differently? Those skilled american workers that are losing their jobs are only, at best, marginally more skilled than the foreign workers. If we stopped trying to phrase it as, "Be patriotic" and treated it as, "Be competitive!" we may catch on- but why would we? What's the point of a better box wrench?

However, when I say outsourcing is a good thing, I'm not just talking about market evolution. I'm also talking about the fact that poor countries are a threat. I know it's not intuitive, but a non-capitalist country IS a threat to us. Why? Because we can fight our wars with our money or our lives. I would rather have free market trade with China and have economic means of disagreeing than to only have violent means of disagreement. Liberal Democracy does not work without capitalism. Two liberal democracies have NEVER gone to war with each other. Why is that? Because I am a whole lot less likely to bomb your kids house when you provide my job, the products I use, and support the economy I live in. I may dislike something you do- but then I can fight back by charging more for your imports, or cutting off production of your favorite product, etc.

Or do you think it is better to keep our fellow Americans gluing shoes together so that they have a job and can be called "skilled labor"- while the foreigner that would do it for half the price and thrive wallows in mud huts and reveives no education? Guess where that leads.....Usually to a tall building in NYC.

What I have always found funny is that certain people hem and haw about the "Sweat shops" in other countries, but then fight for illegal immigrants to work in the US.

First off it's not the same people that do both, and I know that first hand. when the Company I worked for moved it's manufacturing facilities to Mexico my union did an investigation and found out it was "sweat shop" with no safety rules in place - no OSHA, good for Company-. Investigative reporters also discovered "sweat shops" all over Asia employed by American Companies. But then the people who are "fighting" for illegal immigrants to work here are not the unions and unemployed middle class, its the same greedy 5-percenters who wants them to work for two years without health coverage just like the "sweat shops" in the country they're from.

It may not be the exact same people doing both, but it is the exact same problem- just in a different location. While there may have been no "safety rules in place"- what about the contractor who doesn't bother to train his illegal immigrant employees because as soon as he does they get deported? Instead they are up on roofs and don't even have or know how to setup/use scaffolding. You may think this is a fictitious situation, but it's one that I know of personally. I personally think it is better to send the jobs over there, which will raise there standards. We'll create more jobs. It's what we did 100 years ago, but the middle class doesn't want to learn new jobs, and they strike out in fear.

What most Americans don't realize is, ages come and go and the industrial age, for us, is gone.

Certainly, our industry was outsourced by a greedy and unconscionable corporate America with the blessing of those we elect to watch over us - both parties. and I,m sick and tired of hearing "it's because of globalization", America had the power to create the playing field.

We are creating the playing field. But people don't like that either. They come back with, "Who are we to say how Iraq should live?"

The logic is- we don't want to send them jobs, and we don't want to build up their economy, and we don't want to educate them (because who are we to do that?) but we want to create the playing field? Come on. There is an entire world out there. We should look out for ourselves first, I agree with that 100%. But sometimes the best offense is a good defense, don't you think?

I also find it funny that everyone goes to the CEOs. We aren't outsourcing CEOs. We aren't outsourcing marketing, sales, business process employees. Why? Because those are the new "skilled labor". I don't expect you to take a pay cut so that the guy making less than you can make more and you two will be equal. Why is it the answer for the CEO to take a pay cut simply for this reason?

I will agree that CEOs out there have screwed up. I can't deny that. There are some bad, and over paid CEOs. However, there are some good ones too. And the good ones create wealth for others- and wealth isn't always millions of dollars. It's the return on your investment, the new jobs, etc.

I wouldn't expect the American to run the machine for $5,000- there's no way he could live in our economy like that.

Then the logic is, he/she should move to China

That is one possible solution- not the one I would take. I would look for a different job.

If IBM is paying $75K a year, Microsoft may want to attract more programmers by offering $80K. IBM may respond with $82K. And so on until workers and employers are in equilibrium.

Not under Capitalism or any other socio-economic order. But it would be nice to get the same pay as my boss.

Not under capitalism? Are you saying that workers will not supply more work for higher pay and less work for less pay in a capitalistic system? Are saying that a company doesn't need employees to stay in business? I don't see the logic here. I'm not saying that wages will go up forever- but they will go up until there is an even/competitive distribution of jobs. The celtics can afford Paul Pierce, Kevin Garnett and Ray Allen- but they can't afford Tracey McGrady too. They'd sure love to have that talent I am sure- but they can no longer compete for it effectively. However, each one of these "employees" is receiving far more than minimum wage- and a wage that was negotiated in a free market based on what all likely employers were willing to bid for the labor. Can't be much more capitalistic than that.

However, when it comes to low-wage workers- it IS the law to price set. .....It's merely a way to keep McDonalds and Burger King from fighting for employees. If McDonalds needs workers, especially in a low-unemployment environment- and starts paying $8/hour to every scrub off the street, BK will lose all it's workers and go under- unless they go to at least $8 and maybe $8.50 to win some people back. But they don't do this because it's easy to close the deal- we'll pay you minimum wage. That's what everyone pays for this job.

So in a low-unemployment environment then, Big Mac and BK would stay in business if they hire illegals and pay them way less than minimum wages. It would make better sense than to raise the minimum wage. And that's what the pro-illegal employer wants.

What I was originally saying is- the union loves to say, "Minimum wage, we won something." But if what they "won" was allowed to happen in any other, educated environment- it would be deemed illegal. It's price setting. There is no CEO saying, "I want a minimum CEO wage". They woudn't think about it- they know they're better off in the fair market. But when we push it on low-income employees it somehow becomes a good thing? Hmmm....as Shakespeare says, things are not as they seem.

And to follow up with your reply, that is what I am saying- obviously- and another reason why we should not allow illegal immigrants to work in this country. You simply cannot have a capitalist environment without a free labor force. By free, I mean- free to choose their own work at a fair market rate. This is the REAL reason slavery ended. The north was industrializing- and the south relied on slaves. The north couldn't really have a competitive, capitalistic market while the south had unpaid labor doing their work now could they? There could not be any free market in that system. Sounds like there are some parallels with the employment arguement of today- we cannot have a truly free market without outsourcing to other countries. But we rely on our work. Similar to relying on our slaves. Thank god for progress.

[germdoc]

Wow, a lot of information here, too much to process all at one sitting.

My .02--the immigration system is broke. We all agree on that. I think we need to have stable borders and laws which will be enforced. HOWEVER--we need to recognize that the problems with illegal immigrants and abuse of the system is caused by a demand for workers. The 12 million or so illegals--they're not here to live on manna from heaven, they want to work and earn a living and they KNOW there is a demand for their services.

In my opinion anyone who wants to get rid of all persons here illegally (maybe should start with my ancester Finch who came here without papers in 1640) is *choosing my words carefully here so as not to offend* mistaken if he thinks there are American workers who could or would do those jobs. Some states in rural areas have 2% unemployment. That is practically speaking full employment, and they need more workers. 70% of all our food is picked by illegals. Get rid of these workers and guess what will happen? Hint: it WILL affect your pocketbook.

The issues with skilled workers are more complicated but again reflect a typical supply/demand issue. Ever wonder why so many new docs in rural and inner city areas are coming from India or Pakistan? There is a shortage of new docs coming out of American med schools, so these FMG's are necessary. (I won't bore you with the statistics.)

The system sucks and needs to be fixed. Except for the grandstanding by nameless politicians, it would be fixed today. The people most happy with the status quo are the large corporations who can keep wages low, keep employees from organizing and not have to worry too much whether they have a real or fake SSN.

[Anna]

Wow, a lot of information here, too much to process all at one sitting.

My .02--the immigration system is broke. We all agree on that. I think we need to have stable borders and laws which will be enforced. HOWEVER--we need to recognize that the problems with illegal immigrants and abuse of the system is caused by a demand for workers. The 12 million or so illegals--they're not here to live on manna from heaven, they want to work and earn a living and they KNOW there is a demand for their services.

In my opinion anyone who wants to get rid of all persons here illegally (maybe should start with my ancester Finch who came here without papers in 1640) is *choosing my words carefully here so as not to offend* mistaken if he thinks there are American workers who could or would do those jobs. Some states in rural areas have 2% unemployment. That is practically speaking full employment, and they need more workers. 70% of all our food is picked by illegals. Get rid of these workers and guess what will happen? Hint: it WILL affect your pocketbook.

The issues with skilled workers are more complicated but again reflect a typical supply/demand issue. Ever wonder why so many new docs in rural and inner city areas are coming from India or Pakistan? There is a shortage of new docs coming out of American med schools, so these FMG's are necessary. (I won't bore you with the statistics.)

The solution to labor shortage has always been mechanization and process development. The same complaints were made in the 60s with respect to potato and tomato crops.

They claimed that California "will never reach the 100,000 to 175,000 acres planted [with tomatoes] when there was guaranteed supplemental labor force in the form of the bracero." (California Farmer, July 6, 1963, p.5)

They were wrong. To quote:

Take the case of processing tomatoes. In 1960, 80 percent of the 45,000 peak harvest workers used to pick 2.2 million tons of the tomatoes used to make catsup in California were Braceros, and growers testified that "the use of Braceros is absolutely essential to the survival of the tomato industry." In 1999, about 5,000 workers were employed to ride machines to sort 12 million tons of tomatoes harvested by machine on 300,000 acres. In the tomato case, the end of the Bracero program led to the mechanization of the tomato harvest, expanding production, and a reduction in the price of processed tomato products, which helped to fuel the fast-food boom.

As for the potatoes, I know about them because I made a DVD out of 8mm film for a friend showing how they used to harvest potatoes in the '50s. As they were watching the DVD (they're in their '60s and their mom in her '80s), they were talking about how it's all changed now. They don't have to have the entire community in the potato fields anymore because everything is now done by machines.

A more recent example is wine harvest. Here's an article I read a few weeks ago about grape harvesting machines. The part that caught my attention back then was this paragraph:

It picked 3.5 tons of pinot noir grapes in 20 minutes with three workers, the Capital Press article said. Usually that would have taken 34 workers an hour.

The textile industry in the earlier part of the last century is another example of "the sky is falling!" but didn't.

We evolve. We don't have to be stuck in the old paradigms. I'm sure that the horse-carriage drivers' union, if there were one, would have done its best to stop the development of the automobile, and the lamplighters' union, if there were one, would have lobbied to keep the streetlights from turning electric, but thankfully we progressed anyway.

I have much more faith in our system than most people seem to have. I believe we have to fix our broken system (especially the one related to illegal immigration), but, to repeat a cliche, let us not throw the baby out with the bathwater.

Anna


P.S. I know all about the problems with doctors because I'm married to one and have been involved in the medical community for several years. But that is much more complicated and really not germaine to this particular discussion. My biggest concern with our continued importation of foreign doctors, though, is that we are depriving other countries of their essential medical personnel. But like I said, that's a completely different set of discussions. (And aren't they mostly J1s anyway instead of H1Bs?)

[Black wallnut]

"Right here in America. If the CEO's take a pay cut then you can pay the worker $60,000. An American wage."

Who owns the company? How many employees are in the company where the CEO is making what the union workforce thinks is excessive? If you think income for the workers should be $60K per year where is it now, and BTW $60K is far above what I make in my mid level management job! Furthermore I am far and above what most others in my company make in my position. Do the math if the Borg pays its CEO $60 million and they have 200 thousand employees and they somehow got thier CEO to work for free that would only increase each workers pay by $300; if my estimate is off by 100% and there is only 100,000 workers then that's only $600. So IMHO to even bring any credibility to this each worker would need to receive at least $100 more dollars per month, and to do that the work force would be only 50K and the CEO would be unpaid. Will the workers be more productive? Will the workers add value to the company? Will the workers getting paid more bring share prices up? Do the workers have a mutual fund based retirement plan? If so who exactly do you think the Corporation owners are? Is it not the shareholders. It really matters little what a CEO makes when it comes to what blue collar workers compensation is. To be upset about what someone else makes is class envy.

[JR]

FWIW - I heard a presentation by the CTO of Qwest this week. He said their move to Bangalore has much more to do with the skilled labor force available there than with cost savings.

JR