Donald Trump Silent on H-1B Reforms in Vital North Carolina

President Donald Trump speaks at a campaign rally at Carson City Airport, Sunday, Oct. 18,
AP Photo/Alex Brandon
Neil Munro

North Carolina is a critical swing state where many white-collar voters are losing their jobs to H-1B visa workers — yet President Donald Trump did not tout his popular reforms of the visa worker programs.

In an October 21 rally in Gastonia, just east of Charlotte, NC, Trump declined to mention the executive orders he delivered in October to curb H-1B outsourcing. Nor did he mention his August intervention to prevent the H-1B outsourcing of 200 Americans’ jobs at the Tenessee Valley Authority (TVA). Instead, Trump focused on his successful campaign to block blue-collar migration across the Mexican border.

But “there are many financial institutions in North Carolina that are abusing cheap labor and H-1Bs,” said Jay Palmer, a civil rights activist who works with abused visa workers. He continued:

Charlotte, N.C., is the hotbed of visa fraud. They’re laying off American workers left and right because there is so much cheap [foreign] labor in North Carolina … They’re hiring anybody through third-party consulting companies, and they are paying them on 1099s [as gig workers]  to work at the financial institutions. They’re replacing American workers such as risk managers and actuaries — any jobs they can fill with cheap labor. It’s horrible. You don’t even know how bad it is.

“When you look at Charlotte, that whole area has been wracked by H-1B outsourcing and offshoring of jobs,” said Kevin Lynn, the founder of U.S. Tech Workers. He added, “If you’re working at a help desk in an insurance company, and if you see what Trump did for the TVA workers, you’re going to vote for Trump. If you’re a database manager, you’re going to vote for Trump when you hear him talk about what he did for workers at TVA, or when he talks about his Executive Orders [which are] sending these H-1B visa companies screaming to the judges to get relief.”

Lynn said that people who are not directly threatened by H-1B outsourcing will also vote for Trump because of his visa reforms. “We see the future is fewer and fewer opportunities for the sons and daughters of the American professional class because those jobs are either going to be offshored, or they’re going to be given to someone here on a non-immigrant employment visa, like H-1B, or someone on the Optional Practical Training Program,” he said.

Polls show lopsided support for Trump’s policies that favor Americans over corporations hiring migrant workers. That untapped support could help Trump win North Carolina’s 15 Electoral Votes as he tries to collect the needed 270 electoral votes.

In 2020, companies asked to import or keep 15,437 H-1B visa workers for jobs in North Carolina, according to government data held by MyVisaJobs.com.

The request suggests that at least 30,000 H-1B foreign workers hold white-collar jobs needed by Americans in North Carolina.

But many thousands of other jobs in the state are likely held by visa workers who arrived via the L-1, TN, H4EAD, J-1, Optional Practical Training (OPT), or Curricular Practical Training (CPT) programs. The flood of legal foreign workers also helps subcontractors hire illegal white-collar workers, many of whom have overstayed their visas or are working illegally on valid visitor visas.

In June, Trump blocked the arrival of more H-1B and J-1 workers until at least January. In August, Trump blocked the TVA outsourcing and directed his deputies to curb H-1B in federal contracts. In September, Trump’s deputies announced a rule that would curb illegal work by foreign students of American universities.

In October, Trump signed orders that would sharply reduce the cheap-labor outsourcing in North Carolina by forcing U.S. companies and universities to pay their visa workers at much higher rates. Trump’s October rules would also cut the tenure of subcontracted H-1Bs from three years to one year.

The worker protection rules are being implemented by officials at the Department of Homeland Security, by Eugene Scalia at the Department of Labor, and by Secretary of State Mike Pompeo. They are being defended in court by the Department of Justice.

Fortune 500 companies lobbied hard against Trump’s changes, protested his orders, and are now suing to overturn Trump’s regulations. Establishment media outlets have ignored the potential benefits of the changes for Americans.

Yet Trump did not tout his protections for white-collar Americans at his Gastonia rally outside Charlotte.

Instead, he focused on his successful efforts to curb blue-collar migration. “We are bringing our jobs, our factories, and our troops back home to the U.S.A. where they belong,” he said, continuing:

Under my leadership, we achieve the most secure border in U.S. history by far. My opponent’s insane immigration plan would be a nightmare for North Carolina families. He would eliminate U.S. borders by implementing nationwide catch and release. We ended catch-and-release. That’s when you catch somebody — could be a murderer, it could be a rapist, could be a criminal of some kind — and you let them free. … He wants to make every community into a sanctuary city for violent criminals. … The Biden-Harris plan would also increase refugees 700 percent [coming] from the most dangerous places in the world.

But Trump did cite his white-collar job-saving intervention during an October 15 rally in Greenville, SC, not far from the Tennessee border.

“In 2017, I proudly signed a historic executive order making it official government policy to Buy American and Hire American,” he said, adding:

When the Tennessee Valley Authority replaced part of its American workforce with foreign workers, I told the board chairman, “Chairman, you’re fired! Out! You’re fired, Jim!” You know what he was making? … He was making $8 million a year. He’s the highest-paid government official … million dollars a year. … As soon as I said that, they hired all the employees back from Tennessee and five other states, six other states. They’re all back! And they were great. They were great.

Staffing companies requested the vast majority of H-1B requests for 2020 jobs in North Carolina, according to MyVisaJobs.com. The staffing companies lease their imported workers to Fortune 500 companies after taking a cut.

For example, in August 2019, Walmart tried to boost its stock value by outsourcing 569 finance and accounting jobs in North Carolina to cheaper H-1B workers. Walmart picked an American company, Genpact, to supply the Indian workers. The company is a spin-off of General Electric, and it prospers by providing Indian H-1B workers to many companies in the United States. For example, the company asked for 271 H-1Bs in 2018, 410 H-1Bs in 2017, and 307 H-1Bs in 2016.

Some H-1B are imported to work U.S. jobs for many years, and some are imported to funnel additional work back into India and other countries. For example, Genpact may only need to use 100 H-1Bs in North Carolina to help steer the daily work of the 569 fired American finance experts back to large teams of low-wage Indian graduates in India.

The outsourcing business can be lucrative for companies on both sides of the outsourcing business.

For example, Genpact’s outsourcing can benefit Walmart’s executives and shareholders. If Walmart company saves $10,000 per employee, Walmart would save $5.7 million per year. On Wall Street, Walmart’s price to earnings rate is 25 to one, so the $5.7 million in payroll savings will boost its stockholders’ value by $142 million. In turn, Genpact’s 2019 $3.3 billion in revenue was enough to generate $7.5 billion in stock value for its investors, including Bain Capital, Blackrock, and Charles Schwab Investment Management.

The investors are mostly based on the coasts, so their wealth helps to spike wages and real estate values in New York and California — while the reduced payroll in North Carolina reduces local business and real estate values.

Fortune 500 companies and universities also import their own H-1B workers instead of competing for American graduates in the U.S. labor economy. The News & Observer reported in June 2020:

Computer giant IBM, Duke University and UNC-Chapel Hill ranked among the largest applicants for H-1B visas in the state. The average salary for an H-1B worker in Durham-Chapel Hill was $84,700.

…

Raleigh immigration lawyer John Pinnix said the new order is going to hurt many of his clients, which aren’t just tech companies looking to find software developers.

He said many H-1B visa holders work in health care or in school systems, especially in rural areas where its hard to recruit recent graduates from U.S. schools. Many of these workers, like front-line health workers, are acutely needed now because of the coronavirus pandemic, he added.

The H-1Bs are a majority of the roughly 1.3 million visa workers in the United States, alongside the workers pumped in by the J-1, L-1, TN, H4EAD, OPT, and CPT pipelines.

For example, the OPT program allows U.S. companies to hire roughly 400,000 very cheap foreign graduates of U.S. colleges. In 2017-2018, roughly 3,700 foreign graduates got work permits for North Carolina jobs sought by U.S. graduates.

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