Commerce Department Chokes Job Outsourcing to Chinese Tech Workers

Workers are seen on the production line at Huawei's production campus on April 11, 2019 in Dongguan, near Shenzhen, China.
Kevin Frayer/Getty

Agency officials are putting bureaucratic roadblocks against the hiring of Chinese engineers by American high-tech companies, according to the Wall Street Journal.

“Companies need [federal approval when hiring] for existing and prospective foreign-citizen employees working on advanced semiconductors, telecommunication systems, encryption and other technologies,” the WSJ said:

Under rules in place for decades, companies must get licenses before assigning workers with foreign nationalities—Chinese, Iranian, Russian among others—to work on a list of sensitive technologies. Because companies are giving foreigners knowledge about technology they could eventually take home, the Commerce Department considers such assignments the equivalent of an export.

Approvals for so-called deemed-export licenses once took a matter of weeks, whereas a wait of six to eight months isn’t unusual today, a person familiar with the process said.

The new focus on agency roadblocks come as business lobbyists have successfully blocked the statutory and regulatory reforms expected by President Donald Trump’s administration. For example, lobbyists persuaded Trump’s deputies to abandon a proposed reform of the H-1B program that would have excluded many of the cheap foreign graduates who are hired by U.S. companies and their subcontractors in place of the recent American graduates who needed starter jobs.

Similarly, Trump’s new 2020 immigration platform protects blue collar workers at the cost of allowing companies to import many more foreign graduates for technology jobs by U.S. college graduates.

Roughly 50,000 Chinese graduates get jobs in the United States each year, mostly via short term visas. Nationwide, a population of roughly 1.5 million non-immigrant foreign graduates works in white-collar jobs in the United States.

But the corporate pressure for fast track approval of the Chinese workers is being countered by top level concerns over the Chinese government’s aggressive attempts to steal, buy, and dominate critical technologies. The WSJ reports:

The Trump administration has used months of often heated trade talks with China to push back on forced technology transfers, and U.S. authorities have blocked tech-company acquisitions, including Broadcom Inc.’s hostile bid for Qualcomm, citing concerns about the potential impact to the country’s ability to compete with China.

Also, some GOP legislators are pushing a bill to exclude some Chinese graduates and workers from U.S. jobs.

This national security push is being resisted by business groups.

In 2018, for example, the U.S. ambassador to China reportedly sank a reform pushed by some White House officials.

Many of the Chinese experts who are being blocked by the Department of Commerce are being imported via temporary visas, such as H-2Bs and L-1s. The hurdles may also be slowing the employers’ nomination of Chinese nationals for green cards.

The visa hiring ensures that many Chinese experts will eventually go home, carrying U.S. technological secrets with them.

The green card process will deliver many Chinese immigrants into critical U.S. infrastructures, such as telecommunications networks, healthcare databases or financial processing systems. Their knowledge and access to the technologies would be of great value to the Chinese spy agencies, who are judged by U.S. officials to have already stolen many U.S. commercial technologies.

The WSJ article cited several chipmakers —  Intel Corp., Qualcomm and Globalfoundries Inc. — who are being hit by the slowdown.

The website shows that Qualcomm asked for 350 green cards for imported H-B workers in 2018, on top of hundreds of requests made in prior years. The site also shows the national origin of the visa workers who could get green cards: “India(774); China(145); Canada(48); South Korea(29); Taiwan(24); Iran(11); Israel(9); Egypt(8); Brazil(8); Spain(7).”

The company may be reducing its hiring of foreign visa workers. For example, it asked for visas to import 39 new H-1B visa-workers in 2018, and for 19 visa workers in 2019.

Intel Corp. asked for 304 new H-1B visa-workers in 2018, plus 250 three-year extensions for existing H-1Bs. The company also asked for 1,156 more green cards for foreign workers.

Overall, the site reports that Intel has sought green cards for thousands of visa workers: “India(3786); China(296); Russia(92); Canada(80); Taiwan(70); Mexico(60); Bangladesh(57); Costa Rica(45); South Korea(43); Nigeria(33).” The site shows that 2,588 of those hires were foreign students with F-1 visas who had graduated from U.S. colleges.

The mass hiring of Chinese graduates and foreign workers by U.S. corporations likely ensures that many Americans job-seekers were denied places and that salaries were lowered. In turn, this substitution of Americans by Chinese — and also by Indians — reduces the inflow of Americans into the sector, prompting business executives to complain about a shortage of American graduates and further demands for foreign workers.

The inflow of Chinese and Indians into U.S. jobs is also aided by large-scale cheating:

Background numbers to know:

Each year, roughly four million young Americans join the workforce after graduating from high school or university.

But the federal government then imports about 1.1 million legal immigrants and refreshes a resident population of roughly 1.5 million white-collar visa workers — including roughly one million H-1B workers — and approximately 500,000 blue-collar visa workers.

The government also prints out more than one million work permits for foreigners, tolerates about eight million illegal workers, and does not punish companies for employing the hundreds of thousands of illegal migrants who sneak across the border or overstay their legal visas each year.

This policy of inflating the labor supply boosts economic growth for investors because it ensures that employers do not have to compete for American workers by offering higher wages and better working conditions.

This policy of flooding the market with cheap foreign white-collar graduates and blue-collar labor shifts also enormous wealth from young employees towards older investors even as it also widens wealth gaps, reduces high-tech investment, increases state and local tax burdens, and hurts children’s schools and college educations. It also pushes Americans away from high-tech careers and sidelines millions of marginalized Americans, including many who are now struggling with fentanyl addictions. The labor policy also moves business investment and wealth from the heartland to the coastal citiesexplodes rents and housing costsshrivels real estate values in the Midwest and rewards investors for creating low tech, labor-intensive workplaces.






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