Donald Trump Sets Regulation to End Cheap-Labor H-1Bs

WASHINGTON, DC - JUNE 17: U.S. President Donald Trump speaks during an East Room event to announce the “PREVENTS Task Force” at the White House June 17, 2020 in Washington, DC. President Trump held the event to announce plans to prevent suicides among U.S. military veterans. (Photo by Alex Wong/Getty …
Alex Wong/Getty Images

President Donald Trump has ordered his deputies to issue regulations to stop companies from using H-1B workers as cheap-labor substitutes for American graduates.

“His goal here is to ensure that businesses, as they rehire coming out of the coronavirus economic hit, that they have to hire American workers first,” said Ken Cuccinelli, the deputy secretary at the Department of Homeland Security (DHS). The regulation change is being announced on June 22 alongside an executive order that reduces the inflow of blue-collar and white-collar migrants into U.S. jobs.

The regulation change is huge because it will allow hundreds of thousands of young Americans to get starter jobs in the software and accounting sectors, said reform advocates. Under current rules, most young Americans are excluded from the sectors because Fortune 500 companies can import and exploit many H-1B gig-workers on short term, low-wage contracts.

The draft regulation says that each year’s supply of 85,000 H-1B visas will be given to the companies that offer the highest salaries, and it says all H-1B employees must be paid above median wages.

That draft regulation is being fought tooth-and-nail by Fortune 500 companies because it will deliver a huge pay increase to American graduates. In 2017, for example, 65 percent of H-1B workers were paid fair below-median wages for working jobs in New York, according to federal data collected by SAITJ.org.

“Basically, we’re going to get rid of the 17 [percentile tier] and 30 [percentile tier] and set it at the 50th percentile … [or] tier three. And the intent here is to eliminate the bottom two tiers from a pay standpoint to open up those jobs for Americans,” Cuccinelli told Breitbart News June 22. 

The policy also tells the Department of Labor to rewrite the Labor Condition Application (LCA) regulatory process. This is important because companies must get an approved LCA before they can request H-1B visas from DHS.

The new rules will require that companies who ask for H-1B visa workers must show that the foreign workers will not bump Americans out of jobs — even when the Americans are employed by other companies.

For example, Disney hired an Indian company in 2012 to take over various jobs, including Disney’s software jobs in Orlando. The Indian company, HCL, asked for and got the H-1Bs for Disney by swearing only that the new H-1Bs would not displace other HCL workers in the United States — regardless of the intended harmful impact on Americans.

“We’re going to bring that to an end, to a screeching halt,” Cuccinelli said. “The president has ordered us to close that loophole. We’re going to do that by regulation. Again, this will be a permanent change.”

Under the new rules, HCL will have to promise that the new H-1Bs will not displace Americans in other companies, including the Disney workers. 

Under the law passed by Congress, Labor Department officials must quickly approve LCAs if they are correctly filled out. 

“The president wants to move toward a more merit-based immigration system,” said Cuccinelli. “You’ve heard him talk about ‘the best and the brightest,’ but he wants to do that in a way that protects American workers.”

The proposed shift from the current lottery to highest-paid, first-served is welcomed by the white-collar activists who pushed for Trump to follow through on his 2016 campaign promise.

Trump said in March 2016, “I will end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers first for every visa and immigration program. No exceptions.”

“That’s a step forward, absolutely,” said Hilarie Gamm, a co-founder of the American Workers Coalition. She continued:

The thousands of Americans working with AmWorkCo to reach out to President Trump and his administration are grateful and excited to see any movement in the right direction.

The American Workers Coalition has staged a grassroots campaign to contact the White House and the media, and to share the stories of displacement and economic hardship suffered by American professionals and their families … We may not be millionaires, but we all are voters, and the Trump administration in such a tight election year needs to listen to our voice.

“There’s time to celebrate, but we’re going to be cautious,” said Kevin Lynn, founder of U.S. Tech Workers, adding:

This is a success. Is it perfect? No, but we’re going to work towards the perfect. And it is an example of reform that would not exist without the involvement of the [white-collar] grassroots.

Regardless of what I feel about a politician, when they do things I don’t like, I will let them know it. When they do things I do like, I will also let them know. I would encourage our base to say “This is what we like, thank you,” and then to mend what is not perfect.

Most H-1B workers are hired in blocs to perform lower-skilled, routine software or accounting jobs. Very few perform high-skilled tasks that cannot be accomplished by Americans.

These H-1B workers are usually cheaper than Americans, but U.S. CEOs prefer them because they are compliant, controllable, and disposable.

U.S. executives know that visa workers are not immigrants. The visa workers have almost no legal rights in the United States and will rationally work long hours for many years in the hope of getting paid with a green card that allows them to escape India or China.

In contrast, American professionals are a labor headache for CEOs, C-suite executives, and hiring managers. They argue with their managers, demand time off on the weekend, quit for other opportunities, go on local TV when their department is laid off, testify in court when low-quality products cause damage, and they also try to develop innovative products.

Roughly 1.3 million white-collar visa workers are employed by tech companies, insurance companies, banks, manufacturers, hospitals, and universities.

This growing legal population also hides a growing population of illegal professionals, many of whom overstay their visas and get lower-wage work in Indian-run subcontracting companies. For example, Indian companies use B-1 training visas to import Indian workers for low-wage work alongside the legal H-1Bs.

Many young American graduates are getting displaced by this pipeline of Asian workers, a Facebook employer told Breitbart News. “I personally know people who lost their jobs because of that and are now living in camper vans,” he told Breitbart News.

The skilled U.S. graduates “are working minimum-wage jobs, at fast food restaurants, at receptionist jobs, just to make ends meet,” he said, adding that some have since joined the Antifa protests rather than develop novel software products. 

Follow Neil Munro on Twitter @NeilMunroDC, or email the author at NMunro@Breitbart.com.

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