Donald Trump Slashes Corporate Outsourcing to India’s H-1B Gig-Workers

US President Donald Trump pumps his fists as he arrives for a "Make America Great Again" rally at Minges Coliseum in Greenville, North Carolina, on July 17, 2019. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)
NICHOLAS KAMM/AFP via Getty Images

President Donald Trump’s H-1B reforms will shrink the Fortune 500’s large-scale use of cheap Indian gig-workers, say opponents and supporters.

The immediate beneficiaries may include thousands of middle-class Americans at the Vanguard Group, Ascension Healthcare, and other companies who have been told they will soon lose their jobs to Indian contract-workers imported by Indian-run staffing companies, such as HCL and Infosys. The staffing H-1B gig-workers comprise seven-in-ten of the more than 600,000 H-1Bs in the United States.

Industry representatives and lawyers are objecting to the new rules, which will dramatically raise the cost of hiring foreign workers and reduce the CEOs’ incentives to sideline young American graduates and mid-career American professionals.

For example, Indian staffing companies that import H-1B workers will only be allowed to keep them in the United States for one year, instead of six years. Also, U.S. companies would have to pay higher salaries to their imported gig-worker programmers, doctors, accountants, and designers.

Opponents of Trump’s rules say they will damage the Indian-dominated outsourcing business.

“It is clear that by erecting significant barriers to third-party worksite placement, DHS [Department of Homeland Security] has decided to make America great again by returning us to the time before contracting out and specialization existed,” immigration lawyer Vic Goel of Goel & Anderson told Forbes for an October 7 article. He continued:

The combination of limited H-1B validity periods, new definitions of longstanding legal terms and increased documentary requirements for any position involving a third-party worksite is intended to dissuade businesses from employing an H-1B professional by making it exceedingly difficult and prohibitively expensive.

“These regulations will lay the groundwork for the pricing out of foreign labor, which is essential to the solvency of countless American businesses,” said Benjamin Johnson,  the executive director at the American Immigration Lawyers Association, whose members import foreign workers for the Fortune 500. “Under the guise of economic recovery, the government is essentially halting the pipeline of global talent needed for innovation and economic success.”

Companies will be forced to pay an extra $38,000 to an inexperienced engineer contract-worker in San Jose, California, according to an analysis by the National Foundation for American Policy. That would bump the worker’s salary up from $88,710 up to $127,042. Similarly, employers would have to raise the $53,810 pay for an imported “medical scientist” in Boston up to $66,622, said the foundation, which strongly opposes curbs on visa workers.

The Indian-dominated H-1B program keeps 600,000 to 1 million foreign workers in U.S. jobs, in at least three tiers of jobs.

The first tier consists of the short-term workers who are imported to get trained in the U.S. so they can quickly take the jobs back to India.

The second tier consists of the Indian and Chinese workers hired for long-term, mid-skill, or high-skill jobs at Fortune 500 companies, including elite Silicon Valley tech companies. Many of those migrants work diligently and without complaint for many years after their employers put them in a line for citizenship and green cards. This group includes roughly 350,000 workers, nearly all of whom are Indians.

The third tier — by far the largest — comprises the H-1Bs in unstable, gig-worker jobs arranged by many Indian-run staffing companies. These companies, dubbed “body shops,” use roughly 71 percent of the H-1B workers and survive by getting outsourcing contracts from Fortune 500 firms.

This third tier also uses many of the extra contract-workers imported via the TN, Optional Practical Training (OPT), and Curricular Practical Training (CPT) programs and provides a legal cover for the many illegal workers who have violated or overstayed their visas.  The “third-party placement” tier pushes many younger Americans out of lower-tier tech jobs — and away from careers in Fortune 500 companies.

Immigration lawyers defend the “body shop” outsourcing. “This will not only hurt companies that employ H-1B workers, but also the hundreds of thousands of companies that benefit from their work,” tweeted Sarah Pierce at the pro-migration Migration Policy Institute.

“There are many problems with the H-1B program, including that there are instances where H-1B workers are replacing U.S. workers, and that’s a problem that needs to be dealt with,” admitted Pierce. “There is a way to thread this needle to address the problem that they’re concerned with, but instead, they are just hitting it with a sledgehammer,” she complained to CBS News.

Trump’s deputies provided the news amid the industry’s protests when they announced the rules on October 6.

“With millions of Americans looking for work, as the economy continues its recovery, immediate action is needed to guard against the risk lower-cost foreign labor can pose to the well-being of U.S. workers,” said Patrick Pizzella, the deputy secretary at the Department of Labor. “U.S. workers are being ousted from good-paying, middle-class jobs and replaced with non-U.S. workers [and that] has also caused U.S. wages in some instances to stagnate. That is wrong.”

“We’re making good on President Trump’s promise that he made to the American people nearly four years ago,” said Ken Cuccinelli, the acting deputy director at the DHS.

Trump promised “to restore the integrity to the immigration system, to protect Americans from those who seek to exploit our system for personal gain, and to never forget each and every hard-working American struggling to provide for his or her family,” Cuccinelli said. “This rule will help us rebuild our economy and put Americans back to work.”

Advocates for U.S. professionals cheered the new rules.

“The prevailing wage levels have been set so H-1B visa workers are now being paid an appropriate wage,” said Kevin Lynn, founder of U.S. Tech Workers. “This is good news for U.S. workers as the risk of them being replaced by cheap labor from abroad is greatly minimized. Although it is bad news for the ‘body shops’ as it sucks much of the profit out of their labor arbitrage model.”

“After 25 years of wage stagnation and wage decline and hurt to U.S.-educated professionals, finally we see recognition and hope for better days ahead,” said Hilarie Gamm, the founder of the American Workers Coalition.

The Expanding Green Card Economy:

A growing number of visa workers have been imported since 1990 to take the jobs needed by U.S. graduates, via the various H-1B, L-1, J-1, CPT, and other worker pipelines.

Most foreign workers were imported for short-term training or lower-tier and routine software jobs. But an increasing number are being imported for jobs in science, health care, management, accounting, recruiting, marketing, and other white-collar jobs.

The foreign graduates accepted the lower-wage job offers from many Fortune 500 companies in expectation of getting green cards from the employers.

Most of the imported workers are Indians because India’s government works with U.S. investors to exploit the huge wage difference between the United States and India.

But the corporate executives promised far more green cards to Indian recruits than the roughly 23,000 cards allowed per year by the federal government. So, the gap between the executives’ promises and the annual supply of green cards for Indians has accumulated to create a massive backlog of roughly 350,000 indentured, compliant Indian workers (plus 350,000 spouses and older children) who are choosing to wait many years for their promised cards.

This multi-year Indian green card backlog is also a huge problem for the Fortune 500 companies and India’s economic strategy because it greatly hinders their ability to recruit another wave of Indian workers.

There is no limit to the number of foreigners who can temporarily get white-collar jobs in the United States.

The door is held open by administrators at U.S. colleges. They have the power to sign the enrollment documents needed by foreigners to get work permits via the government’s CPT and OPT programs. The two work permit programs were largely created and expanded by Presidents George W. Bush and Barack Obama, with no approval from Congress.

Some of those CPT and OPT graduates are hired directly by Fortune 500 companies, but many get jobs in large or small staffing companies that provide gig workers for jobs outsourced by the C-suites of Fortune 500 companies. Indian migrants tell Breitbart News that many subcontractors hire OPTs and CPTs — as well as overstay illegal aliens — to fill the outsourced Fortune 500 jobs.

The Indian gig workers often work for sub-minimum wages because they hope to win the green cards dangled by Congress and employers eventually.

This shadow employment sector is also shaped by India’s workplace practices. They include job-selling by managers, wage theft, use of fake resumes and corrupt “family and friends” to win contracts with major firms, workers’ kickbacks to hiring managers, disregard for U.S. privacy and security rules, plus routine discrimination against Americans and immigrants who do not accept the Indian workplace rules. Few Indian managers will hire Americans for these jobs because they expect Americans will file lawsuits against the Indian practices, Indian workers tell Breitbart News.

This Green Card Economy includes at least 1.3 million foreign graduates who arrived via the H-1B, J-1, L-1, OPT, CPT, or H4EAD workforce pipelines. For example, the H-1B program includes at least 600,000 workers; the H4EAD program comprises at least 100,000 workers, while the OPT and CPT programs keep at least 400,000 foreign workers in U.S. white-collar and technology jobs.

In contrast, roughly 800,000 Americans graduate each year from four-year colleges with professional degrees in health care, engineering, business, math, science, software, or architecture. Many skilled American graduates are forced into other lower careers — despite college debts — because U.S. executives prefer to hire less-proficient visa workers for starter jobs.

The presence of these many legal and illegal foreign workers ensures a loose labor market in which Fortune 500 employers never have to compete against each other for U.S. graduates, for example, by offering full-time employment, benefits, and decent wages.

Many CEOs also prefer visa workers because they are disposable and subservient. For example, the workers are employed and swapped by a dizzying variety of subcontractors who can move blocs of labor from one city to the next, to fill short term contracts, with little notice or compensation to the disposable workers.

In contrast, American professionals speak their minds, push for high-quality products, ask for higher wages, change employers, collaborate to develop innovative products, complain about workplace discrimination, sue their employers, and testify in court. This professional pressure on executives spurs innovation and quality gains, U.S. experts and managers tell Breitbart News.

But corporate executives are rewarded for raising near-term stock values, not for working with U.S. professionals to develop novel or reliable technology. One result is that many self-serving groups of visa-workers from India and China dominate the technical workforce and management in many West Coast tech firms that were ordinally launched and staffed by open-minded, trusting Americans.

Once executives get comfortable with compliant visa workers, innovation declines because American professionals are “supposed to answer in a very subservient way,” Mary from central New Jersey, a foreign-born software expert, told Breitbart News.

She added, “I would tell [the female executive] professionally what the issue was, and she didn’t like that. You can’t oppose her in any way. If she tells you, ‘It is black,’ it has to be black even if it is white. [The Indian contractors] will feed her what she wants to hear. … They cater specifically to that [attitude]. When the information given to that manager is wrong, and that manager does not care, the professionalism of the field is gone.”

Most of these green card workers are also part of the U.S.-India Outsourcing Economy. The outsourcing economy allows U.S. investors to boost stock values by buying and selling blocs of cheap Indian graduates for U.S. jobs. It helps investors transfer jobs to India by first importing Indians to get trained by the Americans who are getting replaced. It also funds India’s economic growth and appetite for American imports, including products and services provided by Apple, Walmart, and Amazon.

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