Feds Hid White-Collar Outsourcing Program From the Public, Says Judge

A student gestures during the University of Pennsylvania commencement ceremony, in Philade
AP Photo/Matt Rourke

Federal officials excluded the public when they created a program to help U.S. companies hire hundreds of thousands of foreign graduates in place of American graduates, a D.C. Appeals Court judge said February 20.

Law360.com reported the comment, which came during a hearing against the Optional Practical Training outsourcing program:

The judge also challenged [Justice Department lawyer Scott] Stewart … that the latest tweak represented the first time the government actually opened its considerations of the program to public comment. “The public wasn’t involved” in earlier considerations on statutory authority for the program, Judge Edwards told Stewart.

Federal law requires the public be allowed to comment when new regulations are created.

“I have claws up and down my back …. [the judge] was tough on me, but he wasn’t vicious,” said John Miano, the lawyer for the Immigration Reform Law Institute. On behalf of the Washington Alliance of Technology Workers, Miano is suing to shut down the federal “Optional Practical Training” program because the OPT program was illegally created.

“You kind of like it when the judge is tough if he fair,” Miano said, adding that government lawyers “seemed to be taking a lot more shots than we were taking.”

The OPT program gives work visas to more than 300,000 foreign graduates of U.S. universities and college each year.

The program harms the 800,000 Americans students who graduate each year with skilled degrees in healthcare, business, accounting, math, science, computers and engineering, by forcing them to compete for jobs against government-subsidized foreigners.

The OPT program also generates a multi-billion dollar bonanza for universities and companies. The universities use the work-permit program to win fee-paying students from abroad, and the companies use the program to get cheap workers and also to pocket the Social Security and Medicare taxes they would otherwise have to pay American hires.

President Donald Trump promised a “Buy American, Hire Americans” policy on Inauguration Day, but lawyers at the departments of justice and homeland are trying to protect the agency-created program.

The lawsuit has been underway for a decade because prior judges have tried to dismiss the case for different reasons, forcing the institute to make their appeal to the three-judge appeal court. There has been a “complete breakdown of judicial review— the courts have not wanted to reach a decision,” said Miano. 

A key legal issue is whether the government can use the law allowing work permits for foreign students to also grant work permits to ex-students. “None of these Appeals Court judges are buying [the claim] that these are students,” said Miano. 

According to Law360.com, the judge also slammed the lower court judge for dismissing Miano’s well-argued lawsuit:

U.S. Circuit Judge Harry T. Edwards questioned the “weird charade” that saw the district court dismiss the Washington Alliance of Technology Workers’ lawsuit in part for an insufficiently pled complaint. Judge Edwards said the complaint appeared to adequately challenge the U.S. Department of Homeland Security on its 2016 expansion of the “optional practical training” program that by statute is supposed to be limited to students … 

Edwards also slammed the Justice Department’s lawyer for evasive claims, according to Law360.com, which said:

Stewart tried arguing that Washtech’s filings were difficult to read and that some responses “were extremely short,” but those contentions made little headway with Judge Edwards, who wondered why the government didn’t admit it was wrong on the pleading point and move on. At one point, he called government contentions that Washtech had conceded arguments “the height of chutzpah.”

The judges are likely to announce their verdict in three months, said Miano. They can dismiss the appeal, tell the lower-court judges to proceed with the lawsuit, or even resolve the lawsuit themselves, he said. “If this lawsuit gets to a final decision by a court of appeals, it is clear what the decision will be,” he added. 

The Law360.com article is here.

The OPT program is politically powerful because it is a bonanza for the universities and white-collar employers in the United States.

The program offers work permits to an unlimited number of foreign workers, allowing them to work for up to three years after their graduation in the United States in a wide variety of healthcare, business, or technology jobs. That program allows U.S. universities to effectively sell work-permits to foreign customers and it encourages more college departments to get their program included in the OPT program.

Companies also profit because the foreign OPT workers are often willing to accept lower wages in the hope of getting U.S. residency — so forcing down wages paid to Americans. Also, companies do not need to pay Social Security and Medicare taxes when they hire foreign OPT graduates instead of American graduates. That 15 percent tax break is worth several billion dollars every few years to company shareholders.

The OPT program is huge — and growing rapidly. In June 2017, the Department of Homeland Security provided participation data to Breitbart News.

If the 2014 to 2016 trend continued through 2017, the OPT program would have outsourced more than 400,000 white-collar jobs in 2017.

American white-collar journalists have almost entirely missed the economic threat caused by the rapid outsourcing allowed by the OPT program. Instead, journalists have been nudged to focus their emotion and attention on the roughly 700,000 blue-collar ‘dreamer’ illegal immigrants who are seeking jobs sought by blue-collar Americans.

The OPT outsourcing program grew rapidly during Obama’s tenure partly because his deputies extended the OPT work permits up to three years, amid lobbying pressure by U.S. technology companies. The companies view the OPT program as a way to hire cheap, high-IQ foreigners in place of Americans, and as an entry ramp for foreign students into the H-1B and EAD outsourcing programs.

The OPT program operates alongside the H-1B, L-1, TN and J-1 programs, which together keep an estimated population of more than 1 million foreign white-collar guest-workers working for low wages in American jobs. The similar “Employment Authorization Document” rules allow another 2 million workers — including many graduates — to take jobs in the United States before they get green cards.

DHS officials also cited the 1324a claim in a 2017 decision and their plans for 2018 rule-making: “Section 274A(h)(3)(B) of the INA, 8 U.S.C. 1324a(h)(3)(B), recognizes the Secretary’s discretionary authority to extend employment authorization.”

These various outsourcing programs are hidden by complexity and media passivity. For example, many media outlets report that the H-1B program brings in only 85,000 people a year, even though the program keeps a population of at least 450,000 white-collar workers in the United States.

In general, companies want to maximize the supply of foreign graduates because the extra supply reduces the wages paid to their white-collar workforce. For example, many companies are now backing a proposed law by GOP Sen. Orrin Hatch that would allow U.S. companies to hire an unlimited supply of foreign graduates in place of American graduates and their college-trained children. The white-collar outsourcing has been very successful, and white-collar wages have remained flat for many years while profits and stock values have zoomed upwards.



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