Justice Dept. Defends ‘OPT’ Program Which Pays Investors to Hire Foreign Graduates

Student Loan
AP Photo/Butch Dill
Neil Munro

The Department of Justice has joined with business groups to defend the program which pays investors more than $2 billion in tax breaks for hiring roughly 300,000 foreign graduates instead of their recent American counterparts.

The government lawyers replied to a lawsuit against the Optional Practical Training program by saying it is a legal extension of laws that allow foreign students to enter U.S. universities.

But the American plaintiffs in the lawsuit say the OPT program was not created by Congress. The program is merely a lobbyist-created, cheap labor program which discriminates against American graduates, and also transfers at least $2 billion each year from Social Security and Medicare to the wealthy investors in technology companies.

The OPT program allows roughly 300,000 foreign graduates of U.S. colleges to get U.S. jobs, usually at low wages, for one or three years. The program helps the foreigners compete for green cards, it sidelines American graduates into unemployment and low prestige jobs, and it also lowers salaries for a wide range of American professionals, say critics.

The case is likely to be heard by Judge Reggie Walton in May, said John Miano, the lawyer for the American plaintiffs, at the Immigration Reform Law Institute.

“I think things are looking good,” he said. “The law is clear here, [and] at the end of the day,  the courts are not going to rule to that the scheme which Congress has set up is meaningless and that [the Department of Homeland Security] can change the terms of the [student] visa when the alien gets to the United States.”

But, he warned, “the thing you always worry about is that if the judges decide ‘This is the outcome I want to get’ … there are opinions out there where judges can stretch the law.”

India’s government strongly backs the OPT program because it funnels roughly 50,000 of India’s graduates into prestigious and well paid American jobs, usually with the mutual aid of Indian recruiters and managers. The program also feeds many Indian graduates into the H-1B program,  which keeps roughly 750,000 Indian graduates in American jobs. Once in those jobs, the Indians outsource more jobs to India via the U.S.-India Outsourcing Economy, so denying those jobs to Americans graduates.

Overall, a series of visa and work permit programs — dubbed the OPT, L-1, H-1B, TN, J-1, and H4 EAD — keep a shifting population of roughly 1.5 million, non-immigrant, foreign graduates in jobs needed by young, debt burdened American graduates. Many of the foreign graduates get software jobs — but many others are using their national, caste, and ethnic favor-networks to get U.S. jobs in healthcare, accounting, management, engineering, and design.

Congress is now trying to pass a bill, dubbed S.386, that would encourage and reward Indians who take white collar jobs from Americans.

Another set of programs provides blue collar work permits to more than 1 million people each year.

Amid the worker inflow, the career losses for ordinary Americans become stock-market gains for wealthy investors, whose stocks rise by roughly $25 billion for every $1 billion which is cut from annual payroll costs.

The OPT program conflicts with President Donald Trump’s ‘Buy American, Hire American’ policy.

But it is strongly backed by the technology investors who govern most of the nation’s information networks in the year running up to the 2020 election. Trump’s attitude towards the various college graduate visa programs has zig-zagged amid pressure from the investors and from middle class, swing voting college graduates. The result is that his deputies have nudged down the inflow of the H-1B program without making significant changes, while Trump has avoided creating any new programs or canceling any of the existing programs, such as the 100,000-strong H4 EAD program.

“There is a lot of pressure in various sectors to utilize more immigrant labor for employment, whether it is for high-tech or low-tech in the economy … [but the president] has also made clear that is is important to protect ordinary American workers and to not displace them,” Ken Cuccinelli, who runs the U.S. Citizenship and Immigration Services agency, said in October. “Is there some perfect [balanced] target point in every industry? Maybe there is, but we’re never going to be able to know it. So which side do you err on? … So we’re just in a constant battle to balance those things.”

The inflow of tech workers is causing intense pain to some Americans. “I’m a displaced US Worker and my job was taken over by a H1B worker in the US,” says an October GoFundMe appeal from Pamela Pjura. She continued:

All the employees in the department that I was working were replaced by H1B’s.  The manager was a [foreign] H1B worker, who receive a Green Card and was trying to do the same for other H1B workers.    I’m actively searching and applying for positions. When I’m applying, I’m speaking with recruiters, who don’t speak or understand English nor do they know anything about the job.  I never hear back from anyone, even if I follow up.

But the OPT program is being defended by a large group of investors, including some of the wealthiest men in America. Fortune magazine reported:

Intel currently has about 1,100 employees in OPT status who did not win the H1-B lottery last year and “they make a significant contribution to the work we do in our U.S. operations,” said [Intel lobbyist Lisa] Malloy.

…

In the past, judges dismissed [Miano’s]  case on standing or called it moot. But this July he had a breakthrough when a federal district court allowed Miano to go ahead with his challenge to the program. The judge, acknowledging that the Trump administration may not be as eager to defend the program as past administrations have been, also allowed groups representing businesses, the U.S. Chamber of Commerce, the Information Technology Industry Council, and the National Association of Manufacturers, to intervene in the case and present their own arguments in favor of the program.

Congress did not create the OPT program. So the justice department claims the program rests on legal extrapolations and interpretations, and congressional inaction:

Under the INA [immigration and Nationality Act], the F-1 student provision allows DHS to provide F-1 nonimmigrant status to someone who is a “bona fide student qualified to pursue a full course of study and who seeks to enter the United States temporarily and solely for the purpose of pursuing such a course of study … at an established … academic institution.” The statute is silent as to the meaning of the terms “student” and “course of study.” And nothing else in the INA resolves the question whether an F-1 student’s course of study can include a period of post-graduation practical training in the student’s field of study.

The statutory language naturally lends itself to the reading that a student could be permitted to work as part of his “course of study.”

The Department of Homeland Security has the legal authority to redefine education, the legal claim says:

Faced with the statutory gap in the F-1 provision, in the 2016 OPT Rule, DHS adopted a reasonable and longstanding interpretation that the F-1 student provision allows for employment of students after graduation and during a period of practical training. As noted above, employment as a means of educating someone is not unusual, even for graduate students. And DHS enjoys significant authority to enforce the INA and a narrower directive to issue rules governing nonimmigrants.

Congress has not moved to correct the OPT program, so it must be legal, the claim said:

Congress has ratified—or at a minimum acquiesced to—the longstanding agency practice of extending work authorization for F-1 nonimmigrants, including those who have already graduated from an academic institution.

…

The agency’s unbroken interpretation, when combined with congressional awareness of the F-1 OPT program and the lack of congressional action to change the agency’s approach, confirms that the 2016 OPT Rule reflects a reasonable interpretation of the agency’s authority.

…

Indeed, the INA does not define the term “student” as it relates to a permitted course of study, which may encompass both classroom education and practical training.

Business groups, led by the National Association of Manufacturers, said the graduates should be treated as students because they are still getting educated while working in U.S. jobs:

To begin with, it has long been understood that practical training can be an integral part of a student’s education, capping off classroom learning through in-field experience. As DHS con-cluded in promulgating the 2016 Rule, “the STEM OPT extension rule is grounded in the long-standing recognition by DHS and its predecessor agency that . . . experiential learning and practical training are valuable parts of any post-secondary educational experience.”

“They leave out the part that says … aliens are required to leave the country when they no longer conform to the status they have when they were admitted,” said Miano. “They only show that in a footnote.”

Besides, the DHS has the legal authority to provide work permit to whomever it wishes, the business group claims:

the immigration agencies across multiple administrations of both political parties have time and again relied on Section 1324a as authority for allowing the employ-ment of noncitizens not statutorily authorized to work. As the United States has cataloged in previous briefs defending this authority, immigration agencies have cited this provision at least twenty times when identifying classes of noncitizens authorized to work in the United States. Plaintiff’s argument would render each of these substantial programs unlawful. Plaintiff is simply mistaken in its suggestion that the immigration agencies have been acting lawlessly for decades.

The status quo is suitable for investors, the business claim says. For example, it says managers at Intel Corp. more than 1,000 OPT graduates each year:

The inclusion of these high-skilled foreign students is critical to the success of American industry … To take the example of just a single firm, Intel Corporation—a member of all three Intervenors—“seek[s] U.S. workers first when we need to fill U.S. positions,” but nevertheless finds itself hiring “1,400 to 1,700 Master’s- and Ph.D.-level foreign-national college hires a year,” “substantially all” of whom “have work authorization because of OPT or STEM OPT.”

The legal brief by the technology sector, Intel, and various West coast investors — including Mark Zuckerberg and Bill Gates – says the billion-dollar tax-breaks for hiring Indian, Chinese and other OPT workers are too small to notice:

even in the unlikely event that some recruiter happened to be aware of this obscure wrinkle in the tax code, they would not be able to do anything with it. That is because employers typically avoid asking about the details of a candidate’s immigration status during the recruiting process, and thus recruiters are unlikely to know at the time of hiring whether a candidate is a STEM OPT participant, let alone whether the candidate qualifies for a FICA tax exemption.

…

Amici state here clearly that the possibility that a job candidate might have FICA-exempt status simply does not impact employers’ hiring decisions, let alone lead them to prefer foreign workers over native ones.

In response, the legal brief submitted by the Center for Immigration Studies says:

The OPT Program is a regressive income transfer program, which takes from Congressionally-mandated Social Security, Medicare, and Federal Unemployment Insurance Trust Funds for the elderly, the ailing, and the unemployed, and gives it to corporations that discriminate against American citizen graduates.

…

Approximately 300,000 OPT beneficiaries hold jobs at any given time, which means that the OPT program amounts to the elimination of approximately 300,000 entry level positions
available to citizen and permanent resident college graduates. For every OPT beneficiary who is directly favored by the subsidy program, one U.S. worker is pushed aside. In addition to the oneon- one displacement of individual workers, the OPT program adds 300,000 new (temporarily) legal workers to the labor market. This program therefore needlessly swells the labor force, and creates a looser labor market, which suppresses wages for everyone, but particularly for new college graduates.

…

An employer hiring one or more OPT workers is supposed to create a “training program” for these workers, but the “training” involved is nominal at best, merely a fig-leaf to cover OPT’s true nature as a foreign worker program

…

The OPT program contains so many failures to protect American workers as well as the public treasury, at least in part because it was not created through the appropriate statutory process. It was created behind closed doors by the second Bush Administration as a means of obtaining more foreign workers when the public process was not amenable to doing so. The decision to allow approximately 300,000 foreign workers is properly a matter for Congress to decide, and Congress should certainly be the one deciding if a particular foreign worker program ought to be subsidized.

The federal government provides some data about the universities and companies which create and hire OPT workers.

Immigration Numbers:

Each year, roughly four million young Americans join the workforce after graduating from high school or a university. This total includes about 800,000 Americans who graduate with skilled degrees in business or health care, engineering or science, software, or statistics.

But the federal government then imports about 1.1 million legal immigrants. It also adds replacement workers to a resident population of more than 1.5 million white-collar visa workers — including approximately one million H-1B workers and about 500,000 blue-collar H-2B, H-2A, and J-1 visa workers. The government also prints more than one million work permits for new foreigners, and it rarely punishes companies for employing illegal migrants.

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

The federal policy of flooding the market with cheap, foreign white-collar graduates and blue-collar labor shifts wealth from young employees toward older investors. It also widens wealth gaps, reduces high-tech investment, increases state and local tax burdens, reduces marriage rates, and hurts children’s schools and college educations.

The cheap-labor economic strategy also pushes Americans away from high-tech careers, and it sidelines millions of marginalized Americans, including many who are now struggling with drug addictions.

The labor policy also moves business investment and wealth from the Heartland to the coastal cities, explodes rents and housing costs, undermines suburbia, shrivels real estate values in the Midwest, and rewards investors for creating low-tech, labor-intensive workplaces.

But President Donald Trump’s “Hire American” policy is boosting wages by capping immigration within a growing economy.

The Census Bureau said September 10 that men who work full-time and year-round got an earnings boost of 3.4 percent in 2018, pushing their median salaries up to $55,291. Women gained 3.3 percent in wages, bringing their median salaries to $45,097 for full-time, year-round work.

 

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