Attorney Sara Blackwell, conservative author Michelle Malkin |Christine Dittmar Chalkey photo
By Hank Beckman -
Conservative author Michelle Malkin minced no words last Friday night when speaking about the abuses associated with the H-1B visa program.
"The American worker was born in 1776, but murdered by Beltway Crapweasels," she told about 50 people at Flanagan's Restaurant in North Chicago.
Some in attendance were among the 150 workers let go by nearby Abbot Laboratories in a recent outsourcing move.
Malkin and co-author John Miano, recently published Sold Out, a devastating indictment of a program originally enacted to supply skilled workers to companies unable to find American talent, only to be distorted by corporate lobbyists and Congress mostly willing to overlook the fact that H-1B had become nothing more than an outsourcing scheme that replaces American workers.
Marco Pena, ousted Abbott IT specialist |photo from Ulysses S. Arn YouTube
Employees ousted by H-1B program speak out
Marco Pena is one of those Abbott employees who finds himself out of work due to the company deciding to use employees from Wipro, an Indian firm specializing in providing tech workers to American firms.
Pena refused to take or sign a severance agreement offered by Abbott because it came with strings attached, among them agreeing not to sue the company or publicly criticize it.
"I did not sign the agreement so I'd have the ability to speak out," he said.
He noted that many of his coworkers were afraid to lose their severance packages, but stressed that being single and leading a frugal lifestyle, he didn't have the same pressure.
"I can survive," he said.
Several other laid-off Abbott employees declined to go on the record, saying they needed their severance pay and feared retaliation.
"A lot of them are afraid to come tonight," Sara Blackwell, an attorney active in the fight against H-1B abuse, said.
Indeed, one woman asked not to be photographed or identified by name, traveled from the East Coast to relate how she'd been outsourced by a prominent insurance company, and had to suffer the indignity of training her replacement.
"If we didn't train them, we won't get our severance," she said. "We're worried about our pensions. This is happening across America."
Jennifer Wedel spoke of her husband being outsourced by Texas Instruments in 2009, saying "my husband was tossed into the street like trash," while urging American people to wake up to the realities of how the visa was being abused.
"It's time we held the corporate world accountable," she said.
Abbott responds
In an email exchange, Abbott spokesperson Scott Stoffel responded that in order to remain globally competitive, "work being done by fewer than 150 Abbott U.S. employees would move to Wipro as part of a global restructuring of IT."
Stoffel stressed that only 20 percent of Wipro workers would be H-1B visa holders, with the other 80 percent remaining U.S. workers.(Other media reports had the number laid-off as 180 or 200)
The H1-B visa program began in 1990 as a way to meet the need for skilled employees to fill positions that employers would otherwise have trouble filling with available U.S. talent.
The website of the U.S. Citizenship and Immigration Service indicates that the program is intended for specialized labor, "including but not limited to scientists, engineers and computer programmers." The general requirements mandate a bachelors degree, although some work experience may satisfy the requirement.
The program is capped at 65,000 during each fiscal year, but the first 20,000 applicants with masters degrees or beyond are exempt from the cap.
Moreover, those performing research for universities, nonprofits or government are completely exempt from the cap.
The USCIS web site specifically states that H-1B visa holders "must be paid at least the actual or prevailing wage for your occupation, whichever is higher."
But the program has been criticized for several years from those who maintain that the shortage of American workers is exaggerated and that the real reason is to replace American workers with cheap foreign labor.
Since cases of Abbott Laboratories and other companies outsourcing with H-1B visas, including Disney and Southern California Electric, are obviously not caused by a shortage of skilled American workers, critics maintain that there is only one explanation.
"Because they're (foreign workers) cheaper," Blackwell said, stressing that American workers are "not going to do the job for a dollar a day."
Pena agreed, as did everyone else in the room, although none of them have access to hard information on Abbott's new Wipro outsourcing agreement.
Indeed, supporters of the H-1B program have long maintained that the criticism that the program is nothing more than a cost-cutting measure is based on flimsy, often anecdotal evidence.
But even if Blackwell's comment about a "dollar a day" is hyperbolic, recent scholarship on the issue shows that the "anecdotal evidence" charge is starting to lose its credibility.
Are H-1B workers cheaper?
Dr. Ron Hira is an associate professor of public policy at Howard University whose areas of expertise are offshoring, skilled immigration and innovation and competitiveness.
In February 2016, he testified before a Senate Subcommittee on Immigration and the National Interest, and his testimony left no doubt that the driving force companies seeking H-1B visa workers was cost control.
"The reason Southern California Edison chose to replace their (300) American workers with H-1Bs is simple: the H-1B workers were cheaper," he said of the outsourcing by that utility that erupted into a scandal several years ago.
Hira said that the replacement workers were paid at least $40,000 less than the workers they replaced, a savings of 40 to 50 percent, depending on the employee.
Despite the program's requirement that the H-1B visa holders have to be paid the prevailing wage and not have an adverse effect on the working conditions of those similarly employed, Hira noted that a U.S. Department of Labor review had concluded that the outsourcing was legal, as was the lower pay.
He testified that one way that a company might get around the letter of the law was that it was able to define the job position for the visa sought.
He noted that in fiscal year 2015, 41 percent of H-1B visas approved went to "Level 1" employees, described by the U.S Department of Labor as comparable to an entry level position, or "Job offers for beginńing level employees who have only a basic understanding of the occupation."
Hira testified that Level 1 employees were typically paid 40 percent below the average wage.
So while the salaries of the outsourced Disney workers was about $100,000, with benefits, the H-1B visa holders that replace them made 33-39 percent less, depending on the position.
Hira's figures show that for FY 2013, the largest number of new H-1B visas went to Tata, who paid their H-1B workers a mean salary of $65,600 per year. Wipro, the fifth largest recipient of new visas, and the company that is handling the outsourcing of the Abbott workers, pays its replacement workers an mean salary of $64,522 per year.
Annual pay of $60,000 or slightly above is a recurring theme connected to H-1B workers.
Bill Snyder, a tech writer at the online publication InfoWorld, echoes Hira's findings and explains that companies that are so-called "H-1B dependent,"–having more than 15 percent of their U.S.-based workforce visas holders–are required to make a "good faith" effort to hire American workers.
But the companies can get around the requirement if they don't undercut the prevailing wage by too much.
"What companies do is to pay the imported workers a little more than the minimum amount ($60,000) that will cause the federal government to penalize them for replacing U.S. workers with foreign H-1B visa holders," Snyder wrote in a November 2015 article.
Stoffel didn't respond to the question of whether the salaries between the outsourced workers and those who replaced them were comparable, and also didn't respond to a question regarding the ages of the workers who lost their jobs.
And he offered no thoughts on whether or not Abbott's action was an abuse of the H-1B program.
Despite complaints, Abbott denies the company abuses H-1B program
Stoffel denied that any of the outsourced Abbott workers would be required to train their replacements as part of their severance package.
Attempts to contact Wipro were unsuccessful at the time of publication.
Complaints about H-1B abuse have drawn the interests of several elected officials, including Illinois Democrat Sen. Dick Durbin, who recently sent a letter to the Abbott CEO Mile White, imploring him to restore the outsourced employee's jobs, calling the move "harsh and insensitive conduct (that) is not justified by whatever marginal financial benefits might accrue to your company, which is already making millions of dollars in profits every year."
Other elected officials have taken up the cause.
Republican Senator Chuck Grassley of Iowa, has in the past co-sponsored legislation with Durbin to reform the H-1B program. Democrat Senator Richard Blumenthal of Connecticut expressed his concern to the U.S. Justice Department over whether or not Eversource Energy broke any laws when it outsourced 200 IT workers in 2014. But he also sponsored legislation in 2015 that would raise the yearly cap on H-1B visas to 195,000.
Presidential candidate Ted Cruz (R-Texas) has called for a 180-day suspension of the H-1B program until it can be reviewed for abuses, and with Sen. Jeff Sessions (R-Alabama), co-sponsored the American Jobs First Act of 2015, which require employers to pay H-1B workers a minimum of $110,000 annually.
Blackwell acknowledged the efforts of the elected officials, but remained pessimistic about the possibility of real reform coming from Congress.
"They are bought and paid for," she said of the Congress as a whole.
Malkin urged people involved in the fight against H-1B abuse to spread the word.
"We need voices in the courtroom and we need voices in the classroom," she said.
And she told those affected by the program not to lose hope.
"You are not alone," she said.
Hank Beckman is a freelance writer from the Chicago suburbs.
