Importing Cheap Labor Eliminates American IT Jobs

Immigration policy played an important part in the debate before and after the 2016 election.

The debate was focused on whether or not to protect undocumented aliens in the United States because they do “jobs Americans won’t do” – for example agriculture, food processing, and unskilled construction.

But no attention has been paid to protecting jobs Americans are doing from documented alien labor.

Despite the loss of +/- 200,000 US technology jobs, the United States Citizenship and Immigration Services (USCIS) proceeded to awarded 85,000 “temporary high skilled knowledge worker” non-immigrant visas (H1-B) to foreign contract worker firms and American technology firms — 85,000 direct competitors for the limited number of IT jobs available in 2016 and 2017.

Why are we not Employing American Workers?

The phenomenon is not new. Computer World estimates that at least 776,000 tech workers have entered the United States to directly compete with American workers between 2007 and 2017.

For the last few years, the majority of these visas (65,000 annually) went to India-based contract labor (outsourcing) firms. The firms, in turn, hire BA graduates from Indian colleges and universities to fill the visas.

The advanced degree quota for H1-B visas (20,000 annually) go to high technology companies — Facebook, Apple, Google, Microsoft and Intel, to name just a few.

In addition, H1-B visas are issued to American college and universities above the annual quota stipulated by Congress.

While, at the same time, the National Institutes of Health spends $11 million a year to help US citizen Ph.D. graduates in STEM to find alternative careers. There are not enough jobs for all the Ph.D. graduates USA universities produce.

Solution: Hire a Made-in-America Worker

The H1-B visa program poses a direct threat to US technology workers – both present and future – as the numbers of these workers have continued to grow despite a general weakening of demand for IT workers in the United States.

In recent years more and more high profile American companies have fired entire departments of American workers and hired H1-B replacements.

  • Southern California Edison
  • Northeast Utilities
  • Toys R Us
  • Disney Company http://www.mercurynews.com/2016/09/06/emmons-when-walt-disney-co-replaces-americans-with-h1b-workers-its-a-small-world-for-sure/
  • University of California San Francisco Medical Center
  • Too many more to name

In all of these situations, the American workers were required to train their replacements as a condition of receiving their severance pay!

Many of the displaced workers had 10, 15 or 20 years of service to the firms that dismissed them in the name of profits. http://fortune.com/2015/12/24/disney-bob-iger-compensation/

Turn-off the Spigot

Despite extensive investigation and numerous hearings before Congressional Committees no action has been taken to correct the abuses of the H1-B program.

Currently there are three bills pending. One in the Senate and two in the House, including one authored by Silicon Valley representative Zoe Lofgren which would require H1-B employers to pay 150 to 200 percent of the current prevailing wage for that job classification – a move that would bring the program back to its original intent. Once, again, the H1-B visa would be reserved for the rare, unusual and uniquely skilled job creator.

In addition, the Trump Administration has issued an Executive Order to “study” the problem but did so without turning off the spigot.

Exactly the opposite should be done.

There is a practice from an earlier time in information technology that applies to the current H1-B situation.

Before every executive had a laptop with a company performance dashboard in the middle of his/her desk, IT departments used to produce volumes of paper reports. Periodically, the queue of reports had to be “cleared” to reduce wasted paper and reduce labor costs.

The IT Department would simply stop printing all the reports one Friday evening and wait to hear on Monday who called and asked for their report. If no one asked for a specific report by the following Friday, it was discontinued.

Instead of waiting for Congress – which has shown no appetite to touch anything related to immigration this year – let’s just turn-off the spigot by Executive Order.

Don’t hold a lottery to award the 85,000 2017 H1-B visas and see if any labor shortage occurs – if any company mounts a court challenge in the name of shareholder profits.

It is more likely that the result would more be more jobs and better wages for American technology workers.

Banking for 21st Century American Infrastructure

Banking for 21st Century American Infrastructure

I do Pilates every day and go to a Pilate’s class 3 times a week not because I like it – but because I know it’s essential to maintaining strong bones and muscles (the human infrastructure) over a life time.

I choke down two HUGE calcium pills each morning for the same reason.

Not bragging – but comparatively – my infrastructure’s in a lot better shape than America’s.

Just as the human body hangs on a strong skeletal muscular core – the USA’s economy hangs on a strong infrastructure.

That’s a problem.

Infrastructure Drives Productivity

Every hour each individual worker wastes commuting on overcrowded highways reduce our economic productivity decreases and pollution increases in our atmosphere.

An antiquated passenger and freight railway system delivers products to market too slowly at too high a price and serves too few passengers in a small number of commuter corridors.

Our international airports are the first impression we make on foreign tourists and foreign business people – seeking to do business in the United States. Too often – even in Washington, New York and Los Angeles – our airports look less like the gateway to the world’s largest economy and more like the bus station in the 1969 movie Midnight Cowboy.

When portions of our electric grid fail, commerce stops. The national economy shrinks.

Drought and floods both result in costly economic dislocation.

Infrastructure is a Big Capital Expense

We know that our electrical grid, water storage and transport systems are at risk of attack from saboteurs and/or hackers.

There is no effective urban evacuation plan in earthquake prone California. Our road system is inadequate, at risk of failing in a major earthquake and not a reliable corridor of escape.

Baton Rouge flooded for lack of a by-pass canal.

But no one is doing anything to solve the problem

Why? It costs money.

America Needs an Infrastructure Bank

It is time to charter a USA Infrastructure Bank with sufficient capital to meet the estimated demand.

The bank would use its capital to make loans to Federal Highway System, states, localities, airports, Amtrak, and publicly owned utility providers to fund infrastructure refurbishment and upgrades.

The loans would be repaid from taxes, bonds issued by government entities and service fees paid by users.

Hillary Clinton has proposed such a bank as part of her Presidential campaign. Three bills were introduced in Congress in 2015 but never made it out of committee.

These proposals would charter the bank as a WHOLLY OWNED GOVERNMENT CORPORATION.

The problem is we already have one and know the consequences.

The US Post Office is a wholly owned government corporation!

An Economic Shot-in-the-Arm

Rebuilding, modernizing and securing our infrastructure would give the US economy a huge boost.

The American Association of Civil Engineers estimates that needed infrastructure upgrades could add up to $3 trillion by 2020:

  • Create millions of new “skilled jobs” with good wages.
  • Boost productivity by speeding people and goods to market at a lower costs
  • Encourage innovation, creativity and entrepreneurship – leading to new industries and new global opportunities
  • Increase our national security and protect the homeland.

Who is going to pay for it without adding to the National Debt?

Let’s Make a Deal with Big Business

The Treasury estimates that US multi-national corporations are holding approximately $2.3 trillion in profits off-shore to avoid the world’s highest business tax rate.

Repatriating these profits could generate as much as $8 trillion in U.S. domestic economic activity.

This economic elixir is going to remain off-shore as long as the US Treasury demands 35 percent tax-off-the-top.

Why not offer these tax payers a deal they can’t refuse — one-time tax of 15 percent on only half of their off-shore profits in return for lending the other half to the newly chartered USA Infrastructure Bank for a fixed period of time?

To protect their “investments” the corporations (for example Apple, Google, Facebook, Merck, etc.) would be granted the majority of seats on the new bank’s Board of Directors — in ratio to their contribution.

  • The corporations would receive interest on their “investment” in the bank.
  • The corporations could use the money exactly as they do today – collateral for bank borrowing to finance operations.
  • “Investment” would be returned to the corporations after a specified period of time.

Don’t Upgrade — Innovate

Instead of replacing 20th century structures and systems with more “modern” facilities, a Board dominated by the most innovative business leaders in the world would move to capitalize opportunities currently in the design and development stage: Innovative thinkers will anticipate the future — asking questions that lead to a merger of 21st and 22nd century infrastructure.

  • How will driverless cars change the way we drive and build roads?
  • Should we invest in building high speed railways or jump to Hyperloop connections between major cities?
  • Can we turn oceans into environmental friendly sources of water and electricity versus building more reservoirs?

This kind of thinking increases the chances of making major technological breakthroughs exponentially. Innovation can create new global commercial opportunities for American entrepreneurs!

A partnership between business and government can demonstrate to politicians and bureaucrats the value of thinking strategically rather than tactically — the first step toward the 21st century American citizens want and deserve.

What does the USA have to lose?