Saturday, June 02, 2007

H1B visas, Outsourcing and S 1348

When the Senate returns from break next week they will renew their debate on S. 1348, the Kyl/Kennedy immigration bill. One of the proposals contained in this bill is an increase in the number of H1B visas.
Article Here

Currently we allow for about 65,000 H1B visas per year. Under the new Kyl/Kennedy immigration reform proposal that number would skyrocket up to 180,000 per year, almost tripling the number of H1B visas granted per year.

Senator Bernie Sanders of Vermont has already introduced an amendment that would increase the fees for H1B visas from $1500 to $8500. Senator Sanders cited evidence that certain U.S. companies admit to hiring foreign H1B workers over Americans because those workers are willing to work for less money than American workers.

As far back as 2003 many of our software companies were outsourcing jobs, mostly to India. A Washington Post article stated that more than half the Fortune 500 companies were outsourcing software development jobs.

Duke Universities Pratt School of Engineering sent out surveys to 100 companies who outsource for their employees. The results of their findings are located at
Article here, and you can see that on a scale of 1 to 5, with 1 being no advantage and 5 being a significant advantage, that the cost of salaries and personnel savings was the highest ranked reason for outsourcing for employees at 3.83 on their scale.

However, if you watch the news, you are still led to believe that our companies need these workers because there is a shortage of skilled laborers in this country. We are told that we need these highly skilled workers to fill the high tech jobs that American is creating to compete in the global marketplace.

First of all, according to the Dept. Of Education, our colleges graduate around 300,000 students a year with Bachelors, Masters, or PhD's in computer or information sciences and math and engineering studies.

The Dept. of Labor estimates that, annually, there are only 120,000 job openings per year for the jobs that require degrees in higher education like the ones our students are graduating from in the United States.

So, where is the shortage of workers? Many say that these college graduates would all be entry level employees who require years of training to become proficient on the job, therefore they need H1B workers from abroad to fill these positions.

Not so. The office of U.S. Citizenship and Immigration Services awards H1B visas by random drawing. Fifty six percent of H1B visas are rewarded to entry level workers. On top of that, 84% of H1B visa workers earned wages that were below the median U.S. wage. In tech worker positions, the H1B counterparts earned $12,000 less per year.

Still, we are told that our children are not able to compete in the global marketplace because the education they are receiving is not up to par with the rest of the world. President Bush stated that "...we can make sure our children are prepared for the jobs of the future, and our country is more competitive by strengthening math and science skills."

In an article at Tech News World we were told that the President endorsed a proposal by Education Secretary Margaret Spellings to train 70,000 new math and science improve basic education in these disciplines overall.
Article here.

There are many stories of people who have lost their jobs due to companies outsourcing to companies in India and China. Here are a few of them which ought to be sufficient to prove that American workers are being laid off solely for the benefit of the corporations, with little regard to the workers of this country.

In 1996, Natasha Humphreys received her college degree from Stanford University and went to work for Apple Computers. She took additional classes in technology so that she could move up the career ladder and was eventually rewarded by becoming a senior software testing engineer in the Palm Pilot program. In 2002 Palm Pilot decided to move all software testing to India and China were they could pay wages as low as $2 an hour. Natasha was sent to India to conduct training. She was assured that her job would not be affected. She spent two weeks in India training workers and then six months mentoring them from the United States. In 2003, Natasha was laid off, as well as 40% of her co-workers.

In 2005, Delphi, an auto parts giant which is a spin off of G.M. filed for bankruptcy. They claimed they were paying their workers between $26- $30 an hour and they wanted to cut costs by cutting wages, health care, and retirement. The CEO said he hoped to get wages down to the $8-$10 an hour range, and he also said he hoped to use the outsourcing of cheap laborers as well.

And finally, Fox News reported on a particularly tragic example of job displacement that took place in 2003: "Kevin Flanagan, a computer programmer with Bank of America, was fired from his job after being forced to train his replacement, an Indian worker who was taking over Flanagan’s job as part of Bank of America’s effort to replace its American workforce with foreign labor. Flanagan walked outside into his office parking lot and shot himself to death."
Article here

Yet if Bill Gates had his way, the caps on H1B visas would be done away with entirely, leaving all American workers susceptible to replacement by lower paid foreign workers.

To top off the insult of having our jobs sent overseas to be filled by workers who will work for significantly less than Americans will work for, there is this.

According to Senator Byron Dorgan, the U.S. tax code gives big business a tax break when they move their operations overseas. If a company moves it’s operations to China, India, or any other foreign country for that matter, they do not have to pay taxes on their earnings as long as that money stays overseas. Once the companies decide to bring their profits back to the U.S., they are charged only 5-1/4%, less than half of the tax rate for the lowest income families in the U.S.

Now tell me that if a company can get away with moving jobs overseas and hiring workers in China for $.30 an hour, then receive a tax break like that, whose side is our government on? It certainly isn’t the side of the American workers!

But alas, only a few voices in Congress are willing to speak out about the loss of jobs to Americans due to outsourcing, and insourcing of cheap foreign workers. The rest of them are beholden to their corporate masters, and as long as the American public continues to believe in their lies and deceptions, they will continue to hold office and sell the American people down the toilet for corporate profits.


neal said...


If you comment on this and want to talk about it, or any other issue, away from this blog you can contact me at


The Zombieslayer said...

Thank you for the post. I'm going to call everyone I know in the industry and forward this post.

tshsmom said...

GREAT post Neal!
It's just another example of our lawmakers being bought and paid for by big business. :(