Expansion of the H1-B Exploitation: More Cheap Labor and Outsourcing?
The H1-B visa program has so many loopholes that it should be undergoing reform instead of expansion, since expansion would only promote further abuse of the program.
Tech companies asking for expansion state that they have labor shortages and need to recruit the best and the brightest. One would assume that the best and the brightest would be paid at least as much as their American counterparts. However, Norman Matloff’s research has found that H1-B workers are actually paid, on average, 6% less than their comparable American counterparts. His research also found that the foreign workers’ talent was less than, or at best equal to, that of American workers. These findings makes one question whether there is a labor shortage and a need for the best, or if tech companies are simply using the visa program for cheap labor.
Another concern are consulting companies that bring in offshore consultants. These companies are allegedly using the visa to bring workers to learn skills and then off-shoring the service. Ron Hira, a professor of public policy at the Rochester Institute of technology, has been studying how consulting firms use the visas to help American company cut costs. He says, “What these firms have done is exploit the loopholes in the H-1B program to bring in on-site workers to learn the jobs [of] the Americans to then ship it back offshore.” Indeed, information on Molina payroll indicates that offshore workers in India were paid half the price allotted to Americans, confirming the cost cutting effects of offshoring services.
With an expansion in the H1-B visa program, more companies can gain access to foreign workers. Companies would have an incentive to exploit the loopholes in the system for cheaper labor costs. After all, that’s what some companies are doing right now. Expanding the program would just allow more companies to exploit the existing loopholes in the H1-B visa program.