New Administration Must Prioritize US Workers

Whether former president Donald Trump or Vice President Kamala Harris is elected as the United States’ 47th president, at the top of the winner’s agenda must be prioritizing American workers.  As the monthly Bureau of Labor Statistics consistently shows, the American labor pool has, for months, steadily lost ground to foreign-born workers. The U.S. workforce has reached a pivotal juncture and needs citizens’ activism and federal government intervention to spotlight the domestic labor pool and restore American workers to their rightful position as employers’ first choice for increasingly scarce well-paying jobs.

For several decades, U.S. workers—particularly in the tech industry—have been systematically displaced by an influx of cheaper foreign labor through non-immigrant visa programs such as H-1B, PERM (a Department of Labor-issued permanent labor certification) and F-1/Optional Practical Training (OPT). Now the largest but never congressionally approved work program, OPT incentivizes employers to hire foreign students over American graduates. OPT, OPT extension or CPT (Curricular Practical Training) are exempt from paying Social Security and Medicare taxes unless they have resided in the U. S. for more than 5 years. Their status encourages corporations to select OPT candidates, thereby creating unfair competition by making it more difficult for U.S. graduates to find jobs in their native country.

Originally, visa programs like H-1B were meant to fill domestic labor shortages when and if they occurred. Instead, employers have hijacked the H-1B visa program to cut labor costs, enhance profits at the expense of dismissing qualified, more experienced U.S. workers. Recent statistics show that while mass layoffs have disproportionately affected American-born workers, foreign-born workers nevertheless continue to be hired, undermining job opportunities for U.S. citizens. In 2022, federal government data showed that 66% of H-1B visas went to computer-based occupations, specifically, the tech industry. The tech layoff wave is still going strong in 2024. Following significant workforce reductions in 2022 and 2023, 2024 has seen more than 130,000 job cuts across 457 companies, according to independent layoffs tracker Layoffs.fyi. Companies like Tesla, Amazon, Google, TikTok, Snap and Microsoft have conducted sizable layoffs in 2024’s first months. Smaller startups have also slashed payrolls, and in some cases, been forced to shut down operations altogether. Uber discontinued its alcohol delivery service Drizly three years after the cab-hailing company acquired it for $1.1 billion. Drizly ran independently until Uber decided to shut it down.

Since 2022, more than 569,000 technology workers have been laid off.  A recent Wall Street Journal story titled “Tech Jobs Have Dried Up---and Aren’t Coming Back” painted a gloomy picture for laid-off and hopeful future tech employees. During COVID-19, as consumers altered their spending patterns from in-person to online, tech companies’ hiring practices accelerated. Too many employers went on hiring binges and added too many workers. Today, those workers are excess baggage.

Postings for software development jobs are down more than 30% since February 2020, according to Indeed.com. Tech companies’ strategies have shifted. The growth-or-bust philosophy which once dominated has given way to a laser-like focus on revenue-generating products and services. The tech industry has mostly curtailed entry-level hires, cut recruiting teams and abandoned projects and jobs that were only marginally profitable. Concentration is now on AI; prospective employees with skills in that specialty field have a good chance to land a job.

Meanwhile, despite what NPR called “a bloodbath,” a reference to 2023’s record tech layoffs, H-1B employment visas continue to be issued in large numbers and are often awarded to the same companies that laid off staff. For example, Amazon laid off 27,000 workers globally in 2023 but continued to submit H-1B petitions, bringing in additional foreign workers through outsourcing firms like Tata Consultancy Services (TCS) and Infosys; Alphabet (Google) despite laying off 12,000 employees in 2023 filed more than 6,000 H-1B petitions, continuing to bring in foreign workers even as more U.S. workers were displaced. Meta (Facebook): laid off 21,000 workers between 2022 and 2023 but continued to request new H-1B petitions and to increase its foreign-born workforce.

The lack of federal intervention to protect skilled, experienced Americans has led to excessively negative impacts on U.S. workers, especially in the technology sector. The H-1B has been abused, fraudulently applied, and led not only to job displacement but also to wage suppression, which the extensive hiring of lower-paid international labor, particularly through the H-1B and STEM OPT programs, imposed. Research shows that H-1B workers are often paid 20% - 40% less than their U.S. counterparts. In 2020, an Economic Policy Institute report found that 60% of H-1B DOL-certified jobs were assigned Level 1 (entry-level) or Level 2 wages, even for assignments that required advanced skills and qualifications. This prevalent underpayment contributes to wage suppression for U.S. workers and violates the visa’s intent.

A solution to the egregious disregard for U.S. workers is at hand. The Administrative Procedure Act (APA) requires federal agencies to follow a notice-and-comment rulemaking process before implementing regulatory changes. However, under APA 5 U.S.C. § 553(b), agencies are permitted to bypass this process when there is “good cause” to do so, if the usual procedure would be “impracticable, unnecessary, or contrary to the public interest.”

An online petition posted by an organization that advocates on behalf of economic justice for American workers defends invoking the good cause exception based on the urgency and significance of the ongoing harm to U.S. workers, the need for immediate corrective action and the failure of the current regulatory framework to adequately address immigration programs such as the H-1B, PERM, and STEM OPT. For at least three decades, Republican and Democrat administrations have watched passively as good white-collar jobs have been taken away from qualified Americans and cynically given to foreign nationals, mostly from Pakistan and China.

As long ago as the Carter administration, then-Secretary of Labor Ray Marshall recognized the H-1B visa’s pitfalls as they affect U.S. tech workers. Marshall said,

     “One of the best con jobs ever done on the American public and political systems. The supporters argue that we have a shortage of college-educated workers. Well, there's no evidence of that in the numbers. ... If Congress had been making decisions on the basis of objective information [when it mandated the H-1B program] it would have seen that if you have a shortage of college-educated workers, their wages would not have been declining…H-1B pays below market rate. If you've got H-1B workers, you don't have to do training or pay good wages."

Marshall hit the nail on the head. More than 30 years of employment-based visa harm done to U.S. workers is 30 years too long.

Joe Guzzardi is an Institute for Sound Public Policy analyst. Contact him at jguzzardi@ifspp.org