In a Recession, H-1Bs Get the Boot

I’m a life-long Democrat, but one aspect of the Democratic party message that has at times bothered me in recent years is the tendency towards protectionism. It was one of the things (among many) that annoyed me about John Kerry’s campaign, and I was somewhat relieved that Obama wielded this axe a bit more lightly during his campaign, at least after Iowa (notice how most of that talk about NAFTA disappeared too?).

During a bad recession with spiralling unemployment, of course, any earlier caution we might have seen from politicians regarding protectionism is going to be in danger. Congressional politicians from both parties are increasingly turning to populist language to ensure their own political survival. And the easiest group to pick on politically in recent years, by both Republicans and Democrats, has been immigrants, since they can’t vote anyway.

As many readers may already be aware, the recent American economic stimulus bill contained explicit language concerning foreign workers in the U.S.:

The stimulus bill contained the Employ American Workers Act, which was sponsored by Sens. Charles E. Grassley (R-Iowa) and Bernard Sanders (I-Vt.). They say that they are worried that laid-off Americans struggling to find work are being displaced by foreign junior investment analysts, computer programmers and corporate lawyers who accept a fraction of the pay commanded by Americans.

“This H-1B program is a sweetheart deal for employers, in many instances, to be able to gain cheap labor from abroad,” Sanders, the son of a Polish immigrant, said in a telephone interview. “Immigration made this country great. But ask those American laid-off workers if they want $40,000-a-year engineers from Russia or India taking the place of an American engineer who would earn $80,000 a year. I don’t think anyone is going to tell me with a straight face that they can’t find some of that American talent right here on the unemployment lines.” (link)

Actually, Senator Sanders, I’m perfectly happy to tell you, with a straight face, that American IT companies are deeply dependent on foreign workers, whose positions could not easily be filled by American counterparts. Also, I can assure you that are not thousands of unemployed American software engineers on unemployment because Indian and Russian engineers in the U.S. are getting paid $40,000. Indeed, I’m fairly sure that H-1B engineers from India are getting paid considerably more than $40,000 a year on average.

The clampdown on foreign workers is also occurring in financial institutions, especially those that are getting federal bailout money:

During the past several months, the largest banks in the United States have announced 100,000 job cuts, Sanders said. Those same banks, which are receiving $150 billion in a taxpayer-funded bailout package, requested visas for more than 21,800 foreign workers over the past six years for positions such as senior vice presidents, corporate lawyers and human resources specialists, Sanders said, citing an Associated Press review of visa applications that the banks filed with the Labor Department.

As the economy worsened last year and employees were laid off, the number of visas sought by the dozen banks in the AP analysis increased by nearly a third, from 3,258 in fiscal 2007 to 4,163 in fiscal 2008.

What do readers make of the growing drift towards protectionism in American political discourse? How do you feel about the “Employ American Workers Act”? Are there effective ways to counter protectionist thinking during a recession? And: have any of these changes affected you or someone you know personally?

As a side note, I have heard some talking heads on TV–I forget who–arguing that in fact one possibly effective way to counter the housing slump might actually be an increase in high-skilled immigration: highly skilled immigrants in well-paying jobs might eventually start buying up all those empty condos everywhere. But that seems like kind of a strange argument to make right now, since, really, it seems like no one is hiring.

Also see: this Forum thread on the Employ American Workers Act at Immigration Voice. And here is an earlier SM post of mine related to the plight of Indian H-1B workers.

155 thoughts on “In a Recession, H-1Bs Get the Boot

  1. An engineering position with a semiconductor company has barrier to entry – typically a graduate degree in Physics/EECE/CS from a school in the US – and therefore can justifiably hire foreigners if native talent is inadequate in numbers. IT position is a different matter and has been systematically exploited and abused over last 15-20 years by body-shoppers. I have worked in software development for over 14 years in the US and while I have had the pleasure of working with many bright H1B individuals who added tremendous value to the company I have also seen plenty of unfit, for lack of a better word, individuals who shouldn’t have been here if it was just based on the skillset they were supposed to be bringing. Having said the above, I don’t know if the H1-B group I should worry about as a native (now that I happen to be a citizen of the US). Much more worrisome is the offshoring business where your work here can migrate over to another country leaving you high and dry. The other thing I worry about is IT is usually the game of the young people which is why making a career out of IT is not rewarding for most people. Why that is so is a different topic but make no mistake that young ones are gunnin’ for ya. Having so many willing young folks back in India/China/whereever ready to do the same job that Bob is doing today is going to doom Bob no matter what. Anyone over 35 working in IT should either consider to be in a niche area or switch career. Unless you have made a killing in stock options and such or you love to write code you are gonna regret not trying something else earlier in your career.

  2. bytewords, I will agree with that.

    In a way Ramesh is like indian shiv sena. These kind of policies in India is what has hindered India’s development. I really dont know why they would like America to fall so much. I can never forget the awe of all these top-notch research scholars that I saw from across the world in the university corridors. At that time, I felt US was literally stealing them,it is. But removing H1b would result in them not being able to contribute any more. As such there isnt enough research facilities in their country which is why they move to this place.may be they will move to australia and start arguing against us migration like melbourne desi.

  3. bytewords, I will agree with that.

    In a way Ramesh is like indian shiv sena. These kind of policies in India is what has hindered India’s development. I really dont know why they would like America to fall so much. I can never forget the awe of all these top-notch research scholars that I saw from across the world in the university corridors. At that time, I felt US was literally stealing them,it is. But removing H1b would result in them not being able to contribute any more. As such there isnt enough research facilities in their country which is why they move to this place.may be they will move to australia and start arguing against us migration like melbourne desi.

    I do have to say this, as a country I have grown to love this place for what it has stood for. innovation, opportunity – american dream. This place is one of the very few such countries today and I thought rest of the world should learn from US but now this would make us follow india.

  4. You have another category to visa to work in US, the E-3, It is for 20K Australian citizens and unlike the H1B spouse who on an H4 can not work, the spouse of an E-3 can work even if the spouse is not an Australian citizen.

    samir – yes I know. But I have no desire to live in the USA :) I thought it was for only 10K australian citizens and it is an ongoing total not a yearly cap ??

  5. Why can’t our Indian friends stop abusing the H-1B and L-1 visas and just get O visas? Aren’t you people the “best and the brightest”? Since there are no Americans to do routine SAP, .NET, Oracle DBA, C#, and Java, you should all be able to get the O-1 visas.

    Maybe you aren’t the “best and the brightest”, just the cheap and cheapest. FYI, American I.T. professionals don’t really like you. We just act like we do so we don’t get fired by the managers who brought you scabs into our I.T. departments.

    Behind your back, we mock your odor, your thick accents, and your dress. We have funny nicknames for you. We drag our feet when you need something like a login. Some of us put urine in your tea.

    Please go home. We have mortgages and families. You have a suitcase and greed for gold, plus a need to command a large dowry.