The term “outsourcing” has been bandied about for years, becoming political fodder for politicians trying to score points with constituents, at the same time demonizing corporations. Outsourcing is a particularly common practice in the information technology field, where they can go outside of the US to employ foreigners who will work for much lower wages. Though the wages of these foreign workers are much less in their country in comparison to what they would earn in the States, it is often much more then anything which is offered in their native land.
While outsourcing is an appalling practice, especially when magnified during times of high unemployment, there is a much more insidious practice which occurs every year right. Let’s call it “insourcing.”
The main avenue for this is the H-1B visa. It allows corporations to temporarily hire foreign employees for 3 to 6 years. The biggest employers who partake in this practice are in high-tech industries, especially in the information technology and computer fields.
This insourcing allows corporations to hire non-U.S. citizens at a lower wage rate then their U.S. counterparts.
Often, companies will announce mass layoffs, firing American workers, then replacing them with younger, cheaper workers though the H-1B visa program.
There is no law which requires companies to lay-off H-1B workers before firing American and legal citizen workers. This gives the obvious benefit to the employer of getting rid of the higher paid American employee while retaining the lower paid foreign worker.
Currently, the cap on H-1B hiring is 65,000 per year. That cap has reached 195,000 in the past.
Some of the largest users of this visa are some of the biggest companies in the country:
1. INFOSYS TECHNOLOGIES 4,908
2. WIPRO 4,002
3. MICROSOFT 3,117
4. TATA CONSULTANCY SERVICES 3,046
5. SATYAM COMPUTER SERVICES 2,880
6. COGNIZANT TECH SOLUTIONS U.S. 2,226
7. PATNI COMPUTER SYSTEMS 1,391
8. IBM 1,130
9. ORACLE 1,022
10. LARSEN & TOUBRO INFOTECH 947
The country benefiting the most from this visa program is India.
India is also the largest country to which the U.S. outsources employment.
There are very little meaningful restraints placed upon companies which chose to use this visa.
They are not required to hire American citizens before applying for the H-1B visa program. They do not need to show that there are no available U.S. workers to fill the position. Employers are not required to hire a U.S. worker who possess the same qualifications as an H-1B worker. And a company can replace an American worker with an H-1B worker for no reason.
It is a shameful practice, one which has nothing to do with a shortage of skilled U.S. workers, and everything to do with hiring cheap labor.
Though this has been enabled by politicians who have a vested interest in obtaining campaign contributions from companies which employ this practice, two senators have attempted to instill some sanity to the situation.
Senator Bernie Sanders (I-Vermont) and Senator Chuck Grassley (R-Iowa) have introduced in November the Employ America Act:
WASHINGTON, November 19 – Sen. Bernie Sanders (I-Vt.) and Sen. Charles Grassley (R-Iowa) today introduced legislation to prohibit major firms that lay off large numbers of American workers from hiring cheaper foreign labor through temporary guest worker programs.
Sanders, a member of the Senate Budget Committee, said, “With the unemployment rate still climbing and millions of people looking for work, we have a responsibility to ensure that companies do not use the temporary guest-worker program to replace American workers with cheaper labor from overseas.”
Grassley, ranking member of the Senate Finance Committee, said, “Our foreign guest worker programs are in place to fill employment needs where there is a shortage of American workers, not as a subterfuge to hire cheap labor. With the unemployment rate over 10 percent, companies that undertake mass layoffs shouldn’t’t need to hire foreign guest workers when there are plenty of qualified Americans looking for jobs.”
Recently, industries that have hired tens of thousands of guest workers from overseas have announced large-scale layoffs of American workers. The high-tech industry, a major employer of H-1B guest workers, has laid off over 345,000 workers since August 2008. The construction industry, a major employer of H-2B guest-workers, has laid off more than 1.5 million workers since December 2007.
A national disgrace.