Congress and President Obama Cannot Sit Idly By While Companies Use H-1B Guestworkers to Replace American Workers

A recent investigation by Computerworld revealed that hundreds of information technology (IT) workers were laid off by Southern California Edison (SCE) and replaced with temporary foreign workers through the H-1B guestworker visa program, which allows employers to hire temporary foreign workers for up to six years if they have at least a college degree (most work in IT). The replacement H-1B workers are employed by two India-based IT services firms that specialize in outsourcing and offshoring U.S. jobs: Infosys and Tata Consultancy Services. While U.S. Sen. Jeff Sessions (R-Ala.) and Rep. Darrell Issa (R-Calif.) have publicly criticized the move, it doesn’t look like any action will be taken to reverse it.

SCE describes itself as “one of the nation’s largest electric utilities…deliver[ing] power to more than 14 million people.” SCE earned net profits of $1.4 billion on $13.2 billion in revenues over the past year. The company’s stock price is up 10 percent over that time and it pays its investors a 4.8 percent yield in dividends. An observer could be forgiven for believing that a job delivering safe and reliable power to homes in the United States might be reasonably safe from being offshored to India or even outsourced to temporary foreign workers. But he or she would be mistaken. In fact, the SCE case is just one more example in a long line of cases in which American workers are being replaced by H-1B workers.

Adding to the injustice, American workers losing their jobs are being forced to do “knowledge transfers,” an ugly euphemism that means being forced to train your own foreign replacement.

Americans should be outraged that most of our politicians sit idly by while outsourcing firms hijack the nation’s temporary foreign worker programs. Unpublished H-1B data from United States Citizenship and Immigration Services reveals the scale of the problem: A majority of H-1B visas are now being used by firms that displace American workers and facilitate the offshoring of high-wage jobs.

In November, as part of his executive immigration actions, President Obama announced sweeping changes to U.S. immigration policies. Some of what was announced, like deferred action for millions of unauthorized immigrants, will benefit U.S. workers in the low-wage labor market. Other changes—including actions to increase high-skilled immigration at the behest of the tech industry—are still being finalized and no one outside the government knows what they’ll be. Unfortunately, the administration is not considering changes that would help the U.S. workers educated in science, technology, engineering, and mathematics (STEM) who are hurt by the disastrous flaws in the H-1B program.

According to the U.S. Department of Labor (DOL) website, “The Immigration and Nationality Act (INA) requires that the hiring of a foreign worker will not adversely affect the wages and working conditions of U.S. workers comparably employed.” This closely mirrors the language in section 212(n)(1)(A)(ii) of the INA, which requires employers hiring H-1B workers to attest that they will “provide working conditions for such a nonimmigrant [H-1B] that will not adversely affect the working conditions of workers similarly employed.” If the Secretary of Labor receives credible information that leads him to reasonably believe that an employer has not complied with this requirement, he has statutory authority to investigate the case under INA section 212(n)(2)(G).

The SCE case is clearly one in which the hiring of H-1B workers is adversely affecting the wages and working conditions of American workers. There isn’t a clearer case of adverse impacts—American workers are losing their jobs to H-1Bs from another country. The Secretary of Labor has the statutory authority to investigate this and take action; he should use it.

If the president wishes to help the middle class, as he claimed in his State of the Union address, then his administration should take action to prevent the H-1B and other visas from being used to replace American workers. President Obama famously ran attack ads against his 2012 presidential rival Mitt Romney, calling him the “Outsourcer in Chief.” All the while, Obama has permitted an exponential expansion of IT outsourcing through his visa policies. In the past six years, thanks in large part to the H-1B and L-1 visa programs, America has lost hundreds of thousands of high-paying middle-class jobs to overseas locations.

Congress should act immediately to close the loopholes that have transformed the H-1B into the “Outsourcing Visa,” a term coined by Indian government officials.

Fixing problems with the H-1B program is not difficult. Bipartisan solutions have been introduced in past sessions of Congress by Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.) and cosponsored by Sens. Sherrod Brown (D-Ohio) and Bernie Sanders (I-Vt.). The SCE employees should demand that their own senators, Democrats Barbara Boxer and Diane Feinstein, cosponsor and reintroduce the Durbin-Grassley H-1B and L-1 visa reform bill. This legislation would raise wage standards, give American workers a first and legitimate shot at job openings that would otherwise go to new H-1B workers, ensure that American workers are not replaced by H-1Bs, and give DOL more enforcement authority. The California senators should demand hearings to investigate why and how these “guestworker” programs can be used in ways that pervert the real reason they were created: to fill skilled-labor shortages. The SCE employees should demand similar representation from their delegation in the U.S. House, including Rep. Judy Chu, who represents Rosemead, Calif., the city where SCE is headquartered.

The SCE case highlights all of the most flagrant abuses of the H-1B guestworker program, in particular that American workers are being forced to train their own less expensive, foreign replacements. Disturbingly, this is far from a one-off occurrence. It is a systematic and widespread business model, adversely impacting tens of thousands of skilled American workers every year. Another large-scale example was just reported: Disney laid off hundreds of its U.S. IT workers and is outsourcing those functions to India-based offshoring firm HCL. HCL is bringing in H-1B and other temporary foreign workers to replace the American Disney employees, and it will ship some of the work and tasks to India.

  • vbierschwale

    Looks to me like they have failed on this part.
    The Immigration and Nationality Act (INA) requires that the hiring of a foreign worker will not adversely affect the wages and working conditions of U.S. workers comparably employed.


    I made $113,000.00 in 2002 as a software contractor.
    I made $0.00 in 2014 as an unemployable software developer

    I attended their “retraining” that they called VRAP where if I would graduate, the Dept of Labor and Veterans Administration would offer me “Employment Assistance”

    Two years I am still unemployable, and I understand why because I develop maps at Keep America At Work showing how temporary visa holders are brought in, in almost every occupational group to displace Americans in America.

    Trust me, if we don’t end this scam, your name will also be on the chopping block just as mine and millions of others that are over 45 to 55 have found themselves.

    Perhaps we should do more to Keep America At Work by hiring Americans in America?

  • greg

    Corporations cannot be citizens. That is what Milton Friedman said when he said a corporation’s only duty was to maximize its profits. Since corporations cannot be citizens, it is insane to expect them to act like citizens. An international corporation is no different from a foreign power. It is a foreign power, and its interests are neither the interests of the United States, nor its citizens.
    For our government to refuse to effectively tax and regulate these corporations, to refuse to restrain them from the economic war they wage upon the people, is treason, and a betrayal of the people.

  • Joel A. Levitt

    Can H-1B workers become American citizens?

    • Treasurer

      They have to be sponsored for a green card by an employer, which takes 10 years + to get processed at the current levels. After that 5 more years to be eligible for citizenship. Many leave after their US experience of 6 years to places like canada, australia, New Zealand as they get citizenship and good jobs because of their american experience

  • Hank moody