Disney Reverses 35 Layoffs, but No Fairytale Ending for Thousands of Others Displaced by H-1B Visa Program
We learned of some welcome news when Computerworld and the New York Times reported that Disney had reversed a decision to replace 35 American information technology (IT) workers with cheaper H-1B guestworkers at its ABC broadcasting offices in New York City and Burbank, CA. The news comes after a significant spotlight was shined on Disney’s recent replacement of 250 technology workers with H-1B guestworkers at Disney’s Theme Parks division. This is good news for the 35 workers who will keep their jobs for now, and at least in the short term, will not have to train their foreign guestworker replacements. However, this decision by Disney executives does nothing for the 250 workers who have already lost their jobs to workers they were forced to train and who will earn roughly $40,000 less for doing the same job. Nor does it help the approximately 225 Northeast Utilities workers, or the 400 at Southern California Edison (SCE), or the 600 at Xerox, or 900 at Cargill, or 100 at Fossil Group, or tens of thousands of workers who likely suffered a similar fate at hundreds of other places that have never been reported.
It appears that the media attention has shamed Disney into reversing its decision to force more of its American workers out in favor of cheaper guestworkers. Clearly, Disney’s own sense of social responsibility wasn’t enough to convince its executives to do the right thing in the first place. While the reversal of Disney’s layoffs is good news, it hardly makes us sanguine about the future of the H-1B visa program. The payoff for replacing American workers with indentured and underpaid H-1B guestworkers is simply too high: as much as a 49 percent wage savings in some cases. Relying solely on the media to shame firms is insufficient. Simply put, the government must immediately make changes to the program.
We would also like to emphasize two important points about the H-1B that have not been highlighted enough in the recent media coverage. First, the temporary foreign workers employed by the firms hired to replace American workers are blameless in all of these situations, as one American IT worker who was recently replaced by an H-1B at SCE attested to in a recent interview. The blame should be placed squarely on the corporate profiteering that leaves Americans out of a job and foreign workers vastly underpaid for the work they are hired to do. The H-1B workers are simply seeking to advance their careers and to make better lives for themselves in the United States, and are often placed in working situations where they are vulnerable and can be easily exploited.
Second, no one should assume that the outsourcing companies like Infosys, Tata, and HCL—companies that Disney and other corporations contract with to replace their workers with H-1Bs (and which are issued approximately half of the H-1B visas every year)—are the only abusers of the system. Every year thousands of corporations use the H-1B program to keep wages low, because “prevailing” wage laws permit employers to pay H-1B guestworkers below-market wages. According to an analysis from the Government Accountability Office, only about one in six H-1B workers are certified by the government to be paid at a wage level that is considered average or above-average based on their occupation and work location. Since so few H-1B workers are paid at or above the average wage for their job, it is obvious to us that the vast majority of H-1B employers are using the H-1B to undercut U.S. wage standards, either by hiring H-1Bs who are younger entry-level workers, or by underpaying experienced workers. Furthermore, since most employers are not required by law to advertise job openings, recruit U.S. workers, or hire equally or better qualified U.S. workers before they hire an H-1B worker, most employers are free to hire an H-1B worker and ignore the U.S. workforce altogether, instead of having to go through the trouble of replacing them with the help of outsourcing firms.
The upshot is that it is foolhardy to believe that corporate executives will leave on the table the easy profits they get from replacing Americans workers with cheaper guestworkers, or by hiring cheaper guestworkers in the first place. They are acting rationally—and usually lawfully—by exploiting the program’s loopholes. The responsibility for closing the loopholes rests squarely with the Obama administration and Congress.
We strongly believe that skilled migration is good for the United States when it complements and adds value to the U.S. workforce, but the rules must be fair to Americans and migrants alike, and not exploited by corporations to keep both groups of workers underpaid and in fear. While President Obama has publicly stated that the H-1B program should only be used when qualified American workers are unavailable, it’s time for him to help make that the law. The Obama administration should use its authority to conduct a widespread, in-depth investigation of the H-1B program and make whatever changes are possible within its administrative purview. And the president should call on Congress to fix the parts of the program he doesn’t have the legal authority to change. To truly fix the H-1B program, at a minimum, Congress must pass the reforms that have been long championed by U.S. Senators Chuck Grassley and Dick Durbin, including a requirement that all employers recruit U.S. workers first and hire those who are qualified before they can hire an H-1B worker, along with much higher wage standards for the H-1Bs they hire, and a ban on displacing American workers in all circumstances.