When we embrace laws encouraging companies to bypass the U.S. workforce by keeping a stable of indentured foreign workers at the ready to deploy to any available job aross the U.S., why is it a mystery that wages are low and profits are high?
In related news, today, March 5, 2013, there is yet another congressional hearing to increase guest worker importation.
At this hearing, notably absent are any affected workers. There are industry reps and reps from firms that want to have access to young workers such that they can continue to bypass the U.S. workforce, especially workers over 40.
A few years ago, the pharmaceutical giant Pfizer informed hundreds of tech workers at its Connecticut R&D facilities that they'd soon be laid off. Before getting their final paychecks, however, they'd need to train their replacements: guest workers from India who'd come to the United States on H-1B visas. "It's a very, very stressful work environment," one soon-to-be-axed worker told Connecticut's The Day newspaper. "I haven't been able to sleep in weeks."
The good news is Obama's justice department is trying to be an advocate for the U.S. worker by curbing the practice. But there is little they can do while these guest worker laws are on the books. Here, the Justice Department can only help by intervening on the behalf of the guest workers. The companies are within their rights to bypass the U.S. workforce.
A Texas IT services firm has been indicted by federal authorities for using H-1B visa workers to create an inexpensive "as needed" labor force.Bipartisan I-Squared bill would allow 300,000 H-1B guest worker visas every year. The claim is that there are not enough educated workers in the U.S.
A multi-count indictment filed last month charged that Dibon Solutions of Carrollton, Texas only paid Visa-holding employees when there was work.
The full scheme is outlined step-by-step in papers filed in the U.S. District Court for the Northern District of Texas, Dallas Division.
The indictment says that Dibon recruited foreign workers and sponsored them for H-1B visas to work at the firm's headquarters, but required them to provide consulting services to third-party companies located elsewhere.
The company only paid the H-1B workers when they were placed at a third party company, "and only if the third party company actually paid Dibon first for the workers' services," it said.
This scheme, the indictment alleges, "provided the conspirators with a labor pool of inexpensive, skilled foreign workers who could be used on an 'as needed' basis."
This operation "was profitable because it required minimal overhead and Dibon could charge significant hourly rates for a computer consultant's services," according to the indictment.
The IT firm "earned a substantial profit margin when a consultant was assigned to a project and incurred few costs when a worker was without billable work," the government wrote.
The scheme of only paying H-1B visas holder when work is available is called "benching," and has been cited in other, unrelated legal actions as well as in complaints filed by visa holding workers.
When H-1B employees are assigned to work at different locations, regulations require the petitioning company to inform the government.
As general rule, H-1B workers are supposed to be paid prevailing wages based on location. For instance, higher rates typically paid in places like New Jersey and California and lower rates in states such as Iowa.
Moreover, the H-1B rules don't allow employers for forego pay when there is no work.
The company is described as family owned. Named in the grand jury indictment Are Atul Nanda, Jiten 'Jay' Nanda, Siva Sugavanam, Vivek Sharma, Rohit Mehra, and Mohammad Khan. Efforts to reach the company were unsuccessful by press time.
The multi-count indictment also includes wire fraud for using email to execute the scheme.
Yet if tech workers are in such short supply, why are so many of them unemployed or underpaid? According to the Economic Policy Institute (EPI), tech employment rates still haven't rebounded to pre-recession levels. And from 2001 to 2011, the mean hourly wage for computer programmers didn't even increase enough to beat inflation.
The ease of hiring H-1B workers certainly hasn't helped. More than 80 percent of H-1B visa holders are approved to be hired at wages below those paid to American-born workers for comparable positions, according to EPI. Experts who track labor conditions in the technology sector say that older, more expensive workers are particularly vulnerable to being undercut by their foreign counterparts. "You can be an exact match and never even get a phone call because you are too expensive," says Norman Matloff, a computer science professor at the University of California-Davis. "The minute that they see you've got 10 or 15 years of experience, they don't want you."
There is already an oversupply of PhDs. The Chronicle of Higher Ed reportsthat there are already too many science Ph.D.'s looking for work.
The relationship between the number of Ph.D.'s in the sciences and the academic jobs available to them is, to put it scientifically, inversely related. Money for science has stagnated over the last decade and will most likely continue to do so, leading to too many Ph.D.'s competing for too few teaching and research jobs in academe.** UPDATE***
Those who believe it is only a problem for technology workers, have a look at the graph below, notice the "other" category? Your job may be in this section.