Cheap Labor Rhetorical Rhapsody - Reader comments at The New York Sun

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Submitted by Rhetorical Rhapsody, Jan 3, 2008 18:27

Kathy Robertson: "Companies are LYING about a shortage because they want to bring in cheap labor"

Repeat something loud and long enough and eventually people may believe it, particularly since it's easier to level a charge than refute one. Still, despite years of rhetoric critics (see previous post) have presented no compelling evidence that employers are systematically underpaying H-1Bs.

Under current law, H-1B must be paid the higher of the prevailing wage or the actual wage paid to similarly employed Americans. While it is true the Department of Labor (DOL)'s enforcement of H-1Bs is primarily complaint-driven (though Congress has provided a mechanism for self-initiated DOL investigation), it is telling that among the cases investigated relatively few violations have been found to be labeled "willful" and/or result in debarment. DOL found employers either committed paperwork violations or misread employer obligations in a non-willful manner in almost 90 percent of the investigations in FY 2004. In fact, in FY 2004, DOL found willful violations in only 11 percent (15 of 136) of its investigations that became final.

In the small proportion of cases where back wages are actually owed the amounts are no more, on average, than what companies would pay anyway in various legal and government fees. In examining all DOL final agency actions between 1992 and 2004, one finds the average amount of back wages owed to H-1B was only $5,919 – that is about the amount of money U.S. employers typically pay in H-1B legal and government-imposed fees. These figures cast doubt on allegations of widespread underpayment of H-1B, given that even among employers where suspicion of abuse was present the average underpayments have turned out to be relatively small.

A study by Madeline Zavodny, a research economist at the Federal Reserve Bank of Atlanta, found, "H-1B workers [also] do not appear to depress contemporaneous earnings growth." As to unemployment, the study concluded that the entry of H-1B computer programmers "do not appear to have an adverse impact on contemporaneous unemployment rates." The study also noted that some results "do suggest a positive relationship between the number of LCA and the unemployment rate a year later." Zavodny concluded: "None of the results suggest that an influx of H-1Bs as proxied by LCAs filed relative to total IT employment, lower contemporaneous average earnings. Indeed, many of the results indicate a positive, statistically significant relationship." This would mean H-1B employment is actually associated with better job conditions for natives, according to the study, which could be because H-1Bs are complementary to native professionals.

Critics assert the only reason a U.S. employer would ever hire H-1B is because s/he will work cheaper than Americans, implying that only people born in the United States possess desirable skills. It crosses the line to argue that people not born in the United States have no value in the marketplace except if they work "more cheaply than critics" (an unproven allegation). Moreover, it runs contrary to common sense and any serious analysis of how the U.S. labor market functions.

The reason the "cheap labor" argument persists as the mantra of critics is because either critics are against immigration of "certain races" or seek to limit competition in their chosen field.

Note that it is possible that a policy that results in increased competition can affect some people but remain good policy nonetheless. For example, a moratorium on opening new restaurants in an area would help existing restaurant owners and their employees but would be bad for consumers and entrepreneurs who live nearby, as well as workers seeking opportunity. For that reason such protectionist policies are rare in America and their rarity is a primary reason for America's economic success relative to other nations.

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Other reader comments on this article

Comment	By	Date
GuildY/ ZazonY wrote: "Alan Greenspan, March 2007 "If we open up a significant window for skilled workers, that would suppress the... [MORE]	suppress TOP EARNER wages	Jan 30, 2008 12:57
Asking the Department of Labor to regulate the number of visas and green cards to issue is like asking a... [MORE]	No visa for you	Jan 15, 2008 02:30
GuildY/ ZazonY wrote: "Alan Greenspan, March 2007 "If we open up a significant window for skilled workers, that would suppress the... [MORE]	Little empirical evidence!	Jan 8, 2008 17:57
Kathy Robertson: "When there are millions of Americans out of work due to outsourcing, why do we need to bring... [MORE]	Data	Jan 7, 2008 12:17
S. Kolger wrote: "every other type of white-collar jobs stop getting offshored to India" (1) New H-1Bs account for .07% of... [MORE]	Data	Jan 7, 2008 12:13
The people who are finding rising wages and full employment in the IT sector are definitely moving in different social... [MORE]	S. Kolger	Jan 5, 2008 09:46
Kim Berry (President, Programmers Guild) wrote: " ..." IEEE USA is IEEE's policy wing, supported mainly by annual assessment paid by... [MORE]	IEEE USA's Proposal	Jan 4, 2008 12:10
GuildY/ ZazonY wrote: "Alan Greenspan, March 2007 "If we open up a significant window for skilled workers, that would suppress the... [MORE]	Really!	Jan 4, 2008 12:04
H1-B petitions approved vs H1-B workers ------------------------------------------------------------------- (1) From How many H-1B visa workers? Counts vary VALLEY EMPLOYERS AMONG TOP USERS By... [MORE]	Never Mind!	Jan 4, 2008 10:24
Kathy Robertson wrote: "When there are millions of Americans out of work" The unemployment rate in IT sector is a whopping... [MORE]	Just Do It!	Jan 4, 2008 10:10
It is well known within the tech industry that the primary reason that companies are so much in love with... [MORE]	Clearing Smoke Bombs	Jan 3, 2008 20:36
Kathy Robertson: "Companies are LYING about a shortage because they want to bring in cheap labor" Repeat something loud and long...	Rhetorical Rhapsody	Jan 3, 2008 18:27
Kathy Robertson: "Companies are LYING about a shortage because they want to bring in cheap labor" A Dec 2005 Center for... [MORE]	Dis Information	Jan 3, 2008 18:23
S. Kolger wrote: "when American workers are no longer required to train their H-1B replacements" (1) From The Grassley Visa Tax... [MORE]	Train H-1B Replacement?	Jan 3, 2008 10:19
Bruce de la Vega wrote: "B. Lindsay Lowell and Harold Salzman at the Urban Institute that the USA is over-flowing... [MORE]	Caveat	Jan 3, 2008 10:06
Your article is well spiced because you hit the hammer on the nail.thanks [MORE]	moradeyo afeez	Jan 3, 2008 03:22
Background: U.S. STEM Workforce Shows No Sign of Impending Shortages http://www.rand.org/pubs/research_briefs/RB1505/index1.html "The pool of S&E-qualified secondary and postsecondary graduates is several times... [MORE]	Dana Rothrock	Jan 2, 2008 19:01
As "former chief economist at the U.S. Department of Labor", Ms. Furchtgott-Roth certainly knows that DOL is knowingly rubber-stamping labor... [MORE]	Kim Berry	Jan 2, 2008 16:21
"Allowing the Labor Department to adjust legal immigration every quarter to match U.S. need for foreign labor would help America... [MORE]	Bruce de la Vega	Jan 2, 2008 13:40
"labor certification from the Labor Department... requires the prospective employer to affirm that he has determined that no American workers... [MORE]	Bruce de la Vega	Jan 2, 2008 13:29
It boils down to this: WE CANNOT TRUST THE GOVERNMENT TO ENFORCE THE LAW OR TO EXERCISE DISCRETION IN A... [MORE]	TheReallyRightGuy	Jan 2, 2008 12:52
I hate the arcane nature of bureacracy and public policy. However, because we need to protect our sovereignty and regulate... [MORE]	Ken	Jan 2, 2008 16:38
There is a principle of economics that, in a free market (which we do NOT have) there can be neither... [MORE]	Bruce de la Vega	Jan 2, 2008 18:05
This is fine as far as you have gone. However... Let's give the Department of Labor more lattitude. Perhaps they could... [MORE]	Rev. Stephen M. King	Jan 2, 2008 12:28
When there are millions of Americans out of work due to outsourcing, why do we need to bring in temporary... [MORE]	Kathy Robertson	Jan 2, 2008 09:16
If you listen to the CEO/CFO/HR people at the large companies looking to import workers a half way intelligent person... [MORE]	Gene	Jan 2, 2008 13:41
Instead of a well thought-out analysis of the issues, we get a rehash of all of the old arguments Big... [MORE]	S. Kolger	Jan 2, 2008 08:39
The writer of this article does not seem to be much of a believer in Democracy. She wants to take... [MORE]	Voter	Jan 2, 2008 07:22