aging labor force, cheap labor, demographic cliff, green card, guest workers, H-1B visas, H-1B workers, illegal immigrants, immigration, immigration reform, IT, labor markets, population growth, Silicon Valley, skilled labor, STEM, technology industry, technology sector, temporary workers
Today is May Day, a universal recognition of labor everywhere save the U.S.: We have “Labor Day” in September, which serves as a proxy for the end of summer. Thus, Labor Day is a bit of a downer, even if the weather doesn’t start to change towards fall for another month.
May Day, however, has always been tinged with workers’ movements, socialism, communism, etc., etc., so its always been viewed as a little unseemly, hence the U.S. had to create its own day for labor recognition.
Nevertheless, labor is a hot-button issue these days in the U.S., so May Day seems to be a good day to post on labor issues.
Wait. What labor issues? Who’s talking about labor issues?
Well, if truth be told, the entire immigration reform battle, er, discussion, revolves around the labor issue, not the immigration issue. More specifically, cheap labor, and more specifically than that, cheap skilled labor.
A Beautiful Cheer to the Corporatist’s Ear:
Cheap Skilled Labor
Recently, The Register, Britain’s news outlet that brings a harsh light to all things in the technology sector, covered the connection between immigrants to the U.S. and cheap labor in the technology sector.
A British media outlet, mind you, not a U.S. outlet, has to bring us the results of a study on the U.S. labor market.
And here is how The Register’s San Francisco correspondent, Iain Thomson, begins:
“An extensive study of the US labor market has shown that the skills shortage which technology firms are constantly complaining about is overstated and firms may instead be using overseas workers to drive down wage costs.
“In a paper for the Economic Policy Institute by Hal Salzman of Rutgers University, Daniel Kuehn of American University and B. Lindsay Lowell of Georgetown University, the team studied the market for science, technology, engineering and math (STEM) careers.
“If there was a shortage of IT jobs then you’d expect wages to rise, but in fact the team found wages in the field (on average) peaked in 2001 and have remained flat ever since, and in some cases have fallen over the last 14 years. The reason, according to the research, is that overseas workers are being recruited to keep wages low.
“The researchers found that the US produces a surfeit of STEM graduates, but only half of them are hired.”
So although the mainstream media (MSM) will bring you stories of struggling migrant workers trying to provide for their families, the biggest thrust behind the concern over immigration isn’t over farm workers, but skilled workers holding STEM degrees. And how many times have we heard from government and business officials that we need to promote educational reform, reform increasingly and solely aimed at students pursuing science, technology, engineering and math degrees? And for those clueless American students who actually take up the call to duty and pursue STEM majors, what chance have they of finding a job after graduation? From Bloomberg News:
“Employers misuse the program by hiring from abroad at entry-level wages while bypassing more expensive domestic workers,” said Norman Matloff, a University of California Davis computer science professor.
“Despite a requirement that companies pay a ‘prevailing wage’ for the industry, Matloff said H-1B workers often prove cheaper because it’s hard for the government to gauge proper salaries.
“A January 2011 Government Accountability Office report said 54 percent of H-1B labor applications were for workers earning entry level wages.” 
Or if American students do secure a job, will they be able to pay for rent, utilities, food, transportation and insurance, as well as cover those massive student loan payments?
While the technology companies may publicly state that they give American tech workers first consideration, The Register story notes otherwise:
“In the industry we’ve already seen cases of recruitment consultants hiring staff solely via the visa program – not even considering domestic staffing….”
And if cheap skilled labor is not enough for the corporatists, consider the outsourcing companies (New York Times):
“Some of the largest blocs of H-1B petitions are taken by outsourcing companies, which makes them even more contentious, and critics say those firms import engineers with basic skills and pay them poorly.
“‘It invites employers to play a game of wage arbitrage,’ said Ron Hira, assistant professor of public policy at the Rochester Institute of Technology and a critic of the program.”
But the spin on all this is getting incredibly difficult to seriously believe (Bloomberg News):
“Companies don’t have to try to hire U.S. workers before seeking H-1B workers, and critics say a rule requiring that visa holders earn a standard industry wage is tough to enforce.
“Companies in computer, math and science fields dominate H- 1B visa applications and have spent years pushing for a higher quota…
“‘Demand has grown as employers have drained the U.S. talent pool,’ said Emily Lam, senior director of health care and federal issues at Silicon Valley Leadership Group…
“‘The economy is picking up,’ Lam said. ‘Many of our employers are saying that hiring is robust.'” (emphasis added)
Considering the growing number of STEM majors unable to find employment, such misrepresentations are getting incredibly hard to relay with a straight face. Fortunately for Lam, she likely provided the interview over the telephone. And speaking of spin…
The Official Spin
Not to worry about American MSM coverage of the immigration issue, however. No critical call outs will be found here. Consider this piece from Bloomberg News:
“They also are armed with more than two decades of research showing that the 1986 law raised wages and boosted the economy. Economists at the free-market Cato Institute, the pro-labor Center for American Progress and the business and municipal Partnership for a New American Economy are in rare agreement that legalization makes economic sense…
“(As a result of immigration amnesty provided by the U.S. government in the 1980s) Barriers to upward economic mobility eased as the newly legalized found jobs that better matched their skills. They ventured deeper into society, pursuing educations and buying homes….”
As if two decades can make up for misleading research.
So does “legalization makes economic sense”? It certainly does, for the corporations that can hired skilled immigrants at lower wages and less cost to the company. And the lobbyists for these corporations are already optimistic (New York Times):
“Several lobbyists and advocates who have spoken to Senate staff members say they are optimistic about at least two items high on their wish list: a fast-track green card line for math and science graduates like Mr. Sankhla, no matter which country they come from, and a near doubling of the visas for temporary workers.”
Population Growth: More Cheap Workers
Despite our growing global population and the increasing strains it will place on rapidly dwindling natural resources, economists are warning the aging populations of the West will create a “demographic cliff,” one where the number of retired individuals will far outstrip the ability of younger generations being able to support them.
“And there’s a new economic imperative — the demographic cliff, Hinojosa-Ojeda and others say. As a generation of baby boomers enters retirement and fewer young people start families, the growth of the labor force is slowing, putting a drag on the recovery, even as the 1986 law and others since have made legal immigration more difficult.”
The real danger, as corporatists and their high priests the economists fully understand, is that as a worker ages, he or she works at higher and higher levels of income (or, at least, used to). Thus, younger workers, immigrant or otherwise, can be had at far lower income levels.
There’s a double-edged sword being swung here: Corporations want to see the path to legal immigration eased so that they can access skilled workers at lower wages. Agricultural growers, lawn-maintenance services and clothing manufacturers would rather maintain the status quo (short of being charged with hiring illegal immigrants), since any legal status could provide access to minimum-wage incomes, something most illegal immigrants do not enjoy. Therefore, wages could rise for such workers.
There is, however, a mezzanine level to this conflict, namely the “guest worker,” which provides a pseudo legal status to immigrant workers, yet keeps them away from the minimum wage scale (Bloomberg News):
“These ‘guests,’ hardly treated as such, come to harvest lettuce, clean fish and wash dishes at minimum wage or below. They often end up living in filthy dorms with room, board and transportation deducted from their paychecks — virtually indentured to their employers. Look out the window at the man pulling weeds in the yard; he might be a guest worker who owes more money than he makes.”
And even former Republican senator Alan Simpson, who helped oversee the 1986 immigration overhaul emanating from the Simpson-Mazzoli Act, couldn’t deny the obvious:
“Simpson said at the time that it wasn’t “survival but greed” that drove agribusiness to demand more guest workers.”
Immigration Issues = Cheap Labor Issues
Immigration issues shouldn’t be about irrational, xenophobic backlashes against immigrants. Hell, all North Americans are or come from immigrants, including Native Americans, with genetic research suggesting they immigrated here many, many years ago from Asia. They just failed to latch onto the Manifest Destiny concept before the Europeans did, which justified a whole array of bad behaviors that continue to this day.
In fact, immigration issues are, at heart and in honesty, labor issues. The gridlock over immigration reform, as Margaret Carlson noted in her Bloomberg News column, emanates from this nexus:
“This time Democrats are willing to accept guest workers — they’re just asking that foreign low-skilled workers be paid wages above the median hourly wage, so employers have an incentive to hire domestic workers first. What Republicans are saying is that if we can’t pay them less, what’s the point?”
Carlson also wrote:
“We wouldn’t have 11 million undocumented immigrants here today if it weren’t for the desire of employers for cheap labor.”
That pretty much sums it up.
It’s unfortunate that many of these immigrants have little recourse but to accept the substandard wages being offered. It is an affront to their dignity.
It is also an affront to the dignity of American workers, who have seen their incomes come under steady attack since the 1980s. First, America’s manufacturing base was dismantled, then in the 1990’s America’s white-collar management structure was dismantled. And now in the 21st century, skilled workers and professionals find their incomes being dismantled, including many employees of Wall Street banks.
This begs the question: What, or who, is left? America’s Corporatists are now eating their own intestines.
 The report can be read/downloaded here. Specifically, see page 58.
2013.06.25 update: More support for the
American Worker Sell-Out Program Comprehensive Immigration Reform from economicpopulist.org