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Issa introduces bill to thwart H-1B abuse

Higher salary threshold could make it harder for companies to skirt intent

Darrell Issa
Darrell Issa

North County Republican congressman Darrell Issa yesterday (July 20) announced the introduction of legislation that is intended to close a loophole in the H-1B visa program that allegedly depresses wages and job opportunities of American engineers.

The H-1B program permits companies to bring in foreign tech workers (mainly from India). Critics say that the H-1B workers are underpaid, thus pushing down wages of American employees in science, technology, engineering, and mathematics fields.

Issa, a longtime backer of H-1B, was disgusted last year when Southern California Edison engineers were forced to train the H-1Bs who were brought in to replace them. It was clear that Edison had brought in the H-1Bs to replace Americans with cheaper labor — something that was not supposed to happen in the program.

The bill introduced by Issa — and backed by the entire San Diego House delegation — would raise the H-1B salary threshold of $60,000 to $100,000. Backers believe this would make it harder for companies to bring in workers at a salary that would undercut the pay of Americans in similar jobs.

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Darrell Issa
Darrell Issa

North County Republican congressman Darrell Issa yesterday (July 20) announced the introduction of legislation that is intended to close a loophole in the H-1B visa program that allegedly depresses wages and job opportunities of American engineers.

The H-1B program permits companies to bring in foreign tech workers (mainly from India). Critics say that the H-1B workers are underpaid, thus pushing down wages of American employees in science, technology, engineering, and mathematics fields.

Issa, a longtime backer of H-1B, was disgusted last year when Southern California Edison engineers were forced to train the H-1Bs who were brought in to replace them. It was clear that Edison had brought in the H-1Bs to replace Americans with cheaper labor — something that was not supposed to happen in the program.

The bill introduced by Issa — and backed by the entire San Diego House delegation — would raise the H-1B salary threshold of $60,000 to $100,000. Backers believe this would make it harder for companies to bring in workers at a salary that would undercut the pay of Americans in similar jobs.

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Comments
26

I have read H.R. 5801, the "Protect and Grow American Jobs Act." It will do nothing about helping America grow jobs for Americans, only increase the wages for the foreign nationals. The unintended consequences will be more corruption and deceit as there will be more incentive to be the lucky H-1B's that get paid even more. This is simply election time window dressing by political actors on both sides of the aisle using this empty bill in an effort to assuage criticism of the H-1B program and the calls for its end.

July 21, 2016

I think perfect is the enemy of good. The bill is flawed but sounds like a step in the right direction.

July 21, 2016

ImJustABill: Yes, the perfect can often be the enemy of the good. Best, Don Bauder

July 22, 2016

Ponzi: This is certainly possible. In fact, that is the first thing I thought when reading about it. But I want to hear from each side. Best, Don Bauder

July 21, 2016

Scott Wilson: Both parties in the San Diego House delegation want to see this passed. Best, Don Bauder

July 21, 2016

Scott Wilson: One could argue cogently that when the salary is boosted, H-1Bs would be used less frequently to drive American engineers out by hiring those with a lower salary, as Southern California Edison did.

Incidentally, ponder Southern California Edison: few companies are more corrupt. Top management should be replaced en masse. It won't happen. Best, Don Bauder

July 21, 2016

Scott Wilson, you said "the ONLY advantage to hiring H-1B's instead of Americans is price."

If only a politician or bureaucrat would admit this in public and to the media. Because they all deny it. Remember, the H-1B program was launched to import "the best and brightest" who are demonstrably smarter and more talented than the Americans that were overlooked in the recruiting process. The H-1B program was suppose to help our economy by bolstering our intellectual capital; the best engineers and programmers. Those of us actually in the business, who have actually worked with these so-called "best and brightest" know it's a sham.

First of all, there is no "cap" on the pay that an H-1B earns. The pay is negotiated just like with any employee. These are suppose to be the best and brightest, why aren't they demanding higher pay to start with? This bill is a joke. It does nothing, it solves nothing.

Anyone who understands economics, market forces, know that government imposed wage floors and ceilings are not efficient - and there's always a way to avoid complying anyway.

July 21, 2016

Ponzi: The H-1Bs are definitely not the best and brightest. Best, Don Bauder

July 22, 2016

Paul Thompson: Yes, wage cheating is common, especially in corrupt companies like Edison. But will this bill, if it passes, thwart wage cheating? Best, Don Bauder

July 22, 2016

Here is a statement from one IT worker who hopes for the best from this bill:

"I can only hope that our voices are STARTING to be heard and taken seriously.

I can't compete with an h1b. I have more experience, I know silicon valley quite well, I have good contacts and can get things done; but I'm 'an expensive american' because I have US healthcare to pay and US rents to pay, etc. and I'm not willing to have 5 other room mates and live-for-work just to stay employed.

we need a break from this heat wave. many of us who need work cannot get it. companies stopped caring about us and refuse to even consider us. we badly need relief from this or we'll find more of us slipping into the poorest underclass and that's just an absurdity. intelligent and capable thinkers and builders unable to get work because our corp overlords sold us all out.

I'll believe in the relief when I see it. so far, though, its killing many of us. in some ways, almost literally (I may lose my home soon, that's how bad it can get)."

July 22, 2016

swell: That would be my interpretation. American engineers are STARTING to be heard. This bill, if it passes, is a small step. But Congress is still owned by the large corporations that feast on H-1B. Best, Don Bauder

July 22, 2016

I'm not an Issa fan, but I'm glad he's doing something about this. Surprised, too. I have an EE degree from SDSU, but it was relatively useless here in San Diego competing with every Tom , Dick and Jugdish from India, Pakistan, and Bangladesh. My salvation is working as a field engineer, which is essentially an electrician/mechanic. Not a lot of H-1Bs fighting for my job (it's sometimes dirty,nasty, and requires a strong ability to work alone). I wish this bill was prominently in the news. Even in our local paper. Tanks for posting it.

July 25, 2016

mridolf: Issa, a long-time cheerleader for H-1B, claimed he was upset when Southern California Edison forced the American engineers who would be laid off train the H-1Bs who would replace them at a lower salary. Then the American engineers got booted out the door.

As we have learned in the Edison/CPUC scandal, it would never occur to this company to act civilly. Best, Don Bauder

July 26, 2016

Sam Vellah: In democracy, no legislation is perfect. Don't let the best get in the way of the good. Best, Don Bauder

July 26, 2016

The fix we need is free market capitalism. This would involve the total elimination of the H-1B. Free market price rationing of the available American talent would have the available skill set going to the most efficient economic use. The higher wage would attract more Americans to acquire the need skill set and in so doing fix any shortage the same way any other shortage is fixed.

In 1776 Adam Smith in the “An Inquiry into the Nature and Causes of the Wealth of Nations” warned us about employers banding together and sometimes with government to reduce worker wages. The H-1B visa is such an undertaking. It reduces the wages employers have to pay by allowing them to pay wages below the free market wage. The general requirement is that they pay the prevailing wage. Consider this requirement with the economics of the free market. If, as is alleged by advocates, a skill set is in short supply then in a free market that skill set should command a premium wage but the employer is only required to pay the prevailing or average wage. This led Nobel Laureate Milton Friedman to call the H-1B a subsidy saying

"There is no doubt, that the [H-1B] program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy."

The problem with a subsidy is the underlying problem never gets fixed. The H-1B was invented in 1990 to address a shortage of STEM workers and according to Issa is still needed. That suggests that a shortage that existed in 1990 still exists to this very day. That can not happen in a free market. The H-1B subsidy keeps wages down and perpetuates the problem.

The Issa bill is not the fix we need. Many of the Southern California Edison engineers were making more than the $100,000 minimum proposed.

July 27, 2016

n65321: The late Milton Friedman was a very wise man. I used to interview him regularly and was always impressed with his explanations of economic phenomena.

That doesn't mean I am a Friedmanite. Like other University of Chicago economists, he had excessive faith in a so-called "free" market. He didn't take crooks sufficiently into account. I think he went overboard on monetarism, too. Monetary policy is critical, but it is not the only variable that must be examined. Friedman's "only money matters" was an overstatement that deservedly died.

He was right on H-1B. It is corporate welfare. When large corporations buy politicians and become the recipients of massive corporate welfare, it is wise to jettison any ideas about the so-called "free market" being the be-all and end-all. Markets become rigged, not free.

Finally, you may remember that Friedman taught that free-floating currencies would equilibrate the differences among countries. That has definitely not happened. Best, Don Bauder

July 27, 2016

I completely agree that Friedman (and Greenspan and other economists) grossly underestimated the corruption and lack of integrity in the financial industry and the government. I think what we have now is far from "free market capitalism" but is better referred to as "crony capitalism".

In theory, free market capialism improves productivity and efficiency by rewarding good ideas and punishing inefficient ideas. In practice some amount of government is needed to prevent trusts and to place restrictions and limits on activities of corporations which can be harmful to society, e.g. setting minimum wages, limiting environmental impact, etc. And government is SUPPOSED to prosecute and punish those who willfully violate those laws or commit fraud or theft. There are tradeoffs between the inefficiencies to business caused by regulations vs. many ways that regulations protect society.

However, in my opinion governement is NEVER needed to invest in, bail out, stimulate, or otherwise promote businesses or corporations. That's not part of free market capilism. The strongest and most powerful opponents to free market capitalism are Wall Street investment firms - as was seen in the bailouts after the 2008 mortgage meltdown. Clearly any corporation which had even a grain of belief in free market capitalism would have vigourously opposed bailouts for investment firms but we didn't see from that. Any high-ranking executive of one of the failing Wall Street firms would have accepted at least some responsibility for his / her firm's failure and resigned. But I don't think we saw much of that either.

Wall Street firms and many other large and powerful corporations keep our "crony capitalism" system intact.

July 27, 2016

ImJustABill: Right you are, as usual. Those who genuflect at the altar of free trade are living in the past. Free trade would be lovely, but it's no longer realistic.

The government does intervene in so-called free markets and usually worsens the underlying problem. Even the largest blue chip companies use dubious methods of cheating in the market place. Internationally, companies manipulate their own currencies and play all kinds of tricks to get an advantage. Best, Don Bauder

July 30, 2016

some days I think they should introduce a bill to stop bill introduction abuse

July 30, 2016

Murphyjunk: Great idea, but unworkable. What would politicians do for a living if they couldn't introduce bills?

Similarly, I have always said that there is a way to stop all wars. Every country would agree that if potential hostilities break out, the first ones to be armed and to go to the front in each country would be the politicians and diplomats whose job it was to thwart the war in the first place. Then they would find a way to settle differences and we would have peace.

But that's not practical. Best, Don Bauder

July 30, 2016

I think Gen Smedley Butler had some good proposals in "War is a Racket" https://en.wikipedia.org/wiki/War_Is_a_Racket

Basically he says make those who profit from the war pay for the war, and only those who are actually fighting can decide on whether or not to fight.

July 31, 2016

or similar to the old sgts. advice in the book All quiet on the western front., let the country's leaders duke it out in their long johns to decide who wins

( in other words let the politicians do the fighting) no one would show up.)

Aug. 1, 2016

Murphyjunk: Precisely. Best, Don Bauder

Aug. 1, 2016

ImJustABill: You have fingered one of the major problems for those wanting peace: too many people make big bucks from war. We all know that World War II ended the Great Depressioon, not any remedial action from politicians. Best, Don Bauder

Aug. 1, 2016

Sam Vellah: Let the politicians battle over the appropriate wage threshold. Best, Don Bauder

Aug. 1, 2016

Jim McMillan: You are exactly right. The intelligent young grads head for Wall Street, where the money is. The greatest irony is that most Wall Street activity does not help the economy. In many instances, Wall Street activity HARMS the economy. Best, Don Bauder

Aug. 1, 2016

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