GAO's Bland Review of H-1B Scheme Mostly Ignores Impact on Workers

By David North on January 30, 2011

A recently released report on the controversial H-1B program is a disappointment on several levels – mostly because it plays down or ignores the program's negative impact on resident workers.

The report was written by the ultra-cautious Government Accountability Office (GAO) and is entitled "H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program".

Though this is not spelled out in the text, the "risks" and the "costs" of the program appear – in GAO's eyes – to rest on the employers.

Bearing in mind that this is a program that probably shoulders hundreds of thousands of American workers aside, and reduces the wages of many more resident high-tech workers, these are the first words of the report:

"In most years, demand for new H-1B workers exceeded the cap: From 2000 to 2009, demand for new H-1B workers tended to exceed the cap, as measured by the numbers of initial petitions submitted by employers who are subject to the cap (see fig. 1). There is no way to precisely determine the level of any unmet demand among employers, since they tend to stop submitting . . . petitions once the cap is reached each year."

There is no talk of balancing the desires of the employers with the interests of the employees in that opening, no discussion of jobs losses to U.S. workers, no discussion of what harm the program does to wage levels in the high-tech industries, just the sad story of how some companies cannot get as many well-trained, compliant, and inexpensive foreign workers as they want, exactly when they want them.

It is as if the report were written by the National Association of Manufacturers or the U.S. Chamber of Commerce, rather than by a supposedly impartial arm of the Congress of the United States.

There is, for example, a long and pro-employer treatment in the report about how, under some circumstances, when there are more requests for H-1B visas than permitted, that a lottery system is put into place to allocate the remaining spaces. Under these conditions sometimes the worker who wins the lottery is a person who is perfectly acceptable to the employer, but not necessarily the boss's first choice. (See p. 28 of the printed report.)

I have already noted in an earlier blog that the report does not even try to estimate the (huge) size of the nonimmigrant foreign work force produced by the program, a major factor in its impact on citizen and green card workers. I have created an estimate of my own that there is a thumping total of something like 650,000 of them. The lack of such an estimate in the report is symptomatic of the attitude of its authors.

Another well-documented symptom of this attitude is the lopsided amount of consultation the gang of authors – 31 people played a role in writing this 118-page report – had with corporations, as opposed to unions and other critics of the program.

A full two and a half pages (pp. 76-78) are devoted to a section headed "Interviews with H-1B Employers." It begins:

"To determine how the H-1B cap and program affects the costs, R&D, and off shoring decisions of firms doing business in the United States, we spoke to a nongeneralizable sample of 34 companies that employed H-1B workers in fiscal year 2008. For 31 of these companies, we conducted structured interviews with representatives of the company. For the remaining 3 companies, we spoke with a company representative in two separate focus groups." [I have trouble understanding that last sentence.]

There is no comparable description of GAO's contact with critics of the program. To show the contrast to the extensive GAO expenditure of person-power on the employers, I used the "find" key on my computer, and entered "labor organization", "union", and "AFL-CIO" and found no references to any of them in all of the118 pages.

There are, however, a couple of references to "labor advocates" with no name attached; that term has overtones – maybe I am paranoid – of the phrase used by Southern reactionaries in the civil rights era, "outside agitators."

I know, because he told me, that the dean of academic critics of the program, Prof. Norman Matloff of UC-Davis, spent a couple of hours with part of the GAO team, but he is not mentioned, nor are any of his writings, nor, most significantly, is his main criticism of the program.

It is Matloff's position that both the point of the program, and its obvious effect, is to reduce wages for well-educated high tech workers. That's what it is all about.

There is, for instance, no requirement that H-1B employers routinely try to recruit U.S. workers before they can hire foreign ones, though such requirements are at least nominally imposed in the H-2A (seasonal agricultural) and H-2B (seasonal non-agricultural) worker programs.

My own sense is that there is another aspect of the program, one that cannot be measured, that also makes it very attractive to employers, and that is the compliant nature of the workers involved. They are young, in a strange country, and can hold onto their legal status in this country only by pleasing their employers. No wonder they are so easy to supervise.

Needless to say, that important mechanism is not mentioned by GAO.

The report is a double disappointment; first, because it misses the central point of the program, the deliberate depression of wages; and secondly, because the government rarely puts as much money and person-power into an analysis of a foreign worker program as it did into this one.

Sadly GAO was either grossly misled about the true nature of the H-1B program, or, more likely, decided not to notice.