A Little Bit of Nationalism, Please: Or Which of Those Are U.S. Firms?

By David North on April 17, 2012

We all know that the presence of too many nonimmigrant workers results in serious economic harm for resident workers, both citizens and green card holders.

Whether the alien workers are toiling in the fields or designing software, they take jobs at lower wages than residents and are usually more docile than Americans, so they get the jobs and our countrymen do not. People within the 99 percent are the ones who get hurt.

But how might temporary foreign workers adversely effect American stockholders? People who may well be in the 1 percent.

The thought came to me when I looked over a months-old Computer World article by Patrick Thibodeau titled "The top 10 H-1B visa users in the U.S." and noticed the names of the top five users (apparently in FY 2011):

  • Cognizant: 5,715

  • Infosys: 4,042

  • Wipro: 2,817

  • Tata: 1,758

  • Larsen & Toubro: 1,608

What do these five firms have in common other than their extensive employment of H-1Bs (whom they must prefer to U.S. workers) and the fact that they are all in information technology?

With the partial exception of Cognizant, they are all Indian firms, not American ones.

Infosys, Wipro, Tata, and Larsen & Toubro are all incorporated in India, and largely, if not completely, owned by residents of India. Cognizant says of itself on its website that it is "a unit of U.S.-based Dun & Bradstreet with operations based in India".

So do American stockholders of any of these four firms get the benefit of lower wages for the firm's workers? No. Only in the case of Cognizant.

In other words the H-1B system, as far as these four companies are concerned, is harmful to both American investors and American workers.

This reminds me of the situation in the U.S.-affiliated Mariana Islands some 15 years ago (when I was at the Department of the Interior). At that time there were about 20 different garment sweatshops on the islands, and DOI hired a consultant to track down the ownership of the firms. Every one of them was a private firm and every one of them was owned by Asian investors, usually only a handful of them. None were publicly traded.

All of them were profiting from the odd pair of facts that the islands were inside the United States for tariff purposes and outside the United States for immigration purposes, so garments could be sold for American prices in America (often marked "Made in the USA") while being produced with Asian (or near Asian) wage rates. A bonanza for those sweatshop owners! (U.S. immigration law now covers the Marianas.)

No American stockholder got a nickel out of the situation. They could not have bought any stock in any of these firms even if they tried.

So this was another situation, in which U.S. workers and U.S. investors were equally damaged by a nonimmigrant worker program.

I wish those writing about alien worker programs would spend more time on these not atypical scenarios where U.S. capital, as well as U.S. labor, is taking a beating.