The Media Yet Again Ignores the Subsidy in the OPT Program

By David North on October 11, 2019

Even though this foreign worker program includes a $2 billion-plus subsidy to employers for hiring foreign workers rather than domestic ones, the fact of the subsidy — for prosperous, discriminatory employers — was not mentioned in yet another media treatment of the Optional Practical Training (OPT) program.

This time it was the usually reliable Law360 with a report (behind a paywall) on some field audits of the OPT program. The story dealt with the fears of some employers that their OPT program usage might be upset by a government audit — there were no examples in the article that the audits had produced any action at all.

The reporter, in a 1,300 word-plus article, could not find room for an reference to the fact that neither OPT workers nor their employers pay the routine payroll taxes that apply to all American workers and employers; this results in a tax break for an employer of an alien OPT worker with a STEM (science, technology, engineering, or math) degree of about $12,000 over the three-year period of eligibility, and the same break for the alien worker.

An employer faced with two recent college grads of equal ability, one a citizen and the other an alien, each of whom is available at the same salary, might just decide to hire the alien and pocket (over time) the $12,000. Does Law360 mention this variable?

No.

And who, in effect, funds these tax breaks? It is America's elderly, ailing, and unemployed, as the payroll taxes support the Social Security, Medicare, and Federal Unemployment Insurance trust funds. Does Law360 notice?

No.

And how many citizen and green card college grads lose jobs because of this program?

About 300,000 a year.

The Optional Practical Training program was created, by the Bush II administration, without a word of congressional authorization. It simply redefines as "students" aliens on foreign student visas who have completed their studies and graduated college. These graduates remain "students" for a period of one year for non-STEM grads and three years for STEM grads, giving them and their employers huge tax breaks for those periods. The Obama administration expanded the program and the Trump administration has preserved it.

The little agency running the program, the Student and Exchange Visitor Program (SEVP), an obscure (and passive) arm of the Department of Homeland Security, never mentions the subsidy in its reports, a precedent followed, as we have reported in the past, by the New York Times, the San Jose Mercury News, the Wall Street Journal, the Pew Charitable Trust, and others.

The diversion of funds from the massive Pentagon budget to the construction of walls along the Mexican border gets massive publicity. But the diversion of money from the ailing and the elderly to corporations in the OPT program? Not a word.