System Makes It More Likely a U.S. Worker Would Be Laid Off than an H-1B

By David North on May 19, 2020

I hate to make this argument, but some of the worker protections built into the H-1B program, and the relative difficulty in getting new visas, all else being equal, make it more likely that Americans will be laid off, rather than H-1B workers, in cases where both are employed by the same firm.

Let's take a situation in which an unbiased employer has had good luck with both his 10 H-1B workers and his 10 U.S. workers, all doing pretty much the same work, and paid (in this hypothetical case) at about the same levels.

He is facing a 10 percent loss in volume, and though he can absorb half of that without a layoff, he feels he has to reduce his work force by one person (or 5 percent). Who will he lay off?

My strong sense is that an American will be the one who loses his or her job. Here are the rules and the practicalities of the situation:

Laying Off the
U.S. Worker (Sam)
  Laying Off the
H-1B Worker (Joe)
Sam's hours can be reduced.   Joe's hours cannot be lowered below those set by the H-1B system.
Sam can be "benched" and not paid
at all.
  Joe cannot.
Sam can be laid off for 90 days and
rehired (Sam willing) with a minimum
of paperwork.
  If Joe doesn't work for 60 days, he will need a new visa.
Rehiring Sam after 90 days will not
involve any government or legal fees.
  Joe's will.
If Sam is laid off, the employer will pay no travel costs.
  If Joe is laid off for a long enough period, the employer must buy a one-way plane ticket to Joe's homeland.
On the other hand:    
If Sam is laid off, and does not get
another job right away, he may collect
unemployment insurance which will increase his employer's costs in the future.
  Joe cannot collect UI.

With all these variables in play, even an unbiased employer might well opt to lay off Sam, and not Joe.

Think then how an employer who likes his workers indentured, or who pays his H-1Bs less than his U.S. workers, or who has a pro-Indian bias, would respond to these incentives.

I speak of the "relative difficulty of securing H-1B visas" without meaning that the current system is too difficult; not at all. The whole process should be tightened up and made more expensive, if not suspended for the rest of the year. My point is that the system is currently designed in such a way that the layoffs of U.S. workers can be expected if both H-1B workers and U.S. workers are employed in the same firm.