Saturday, December 4, 2010

How Globalization And International Labor Arbitrage Undermine The American Economy And Marginalize The American Worker

One of the most controversial aspects of globalization is international labor arbitrage. International labor arbitrage is an economic phenomenon where, as a result of the removal of international trade barriers, jobs move to nations where labor and the cost of doing business (such as environmental regulations) is inexpensive and/or impoverished labor moves to nations with higher paying jobs. In many cases, the foreign workers are willing to labor for as little as 10 percent of what Americans would be paid, placing American workers in the impossible position of competing directly against the foreigners. Naturally, a company will move jobs outside the United States if they can realize significant labor savings; who wouldn't?

However, there's another aspect to this phenomenom. Not only do jobs move where people are willing to work for less money, but people willing to work for less money are moving to the United States to take jobs from Americans. This is permitted under the H-1B and H-2B immigrant programs. Ideally, the immigrants are supposed to be limited to jobs not taken by Americans; companies desiring to employ H-1B immigrants are technically required to advertise the jobs to Americans. But often the ads are posted in obscure locations where few Americans will see them, or they will offer a wage that's too low for an American, particularly one fresh out of college and saddled with a substantial student loan debt, to accept. But the wage is fine for the immigrant, so the immigrant is hired. This marginalizes the American worker. As word of this problem spreads, the next batch of college students will pursue majors in less vulnerable professions, leaving us with fewer American workers in the more vulnerable professions. The IT industry in the United States is in the process of being taken over by foreigners; over 25 percent of all startups in the Bay Area during the past 15 years were by immigrants (most likely former or current H-1Bs, and 40 percent of all publicly traded and venture founded companies in high tech manufacturing were started by immigrants.

In addition, there are accounts of H-1B immigrants performing substandard or slipshod work or rendering faulty service. In addition, once one of these immigrants works hid way into a managerial position, they have a tendency to reach back into their home countries for workers rather than hire Americans. This problem starkly manifested itself in the wake of a February 2008 raid on the Universal Industrial Sales factory in Lindon, Utah, where at least 50 illegal immigrants were found. It turned out that the human resource director, a 39-year-old naturalized American citizen named Alejandro Alex Urrutia-Garcia, was the pipeline for the illegal immigrants. Instead of making a genuine effort to hire Americans, he was reaching out to his compadres in Mexico, and not asking any questions about their paperwork.

More problems with the H-1B program are documented by NumbersUSA and H1BScam and Watchdog Politics Examiner.

Another example is posted on Stormfront by a computer programmer identified only as Lord Jim. Here's his story (after the jump):

These are tough times for all Americans, and the computer industry is no exception.

In the computer industry, years of hiring H1B visa Indians, has created an environment where white programmers just can not get jobs. In some companies, IT departments are staffed by entire villages and Indian managers have no desire to hire a non-Indian.

It is hard to imagine that in the 21st century, discrimination based on national origin or ethnicity still takes place, yet it does but only aginst whites.

One would think that in light of the social revolution of the 60's and the paranoia of a mere insinuation of racial preferences both would act as a some sort of self-imposed reluctance in selecting new hires based on the color of the skin, or even their name. However, the world is what it is, and it does.

In June 2004 my employer filed for bankruptcy and I became another unemployed programmer. I scoured job boards, newspapers, and the Internet while my 401K and savings dwindled. I sent out hundreds of resumes, some 20-30 a day. I was lucky to see an interview out every 200 resumes. I received many rejections, most companies just never responded. Like so many other unemployed programmers, I even sent in my resume to jobs I was overqualified for. In some cases, I would doctor my resume to make myself appear to have less experience.

I did get some calls for jobs but they wanted to pay only 2-3 times the minimum wage, a little low for a recent graduate, much less one with a computer science degree. I asked them, why so low. In each and every case, they brazenly admitted that is what they can get an overseas programmer for, but the government makes them look for a domestic client first. They were under no constraints to change the wage value.

After some 1000 resumes in two years with no job leads and out of desperation, I took a few contract positions that came up, just to make ends meet. In nearly every case, I was working under recent immigrant from India who, in addition to not being able to speak English, would know so little about computers and programming and with such poor general skills I could not imagine how such a person landed any job much less a programming position. I worked in companies with entire I.T. departments from India. In one case, they were all from the same village. One girl, listed a senior e-commence programmer, knew so little about computers, she was unable open an application after deleting the shortcut from her desktop, or perform other mundane computer tasks. She spent her day reading romance novels at her desk. I watched the open theft of company supplies, surfing to porn sites on company time, playing games, or sending instant messages to and from friends with impunity.

I started wondering what was going on. How is possible that programmers being out of work for months, and in my case, years, while these unqualified people clearly working for jobs they had no skills for, much less keep them with such horrible work habits?

After receiving several rejections for jobs I was very overqualified for, I created a duplicate resume, identical in every way, save for an Indian name and a disposable email address from hotmail. I sent this resume to jobs that claimed to have filled the position, companies that claimed to have used an internal application, jobs that withdrew the offer, and those jobs that received my resume more than 3 months previously, but were still listed as open on internet jobs boards. Surprise of surprise, I got calls, lots of calls. I got far more calls than I ever got with my non-Indian resume. Nearly every job that I hadn't heard back from called me. Jobs that were "filled" called me. And, in nearly every case, they ALL had an Indian accent. Discrimination you say? So it would seem.

With the influx of cheaper programmers from India and the horror stories of experienced programmers being laid off after being forced to train their Indian replacement, it is little wonder that American no longer turns out computer science majors. College students, in selecting their majors, see that a computer science degree is a fast track to nowhere and the unemployment line.

So not only is there discrimination against Americans taking place inside the United States itself, but the replacement foreign workers often are not as efficient or effective as Americans. If a senior e-commence programmer can't even open an application after deleting the shortcut from her desktop, how can she be expected to devise and write code, or to provide effective technical support for those who use her company's products or services?

President Barack Obama has hailed his just-concluded free trade agreement with South Korea, saying it will create 70,000 American jobs. But will that really be 70,000 jobs for Americans, or merely 70,000 jobs in America, some to be filled by foreigners. Koreans have a reputation for being good workers, but with an American unemployment rate hovering just below 10 percent, is any foreign worker good enough to take a job from an equally-qualified American?

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