Trading People: How H-1B, Outsourcing and Trade are Connected

Business Week published a front page article, Work Visas May Work Against the U.S. Indian outsourcers file the most applications for temporary H-1B visas. Are they using them to train staff for jobs abroad?.

In Peter Elstrom's article, the connection between technology transfer out of the United States, trade, offshore sourcing and guest worker Visas are correlated.  Quote:

Outsourcing Conduit...
But a review of new information from the federal government suggests that the companies benefiting most from the temporary worker program aren't U.S. companies at all. Rather, they appear to be Indian outsourcing firms, which often hire workers from India to train in the U.S. before returning home to work. Data for the fiscal year 2006, which ended last September, show that 7 of the top 10 applicants for H-1B visas are Indian companies.

Another Clue, President Bush said in talking about trade with India, "We've got to expand what's called H-1B visas".  Yet, Under the H-1B program, employers do not have to search for Americans, and can prefer an H-1B [visa holder] over an American citizen or green card holder.

Even for jobs in the United States, by law, offshore outsourcing firms do not have to bother considering a green card holder/US citizen for the position.  There are many such job postings which state "H-1B Visa holders only need apply" on American technical job boards.  This fact is yet another indication that the H-1B Visa program is being used for technology transfer.  Americans are simply cut out of the entire loop, except when potentially forced to train their replacements.

Fig 1.

Let's examine the WTO, GATS mode 4, known as Movement of Natural Persons by trade.  From Debunking the Myth of Mode 4 and the U.S. H-1B Visa Program
Lori Wallach and Todd Tucker, Public Citizen's Global Trade Watch, March 2006.

Currently, misunderstandings about the H-1B visa system are being exploited by service industry and U.S. government representatives to try to trick other countries involved in negotiations on the World Trade Organization's (WTO) General Agreement on Trade in Services (GATS) into making offers regarding "liberalizing" their countries' service sectors in exchange for promises of new U.S. immigration rights for foreign workers.

Yet for obvious financial interests, Wipro's Badiga says

the H-1B visa program allows Wipro workers to get valuable experience in the States and be more effective at serving customers in the U.S.

Yet adding insult to injury, Billionaire offshore outsourcing Wipro Chairman, Azim Premji :

those [Americans] who complain they are not getting jobs, their jobs are getting displaced, are going to be on the fire list anyway because they were not doing their jobs well enough

Now, how can someone insult Americans from Stanford, Georgia Tech, MIT, the best engineering schools in the world, strive to study at these very US schools, yet claim Americans aren't good enough while he makes billions by offshore outsourcing American jobs?

Here's a quote Dollars and Sense:

Trading in People

Since guestworkers already face such abusive conditions, it is fair to ask how GATS could possibly make it worse for them. GATS is unlikely to change the circumstances of individual guestworkers. However, it worsens the exploitation of guestworkers as a whole in two fundamental ways. First, the draft GATS agreement erodes even the limited legal protections that are available to guestworkers (whether documented or undocumented) today and blocks the evolution of progressive national and international legal instruments to protect migrant workers' rights. Second, by making it easier for employers to hire guestworkers, GATS could greatly increase the number of exploited migrant workers worldwide.

Economist Paul Craig Roberts wrote Economists In Denial;  Blind To Offshoring's Adverse Impact.

Many American software engineers and IT professionals have been forced by jobs offshoring to abandon their professions. The November 6, 2006, issue of Chemical & Engineering News reports that "the percentage of American Chemical Society member chemists in the domestic workforce who did not have full-time jobs as of March of this year was 8.7 percent." There is no reason for Americans to pursue education in science and technology when career opportunities in those fields are declining due to offshoring.

My ultimate question on the H-1B:  how come none in Congress right now, especially Democrats claiming to be supporting the US Middle Class, are sponsoring or co-sponsoring the The Defend the American Dream Act of 2005?  This bill stops some of the more blatant abuses by corporations using the H-1B.  From the statistics, clearly using the H-1B for technology transfer, i.e. the trading of people[jobs] to gain a trade comparative advantage also needs to be addressed.  Why would any Democrat, anywhere even consider raising the H-1B Visa cap with such obvious abuses surrounding this program, plus being used as a technical expertise transfer vehicle which enables the offshore outsourcing of jobs and adds to the United States trade deficit?

Fig 2.

H-1B, a temporary Visa, is not an immigration issue, as so often mistaken.  The H-1B and L-1 are guest worker Visas and clearly due to the above evidence and abuses described, H-1B is also a trade and an offshore outsourcing issue.  Like other global labor arbitrage vehicles, H-1B is clearly a threat to US national security and economic interests.  Like it or not, the WTO sees people as services and it's clear nation-states and multinational corporations wish to trade us like cattle via WTO, GATS mode 4.

Indian Outsourcing Industry Set to Jump 33% to $31.3 billion.

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