Will Biden Follow in Obama’s Footsteps With H-1B Visa? Labor Advocates Have Concerns

President-elect Joe Biden is pledging to reverse a slew of Trump-era immigration restrictions, which brings up the question of what he will do with the H-1B visa for highly skilled workers. Over the last three decades, it has been a pathway to work in America for several million people, but at the same time corporations have used it to underpay foreign workers, outsource jobs and drive down wages.

Biden’s campaign has said he will try to stop abuse of the visa, but he is also surrounding himself with advisers from big tech, and people in that industry have always urged expanding the program.

This is the backstory of how corporations have misused the visa and the failed attempts at reform.

The story begins when Democrats and Republicans worked together to pass the Immigration Act of 1990. It greatly increased legal immigration, allowing for family reunification, a green card lottery to increase immigrant diversity and the H-1B visa.

At a press conference, then-Rep. Bruce Morrison, D-Connecticut, explained the visa’s purpose.

“This legislation focuses on the need for skilled workers to be brought to the United States for jobs that are not being filled and will not be filled in the near future by American workers,” he said.

The H-1B is a three-year visa, renewable once, available to 85,000 workers a year. There is no official statistic for the total number of people currently on H-1B visas in the United States, but estimates range from around 300,000 to over 500,000.

From the beginning, companies have abused this visa. We’re going to look at three major ways, beginning with how it is sometimes used to replace American workers with underpaid foreign workers.

In a "60 Minutes" story from 1993, reporter Lesley Stahl describes a contracting agreement with a worker from India on an H-1B.

“It tells her she will be assigned to Hewlett-Packard in California,” Stahl says, “that her salary of $250 a month will still be paid back in India and she will receive $1,300 a month for living expenses in the United States. Total that up and it comes to less than $20,000 a year, nowhere near what Hewlett-Packard would have to pay an American.”

Even in 1993, it would have been hard to get by in the Bay Area on double that salary. Later in the segment, Stahl talks with staffing agencies who say that American workers are being undercut by people being paid less on H-1B visas.

This continues to be a problem. Over the years there have been numerous examples of U.S. workers being fired and having their jobs given to people from contracting firms that rely on H-1B visas. In the last decade, U.S. workers have been replaced at companies like Disney, utilities like Southern California Edison and PG&E, and public universities like UCSF

The second major issue labor advocates have with this visa is how it is used to mistreat foreign workers. People who wish to work in the U.S. on an H-1B need a company to sponsor them for the visa, and — if they want to stay on permanently — for a green card. This leverage allows companies to discourage workers from changing jobs and to keep wages low, which they do.

For a story on The World in 2013, I interviewed a worker who was experiencing just this. He didn’t want to use his name for fear of retaliation. He said he was getting paid 20% less than U.S. workers doing the same job.

“I am being paid less, which sucks for me,” the programmer said, “but it also sucks for American developers because I am a threat to them in some ways. I am cheaper.”

It started when he got his job offer. He felt like he had to accept a low rate because they were offering him a visa.

“Maybe it’s just naivete on my part but I definitely think they low-balled me and I was like, ‘OK, yeah sure,’ ” he said.

The third issue with the H-1B is that a majority of the visas aren’t going to truly high-skilled workers like top college graduates and ace programmers.

Instead, firms like IBM and Accenture use the visa to hire people for routine information technology work, such as server maintenance and low-level programming. And international IT contracting companies like Wipro and Infosys use the visa to offshore work, mainly to India. Contracting companies send people on H-1B visas to banks, universities, accounting firms in the U.S. Those workers then serve as liaisons to large teams, mostly in India, who work for much lower pay.

Neeraj Gupta knows how this all works. He has had management positions at Oracle and other tech companies where he says he was instructed to outsource jobs. “I remember sitting in Washington, D.C. in 2008 with a proposal that was going to outsource 300 American jobs,” he said.

In a 2016 interview with KQED, Gupta, who came to America on an H-1B visa himself, said the H-1B visa program needed to be changed so it can’t be used as an outsourcing tool. “I do believe there is an underutilized workforce here in the U.S.,” he said. “Kids who could get much more meaningful jobs in the technology industry.”

Companies get so many H-1B visas for outsourcing and lower-skilled IT jobs that there aren’t enough visas left for truly high-skilled workers. The visas are distributed through a lottery system, meaning lower-skilled workers have the same chance as graduates from top U.S. colleges to get one. And there have been so many applicants in recent years, only one in three people receive a visa. That means many people who come to the U.S. and study at the best universities end up having to leave and take their talents elsewhere.

For three decades, politicians have tried and failed to address these three issues. Suggested fixes include: increasing the enforcement of the wage requirement to make sure companies are paying people on H-1Bs as much as U.S. workers; limiting the amount of time H-1B workers may work as off-site contractors to dissuade offshoring operations; and requiring more proof that companies first tried to hire an American for the job.

Numerous bills proposed over the years have included some of these changes, but no bill has garnered enough support to become law. Labor advocates say that’s because Democrats and Republicans are both getting lobbied by corporations that want to maintain the lax enforcement and loopholes in the program.

The abuses of the visa have created unlikely coalitions between lawmakers. On the one hand are anti-immigration Republicans like Sen. Chuck Grassley and former Sen. Jeff Sessions, and on the other are pro-labor Democrats like Sens. Dick Durbin and Bernie Sanders.

Back in 2007, Sanders put forward an H-1B reform bill that had support from Republicans like Grassley. When he introduced it, Sanders pointed out the hypocrisy of American companies laying off workers and simultaneously calling for increased numbers of H-1B visas.

“You can’t lay off large numbers of American workers and then tell us you desperately need workers, professionals from abroad,” he said.

CEOs in the tech industry have consistently opposed efforts to tighten the rules. They say there is a shortage of skilled workers in the U.S. and that the country needs more H-1B workers.

Here is how Eric Schmidt, former CEO of Google and adviser to President Obama, put it: “I spent the last 20 years announcing that the single stupidest policy in entire America was the limit on H1B visas.”

Labor advocates say the programmer shortage is a myth. Their strongest evidence is that programmer salaries have been stagnant for decades.

When there is a labor shortage, wages should rise as companies compete for talent. But that is not happening for programmers. Their wages are relatively stagnant. It’s similar to the story for most workers in America since the 1980s. There is no concrete evidence that companies can not find high-skilled workers in the U.S.

Ron Hira is a political science professor at Howard University who has been following the H-1B issue for two decades. He says pro-labor Democrats have been continually blocked by those in the party who are being lobbied by people from big tech.

Hira says the Obama administration was particularly influenced by advisers from big tech, including Schmidt.

“The Obama administration really kowtowed to what the tech industry wanted,” Hira said.

After Obama failed to close loopholes in the H-1B program, Trump made reform of the visa a big talking point, and the issue became wrapped up in racist, anti-immigrant rhetoric of his administration. But in four years the administration did not succeed in getting any major reform legislation passed.

Just days before the election, however, the Department of Labor and the Department of Homeland Security proposed new rules to shore up wage requirements and limit contracting work. Some immigration analysts said the rules failed to deliver fundamental reform of the H-1B program. Despite the xenophobic tenor of the administration and the rushed implementation, Hira and other labor advocates supported many of the proposed changes.

That brings us to Biden. Labor advocates worry that he, like Obama, will be heavily influenced by tech executives and venture capitalists who donated tens of millions to his campaign, and are informally advising him.

“There are some good people on the transition teams and also good advising on the economic policy side of things,” Hira said. “Let's hope that their voices get heard and don’t get drowned out by these corporate interests.”

The Biden-Harris transition website includes a commitment to address the exploitation that hurts both U.S. and foreign skilled workers, but also a pledge to eventually expand the program. It’s a pitch to both workers and big tech.

Any lasting change would require legislation, which would mean getting a majority of members in the House and Senate on board. H-1B reform has had bipartisan support in the past, but today’s political climate is far more polarized. Without support for a bill, a lasting overhaul of the H-1B visa program will probably remain in limbo, where it has been for almost three decades.