The Myth of H-1B Job Creation
A Commentary By Michelle Malkin
Friday, November 13, 2015Every day brings new headlines, ignored by the Washington press corps, of U.S. workers losing their livelihoods to cheap H1-B visa replacements.
Just this week, Computerworld reported: "Fury and fear in Ohio as IT jobs go to India."
Yet, it remains an article of faith among Big Business flacks and Beltway hacks that H-1B not only protects American jobs, but also fuels miraculous job growth.
The myths are recycled and regurgitated by the likes of Sen. Orrin Hatch, R-Utah, who claims that "foreign-born STEM workers complement the American workforce, they don't take American jobs."
Bill Gates, citing the National Foundation for American Policy, which is run by one-man Beltway advocacy research shop operative Stuart Anderson, testified before Congress that "a recent study shows for every H-1B holder that technology companies hire, five additional jobs are created around that person."
Citing another NFAP study by economics professor Madeline Zavodny of Agnes Scott College, Facebook CEO Mark Zuckerberg's FWD.us and the U.S. Chamber of Commerce asserted: "2.62 MORE JOBS are created for U.S.-born workers for each foreign-born worker in the U.S. with a U.S. STEM graduate degree."
But even the reliably pro-immigration expansionist Wall Street Journal had to call out Bill Gates on his misleading testimony to Congress regarding oft-cited NFAP job-creation figures. First off, the data set was confined to S&P 500 technology companies, which "excludes the leading users" of H-1B visas -- offshore outsourcing companies from India such as Infosys, Wipro and Tata.
Moreover, Carl Bialik, the newspaper's "Numbers Guy," reported that the study Gates cited to claim amazing H-1B job generation "shows nothing of the kind. Instead, it finds a positive correlation between these visas and job growth. These visas could be an indicator of broader hiring at the company, rather than the cause."
University of California, Davis professor Norm Matloff explained that Gates' false conclusion is a common analytical error known as Simpson's Paradox, "in which the relation between two variables is very misleading, due to their mutual relation to a third variable."
NFAP's Zavodny study was published by the American Enterprise Institute, sponsored by open-borders billionaire Michael Bloomberg's Partnership for a New American Economy and touted by the open-borders U.S. Chamber of Commerce and the pro-H-1B FWD.us.
Zavodny's study initially examined data from the years 2000 to 2010. She hypothesized that states with more foreign-born workers would have higher rates of employment among native-born Americans. Initially, she was unable to find a significant effect of foreign-born workers on U.S. jobs.
So what changed? In correspondence with John Miano, co-author of our new book "Sold Out" on the foreign guest-worker racket, and I, Zavodny revealed that when she showed her initial results to the study sponsor, the backers came up with the idea of discarding the last three years of data -- ostensibly to eliminate the effects of the economic recession -- and trying again.
Voila! After re-crunching the numbers at the sponsor's request, Zavodny found the effect the study sponsor was hoping to find.
Standard research practice is to formulate a research hypothesis and specify a study sample before the analysis has been completed. The practice of "data dredging" -- that is, tweaking the sample data until one gets rid of "anomalous results" -- is frowned upon.
To her credit, Zavodny provided her data to a curious software developer in Silicon Valley who was interested in immigration policy. The blogger, R. Davis, discovered a number of serious methodological deficiencies in Zavodny's work.
Most importantly, he documented that Zavodny's results are highly sensitive to the date range selected. When she studied the years 2000-2007, she found 100 foreign-born workers in STEM fields with advanced degrees from U.S. universities were associated with 262 additional jobs for native-born Americans. But change the date range a little bit to 2002-2008, and the exact same regression model shows the destruction of 110 jobs for natives, according to the independent researcher.
Also, Zavodny's "262 additional jobs" factoid deals not with H-1B visa holders but with foreign-born workers in so-called STEM fields (science, technology, engineering and math) who have advanced degrees (that is, a master's or doctorate) from U.S. universities. About 45 percent of H-1B visa holders do not have advanced degrees (as noted above), let alone advanced degrees from U.S. universities.
According to public policy professor Ron Hira of Howard University, only 1 in 206 of H-1B workers at offshore outsourcing giant Infosys holds an advanced degree from a U.S. university. Even fewer of Tata Consultancy Services H-1B workers do -- just 1 in 222. So there is almost no overlap between the highly educated workers in Zavodny's "262 additional jobs" analysis and the mostly entry-level workers who actually come to the U.S. on H-1B visas.
While industry lobbyists have to employ dubious and convoluted means to show H-1B creates jobs, it is brutally simple to show that H-1B workers take American jobs. Just ask the folks who trained their H-1B replacements at Disney, Southern California Edison, Toys R Us, Fossil and countless other companies across the nation.
This column is adapted from Malkin and Miano's new book, How High-Tech Billionaires & Bipartisan Beltway Crapweasels Are Screwing America's Best & Brightest Workers (Mercury Ink/Simon & Schuster).
Michelle Malkin is author of the new book "Who Built That: Awe-Inspiring Stories of American Tinkerpreneurs." Her email address is email@example.com.
Immigration Policy is Being Used to Pink-Slip American Workers
By Jon Feere
TheHill.com, November 11, 2015
Excerpt: Immigration policy impacts Americans of all skillsets and education levels. It is often incorrectly assumed that our immigration system only brings in low-skilled laborers who compete with blue collar Americans in an increasingly difficult job market. Many politicians, whose jobs are not threated by foreign labor, often welcome mass immigration; in their minds, high levels of immigration means cheaper landscapers, housekeepers and au pairs. Elites in the halls of Congress and in many of the nation's newsrooms simply don't care about the impact low-skilled immigration has on American workers.
But some are starting to take notice about the impact of our nation's immigration policy on high-skilled Americans who work in the STEM (science, technology, engineering and mathematics) fields.
THERE IS NO GREATER IMPACT ON KEEPING WAGES DEPRESSED THAN THE
DEMOCRAT PARTY'S CONSPIRACY OF OPEN BORDERS, ENDLESS HORDES OF
ILLEGALS JUMPING OUR BORDERS AND JOBS, AND THE ASSAULT ON E-VERIFY!
Obama’s low-wage “recovery”
31 January 2014President Obama’s State of the Union address this week coincided with the release of several year-end profit reports. Profits for the firms listed on the S&P 500 stock market index jumped 11 percent in 2013, in large part because of declining wages and the increased exploitation of American workers.
In his national address Tuesday night, Obama acknowledged that “corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened.” The “cold, hard fact,” he added, “is that even in the midst of recovery, too many Americans are working more than ever just to get by—let alone get ahead.”
As is his wont, the president posed as an innocent bystander, suggesting that some sections of the population had unfortunately missed out on “four years of economic growth.” In fact, the explosion of social inequality the president paid lip service to is the product of quite deliberate policies spearheaded by his administration.
Obama’s principal task on coming to office was to initiate the largest transfer of wealth—from the working class to the corporate and financial elite—in US history. This began with the bailout of the financial system. It continued through the 2009 restructuring of GM and Chrysler, premised on the halving of wages for new hires and a shift in the burden of health care expenses from employers to workers.
Billions have been slashed from social programs, including the cut-off of long-term unemployment benefits and cuts in food stamps, and the administration has backed the bankruptcy of Detroit, which is seen as a national model for forcing through pension cuts and other measures.
The surge in corporate profits is one consequence of these policies. According to Bloomberg, US corporations’ after-tax profits have grown by more than 170 percent under Obama, more than any president since World War II. They have reached their highest level relative to the size of the economy since the government began keeping records in 1947. Profits are more than twice as high as their peak during the Reagan administration, which, beginning with the smashing of the PATCO air traffic controllers strike in 1981, initiated a class war against workers.
Since Reagan, the American ruling class has waged an unrelenting campaign, utilizing the services of the trade unions, which abandoned any defense of the working class. Deindustrialization and financialization has been accompanied by the destruction of millions of jobs and the decimation of entire industries. To the extent that any jobs are created, it is on the basis of poverty level wages.
Labor’s share of the Gross Domestic Product has now fallen to 57 percent, the lowest portion of the country’s output since 1950. Since the recession officially ended in January 2009, wages for auto workers have fallen by 10 percent in real terms, and for manufacturing as a whole they have fallen by 2.4 percent.
Although the global economic crisis resulted in losses or slower profits in Europe, China and the so-called emerging markets, multinational manufacturing firms reaped huge profits in the US. Aircraft manufacturer Boeing saw its profits rise 18 percent to $4.6 billion last year, while Ford saw profits rise 26 percent to $7.2 billion. Caterpillar beat analyst expectations with a 44 percent jump in fourth quarter profits, due primarily to “aggressive cost-cutting,” i.e., mass layoffs and wage cuts, which its CEO promised would accelerate in 2014.
US corporations are holding on to a record $1.5 trillion in cash reserves, according to Moody’s credit rating agency. Rather than investing in new plants or hiring, let alone raising wages and benefits, corporations are chiefly spending this stockpile of cash on dividend payouts to their investors and stock buybacks to drive up share values, like Caterpillar’s $10 billion program.
Talk of a manufacturing “renaissance” is largely a fraud. Only 568,000 manufacturing positions have been added since January 2010, a small fraction of the nearly six million lost between 2000 and 2009, according to a New York Times column published last week by Obama’s former “car czar,” Steven Rattner.
Employers that have moved production to the US have been lured through wage reductions and massive tax cuts, like the $280,000 a job credit given to Volkswagen for its Chattanooga, Tennessee plant. Pointing to the German auto company, Rattner noted that it “moved production from a high-wage country (Germany) to a low-wage country (the United States).”
As Obama boasted in his address, “for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.” The president added that, “over half of big manufacturers say they’re thinking of in-sourcing jobs from abroad.”
As a model of success, the president pointed to Detroit Manufacturing Systems, a business that hires welfare recipients and the long-term unemployed to produce components for Ford. A Washington Post article noted that the workers, who are members of the United Auto Workers union, are hired “at far lower wages than many had been earning in their previous jobs.”
The Obama administration and the ruling class have counted on the UAW, the International Association of Machinists (IAM) and other trade unions, whose executives and their financial advisors see “in-sourcing” as a growth strategy. Manufacturers making some of the largest profits have relied on the treachery of the unions to impose wage-cutting contracts and suppress struggles when they did erupt.
This included the UAW’s collaboration in the restructuring of the auto industry, which reduced wages of new hires to the equivalent, in real terms, of what was earned by workers in 1914, when Henry Ford first established the $5 day. The UAW was rewarded with corporate shares and millions more in dues money from newly hired workers, who, on top of suffering the indignation of poverty wages, are soon to be hit with a 25 percent dues increase.
Most recently at Boeing, the IAM rammed through a contract extension originally defeated by rank-and-file workers that allowed the jet manufacturer to end company paid pensions, won in 1947, and ban strikes for the next decade.
The experience of the Obama administration, which has overseen the greatest explosion of social inequality in US history, while accelerating the attack on democratic rights and war-mongering policies of his Republican predecessor, has provoked widespread disgust and anger. The president’s election-year rhetoric about “equality” and his proposals for token “reforms” is largely falling on deaf ears.
The historic reversal in living standards for the working class in the United States and around the world is producing enormous levels of social anger, which the capitalist parties, the trade unions and their apologists will not be able to contain. It is only a matter of time for these tensions to erupt into massive struggles. When they do, however, they must be guided by a new leadership and political program, based on the international unity of the working class, its political independence from the corporate-backed parties and the fight to replace the capitalist profit system with socialism, that is genuine social equality.