Economy, Regs, & Taxes

A Bipartisan Betrayal of American IT Workers

Arnold Ahlert · Feb. 11, 2016

Sen. Richard Blumenthal (D-CT) is belatedly discovering there are worse things than American IT workers replaced by foreign counterparts they were obligated to train. He has sent a letter to the Justice Department demanding an investigation of Eversource Energy (formerly Northeast Utilities), a state utility agency that not only fired those workers, but included a clause in their severance package that stated the following: “Employee agrees that he/she shall make no statements to anyone, spoken or written, that would tend to disparage or discredit the Company or any of the Company’s officers, directors, employees, or agents.”

Blumenthal claims he is “outraged” by the firing of American IT workers, characterizing the effort as “shocking.” In his letter to Attorney General Loretta Lynch, he noted there were regulations governing programs like H-1B visas that ostensibly require companies “to attest that they offered the job to qualified American applicants and sought to avoid the displacement of American workers.” He alleges Evergreen’s coercive efforts may have violated the law.

Evergreen uses the offshore India-based IT firms Infosys and Tata Consultancy Services to procure foreign workers. They, along with companies such as Cognizant, IBM, Microsoft, Amazon, Intel, Google and Oracle have a vested interest in not only maintaining that supply, but convincing Americans it is a necessary evil due to a shortage of qualified American workers.

That claim was eviscerated in 2014 by Michael S. Teitelbaum, senior research associate with the Labor and Worklife Program at Harvard Law School. “A compelling body of research is now available, from many leading academic researchers and from respected research organizations such as the National Bureau of Economic Research, the RAND Corporation, and the Urban Institute,” he wrote. “No one has been able to find any evidence indicating current widespread labor market shortages or hiring difficulties in science and engineering occupations that require bachelors degrees or higher. … All have concluded that U.S. higher education produces far more science and engineering graduates annually than there are S&E job openings — the only disagreement is whether it is 100 percent or 200 percent more.”

Unfortunately, a ruling class with a vested interest in promoting the opposite narrative prevails. When 10 U.S. senators, including Blumenthal, asked the Departments of Justice and Labor last April to conduct an investigation into the use of H-1B visas by Infosys and Tata “to replace large numbers of American workers” at Southern California Edison (SCE) and other entities, the effort went exactly nowhere. A spokesman for Labor insisted both companies “were found to have only hired H-1B exempt workers,” and thus “the displacement and recruitment provisions do not apply to any of the H-1B applications examined and no violations were found.” Yet as Computerworld magazine explains, Labor Department requirements for companies that rely heavily on H-1B visas can get around provisions such as a $60,000 per year wage threshold, explaining that “the lowest prevailing wage for an entry-level systems analyst in central Connecticut is $68,000.”

Blumenthal also sent a letter to Evergreen CEO Thomas May calling the non-disparagement severance provision “an effective gag order” that kept workers from “speaking openly about their experiences, and further smacks of intimidation and maltreatment of your workforce.”

Perhaps Blumenthal might speak openly about his own efforts in undermining American IT workers. He is a co-sponsor, along with Utah Republican Orrin Hatch, of the I-Squared Act that would raise the cap on H-1B workers from 65,000 to as high as 195,000. That effort was described by the 200,000-member engineering association IEEE-USA as one that would “help destroy” the American IT workforce. Hatch espoused the ruling class narrative, insisting “America will face a shortage of more than 220,000 workers with science, technology, engineering and mathematics degrees by 2018.”

That statement is, quite simply, a bald-faced lie. As a 2013 report by the Economic Policy Institute revealed, “U.S. colleges graduate 50 percent more computer science majors than are able to find a job in IT.” They further noted that high-skill “guest workers,” defined as those possessing at least a college degree, comprised 66% of the 166,000 new college-educated IT job-holders under the age of 30, a reality that is discouraging American college graduates from entering the field.

So why does the myth persist? “Because labor markets in science and engineering differ greatly across fields, industries, and time periods, it is easy to cherry-pick specific specialties that really are in short supply, at least in specific years and locations,” Teitelbaum explains. He also notes that “surprisingly high unemployment rates prevail for recent graduates even in fields with alleged serious ‘shortages’ such as engineering (7.0 percent), computer science (7.8 percent) and information systems (11.7 percent).”

Some senators have noticed. Last November, Chuck Grassley (R-IA) and Dick Durbin (D-IL) introduced the H-1B Visa Reform Act of 2015, that Blumenthal co-sponsored, along with Sherrod Brown (D-OH) and Bill Nelson (D-FL). The bill ostensibly requires American companies “to first make a good faith effort to recruit American workers” prior to hiring foreigners. According to the govtrack.us website, which tracks the progress of legislation, the bill was assigned to a congressional committee that will consider it before passing it on to the House and Senate for a vote. In a sobering prediction, the website put its odds of actually being enacted at 2%.

In other words, this is likely an election year gambit designed to bamboozle the American public.

Some IT workers are fighting back. Three former Disney employees, who suffered the indignity of training their replacements as part of that company’s severance package, have filed lawsuits in federal court. They claim Disney and two global consulting companies, HCL and Cognizant, “colluded to break the law” because they knew American workers would be replaced by their foreign counterparts. Another 30 of the 250 IT workers Disney replaced have lodged a complaint with the Equal Employment Opportunity Commission alleging discrimination — because they are American citizens. Tata is also facing a lawsuit filed by an American IT worker who alleges that because 95% of the company’s 14,000-person U.S. workforce hails from South Asia, mostly India, the company has engaged in intentional favoritism that constitutes discrimination.

Regardless, Computerworld’s Patrick Thibodeau reveals the real cost of what has already occurred. “Former employees at Disney, Edison and Eversource tell of financial strains, tapped retirement funds and an inability to find a job, or to find one that pays close to what they once made,” he writes. And it’s not likely to get better, due to a Democrat Party that depends on expanded dependency to increase it base, or a GOP establishment determined to accommodate their business allies. Looking toward the 2016 election, it behooves American voters to dispose of feckless politicians who view national sovereignty and putting Americans first as a bug, not a feature, in our system of governance.

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