H-1B Visas Cost Americans Jobs And Suppress Wages, Economists Find

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Rachel Stoltzfoos Staff Reporter
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The H-1B visa program costs American workers jobs and suppresses their wages, while substantially increasing profit margins for tech firms, economists concluded in a study published in February.

If tech companies were unable to import temporary foreign workers, employment in the tech industry for American workers would have been up to 10.8 percent higher in 2001, the study found. And wages would have gone up by as much as 5.1 percent. (RELATED: Qualcomm Lays Off 4500 Workers While Demanding More H-1bs)

Economists at the University of Michigan and the University of California, San Diego, reached the conclusion after analyzing the effect of the H-1B program on the U.S. job market from 1994 to 2001. The analysis includes both positive and negative effects of immigration, including wages, employment, production and its effect on corporate profits.

The winners, according to the study, are undoubtedly firms in the IT sector, which earned “substantially higher profits” because of the visa program, and were able to raise output of IT goods by up to 2.5 percent. Consumers also benefited to some degree because of the lower prices of goods.

The study raises problem areas in the favorite talking points of H-1b lobbyists who argue businesses need to import relatively cheap foreign workers, because of a shortage of qualified workers in the U.S. job market. Critics of the program, however, have argued for years it’s detrimental to U.S. workers and is little more than a profit-growing scheme. (RELATED: Laid Off Disney Worker Heads To The Hill To Fight H-1b Myths)

“Such findings could make the industry’s fight more difficult,” The Wall Street Journal notes in a write-up of the study.

Businesses including Disney, Southern California Edison, Fossil Group and Catalina Marketing have literally replaced hundreds of American workers with people imported from abroad, and then forced the American workers to train their replacements in recent years. (RELATED: Disney Blacklists Displaced American Workers)

The H-1B program could be on the chopping block, as President Donald Trump made a substantial reform of the program a substantial part of his immigration platform. He is reportedly preparing a draft executive order aimed at revamping the program to ensure tech companies make a good faith effort to hire American workers before hiring foreign workers.

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