L-1 Visa: New Tool To Dispossess Americans

Date: Tuesday, March 25, 2003 2:45 PM

H-1B and JOB DESTRUCTION NEWSLETTER

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http://www.vdare.com/roberts/l1_visa.htm

March 11, 2003

The L-1 Visa: New Tool To Dispossess Americans

By Paul Craig Roberts

U.S. corporations no longer have to outsource your high-tech or
information technology (IT) job to China or India. They just bring your
replacement here on an L-1 visa.

L-1 visas get around the legal technicalities that Congress placed on
the H-1B visa program. Employers are not supposed to use H-1B visas to
bring in foreigners to displace U.S. employees or in order to cut costs
by paying low wages. H-1B visas are supposed to be utilized only when
there is a shortage of particular skills, and the visa holder is
supposed to be paid prevailing U.S. wages.

Of course, as any economist can tell you, a shortage is always at a
price. H-1B visas were used to keep employers from bidding up U.S.
wages and calling forth a larger supply of the needed skills. Instead
of allowing the price system to work in the U.S., H-1B visas simply
enlarged the U.S. labor supply to include the entire world. Many
American students who invested in obtaining software and IT skills
graduated only to discover that their careers had been given to
foreigners or outsourced abroad.

Several hundred thousand educated and formerly high income Americans
were displaced by the H-1B program. Complaints were rising, but before
the scandal could break, L-1 visas took over.

L-1 visas were created to facilitate intracompany transfers within
multinational corporations. Corporations use them to hire Asians at
one-third the salary of their U.S. employees. Then the Asians are
transferred to the U.S. where the downsized U.S. employees spend their
last employed months training their replacements.

Loopholes in the L-1 visa law or negligence in its enforcement allow
U.S. corporations to contract with foreign companies to supply them
with IT workers. This keeps the foreign workers off the U.S.
corporations payrolls and permits the corporations to confine their
dealings to the foreign consulting firms that provide the replacements
for U.S. employees. This allows U.S. corporations to claim that they
are paying prevailing wages to all employees.

According to Business Week, there are now about 350,000 foreigners on
L-1 visas who have displaced U.S. IT and high-tech employees. Put this
number together with the number of H-1B visas, and Americans have lost
750,000 high income jobs in the last few years. [March 6, 2003, A
Mainframe-Size Visa Loophole]

L-1 visas allow employees to remain in the U.S. for seven years. The
program creates an ever greater source of foreign IT workers who, on
their return to their homelands are productively employed in training
their fellow citizens in the business cultures of blue-chip U.S.
companies.

The L-1 visa program is especially attractive to U.S. corporations,
because it allows them to tap low-paid skilled labor without having to
construct facilities abroad. Instead of moving to China and India in
order to hire engineers and scientists at a small fraction of U.S.
prevailing wages, the companies can simply import the labor.

As a significant proportion of foreign engineers are U.S. trained or
trained by their fellows with U.S. educations, the supply is sufficient
to replace every American engineer and IT employee with low-cost
foreigners.

Free traders, who ceased to think two centuries ago, will accept the
displacement of U.S. employees with equanimity as the beneficial
workings of free trade. The bonuses of cost-cutting corporate CEOs will
soar with their companies profits, while the living standards of
native-born Americans will fall. Increasingly, Americans will find that
even domestically produced goods and services are supplied by
foreigners. Americans will become an occupied underclass in their own
country.

No other country in the world, with the partial exception of the U.K.,
dispossesses its own citizens in this way. Will a people who feel
betrayed by their own government and corporations support the foreign
adventures of American empire, or will American identity dissipate,
dissolving the country?

Paul Craig Roberts is the author with Lawrence M. Stratton of The
Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are
Trampling the Constitution in the Name of Justice. Click here for Peter
Brimelows Forbes Magazine interview with Roberts about the recent
epidemic of prosecutorial misconduct.

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