New evidence of widespread wage theft in the H-1B visa program

Thousands of skilled migrants with H-1B visas working as subcontractors at well-known corporations like Disney, FedEx, Google, and others appear to have been underpaid by at least $95 million. Victims include not only the H-1B workers but also the U.S. workers who are either displaced or whose wages and working conditions degrade when employers are allowed to underpay skilled migrant workers with impunity. The workers in question were employed by HCL Technologies, an India-based IT staffing firm that earned$11 billion in revenue last year. HCL profits by placing workers on temporary H-1B work visas at many top companies. The H-1B statute requires that employers pay their H-1B workers no less than the actual wage paid to their similarly employed U.S. workers. But EPI analysis of an internal HCL document, released as part of a whistleblower lawsuit against the firm, shows that large-scale illegal underpayment of H-1B workers is a core part of the firm's competitive strategy.The Department of Labor should launch a sweeping investigation into whether companies are systematically underpaying H-1B workers in violation of the law. If violations are found, penalties should be imposed that are significant enough to deter all H-1B employers from such behavior. DOL should also close the outsourcing loophole that supports the outsourcing business model by requiring both direct employers like HCL and the secondary employers that use H-1B staffing firms to attest that they will comply with H-1B wage rules. DOL and the Department of Homeland Security (DHS) should take additional measures to ensure the H-1B program achieves its purpose of filling genuine labor market gaps. Such measures include raising minimum wages to realistic market levels, allocating H-1B visas to workers with the highest skills and wages, and adopting a compliance system that ensures program accountability and integrity. Finally, the Department of Justice's (DOJ) Civil Division, in conjunction with DOL and DHS, should vigorously prosecute visa fraud under the False Claims Act, consistent with a recent federal court decision applying the False Claims Act to H-1B visa fraud

Printing industry offshoring: Perspectives from U.S. based printing

Offshoring and offshore outsourcing, the movement of work and tasks to low-cost countries, has been increasing in scale and scope. Offshoring in the manufacturing sector has been an ongoing phenomenon for more than forty years. More recently, examples of offshoring in services industries such as software, once considered non-tradeable and therefore immune to offshoring, have emerged. The concurrent effects of very rapid growth of the Indian and Chinese economies and dramatically lower international cross-border transaction costs have the potential to change the structure of many industries. Some have called this as historic an economic transformation as the Industrial Revolution (Blinder, 2006). Offshoring has already transformed a number of industries. On the manufacturing side, in response to pressures from foreign competitors, U.S. semiconductor firms were able to take advantage of labor in low-cost countries by modularizing their value chains (Sturgeon, 2006). By modularizing, they could isolate pieces of the value chain and site them in the most efficient geographic locations. Very labor-intensive tasks such as assembly were first moved offshore, and later foundries were moved to more efficient locations, while high-level design was kept closer to customers (Brown & Linden, 2005). Similarly the U.S. automotive industry has been able to improve its competitive position by moving some of its labor-intensive production to Mexico to lower its costs. On the services side, certain industries are being transformed very rapidly. In a span of about three years, the American IT services industry has adopted a “global delivery model,” in which customers expect bids on projects to have blended rates, including both on-site and offshore labor components. These projects do not reflect a simple division of labor, where the work completed on-site is high-skill and the offshore work is low-skill. Instead, major companies are creating product-specific centers in low-cost countries that will serve customers throughout the world. For example, IBM has announced that Bangalore will be the global home for its Service Oriented Architecture (SOA), a strategic business segment it expects will grow rapidly over the next decade (Global News Wire, 2006). The printing industry has characteristics similar to both manufacturing and services industries. Like manufacturers, printers produce tangible goods, but like services providers, the products delivered are often highly customized, requiring co-production by customer and printer. As a result, increased international cross-border trade, especially with China and India, will affect the printing industry in distinctive ways. The goal of this paper is to better understand how the offshoring phenomenon is playing out in the printing industry. Because of the high number of small firms in the printing industry and thus the lack of public data, and because of the complex nature of the industry itself, there is much to be understood about how offshoring is affecting U.S. printers. This problem is magnified for the lack of data on service offshoring (Sturgeon, 2006). Printers and their suppliers are keenly interested in how globalization and offshoring are impacting their industry. The fact that China and India have emerged as market sources as well as competitors has been a frequent topic in trade publications and industry conferences. In this paper we will offer a number of hypotheses, review descriptive survey data on the industry, test the hypotheses with this data, and expand these quantitative findings with interview data