Graduating seniors who were told they should study technology fields, such as computers, are receiving a nasty surprise as they discover the jobs simply are not out there and that they face competition from foreign workers admitted under a variety of immigration programs, most conspicuously, the notorious H-1B visa program.

The very purpose of the H-1B visa is to replace American workers with cheap, foreign labor.  No other description of H-1B fits what Congress has actually enacted. In theory, the H-1B program requires employers to pay the foreign workers at least the prevailing wage for the occupation and location, but in practice, the lobbyist-written H-1B statutes allow the employer to determine the prevailing wage. 

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The Department of Labor is effectively required to approve all employer claims within seven days as long as the form is filled out correctly.  Under this “trust me” system, the claimed prevailing wage is about the bottom 1/6th of U.S. wages in most cases and is rarely at or above the actual prevailing wage. 

To make this system for low wages perfect, the Department of Labor is also prohibited from reviewing employer prevailing wage claims after they have been approved. Furthermore, the Department of Labor is prohibited from acting on information provided by DHS received as part of the visa application process.  Financial analysts boast that U.S. workers are paid 25%–30% more than their H-1B counterparts.

The H-1B program has an even greater effect than direct competition with U.S. workers for jobs. The H-1B program is largely responsible for creating the business of offshoring technology jobs to other countries. 

If you look at any list of the top users of H-1B visas, you will find generally unfamiliar names in the U.S., companies such as Cognizant, Infosys, Tata, HCL, Wipro, whose business is to move technology jobs offshore. These have been joined by more familiar names such as IBM and Accenture, that have gotten into the business of moving jobs out of America as well. These companies are known as “H-1B bodyshops” in the industry because they supply bodies without providing any particular technical skill. The offshoring industry is the largest user of H-1B visas and only survives because of visas.

The way the system works is the employer in the United States hires an H-1B bodyshop to supply labor. The bodyshop brings in a transition team composed of H-1B workers to study what the American workers do so that they can be replaced by foreign workers. The bodyshops often use video cameras to record the activities of the Americans. The Americans losing their jobs dig their own grave by training their replacements as a condition of receiving a severance package when they leave. 

After the transition process is complete, most of the work moves overseas, typically to India, while the bodyshop leaves behind a relatively small number of H-1B workers on site to provide direct customer support. The transition team moves on to pillage another company. In this model one H-1B worker in the U.S. typically represents about eight or more jobs moved out of the U.S.

This business of offshoring jobs took off around 1994, just three years after the H-1B program started when AIG in Livingston New Jersey and Sea Land Elizabeth New Jersey were among the first companies to replace hundreds of Americans using the H-1B program and offshoring. Also in 1994, Dun & Bradstreet founded Cognizant to supply offshoring services to itself. It later spun off Cognizant, which is now one of the largest users of H-1B visas.

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No company was punished for replacing Americans because of a loophole that existed in the law. When AIG brought in Syntel to replace hundreds of Americans with H-1B workers, AIG could say it did not hire H-1B workers. Syntel could say it did not fire any Americans. 

Congress closed that outsourcing loophole in 1998 by making it explicitly legal to replace Americans with H-1B workers. H-1B’s goal of replacing Americans with cheap, foreign workers is now explicitly stated in statute. When a company like Disney replaces hundreds of Americans with low paid H-1B workers, that is not abuse. That is H-1B working as Congress intended—and no company has ever been punished for doing so. When politicians say they support the H-1B program, they are also saying that they support replacing American workers with foreign workers.

John Miano is an attorney who specializes in violations of H-1B visa rules