|
Once in a great while, our Dear Leader does something half-right. Exhibit A was Operation Warp Speed, where Trump spent a fortune in taxpayer dollars to develop mRNA COVID vaccines, but got nothing back from the immense windfall to drug companies (he hadn’t discovered nationalization yet). He then rained on his own parade by naming RFK Jr. to head HHS, disparage vaccines, and pull funding from the next generation of mRNA vaccines.
Exhibit B is the H-1B visa program, where Trump abruptly imposed a visa fee of $100,000 per imported worker. The program, on the whole, is a travesty. It’s a modern version of international indentured servitude. Trump’s action was impulsive, weird, and theatrically disruptive rather than reformist. He didn’t say whether it was a one-time or annual fee, and reportedly he hasn’t even figured that out yet. Nonetheless, we’ll take it.
Under H-1B, which dates to 1990, large multinational companies, claiming shortages of qualified workers, can get special visas to import low-wage workers from countries such as India, on special five-year visas. During the five years, the worker is basically the property of the company. The worker is not free to take other jobs, which of course undercuts the bargaining power to demand decent treatment and pay. Currently, about 700,000 foreign nationals work in the U.S. on H-1B visas.
In principle, the program requires workers to be paid at prevailing wage levels commensurate with their domestic counterparts. While some are, this is systematically violated, and supply and demand comes into play. If you expand the pool of workers, especially ones from lower-wage countries, the increased labor supply will reduce the prevailing wages and worker bargaining power.
Meanwhile, with AI’s impact on coding and other related business lines, there is no shortage of domestic tech workers. There is merely a shortage of domestic tech workers who will work for Indian wages. According to the Federal Reserve Bank of New York, recent computer science graduates have an unemployment rate of 7.6 percent, more than double the average for all recent college grads. Their median early-career pay is $80,000, and their mid-career pay is $122,000; thus the appeal of H-1B indentured servants who will work for less.
|
