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H-1B Foreign Workers Are Destroying Merrimack Valley Economy

By: Duncan Burns – May, 2016

IBM2Right now, when it comes to labor issues, all eyes are currently on The Verizon Strike, which affects many municipalities across The Merrimack Valley. Many will question the union’s motives, as the tactic of going on strike is usually in order to strong-arm a company into submission and usually with the help of some political clout.

This time it is truly different.

There is an insidious movement in our country, one that is causing extreme harm to our fellow American, unionized or not. It is the precipitous rise of the H-1B Visa worker, and they are destroying the American workforce, and it is happening right here in The Merrimack Valley.

The H-1B program is facilitated by The Department of Homeland Security and falls under The U.S. Citizen & Immigration Services. The requirements are as follows: a Bachelor’s degree or higher, the degree must be common for the position in the industry, the employer normally requires a degree for the position, and the nature of the job is so complex that the position usually is associated with acquiring a Bachelor’s degree or higher. The degree must also be related to the position applied for and evidence must be submitted demonstrating such. However, an H-1B applicant can be approved without a degree if the applicant has an unrestricted state license, registration, or certification, which would authorize the applicant to immediately engage in the specialty occupation.

Where do we look for this war on the American Worker? We go to our own backyard in Littleton, Massachusetts where International Business Machines (IBM) has a sizable campus based there. ibm6IBM has a fairly large employment footprint in Massachusetts in general, however, “Big Blue” as it was once called, is not the IBM of old where getting a job secured you with decent pay and great benefits, a place one could retire from. Those days are over. IBM, like a lot of Corporate America, is going through a secular change, a change that has finally caught up with those striking Verizon workers. That change is taking talented and hardworking Americans, and replacing them with H-1B Visa workers, or off-shoring and outsourcing American jobs entirely.

IBM was the fourth largest user of the H-1B program in the country in 2015, but has since moved to the number three position. From 2013 to 2015, IBM has filed 27,398 applications for H-1B Visas, third overall during said time period. Why is this important some may ask? A lot of companies do it, right?

They do, only IBM is treated special, and because of that special treatment, we simply do not know how many Americans have lost their job to H-1B Visa workers. Specifically, for Massachusetts, there was a 45% increase in certified H-1B workers from 2015 to April 2016; over 500 H-1B workers are now working for IBM alone in Massachusetts. In Littleton, that percent increased 68% to over 100 H-1B workers just at the Littleton campus.

Why does this matter?

The mainstream media has been silent on this issue, but IBM has been in the process of firing, in IBM terms it’s called a “Resource Action” (RA), tens-of-thousands of American Workers here in the United States.

ibm5We don’t know the exact number because part of the special treatment IBM is receiving is that they are not being forced to divulge how many American Workers they fired, as IBM is treating it as a trade secret.

Estimates have been speculated to as low as 14,000 to a high of 33,000 American, U.S. based workers. Even on the low end, one would think that with this many in a mass firing event, it would trigger The WARN Act reporting requirements. It has not, at least not in Massachusetts.

Why are these numbers important in regard to firings of American workers? If we look at the low number of 14,000 being fired, IBM for this year has added 15,275 H-1B workers. These H-1B workers have conceivably passed the amount of American workers IBM has fired, and the correlation being American workers have simply been replaced by foreign nationals to do the very same jobs Americans were recently doing. This is probably why there is a corporate media blackout of the mass firings going on within IBM. The sheer number of Americans losing their jobs based in the United States at the hands of a foreign nationals is certainly a media highlight no company wants to admit too.

What is happening at IBM? IBM CEO Ginni Rometty took over the reins at IBM in 2012, and since then, IBM has lost almost 20% of its shareholder value. Whatever vision Rometti had for IBM doesn’t appear to be working out all that well, but long-time shareholders are happy, as IBM recently increased their quarterly dividend payout to $1.40 per share. IBM has also engaged heavily in share buybacks, a practice usually reserved for a company that feels they may be undervalued. However, what this practice also does is boost Earnings Per Share (EPS), which is tied in to executive compensation agreements. IBM is no exception. Since Rometty’s takeover, IBM executives and directors have cashed in their shares for over $263 million dollars. To be fair, almost $48 million of these monies were a supplement to the “Golden Parachute” of Ex-IBM CEO Samuel Palmisano. Rometty, for her endeavors of plummeting shareholder value, has seen fit to cash in her “fair share” at just under $15 million dollars.

How do companies do this?

IBMLook no further than a mirror. Yes dear Americans, you are partially responsible for your own career demise. How do you ask? According to The Massachusetts Office of Campaign & Political Finance, IBM employees over the years have donated over $80,000 to Beacon Hill and current and past Massachusetts Attorney Generals campaign coffers. It would be interesting to see if some of those donors are or were part of IBM’s past and current “RA” actions.

The old cliché’: “Elections have consequences” fits here as well. According to OpenSecrets.org data, IBM has contributed millions of dollars to Members of Congress, tens-of-thousands to Massachusetts’ very own, including U.S. Senator Ed Markey, U.S. Senator Elizabeth Warren, and The Merrimack Valley’s own, U.S. Representative Niki Tsongas. In Tsongas’s case, and possibly her defense, she has been the recipient of the least amount of money from IBM.

The irony here falls upon the unions, and most likely the union leadership.

IBM has been successful in beating away any and all attempts at unionization to the point recently they simply gave up trying. However, these same unions donate large sums of money to the very same politicians that either legislate or look the other way while their jobs disappear. As readers can see, there’s a lot of blame to go around when it comes to being outsourced, off-shored, or replaced by an H-1B Visa worker. It’s unfortunate that the workers, whether they’re unionized or not, continue to support the politicians that say one thing (i.e. support American jobs), but continue to do the opposite by taking the corporate monies and legislating your job away.

ibm3If there’s any reason to question the rise of both Senator Bernie Sanders and Donald Trump, this is it. Whether you agree with their platforms or not doesn’t matter. American workers are being systematically exterminated, the people who are losing jobs or can’t get one, Americans know this all too well and they’re angry. Corporations of course can use the H-1B hirings, as we see here at IBM, to claim that they are in fact hiring; but what they omit is that they’re not hiring Americans. It also correlates to the oft-mentioned income disparity and income destruction, as H-1B workers, while still well paid in IBM’s case, still does not equate to the pay and benefits of what their now fired American counterparts were receiving. In Massachusetts’s case, our real median income level peaked in 2001, and we haven’t been close to returning to those levels since. If you’re over fifty at IBM and an American, you may as well have your cube packed, as even long-time employees who have had excellent reviews are not being spared, they are simply too costly. That cost by the way, to do business, has also only been driven higher, especially from healthcare costs for both the worker and employer.

Democrats and Republicans alike appear to be happy with this paradigm, the firing of the American Workforce, the importation of more H-1B’s at the cost of American jobs in exchange for cheaper labor for their corporate connections, as neither party has done anything to change it. The corporate enablers may be happy because not only do they have a cheaper means to do business, they can continue to pay themselves quite handsomely at the American worker’s expense.

It should be noted, that during research for this piece for The Valley Patriot, no one from local, state, or federal offices would respond to inquiry. IBM also did not respond to inquiry for this piece. Therein lies the problem, no one in our own government feels as though they need to answer to The People because they know that no matter how badly they treat us, The People will not only vote them back into office, but they will pay them by way of campaign donations to keep abusing us and putting more of our fellow Americans out of work.

 

Duncan Burns is the official economic researcher for The Valley Patriot.

ValleyPatriot

ValleyPatriot

The Valley Patriot is a free monthly journal of news, commentary, and events, serving Northern Massachusetts and Southern New Hampshire.

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34 Responses to H-1B Foreign Workers Are Destroying Merrimack Valley Economy

  1. Jack Reply

    May 21, 2016 at 10:54 PM

    Unreal……that’s all I can say

    • TechTalk Reply

      April 27, 2017 at 6:38 PM

      I’ve no idea why they’re only talking about this now and only about IBM.
      Starting around 1998, Lucent, Cisco, Nortel, Oracle, etc. would only hire H1Bs for tech, and ousted most citizens in the 2001 tech meltdown. It was awful, and citizen hires never recovered.
      A friend, who came as an H1B, mighty upset. Tasked with interviewing a highly qualified MIT grad, but not allowed to offer him a position (interview was only to meet fed requirement, as they sponsored an H1B for employment based green card), even though he was better qualified than employee. She’s reading the writing on the wall – this is what her American kids will be facing.

  2. R Lawson Reply

    May 22, 2016 at 7:33 AM

    Well done.

  3. noh1bvisas Reply

    May 22, 2016 at 7:40 AM

    a well-written and factual article. thanks!

  4. DB (@ndb001) Reply

    May 22, 2016 at 8:30 AM

    The destruction of American workers through this H-1B system is pretty stark. You can see that IBM has donated a lot to Elizabeth Warren too – so called supporter of workers! Yeah right! Politicians of all hues and kinds have truly waged a war on the worker. Originally, the system was meant to bring the best and brightest ONLY, But, during the greed-filled 2000s, Corporates with full help from politicians subverted the system, They used the myth of “STEM crisis” and the lawyers happily played it out since they made huge amounts out of this scam, and people believed it because the economy was doing well at least on surface. Nobody believes in it anymore – there is surplus of STEM workers as study after study has shown. The system has hollowed out Americans as they accrue huge debts in college only to be overlooked during jobs.

  5. Michael T. Emmons Reply

    May 22, 2016 at 9:57 AM

    Toss in the infamous L-1b visa and it gets much worse. I had 3 replacements, 3 TATA India Inc employees, L -1b visa holders.

    Hated it, now I hate the US Govt, especially my a$$ of a us congressman John L. Mica. Within 6 weeks of contacting his office about our replacement the damn jerk went back to Siemens Lake Mary for more campaign donations,

    http://commdocs.house.gov/committees/intlrel/hfa91679.000/hfa91679_0.HTM#104

  6. EngineerGuySE Reply

    May 22, 2016 at 3:02 PM

    here’s the mantra:

    “The goal is NOT to Find an American worker!”

    http://www.youtube.com/programmersguild

    http://www.youtube.com/watch?v=TCbFEgFajGU

    and suggested reading:

    SOLD-OUT by Michelle Malkin, John Miano

  7. Jim Wesley Reply

    May 22, 2016 at 9:27 PM

    Thank You! Finally a story on this hellacious attack on Americans. Here in the Silicon Valley, our rents have doubled/ tripled in about 5 years. Traffic has become much worse as well. These companies have done much harm to Americans ( do you have an extra $1,000+ per month for rent ). These companies can go overseas instead.

  8. Ben Reply

    May 22, 2016 at 11:36 PM

    F-the writer of this article for very poor journalism. Besides the article not being written well–in the first to fifth paragraph we should know where the Merrimack Valley is.

  9. pitha Reply

    May 23, 2016 at 2:01 PM

    here are some aspects of the h1b abuse which are often overlooked. While the focus on the H1b visa abuse has correctly been placed on the numerous Indian IT companies like TATA, Infosys, Wipro ..etc what is often overlooked is the damage caused by the small body shops which file H1b visas every year. These smaller companies are far worse than the large outsourcing companies. These companies are usually set up by the people who themselves are already here in USA on h1b visa or by people who have got green card after coming here on h1b visa. They act like a cartel and this is their modus operandi.

    1. Worker pays $6000 for company to apply for his/her H1B
    2. If workers VISA is rejected, company will refund the money barring a small fee of about 1000$
    3. If the VISA is approved, the worker goes to the US and gives the cartel a percentage of his/her earnings

    These body shops are registered as Limited Liability Company(LLC) in different states in USA. it is a very simple process to register a Limited Liability Company(LLC) in USA, this LLC works as the body shop for supplying IT consultants. These LLC owners then run ads in India inviting people to apply for H1b visa. The people responding to the ads are asked to pay for the h1b visa processing fee which is approximately US$6K. Collecting money from h1b applicants is against the law but the money is exchanged in India and the h1b applicant after coming to USA never complains because he/she also broke the law by paying for the h1b visa application when the company should have paid for it. Before applying for h1b visa the companies are supposed to be undertaking good faith measures to hire american workers but this never happens because the whole point of these small body shops is to undercut the wages of the american workers by bringing in foreigners who will work for a low price. Another blatant abuse of the h1b visa is the non payment of the wages. not only is the salary already low for h1b, in addition this salary is paid only if the h1b worker has a job, if he is out of a job (refereed to as being on bench in IT consulting) he is not paid his salary. This is another violation of the law as the h1b worker has to be paid the salary certified in the h1b visa application irrespective of whether he is on bench or not. Again the h1b worker does not complain because as per law he is supposed to leave USA immediately when he is out of job, to avoid leaving USA the h1b worker breaks the law by working with the small body shop LLC to not report the job loss to USCIS. Both the body shop and the h1 worker wins because the body shop does not have to pay salary and the h1b worker does not have to leave USA. When the h1b worker gets a job that is usually a temporary contracting job, The small body shop gets 20% of the billing. As mentioned above both the h1b worker and the body shop are willfully breaking the law from the very beginning of the application process and because it is a mutually assured self distruction by complaining neither the h1b worker nor the small body shop complain about this. the new h1n fee for fraud detection etc are only applied on the companies with more than 50 employees. These small body shops are less than 50 employees because they are sham companies whose only business is filing h1b visas. They have zero risk and unlimited profits because they never pay for the h1b application as the h1b worker himself is paying for it, they get to keep 20% percentage of the h1b worker earning and dont have to pay a salary when the h1b worker does not have a job. on an average the body shop makes 10k to 15k per each h1b visa they hold and on an average these small body shops hold 35 to 45 h1 b visas each. Since the scrutiny begins to increase when the employee strength goes above 50, they start another LLC company to file h1b visa when the number of h1b visa in the original body shop reaches near 50. These body shop companies work without any hassles as no one is investigating them, the press, media, law makers are also concentrating on the big outsourcing companies while ignoring these companies. There are thousands of such small companies holding about 30 to 50 h1b visas. This number is increasing each year as new companies are set up every year.

    Another lucrative stream of money for these body shops is the f1 students. Initially after graduation the f1 students got an employment authorization document(EAD) which was valid for 12 months and gave them authorization to work in USA legally for the period of that EAD. over the last couple of years the EAD period has been increased from 12 months to 36 months. The EAD is initially issued for 12 months with a renewal for the remaining 24 months by showing proof of employment. Again it is these LLC body shops which give a fake letter saying they have a job when infact in most cases they dont. irrespective of whether the f1 student is on a contract job or not the body shop always gives a letter saying he has a job, which is false and illegal because the student is paid only if he is on a project and not if he is on bench. The body shops create fake resumes saying the students have 7 years experience when infact these students are not even older than 23 or 24 years and have been is USA for less than 2 to 4 years.

    I am not anti india or a racist. I myself am an american citizen of Indian origin. I am not trying to bash indians, 90% of the body shops and the so called IT consultants are from India and that is the reason I gave specific example of India. Not everyone coming from India is a law breaker and as a responsible citizen I am voicing my opposition to this blatant misuse and illegal actions of both the body shops and the people who work in these body shops.

    • TechTalk Reply

      April 28, 2017 at 5:29 PM

      Contact Sara Blackwell. You’ll find her on Twitter, as @4US_Workers.

  10. Hijohnhello Hello Reply

    May 24, 2016 at 4:38 AM

    Unintended, or intended result of Corporate Personhood and it’s election financing implications.

  11. swampwiz Reply

    May 24, 2016 at 7:07 AM

    I am an early middle-aged “obsolete”, “unemployable” American programmer. Thank you for this article.

    • Nutella Reply

      May 24, 2016 at 4:03 PM

      Just get ripped and beat the pants off the competition.

  12. Richc Reply

    May 24, 2016 at 10:27 AM

    Thank you for bringing all of this to light. I know most of the media outlets would never report these truths. Several years age, when Obama first took office, he hosted a “round table”, ostensibly on “how to create jobs in America”, comprised of CEO’s from some of the largest corporations in America. Front and center at the meeting was Samuel Palmisano, CEO of IBM, This meeting was reported in all the major news outlets, but what I never heard reported was at the time of this meeting IBM was laying off thousands of workers and shipping their jobs overseas, and forcing the worker to train their replacement or lose their severance package. What a joke.

  13. David Merkel (@AlephBlog) Reply

    May 24, 2016 at 1:46 PM

    If “Americans” could do the job, they would be hired. It is always cheaper to hire local people. The H-1B folks cost more, not less, AND they are usually not as good with English.

    If it were just programming skills, IBM and other firms like them would outsource the labor to Ukrainians, Indians, etc. who harder and better than most “Americans,” and do so in their own countries, where the cost of living is cheaper.

    The reason the H-1B visa folks get hired is that they need people locally, and there are no “Americans” with sufficient skills to fill the positions. Our schools don’t produce enough math and science trained folks to fill those spots. That’s why IBM hire talent from abroad to become real Americans — talented people who work hard, rather than the lazy kids who could be bothered to learn math because it’s hard.

    Add in one more factor, we aren’t having as many kids, and we need younger workers, so we bring them in from abroad, because “Americans” are too lazy to average 2.5 kids per family. Only immigrants and religious nuts do that, to pay for your Social Security benefits.

    • Nutella Reply

      May 24, 2016 at 3:41 PM

      Americans invented IT long before Indians and Chinese ever set foot in USA. All these big major companies were created by white Americans and that is a fact.

      Microsoft stock has slipped 30% since Nutella took over and shipped 18,000 jobs created by Americans to India. 30%.

      The fact is India is looting US tech companies under the guise of “skilled workers”. American companies collapse and the cash all gets sent back to India in the form of remittances. That’s a fact.

      Have 20 years of importing millions of foreign workers helped America? NO! America was BOOMING in 1998 but is a disaster today.

      America is being looted by foreign powers. All claims to skills is just a cover.

    • carlos Reply

      July 8, 2016 at 10:56 AM

      David?? You are obviously biased by your self interest… Please go away and play with your wicked friends.. You know, the ones that don’t care about anyone but their-self?? You’re nothing but a poser…

  14. David Merkel (@AlephBlog) Reply

    May 24, 2016 at 1:46 PM

    But don’t blame IBM, AT&T, Verizon, whomever… they are under pressure from the pension plans of the Baby Boomers to perform so that they can have cushy retirements relative to that which their paltry few children and grandchildren will have. They have to earn money to fund that, and an easy way to do that is to seek out labor that produces more per dollar. Companies are only middlemen for other people… they may be legal persons, but they are the tools for human persons, notably union and state government defined benefit pension plans. Ask them if they want to see returns go down.

    So rather than being xenophobic snobs, take a good look in the mirror, and see what you have done to improve your skills in your middle age. No one owes you a job. These people you look down on have outcompeted you. They deserve a spot in America more than those that think they can take it easy and keep their jobs. After all, they pay the taxes, more so than those that don’t work at such productive tasks.

    • Duncan Burns Reply

      May 24, 2016 at 3:08 PM

      For the record, I sent this piece to Mr. Merkel for his opinion. I respect his insight & opinion on many issues, even those contrary to my own, and I thank him for chiming in.

    • Nutella Reply

      May 24, 2016 at 4:36 PM

      Are iOS, Swift, Obj-C, and Xcode good enough in this age of mobile apps? If not then what is? Is working @ Apple and Sony (Playstation) good enough? If not then what is?

      Stop the lies. Americans invented IT.

      Meanwhile all those “highly skilled” workers from India are in fact in the US to steal trade secrets and loot USA.

      Tata was just found guilty of looting $940 million out of USA:

      http://timesofindia.indiatimes.com/business/india-business/TCS-fined-940m-in-US-for-stealing-healthcare-software/articleshow/51853815.cms?

    • Nutella Reply

      May 24, 2016 at 5:07 PM

      None of your assertions are valid since ALL foreign workers are illegal if American workers are unemployed.

      TITLE 8, SECTION 1182 INADMISSIBLE ALIENS

    • carlos Reply

      July 8, 2016 at 11:05 AM

      David?? What a bonehead… Don’t you realize why these “Criminals” do what they do? It’s all about selfishly refusing to pay the salaries of “Seasoned” professionals. They use H1-B and other programs put in place by their little toys in Washington, to allow them to circumvent laws that have been in place against Age and other types of discrimination while they hire “younger” Indian Slaves that have been trained by Micro-Gates, Dell, IBM, criminals, etc.. in their deliberate little micro training centers they created in India approx. starting, 20 years ago.

      Don’t you see the crime here? People work and toil for years creating something that is simply stolen from them, by these corporate meatheads?

      You need to wake up and realize this is a concerted effort to take everything away from everyone, except of course from the ones that are guilty of being devoted servants of the Devil himself.

      The same devil It seems that you are serving.

    • BeenThereDoneThat Reply

      April 27, 2017 at 6:56 PM

      At best more likely IBM, AT&T, Verizon blew the pension funds and being as they want to retain their fat CEO salaries they opted to commit yet more fraud claiming on the federal forms they can’t find qualified citizens. I’m guessing your a benefactor of the corruption.
      Isn’t that big chip on your shoulder going to scare off the natives when you’re on the street trying to sell your watch, during the net result of this 1928 game plan, Mr. Brainstorm?

  15. troup1998 Reply

    May 24, 2016 at 3:34 PM

    Mr. Merkel is opinionated, uninformed and stereotypes people into categories. I bet he’s never worked with any H-1b or L-1b visa holders? I have, since 1993. From what I can tell he believes all Americans are dumb and lazy while all foreign workers are hard working. With generalizing statements like he has made it is difficult to take anything he says seriously.

    He knows nothing about my work ethic, skill set nor what I’ve done since I was ordered by corporate mgmt to train 3 replacements. Yes, I had 3 trainees; TATA India employees, holders of L-1b visas. Each learned a different facet of my job. None of them had the skills nor knowledge I had, nor could they communicate they way out of a wet paper bag.

    Lucky for me, I left on my own when I landed work elsewhere.

    Again, I’ve worked with H-1b visa holders for a very long time. In fact there were 2 that were among us replaced by TATA employees. One of the H-1b visa holders I was working with asked a “TATA” what they were being paid. His reply, $3000/month, but $2000 of that was paid as non-taxable expenses. So their “high tech” jobs had taxable salaries of $1000/month. I don’t know any American that can survive on $1000/month.

    My medical insurance alone was $953/month.

    Since Mr. Merkel thinks all Americans are lazy and uneducated; Since training my foreign replacements, I’ve been fully employed (plus side work/self-employed contracts) for the past 14 years.

    I’m not afraid of competing with anyone, but the H-1b and L-1 visas are not fair to American workers. The low cost and “indentured servitude” of these visas benefit corporations at the expense of American workers.

    I agree with one comment Mr Merkel makes. It’s not the corporations that should be blamed. It’s the damn gov’t, US Congress, Senators, Representatives and Presidents.

    They have sold out the American worker. They care more for the corporations lining their pockets than their constituents.

    WKMG CBS Orlando emmy-nominated series “Where did the jobs go?”

    • Nutella Reply

      May 24, 2016 at 5:01 PM

      We all know the “Americans are dumb” is NASSCOM propaganda. And Wall St. Bankster propaganda. Americans invented the IT industry, India cannot even pick up trash in its streets or build enough toilets.

      The fact is the whole world is jealous of elite Americans programmers and Greenspan (bankster) said he wanted “Wage-leveling”.

      We all know the whole thing is a wealth-redistribution fraud.

      Jealous, jealous, jealous.

      • DB (@ndb001) Reply

        May 26, 2016 at 5:44 AM

        It was the scam called “STEM crisis” used to import hundreds of H-1B into this country from India and China. Lawyers, politicians and greedy corporates used it very well in the 2000s (in the backdrop of another scam callled Y2K). Now we all know the myth!! American s/w developers are some of the finest and actually learn software engineering formally

    • TechTalk Reply

      April 28, 2017 at 5:36 PM

      Lucky you! And, you (and the rest of us) get to pay for health insurance for their cut rate visa indentured worker: https://www.healthcare.gov/immigrants/immigration-status/

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