Why CompeteAmerica Is Wrong and We Don't Need More Foreign Workers

by Ian Fletcher
February 2005

A wise man once wrote, "when they say it's not about the money, it's about the money." A corporate-sponsored organization called CompeteAmerica has been spreading misleading studies in an attempt to con Congress into allowing them cheaper labor through the importation of foreign workers to take American jobs. Below is a refutation of their claims.

CompeteAmerica:

"At the same time that the U.S. production of a highly educated work force is slowing down, American companies must compete against firms from countries that are rapidly increasing their own pools of highly educated workers. The evidence clearly points to the need for increasing access to highly educated foreign nationals to perform specialized jobs here in the United States."
(Sandra Boyd, CompeteAmerica chairwoman, 11/16/04)

The Truth:

More Americans than ever are attending college. (Source: US Dept. of Education) If not enough of them are studying technical disciplines, this is an argument for education reform, not importing foreigners. And with record unemployment among US engineers, due to offshoring and imported labor, how are we supposed to get students to study technology? Will they find such careers attractive? CompeteAmerica's proposal is a recipe for a "race to the bottom" in American high technology that will destroy the wages of American technology workers and leave the nation dangerously dependent on indentured servants from abroad.

CompeteAmerica:

CompeteAmerica claims there is a shortage of technology workers.

The Truth:

There is record unemployment among American tech workers. (Source: Labor Dept.) Shortage predictions have been manufactured over and over again for years in order to justify importation of cheaper foreign labor. According to a recent Rand Corporation study:

"Despite recurring concerns about potential shortages of (scientific, technical, engineering and mathematics) personnel in the U.S. work force, particularly in engineering and information technology, we did not find evidence that such shortages have existed, at least since 1990, nor that they are on the horizon."(Source: Rand Corporation)

CompeteAmerica:

"There is no clear evidence that highly educated foreign workers displace native workers in comparable occupations." (Study with Hudson Institute, 2004)

The Truth:

This is one of the most audaciously dishonest attempts in years to turn a simple matter of common sense into a complicated public policy question that has to be settled by PhD's conducting regression analysis. Of course it displaces an American when a company hires a foreigner for a job they could have filled with an American! How could it possibly not do so? If CompeteAmerica wants to argue this is a good thing, that's their right, but to deny that it happens, doesn't pass the laugh test.

CompeteAmerica:

CompeteAmerica says its members face a "labor shortage."

The Truth:

Nobody has yet produced a definition of this term. Sure, there can be a labor shortage at the price some company wishes to pay, but there's not a job in America that can't be filled if the employer is willing to pay the market rate for the skill in question. That's how free markets work, not by demanding government intervention when labor doesn't come cheap enough.

CompeteAmerica:

CompeteAmerica says America companies must import foreign workers to be competitive.

The Truth:

Our greatest economic competitors don't seem to need to import foreign technology labor. Japan, China, and India don't do it. Decadent and technically-underdeveloped societies like Saudi Arabia and Kuwait import foreign technology labor.

CompeteAmerica:

CompeteAmerica says safeguards in the H1-B program will protect American workers.

The Truth:

So long as safeguards don't actually stop American workers from losing their jobs to foreigners, they are a minor gesture at best. "Prevailing wage" provisions cannot repeal the law of supply and demand, so foreign workers still drive down wages. And safeguards are easy to cheat and negligibly enforced anyway.

What's Needed:

Don't expand the H1-B visa by exempting Masters and PhD graduates of American universities.

Do radically cut the quota on the H1-B and L-1 visas.

For further details on this issue, please see http://www.aea.org/lobby2004.htm

This analysis was prepared by Ian Fletcher, Vice-President for Government Relations of the American Engineering Association, a nationwide nonprofit professional association. Contact: ianfletcher@aea.org or 646.281.7962.

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