Cognizant, a tech firm in New Jersey, routinely obtains over 5,000 H-1B work visas a year, which it uses to bring foreign workers over to manage IT and cyber security projects. It’s a business strategy that has turned the company into a powerhouse valued at over $40 billion. And it’s an arrangement that has become commonplace among tech giants.
Google, Amazon and Microsoft all rely on a funnel of such workers; Meta is classified as “H-1B dependent” over its unusually high foreign visa workforce. And as layoffs hit Silicon Valley last year, the tech industry ramped up applications to bring in even more foreign personnel.
But in a moment of political realignment and worker uprising, a reckoning may be coming.
In October, a jury found that Cognizant engaged in systemic discrimination against American workers, in favour of thousands of South Asian workers on H-1B visas. The trial unearthed damaging facts about the system — namely, that Cognizant gamed the visa lottery process with fake applications and sought to depress wages with visa-dependent foreign talent.
“The entire business model is built on the back of cheap Indian labor,” said one former director at the firm. The people who are on visas are the people Cognizant wants.”
And now the H-1B visa has caused the first major rift in the Trump coalition as MAGA squares up to Silicon Valley.
The touchpaper was lit by Sriram Krishnan, Trump’s adviser on artificial intelligence policy, with his announcement that he wants to lift the annual cap on the permits, which currently sits at 65,000, plus an additional 20,000 for those with degrees from American graduate schools.
The online Right exploded: “We won’t allow Big Tech to create their fantasy monarchy in America and make MAGA their indentured servant slaves,” wrote the online activist Laura Loomer. Other conservatives weighed in, urging Trump to remain true to his America First-values, reminding him that in 2016, he called the H-1B programme “very, very bad for workers” and declared, “we should end it”.
Then Vivek Ramaswamy, fanned the flames, writing a lengthy post about the inadequacies of American culture, seeming to suggest the need for H-1B style immigration was just as much about changing the American way of life as meeting economic demand. “More math tutoring, fewer sleepovers,” he scorned, “More weekend science competitions, fewer Saturday morning cartoons.” A more study-focused method of raising children reinvigorated by attracting foreign-born engineers, he argued, would produce a “culture that once again prioritizes achievement over normalcy”.The subsequent storm of racist vitriolic rage in response — featuring the invasion of Indian migrants and deficiencies of Indian culture — drew Elon Musk into battle. A long-time supporter of the visa arrangement, he began removing the verified status of some accounts and suspending others over allegations of harassment.
“The reason I’m in America along with so many critical people who built SpaceX, Tesla and hundreds of other companies that made America strong is because of H1B,” wrote Musk, promising “war on this issue the likes of which you cannot possibly comprehend.”
Like much of the past few years of conservative populist rage, the issue is clouded by inflammatory rhetoric around identity and culture. But at the centre remains an economic issue that has festered for decades. Elites have gained tremendously from the H-1B programme. The record for everyone else is quite mixed.
Originally designed in 1990 to plug a gap in scientific and technological knowledge, and to bring over foreigners of “distinguished merit and ability”, there are safeguards which are supposed to prevent corporations from exploiting the H1B visa to harm American workers. But inevitably, these loophole-ridden rules are easily manipulated by employers who favour foreign workers, and are using them to undercut American wages.
The Department of Justice investigated Meta, for example, and found that the company created an entirely separate job programme to comply with the rules. Positions the firm sought to fill with H-1B holders were effectively disguised from the public — advertised in print media and applicants could only respond through physical mail-in forms — despite other routine jobs posted by the company accessible electronically.
The government found that Meta discriminated against American workers, refusing to recruit, consider, or hire qualified Americans for more than 2,600 jobs. The Department of Justice, however, ended the issue with a slap on the wrist penalty of $14.25 million, or a mere 0.016% of company revenue.
While government enforcement actions are rare and generally impotent, research strongly shows that major employers, especially those in Silicon Valley, are using the H-1B and similar visa programmes to depress wages. Amazon, Microsoft, Google, Apple, and Meta use the scheme “in order to legally pay many of their H-1B workers below the local median wage for the jobs they fill,” noted the Economic Policy Institute, a Left-leaning think tank, in a research report.
It’s more indentured labour than free market: should a foreign worker complain about wages or working conditions, an employer can rescind the visa and send them back to their home country. Meanwhile, economists from the University of Michigan and the University of California, San Diego found that tech worker wages would have been as much as 5.1% higher in the absence of H-1B visa workers in the same field.
Proponents of the visa counter that the programme leads to greater dynamism and economic expansion, a trickle-down effect that helps workers. But recent experience has called such claims into question. Last year, the top 30 H-1B visa employers laid off 84,556 people at the same time as they sought 34,414 new H1-B foreign workers. This includes firms such as Musk’s Tesla.
Such lax supervision of the H-1B programme has led to other indignities. In 2016, Disney and Southern California Edison were caught forcing laid-off American workers to train their H-1B foreign replacements. Similar stories have been reported around the country, especially in California, where such in-shoring dynamics are common.
To add insult to injury, as tech firms laid off thousands of Americans last year, they lobbied the Biden administration and Congress to lift the cap. But, of course, it is in the economic interest of any corporation to hold down labour costs, by any means.
Such obvious realities are confirmed in the litigation documents revealed by the Cognizant trial. The courtroom drama forced the disclosure of an internal presentation that warned about reforms that might limit the number of H-1B visas, which might force Cognizant to hire more native-born Americans. That option, the company warned, “may reduce [profit] margin”.
One might assume the Democrats, not the Republican Party, would mobilise more effectively to crack down on H-1B abuses. But the party has changed dramatically in recent generations. Silicon Valley and immigration lobby influence have moved the Democrats into a position far from its historic labour movement roots.
In 2010, for example, then-Speaker Nancy Pelosi organised a retreat for the leading tech titans, featuring some of the same Silicon Valley leaders now in the orbit of Trump. The demand from donors was clear. “They want H-1B visas for immigration, and we’re saying ‘help us have a comprehensive immigration reform and we can help you with that,’” Pelosi told reporters.
Similarly, the American Immigration Lawyers Association, another group with sway over Democrats, has lashed out at any attempt to raise H-1B wages. In reaction to a previous proposal, the AILA howled that hiking wages threatens the “solvency of countless American businesses” and represents efforts to “scapegoat immigrants”.
Not much has changed. President Joe Biden had promised strong reforms to the H-1B programme, such as raising the $60,000 income threshold, but ended up settling for more minor tweaks to the system. Notably, Biden signaled his seriousness on the issue with his appointment of Ur Jaddou, a former aide to former Rep. Zoe Lofgren, D-Calif, to lead USCIS, the agency overseeing the visa scheme. Lofgren long served as the representative for the district encompassing Silicon Valley and was one of the biggest boosters of H-1B.
On Saturday, Trump finally weighed in, siding with Musk and his other tech-centric advisers. “I’ve always liked the visas, I have always been in favor of the visas. That’s why we have them,” Trump told the New York Post. “I have many H-1B visas on my properties. I’ve been a believer in H-1B. I have used it many times. It’s a great program.”
But for all his enthusiasm, and for every Silicon Valley executive posting on X about the need for foreign talent and STEM expertise, hundreds of other users have flooded social media with online H-1B applications which show businesses using the programme for low-skilled jobs, such as “golf development director” and “cook”.
It will be interesting to see how this plays out. The president-elect has, after all, surrounded himself with diverse viewpoints and many who hold diametrically opposing positions. JD Vance and incoming White House advisor Stephen Miller are avowed critics of H-1B visas, so it is far from certain that Musk will have the final word.
It all highlights the uncomfortable dynamic at play in Trump’s coalition. On the one side are libertarian business leaders who seek economic growth at all costs, often at the expense of American wages and consumer protections. Ramaswamy, for instance, is tasked with the DOGE commission, which will suggest vast swaths of government spending to cut — a position that will spark new debates about austerity, the welfare state and whether Americans are simply too lazy to compete. On the other side, we have the average Trump supporter who seeks a halt to immigration and a focus on rebuilding the middle class. Given the strongly held beliefs on both sides, the H-1B fight is only the first of many that will divide the administration over class lines. How long will Trump be able to hold it together?
Disclaimer
Some of the posts we share are controversial and we do not necessarily agree with them in the whole extend. Sometimes we agree with the content or part of it but we do not agree with the narration or language. Nevertheless we find them somehow interesting, valuable and/or informative or we share them, because we strongly believe in freedom of speech, free press and journalism. We strongly encourage you to have a critical approach to all the content, do your own research and analysis to build your own opinion.
We would be glad to have your feedback.
Source: UnHerd Read the original article here: https://unherd.com/