One of the few positives of the economic “stimulus” plan was the provision limiting the ability TARP recipients to hire foreign workers over American workers. Drafted by Senators Bernie Sanders and Charles Grassley, the provisions require only that a good faith effort be made to hire American workers over foreign workers, but the increased government scrutiny over the recipients of federal bailout money should give pause to any employer seeking to violate the spirit of this rule. Substantial research has shown that, despite an abundance of well educated domestic talent, employers often seek to hire foreign workers in an attempt to lower labor costs.
The argument for the importation of labor is often framed as a void of qualified American workers necessitating the importation of foreign employees. Economists often argue that an unlimited number of H1B visas would enable US companies to hire the best and most qualified talent despite their origin. While this is sometimes the case, the argument often fails due to social bias, stereotyping, and issues with bounded rational decision making. Limited search capabilities, biased or ethnocentric evaluation methodologies, and flawed heuristics often lead to sub-optimal outcomes. Driven strictly by the bottom line, management often seeks to hire an acceptable, rather than the best, worker at the lowest cost. Foreign workers are conveyed non-monetary benefits, through the privilege of residency and employment in the United States, leading them to often accept lower wages than comparable U.S. citizens. It is these reasons that foreign workers often dominate certain fields, such as engineering or computer programming, not a dearth of qualified domestic employees. Many engineering students in the US opt for careers in other fields when confronted with an overwhelming inflow of foreign workers and the corresponding suppression of market wages.
President Obama and his economic staff clearly subscribe to the same social biases and stereotypes that predominate the government’s immigration policies. Former Treasury Secretary and Obama economic advisor Larry Summers infamously stated in 2005 that women were inferior to men in math and science, not due to socialization or societal norms, but instead due to innate differences and the incompatibility of 80-hour work weeks with child rearing. With such advisors, there is no reason to believe that President Obama’s immigration policy will deviate from the traditional appeasement of corporate executives that seek to pad their salaries by exploiting cheap immigrant labor at the expense of qualified US citizens.
CNN’s Lou Dobbs reports on immigrant workers in America.