The L-1 Visa: New Tool To Dispossess Americans
L-1 visas get around the legal technicalities that
Congress placed on the H-1B visa program. Employers are
not supposed to use H-1B visas to bring in foreigners to
displace U.S. employees or in order to cut costs by
paying low wages. H-1B visas are supposed to be
utilized only when there is a shortage of particular
skills, and the visa holder is supposed to be paid
prevailing U.S. wages.
Of course, as any economist can tell you, a shortage
is always at a price. H-1B visas were used to keep
employers from bidding up U.S. wages and calling forth a
larger supply of the needed skills. Instead of allowing
the price system to work in the U.S.,
H-1B visas simply enlarged the U.S. labor supply to
include the entire world. Many American students who
invested in obtaining
software and IT skills graduated only to discover
that their careers had been given to foreigners or
Several hundred thousand educated and formerly high
income Americans were displaced by the H-1B program.
Complaints were rising, but before the scandal could
break, L-1 visas took over.
L-1 visas were created to facilitate intracompany
transfers within multinational corporations.
Corporations use them to hire Asians at one-third the
salary of their U.S. employees. Then the Asians are
transferred to the U.S. where the “downsized” U.S.
employees spend their last employed months
training their replacements.
Loopholes in the L-1 visa law or
negligence in its enforcement allow U.S.
corporations to contract with foreign companies to
supply them with IT workers. This keeps the foreign
workers off the U.S. corporations` payrolls and permits
the corporations to confine their dealings to the
foreign “consulting” firms that provide the replacements
for U.S. employees. This allows U.S. corporations to
claim that they are paying “prevailing wages” to all
According to Business Week, there are now
about 350,000 foreigners on L-1 visas who have displaced
U.S. IT and high-tech employees. Put this number
together with the number of H-1B visas, and Americans
have lost 750,000 high income jobs in the last few
years. [March 6, 2003,
A Mainframe-Size Visa Loophole]
L-1 visas allow employees to remain in the U.S. for
seven years. The program creates an ever greater source
of foreign IT workers who, on their return to their
homelands are productively employed in training their
fellow citizens in the business cultures of blue-chip
L-1 visa program is especially attractive to U.S.
corporations, because it allows them to tap low-paid
skilled labor without having to construct facilities
abroad. Instead of moving to China and India in order to
hire engineers and scientists at a small fraction of
U.S. prevailing wages, the companies can simply import
As a significant proportion of foreign engineers are
U.S. trained or trained by their fellows with U.S.
educations, the supply is sufficient to replace every
American engineer and IT employee with low-cost
Free traders, who ceased to think two centuries ago,
will accept the displacement of U.S. employees with
equanimity as the beneficial workings of free trade. The
bonuses of cost-cutting corporate CEOs will soar with
their companies` profits, while the living standards of
native-born Americans will fall. Increasingly, Americans
will find that even domestically produced goods and
services are supplied by foreigners. Americans will
become an occupied underclass in their own country.
No other country in
the world, with the
partial exception of the U.K., dispossesses its own
citizens in this way. Will a people who feel betrayed by
their own government and corporations support the
foreign adventures of American empire, or will American
identity dissipate, dissolving the country?
Craig Roberts is the author with Lawrence M. Stratton of
The Tyranny of Good Intentions : How Prosecutors and
Bureaucrats Are Trampling the Constitution in the Name
of Justice. Click
here for Peter
Magazine interview with Roberts about the recent
epidemic of prosecutorial misconduct.