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Disney’s Questionable Ethics in Replacing US Workers with H1-B Foreign Workers

Where is the Outrage from Congress, the Candidates, and the Media?

Last October about 250 Disney employees were told that they would be laid off. Many of their jobs were transferred to immigrants on temporary visas for highly skilled technical workers, who were brought in by outsourcing firms, such as Infosys and Tata, based in India. Over the next three months, some Disney employees were required to train their replacements to do the jobs they had lost. Talk about adding insult to injury. Disney needs to be held accountable for its actions and questions should be raised about how this American icon of a company could act so irresponsibly.

Disney executives said that the layoffs were part of a reorganization, and that the company opened more positions than it eliminated. But the layoffs at Disney and at other companies, including the Southern California Edison power utility, are raising new questions about how businesses and outsourcing companies are using the temporary visas, known as H-1B, to place immigrants in technology jobs in the US. These visas should be at the center of a meaningful debate, not political posturing by Congress, over whether they complement American workers or displace them.

According to federal guidelines, the visas are intended for foreigners with advanced science or computer skills to fill discrete positions when American workers with those skills cannot be found. Their use, the guidelines say, should not “adversely affect the wages and working conditions” of Americans.

Because of legal loopholes, however, in practice, companies do not have to recruit American workers first or guarantee that Americans will not be displaced.

Too often, critics say, the visas are being used to bring in immigrants to do the work of Americans for less money, with laid-off American workers having to train their replacements.

In his testimony before Congress on March 17, Professor Ronil Hira explained that in the H-1B program rules the U.S. Department of Labor prominently and plainly states, "The Immigration & Nationality Act (INA) requires that the hiring of a foreign worker will not adversely affect the wages and working conditions of U.S. workers comparably employed.” According to Professor Hira, the clear intent of the law is that hiring foreign workers will not harm American workers. Still, he believes that the H1-B program is harming American workers, and on a large scale.

Mostof the H-1B program is now being used to import cheaper foreign guest-workers, replacing American workers, and undercutting their wages. So, contrary to intent of the law, the use of the program is indeed adversely affecting American workers' wages and working conditions. The scale of this damage is large and its effects long lasting, adversely impacting: the careers of hundreds of thousands of American workers; future generations of students; and, America's future capacity to innovate.

The practice is not just adversely affecting a few workers. The H-1B program is very large with approximately 120,000 new workers admitted annually. Once admitted those workers can remain in the U.S. up to six years. While no one knows exactly how many H-1Bs are currently in the country, analysts estimate the number as high as 600,000.

A limited number of the visas, 85,000, are granted each year, and they are in high demand. Technology giants like Microsoft, Facebook and Google repeatedly press for increases in the annual quotas, saying there are not enough Americans with the skills they need.

Many American companies use H-1B visas to bring in small numbers of foreigners for openings demanding specialized skills, according to official reports. But for years, most top recipients of the visas have been outsourcing or consulting firms based in India, or their American subsidiaries, which import workers for large contracts to take over entire in-house technology units — and to cut costs. The immigrants are employees of the outsourcing companies.

H-1B immigrants work for less than American tech workers, Professor Hira said, because of weaknesses in wage regulations. The savings have been 25 percent to 49 percent in recent cases, he told lawmakers.

In a letter in April to top federal authorities in charge of immigration, a bipartisan group of senators called for an investigation of recent “H-1B-driven layoffs,” saying, “Their frequency seems to have increased dramatically in the past year alone.” That’s it? That’s the best you have, Congress?

The underlying issue is whether companies like Disney hire foreign workers simply to save some money or because there truly is a shortage of workers with the requisite skills in an area in which information technology skills are a must. Even if we accept the premise that skilled workers are lacking in the US, that doesn’t mean we should sanction what some companies do in bringing in H1-B workers.

If we such a problem, then Congress needs to address it from a training perspective. Why not devote some of the useless, non-productive spending by Congress in so many areas instead on something that makes sense economically and from a fairness perspective? You see, it is an ethical issue.

Why not solicit bids from high-tech companies to train, not only their own employees but American workers who want to get ahead – who want to work in the high-tech area and are not afraid to spend the time necessary to gain needed skills?

I don’t get it. Disney replaces American workers with H1-B workers and no one seems to discuss this important issue whether it is in Congress, on the campaign trail, or in the media. Do we have to continue to watch an unending litany of interviews with the Duggars instead of something that has real value to society? Are you listening FOX News?

Shouldn’t we tackle head on the reasons we are becoming increasingly less competitive on a global economic scale? Isn’t this a critical campaign issue as we move towards the 2016 election? If we don’t talk about it now, then when. After China replaces us as the largest economy in the world???

Blog posted by Dr. Steven Mintz, aka Ethics Sage, on June 9, 2015. Professor Mintz is on the faculty of the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at:

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