Labor Rule Strikes a Blow for U.S. Workers



The Trump administration’s Department of Labor (DOL) has implemented new prevailing wage rules that both political parties should get behind – but probably won’t.

Taking aim at a system that has crassly commodified H-1B visa workers while displacing qualified Americans, DOL determined that its prevailing (mandatory minimum) wage classifications were severely undervalued.

Previously, pay scales for four tiers of H-1B employment – “entry level,” “qualified,” “experienced” and “fully competent” – were set at 17, 34, 50 and 67 percent of the prevailing wage rates. Noting that most H-1B workers are in the first tier, the Center for Immigration Studies (CIS) called this “a screaming bargain for employers.”

The new levels are 45, 62, 75 and 95 percent of the prevailing wage ranges, meaning substantial salary increases for H-1B workers hired through outsourcing shops.

Forbes estimated that the change will boost wages of software developers hired through the H-1B program by up to 48 percent, depending on where they work. Overall, CIS figures a large portion of the 600,000 H-1B workers in this country would see collective pay increases of some $23 billion over 10 years.

Not everyone is rejoicing. According to critics, DOL’s methodology inflates the prevailing wage and will pinch U.S. employers, especially nonprofits, universities, hospitals, start-ups and small businesses. Litigation is expected.

Naysayers further warn that the rule will push businesses to relocate overseas. In other words: Better to take advantage of foreign servitors here, regardless of the toll they take on American workers.

The immigration lobby, free marketeers and the politicians they bankroll are welcome to such arguments. But it’s a hard and disingenuous proposition to justify outdated prevailing wage scales in the defense of bottom-feeding employers and their foreign labor procurers.

As FAIR noted recently, “The big picture argument against the alphabet soup of guest worker programs (H-1B, H-2B, H-2A, etc.) is that they are essentially a cheap labor subsidy to business resulting in stagnant wages or outright job losses for American workers.” 

By bringing wage scales into better alignment, DOL is taking a much-needed step to “more effectively ensure that the employment of immigrant and nonimmigrant workers … does not adversely affect the wages and job opportunities of U.S. workers.”

About Author

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Bob Dane, the Federation for American Immigration Reform (FAIR)'s Executive Director, has been with FAIR since 2006. His deep belief is that immigration is the most transformational determinant of where we are heading as a nation and that our policies must be reformed in the public interest. Over many years on thousands of radio, TV and print interviews, Bob has made the case that unless immigration is regulated and sensibly reduced, it will be difficult for America to reduce unemployment, increase wages, improve health care and education and heighten national security. Prior to joining FAIR, Bob spent twenty years in network radio, marketing and communications after an earlier career in policy and budgeting within the Reagan Administration. Bob has a degree from George Mason University in Public Administration and Management.

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