Illegal immigration has received a lot of press lately. Americans are worried that illegal immigrants are taking their “rightful” jobs. However, most of these jobs are the low paying ones that US workers are reluctant to take anyway.
However, Americans losing jobs to legal foreign workers does not tend to attract the same amount of media attention. The truth is that perfectly legal immigrants are having a significant impact on higher paying job opportunities and wages. One of the major avenues for a foreigner with certain skills is via an H1B visa that allows for “the temporary hiring of foreign nationals in specialized occupations.” This enables employers, especially in the high-tech industry, to hire people from abroad at lower wages. To add insult to injury, US workers are often expected to train their foreign replacements. Instead of off-shoring to a lower-wage country, high-tech companies can just stay put and legally import foreign workers.
The argument made by the industry is that there aren’t enough Americans available to fill these jobs. However, because citizens know that such jobs are going to foreign nationals at lower wage scales, they are discouraged from entering the high-tech field in the first place.
Bottom Line – Every H1B Worker REPLACES an American Worker
Studies show that approximately 50% of foreign workers with H1B visas eventually return to their home countries, taking the knowledge gained in the US with them. A proportion of the other half ends up working for firms that fail or that lay them off. Then they stay and take advantage of social welfare benefits. Or, they find work “off the books,” and thus don’t contribute to the tax base. All of this would seem to be counterproductive to the US economy.
Because the issuance of H1B visas impacts the labor market in a negative way, this negativity can spill over into the financial markets. Contact us to find out how to protect your savings and earn a reasonable rate of return.