The president is betting big on a thin economic record.
Don’t Bother Learning to Code
Ruthless outsourcing will be the death of the American Dream.
The shotgun blast reverberated across the parking garage of Bank of America’s Concord Technology Center in the Bay Area suburb of Walnut Creek, California.
In the front seat of a pickup truck sat the lifeless body of Kevin Flanagan beside a 12-gauge Remington. Behind him were boxes of his personal effects from his office at Bank of America, where the programmer had worked for nearly a decade.
In the months leading up to his 2003 suicide, Bank of America had forced Flanagan and his colleagues to train their foreign replacements before laying them off. These transplants entered the United States on the H-1B worker visa. After months of the humiliation of having to train his replacement, a broken Flanagan climbed into his truck and shot himself in the head the day Bank of America let him go. “Kevin losing his job with Bank of America was the defining event in his decision to end his life,” said Tom Flanagan, his father.
Come late summer, ears still ringing from the shot heard ’round the industry, protestors gathered at the office where Flanagan once worked. “The pressure to reduce workers’ wages and rights due to government subsidized labor creates terrible desperation in the work force,” said organizer and spokesman Lee Perry, “expressed to its ultimate degree by Kevin Flanagan.”
The Nobel Prize-winning economist Milton Friedman characterized the H-1B visa as a government subsidy program the year before. Socialism for the rich.
But bad press and picket lines in parking lots fell on deaf ears.
Vivek Paul, then vice chairman and president of Wipro Technologies, told reporters he felt confident, despite Flanagan’s suicide, that his business would outlast the outcry. “We know how this movie ends,” he sniffed. “If a decade ago we discovered that manufacturing can be done anywhere, in this decade we are learning that knowledge can be learned anywhere.”
Americans like Flanagan were just extras to be killed off in the Silicon Valley slasher film.
Paul, nevertheless, turned out to be a prophet. Bank of America sacrificed another hundred tech support workers with the same ghoulish ritual three years later. Of course, the bank was careful not to spell out the details in which the devil resided. But American workers received the message loud and clear. “If people want their severance packages,” a senior engineer told reporters, “they have to train their replacements.”
Those who learn to code have done so with a sword hung over their head ever since. No amount of updating one’s skills makes one “future-proof” in the crushing maw of this industry, which always looks to sink its teeth into cheaper labor.
The Highly-Skilled Worker Scam
I came across Flanagan’s story while reading about the L-1 program, an obscure relative of the H-1B. The H-1B visa enables foreign nationals with specialized skills to enter the country and work in a relevant industry. Between 2007 and 2017, figures from the U.S. Citizenship and Immigration Services show 3,401,117 H1-B receipts and 2,634,328 approvals. How many Flanagans were they worth?
The L-1B visa works similarly. It allows an employer to transfer an employee with “specialized knowledge” relating to the organization’s interests from its affiliated foreign offices to one of its offices in America. There is also the L-1A visa, which gives American employers the ability to transfer an executive or manager from one of its foreign offices to one of its offices in the United States.
The L-1A also enables a foreign company that does not yet have an affiliated office in America to send an executive or manager to the United States to establish one. The majority of L-1 holders work in the fields of computer science and I.T. Companies that use the H-1B to replace American workers use the L-1 for the same purpose.
In 2006, the Office of the Inspector General reported that USCIS found it difficult to verify that L-1A-imported managers actually were employed as such. In other words, foreign “managers” can just end up replacing rank-and-file American workers.
The report also found the definition of “specialized knowledge” so broad as to be meaningless, making almost every L-1B petition approvable. Indeed, a common refrain from visa program advocates is that foreign nationals are just as knowledgeable as the American workers they replace, if not more so. That is simply not the case.
Drawing on data from the Program for International Assessment of Adult Competencies, the Center for Immigration Studies found that foreign-educated immigrants with a college or advanced degree perform poorly in both literacy and computer operations, scoring at the level of Americans with only a high-school diploma. One in six foreign degree holders score “below basic” in numeracy—so much for STEM supremacy. Skill disparities persist even after foreign degree holders have had at least five years in the United States to learn English. Underpaid, overworked, and in over their heads, some foreign workers crack.
On September 19, 2019, reportedly after a bad performance review and driven to the edge by the corporate bullwhip, Qin Chen, an H-1B worker, jumped to his death from the fourth story of Facebook’s Menlo Park office in California. The Silicon Valley masters of the universe gazed on Chen’s body, lying 45 miles from where Flanagan ended his life nearly two decades before, and put a bloody finger to their lips.
For defiantly speaking out against Facebook’s gag order on the incident, Chen’s colleague was fired, told to pay back a prorated portion of his sign-on bonus, and informed the company would not cover the cost of a trip home to China. Companies can replace these workers with the same cruel abandon that they replace Americans.
The annual H-1B quota stands at 65,000 per year. There is an additional 20,000 set aside for applicants holding a degree from an American graduate school, such as those studying on a J-1 “exchange visitors” visa. The J-1 typically goes to teachers, professors, research scholars, for whom the visa expires after five years.
To obtain a J-1, applicants must show their intention to return to their country origin at the end of the program, because the program is “designed to promote the interchange of persons, knowledge, and skills, in the fields of education, arts, and science.” But there is nothing so permanent as a temporary nonimmigrant visitor. J-1 holders can apply for an adjustment of status to H-1B. The H-1B is a dual-intent visa, which means it offers a path to a green card.
With a few twists and turns, then, exchange visitors become permanent residents who displace Americans in the fields of education, arts, and science.
Unlike the H-1B, however, an unlimited number of L-1 visas can be issued. There is also no specific minimum salary requirement with the L-1. Why primarily import workers from poorer countries? “Wages for L-1’s are tied to their home country, not the prevailing wage in the United States,” as Senator Chuck Grassley (R-Iowa) noted in a letter to Acting Homeland Security Inspector General Charles Edwards in 2011.
Since 1998, Uncle Sam has issued roughly 1,500,000 L-1 visas, the lion’s share of which have gone to tech companies. “There’s growing concern by many experts that companies are turning to L visas when the supply of H-1B visas are low,” Grassley wrote.
Michael Emmons is painfully familiar with this process.
Emmons is a veteran of the I.T. industry. He tells me how the pay he earned helped him provide for his daughter, who suffers from spina bifida and hydrocephalus. Her spine and spinal cord aren’t properly formed, and there is a build-up of spinal fluid in the ventricles of her brain which affects her motor and cognitive functions. When she’s not on crutches, she uses a wheelchair. Nevertheless, with a calm and measured voice, Emmons tells me: “We’re blessed to be in America.”
Emmons worked for Siemens Information and Communication Networks as a contractor for six years in Florida, doing well enough to cover his daughter’s monthly $900 health insurance premium. But all that changed in the span of a half-hour meeting in 2002. “Next thing you know, I’m told to train replacement workers right here in my own hometown so we can be laid off.” He was one of about 20 white-collar employees and contractors—some of whom had been with Siemens for decades—told they would be fired and could only keep their severance pay if they trained their foreign replacements.
“We were a very diverse group,” Emmons says of his team at the time, “male, female, Hispanic, black, white, and Asian Americans.” Together they built custom software that an all-young, male, Indian team usurped for less pay, saving Siemens a pretty penny.
After some sleuthing, Emmons got hold of staffing documents and discovered many of these replacements came to America on L-1B visas. “Everyone just assumes they’re H-1Bs,” he said, “and I bet many, many of the people think they’re H-1Bs. They’re really L-1Bs.”
How does a foreign national enter the United States through a visa designed for intracompany employee transfers? That’s where Tata Consultancy Services (TCS), an outsourcing giant based in Mumbai, comes in.
TCS partners with companies like Siemens to find cheap labor abroad. As a consultant under the Siemens umbrella, TCS transfers them to the United States, where they replace Americans as employees of TCS, not actually Siemens. In some cases, after their American counterparts train them and exit the building, entire divisions, such as tech support, are exported abroad.
The whole process is parasitic. “These people don’t have a product,” says Emmons, “they just sell people.”
And the people-selling business is booming. Using data from the Commerce Department, the American author and academic Michael Lind found that between 1999 and 2009, U.S. multinational corporations cut 864,600 workers domestically while adding 2.9 million workers abroad. In 2018, TCS reached $100 billion market capitalization, making it the second Indian company to do so.
Emmons and his colleagues appealed to John L. Mica, then a Republican congressman in Florida. Mica initially waxed sympathetic, but ultimately sat on his hands. The Center for Responsive Politics, a non-profit, nonpartisan research group, found Mica received $3,999 in donations from Siemens between when Emmons first spoke to him in August and the November elections that were around the corner.
The more recent November election of 2016 was supposed to break the cycle of bought silence and be a turning point in this fight.
Since the early aughts, American workers have performed a Tiananmen Square “Tank Man” routine, sometimes slowing, but never stopping, the forces of globalization. President Trump’s administration would finally bring to bear much-needed artillery. Or so we thought.
Before a raucous crowd in Madison, Alabama, two former Disney I.T. workers took the stage with then-candidate Donald Trump while he blazed the campaign trail in 2016. They were part of a group of about 300 I.T. workers put on professional death row by the Magic Kingdom the year before.
Employees were called one at a time into conference rooms, like victims of Stalin’s Great Purge, and informed of their termination by an executive monotonously reading from a script. They trained their H1-B and L-1 replacements, who the New York Times reported were not knowledgeable industry veterans but “younger technicians with limited skills [who] did not speak English fluently and had to be instructed in the basics of the work.”
“Some of these folks were literally flown in the day before to take over the exact same job I was doing,” one of the I.T. workers told Computerworld. Like Flanagan and Emmons, they felt humiliated and angry over the fact that they had to train someone from India “on site, in our country.”
“Our jobs are not only being given to foreigners,” former Disney I.T. worker Dena Moore told the crowd of Trump supporters, “but they are robbing Americans of our futures and our dreams.” Americans, she said, are “not coming forward because you know we have been taught all our whole lives just to make do and keep going on.”
I thought back to what the bank official in charge of firing Flanagan told police of his disposition on the day he died, that he was in “good spirits and had been taking it well.” Moore was speaking for Kevin on that stage.
“I feel if we want to achieve the American dream, or even more important, keep what is ours,” Moore went on, “the American dream we have already struggled to create, the American dream that others have sacrificed for us, now is the time to link arms with a champion.” The crowd broke into cheers. The champion of so many Americans living lives of quiet desperation, she declared, was Donald Trump. “He shares our vision, our dreams, and will fight for our futures.”
While President Trump may share in the vision, dreams, and fight of forgotten Americans, prominent members of his administration do not. Whatever gains Trump made on this front since Moore gave that speech, they are quietly undoing. The turning point, ironically, came with the import of a foreign pathogen.
In response to the coronavirus pandemic, the administration assembled executives, economists, scholars, and industry leaders to form a conglomerate “to chart the path forward toward a future of unparalleled American prosperity.” These groups now have a direct line of communication to the White House. They are also among the chief abusers of American workers.
Along with Kevin Flanagan’s former employer, Bank of America, the “Great American Economic Revival Industry Groups” include some of the top H-1B users: Walmart, JPMorgan Chase, Facebook, Amazon, Google, IBM, Goldman Sachs, Salesforce, Intel, Uber, Apple, and others. Verizon and Qualcomm, both on the list, outsourced thousands of jobs only recently. Scann the long list of approved L-1 petitions by employer for any given year, and you will see many of these same names.
The week after these groups came into the administration’s fold, the president announced he would suspend immigration to the United States to protect jobs and wages of Americans. But the “Great American Economic Revival Industry Groups” didn’t take kindly to the idea.
“Tim Cook won’t like this, Mr. President,” said Derek Lyons, then the White House staff secretary, after Trump tweeted his intention to impose the immigration moratorium on April 20. Cook’s voice evidently trumped that of the 36.5 million and counting Americans unemployed as a consequence of the pandemic.
Before coming to the White House, Lyons was a senior associate with Boyden Gray & Associates, a law firm founded by Boyden Gray, White House Counsel to President George H.W. Bush. “On behalf of a group of Silicon Valley entrepreneurs and investors,” Lyons represented TechFreedom against the Federal Communications Commission in 2016.
Lyons served on Jeb Bush’s 2016 presidential campaign, and then as General Counsel for Senator Rob Portman (R-OH), an advocate for expanding worker visas. He joined the administration in January 2017, and, in early May 2020, two weeks after he cautioned the president of the United States not to offend the Silicon Valley entrepreneurs and investors he once represented, he was promoted to counselor to the president, while keeping his job as White House staff secretary.
Tim Cook and Lyons have a mutual and influential ally in the White House. Lyons, Politico reports, is close to Trump’s son-in-law and senior adviser, Jared Kushner. Many wrote it off as a coincidence that Lyons, with Kushner’s hand at his back, climbed through the ranks of the administration.
The mirage of coincidence melted away on April 21 when the Spectator USA reported that an “internal battle” erupted in the White House over the immigration moratorium. Sources told the Spectator that Kushner “is one of the loudest voices pushing back on a full ban and is seeking to carve out exemptions for refugees, temporary workers under the H1B visa program, and farmworkers under the H-2A visa program.”
When the immigration “ban” finally came, it painstakingly exempted virtually every type of visa worker program. Even amid a public health emergency turned unemployment crisis, the White House’s industry groups were enabled to use these programs to rob Americans of jobs and wages—and that is precisely what is happening.
“Right now there are a lot of companies that are firing a lot of Americans and they’re keeping their foreign visa-holders,” said Sara Blackwell in a recent interview with Michelle Malkin. Blackwell is a lawyer who represents Americans displaced by workers on visas or overseas. “If you look at it from the employer’s point of view, if they fire the foreign visa-holder, they have to report it and then they have to let the foreign visa-holder go,” Blackwell went on, “and then if they have to rehire them, that company has to redo the paperwork and redo all this other stuff. It’s just easier to keep the foreign workers there and let the Americans go and then rehire them if they can.”
Kushner scored a total victory for companies that exploit visa worker programs, then went further.
Shortly after Lyons put on the counselor’s cap, President Trump named Brooke Rollins acting director of the Domestic Policy Council. Rollins, like Lyons, is a close ally to Kushner. She recently worked with Kushner in the White House Office of American Innovation on immigration policy. “Rollins supports the Jared Kushner agenda,” tweeted U.S. Tech Workers, a non-profit representing white-collar workers harmed by visa programs. “She has been a proud supporter of the H-1B visa program & wishes for it to be expanded.”
Rollins is a friend to those who have made their fortunes selling out America. Before ascending to her new domestic policy post, she was president and CEO of the Texas Public Policy Foundation (TPPF) until 2018. Journalist Mark Hand described TPPF as “a Koch-funded research and advocacy group.” Indeed, a list of TPPF’s donors posted online revealed a long list of visa worker lobbyists, including Koch Industries, Inc.
In 2016, Rollins’s think tank published a study that concluded the solution to “reducing” illegal immigration is to expand the H-2A agricultural worker program. But programs like H-2A in fact contribute to illegal immigration, because “temporary” workers come, overstay their visas, and never leave. The study also called for removing housing stipulations for H2-A employers who are required to put up their workers.
Rollins’ organization argued it is even too much to ask employers to provide these workers, often paid awful wages and forced to work in awful conditions, with at least room and board. In short, her organization concluded the “solution” to illegal immigration is giving out so many visas that it just stops being a problem, while making as many concessions as possible to cheap labor exploiters.
Among the other “failings and weaknesses” of the American immigration system, Rollins’ foundation lamented limitations on the number of available green cards and H-1B visas. “Excessive government oversight” of programs like H-1B, “particularly in the form of audits, consumes an extraordinary amount of a company’s time and resources.” The study cites Stuart Anderson as an authority pointing to “key problems” in our immigration system that need to be redressed. Anderson is an advocate for radically expanding both the H-1B and L-1 visa programs. Now he has an ally in the White House’s policy shop.
For Rollins, who oversees immigration policy in the White House, replacing American workers and outsourcing their jobs is a no-brainer—and always has been.
When asked by Texas Monthly‘s Erica Grieder if she saw the U.S. “expanding the number of visas for highly skilled workers,” Rollins responded emphatically. “Yes. That, I think, is the easy solution. I don’t know of anyone who is against that—Republicans, Democrats, educated, not-educated, blue collar, white collar.”
I wondered what people like Dena Moore and Kevin Flanagan might think, so I asked.
“I’m the Rodney Dangerfield of this movement,” Virgil Bierschwale told me over the phone after I asked him if he ever spoke to the press about his white-collar woes. “You know what I mean by that? I get no respect,” he said with a Texas twang. Bierschwale is a veteran of both the Navy and the I.T. industry. He took up tech in 1984 and, in time, became skilled enough to lead I.T. development teams. However, starting in 2003—around the time of Flanagan’s suicide and Emmons’ firing—jobs became harder to find and hold.
By 2007, Bierschwale said, “I began to hear from other people like myself, and over the course of the next five years, we finally began to realize what was happening.” People like Bierschwale realized that they were competing in a market saturated with foreign visa workers, against corporations boosting their profits through global arbitrage—defined by Lind as “the strategy of taking advantage of differences in wages, regulations, or taxes among different political jurisdictions in the world or among states or provinces in a federal nation-state.”
It did not matter how good they were at their jobs if their employers could lobby politicians for cheap labor. “I never went a day without work before that,” Bierschwale said. When I mentioned Rollins to him, he said he’s never heard of her. When I told him that she can’t find one person opposed to expanding programs like the H-1B, he said: “Feel free to tell her my name.”
Because Bierschwale could not find a politician to care, he put himself down as a write-in candidate for Texas’s 11th congressional district.
Tech workers are generally without a voice in this fight and have only each other to depend upon. Sometimes, that comes at the cost of a job, as it did for Robert Coleman.
He is uninterested in politics but wanted to share his experience as a manager in the I.T. industry. Coleman tells me about what is essentially a decapitation strategy for outsourcing. “They start to bring people over on the H-1B visas, as programmers, and as managers, because if you start replacing the U.S. managers, it makes it easier to outsource people.” While it is not the case with imported managers, the tendency among American managers, Coleman says, is to “bucket the idea of firing people and outsourcing to people from India” or other countries.
He experienced this firsthand as a manager at Highmark, a healthcare company and Integrated Delivery Network based in Pittsburgh, Pennsylvania. “Highmark actually came out and told us one day in a meeting, and that was a meeting of managers, not the staff, that their new plan was a ’70/30 plan,'” he said. That is, “they wanted to have 70% of their work done offshore and 30% here in America.”
In December 2018, corporate asked managers at Highmark to compile names of American workers to be fired so their jobs could be outsourced. “Myself and one other manager, we refused to give them any names of people to fire. We did not have any people who were not doing their jobs. We had good people.” Only Coleman and his colleague, a fellow manager, refused to sell out the Americans who worked under them. But no good deed goes unpunished in this industry.
Come January 2019, a “restructuring” saw just two managers fired: Coleman and the one other manager who stood up for American workers. “Him and myself were both told we were doing an outstanding job. We both had gotten good reviews, he had been there for 17 years, always got very good reviews.”
Companies like Highmark profit from these schemes in more ways than one. On the one hand, they save money through their captive labor force, which they pay less than their American counterparts. On the other hand, because these workers generally are less skilled than the Americans they replace, it takes them longer to complete projects for which companies contract by the hour. These companies charge for more contract hours while paying lower wages to workers—a great recipe for a bigger bottom line.
While bottom lines fatten in this way, however, American workers suffer.
By the time Anthem, a health insurance provider, let Melody Brooks go, the I.T. department was composed almost entirely of foreign transplants. Layoffs of 50 or so employees at a time had been the norm since she started working at the company in 1998. But Anthem became a killing field in 2019.
“A hundred in January, 1,000 in March, and 700 in May,” Brooks said. Anthem fired her with the group in May. “I was the only American woman left in my department,” Brooks recalls. She eventually was only permitted to speak with visa workers at her department. “And if I tried to speak to an American, or another fellow American without including them, I’d get written up.”
“I couldn’t talk to other Anthem Americans. I was isolated and ostracized.” The strain at work emotionally isolated Brooks from her husband, who could not understand her plight. They recently divorced.
By the end of 2019, Anthem cut 1,800 workers loose. Brooks’s colleague, still at Anthem, tells her the company is outsourcing much of its I.T. work to IBM—a top H-1B and L-1 user. Both Anthem and IBM are on the administration’s list of industry groups.
I learned from a profile by Donald L. Barlett and James B. Steele that Kevin Flanagan studied computer science and philosophy at California State University in Long Beach. The common thread that runs through every conversation I had with workers is the belief that this question is not political, but philosophical—and it is an old question.
Americans suffering through the Siege of Yorktown relied on French muskets and ships to break the hand of Britannia. They resolved afterward to construct a system capable of producing the necessities of life so that our national destiny would never again hang on foreign wares and talents. That system was based on the philosophy that our nation exists first and foremost for American citizens—to borrow a line from Viscount Palmerston, the interests of citizens are eternal and perpetual, and these interests it is the duty of the government to follow.
Freed from George III after the American Revolution, the machinery of government today is captive to the whims of petty princes. Now it appears we are witnessing a revolution of sorts unfold before our eyes, as the pandemic provides the managerial elite an opportunity to fuse themselves more perfectly to the engines of policy. The American government is reduced to a middle man between the managers with transnational interests, rather than a defender of sovereignty and the commonweal. The managers are entombing the very people who laid the foundations of American greatness and are using our government to pour the slab.
As Tom Flanagan said of his son, American workers remain “so desperately in need of help.” Fathers should not have to bury sons, and citizens should not have to bury the American dream.
The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.
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