It’s because the companies are following a flawed process, not that they’re committing fraud.
The PERM process is flawed because it puts the onus of proving a need for international labor in the market on the company instead of doing it at a government level. Say in the market, you have 1000 jobs available for a role, but 900 US citizens available for doing the job. If the companies want to fill the 100 positions with non citizens and provide them to a path for permanent residency, they have to prove that no US citizens are available by advertising the position and hiring for it.
In a theoretical state, none of the 900 candidates will apply for that job because they are already employed. In reality candidates move around, so the test they ask companies to conduct is flawed.
I know people get emotional on this matter but they don’t understand the process. IMO all of this can be avoided if the labor market tests are managed centrally like a lot of countries do. You evaluate the shortage, fill those roles and then update the statistics to reflect that the shortage was filled.
This model assumes that the number of positions is fixed at any given time, but that is not true. Instead, it will fluctuate based on what must be paid. So, to extend your example, without H1B or a similiar program or de-facto state that does the same thing, then we'd get roughly the 900 jobs that are willing to pay the most to be filled, while the rest are not worth the cost of employing someone in this hypothetical market. The result, then, is a higher wage for those 900 citizens.
This is not to say that such programs are bad. To consider that, we must ask questions like:
- Is citizens being able to make much more than non-citizens a desirable outcome? (it's electorally incentivized, since citizens can vote in the relevant elections but non-citizens can not but that is not the same as being desirable in a more broad sense) - How big is this effect? - How badly do we (meaning society at large) want these final 100 jobs done? - How will this affect competition with other countries? - What about outsourcing?
A labor shortage has a temporary effect of creating an upward pressure on the 900 jobs, but there’s a ceiling and the long term effects are complex. I may have to pay 900 jobs 1.5x to attract and retain the talent as a business, but that cost will be eaten by other functions where there’s a surplus. Or long term, the businesses will find ways to either automate or ship the jobs away.
Additionally there will be a loss in productivity for business and the 900 jobs will have more work on their plates, so in a way they could be underpaid for the job they do. This is just scratching the surface, but I assume there’d be a lot of second order effects.
> the businesses will find ways to either automate or ship the jobs away
Both are acceptable terms for me compared to importing cheap labor. If they automate, then at least it creates new high end jobs, and if they ship jobs away then they now have to deal with foreign cultures, foreign courts and legal system, etc that will hamper their business.
That’s because you’re automatically assigning “cheap labor” tag to all workers on visa. Which in itself is not accurate. But these same workers after following the above process become permanent residents and citizens. (Which implies these are the people companies want to retain and move them off a visa by sinking 10s of thousands of dollars) The reality is much more nuanced.
Nope. Companies are just taking advantage of the system. Just look at who the biggest importers are. Tata Consulting? I mean that's clearly just cheap tech labor. I once was contracting and had to train my replacement from Infosys who was there on an H1b visa.
This about the PERM process and Microsoft. Consultancies abusing H1B visas is problematic, there’s no denying that. But this is a separate matter.
> I know people get emotional on this matter but they don’t understand the process.
This kind of “logic”—the process is broken, therefore it’s okay to cheat—isn’t very popular with Americans.
So anyone following the immigration process laid out by the government is cheating?
They elected a president twice that says he was being “smart” by avoiding taxes. Americans are fine with this logic.
> This kind of “logic”—the process is broken, therefore it’s okay to cheat—isn’t very popular with Americans.
Especially because when such processes are broken they usually got that way not on accident, but because of sustained lobbying by the same forces that then take advantage of the broken system they helped to shape.
(I'm speaking generally, not necessarily claiming it applies to the particular policy being discussed here, which I'm not super familiar with the history of one way or the other).
The companies lobbied for this process. It's flawed by design. If ti worked as you suggest, then companies couldn't exploit their workers.
TLDR;
They were committing fraud fraud fraud
We need clawbacks from the C-suite and disgorgement of illicit profits