Trump pushes against outsourcing, but it's time to go all-in

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The H-1B visa program underwent some changes this week, and it shows one place where President Trump has an opportunity to get it right in his reelection bid.

The Departments of Labor and Homeland Security unveiled the new H-1B work visa guidelines on Tuesday which, in all likelihood, will result in more rejected visa requests.

New requirements from the Department of Labor require companies to pay entry-level workers in the 45th percentile of their profession’s salary, rather than the 17th. For high-skill labor, it rises to the 95th percentile from the 67th percentile. Additionally, the Department of Homeland Security’s rules include limiting the “specialty occupations” H-1B visa holders qualify for, requiring proof that the visa applicant has a college degree in the field they want to work in, and limiting workers hired via third-party firms to one-year work authorizations, down from three years.

There are many issues with the H-1B visa program, but that last provision especially looks to be a winning issue for the Trump administration: tackling outsourcing.

Yes, the H-1B visa program brings people into the United States to work. However, firms like Infosys and Tata Consultancy Services oftentimes use the program in a way it is not intended. They will bring people from, say, India into the country to train for a job — but the goal is not for that worker to stay and work in the U.S. Rather, the Indian workers take that knowledge, go back home, and either do that job in their country for lower wages or train other people to do the job. You might know it better as outsourcing. The Americans who trained those Indian workers had to train their foreign replacement. Companies also sometimes have cheaper foreign replacements work in the U.S. without intending to outsource.

Our country loses an estimated 300,000 jobs a year due to outsourcing. The obvious reason for it is cheap labor. The average IT worker in India, for example, makes the equivalent of $6.65 an hour. Americans don’t like that. In 2016, a poll from Pew Research found that 80% of people thought that outsourcing hurt workers in this country while only 15% said that it helped.

Surely, large companies benefit from that system, and economics books may chalk it up as comparative advantage, but the people who lose their jobs are not better off at home collecting unemployment.

That’s important for Trump to remember, along with the words from his inauguration speech.

“From this day forward, a new vision will govern our land,” he said. “From this moment on, it’s going to be America First. Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength. I will fight for you with every breath in my body — and I will never, ever let you down.”

When there is such an overwhelming dislike for outsourcing jobs among voters, and Joe Biden wants to loosen restrictions on the H-1B visa program, Trump has a clear path to go all-in against it and push for stricter H-1B reforms.

Additionally, Trump could make a populist appeal against other parts of the H-1B program at a time when the country has a high unemployment rate. When 74% of STEM majors with college degrees don’t work in their fields, according to the Census Bureau, it’s hard to make the case that there is some huge need for foreign labor to fill entry-level jobs. Many of these jobs are not exactly going to the best and brightest. After all, 40% of them are entry-level positions. And there is evidence that they depress wages for American workers. Part of the issue is that not only do H-1B workers increase the labor pool, but they also cannot transfer their visas from one company to another and therefore have virtually no leverage over employers.

People want well-paying jobs and to not lose those jobs. While protecting low-wage earners from an influx of illegal immigrant labor understandably takes priority, Trump should also take the opportunity to curry favor with college graduates. After all, he will need to win the college-educated white vote to win another term.

Tom Joyce (@TomJoyceSports) is a freelance writer who has been published in USA Today, the Boston Globe, Newsday, ESPN, the Detroit Free Press, the Pittsburgh Post-Gazette, the Federalist, and a number of other media outlets.

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