The Assault on Laborers Wages in America & Abroad - UPDATED With Addendum |

The Assault on Laborers Wages in America & Abroad – UPDATED With Addendum

By Mitch Gurney

June 11, 2011

We have met the enemy and he is usPogo, Author Walt Kelly

In some of my articles where I write about our dire U.S employment situation I’ve only discussed outsourcing and the impact it has on our standard of living as our wages are driven down and jobs disappear. Until now I’ve not discussed the impact that immigrant workers via H1-B visas have as well.

A recent article by Yahoo News, College-educated immigrants outnumber unskilled immigrants,  features a Brookings report “The Geography of Immigrant Skills” that indicates American workers on many fronts could be losing in this wage race to the bottom. 

While the focus of the article is on the percentages of college-educated immigrants versus unskilled immigrants, the real meat of the story is here:

More college-educated immigrants came to the United States in the past 10 years than immigrants lacking a high school education, in part due to increased demand from U.S. employers. Half of all skilled immigrants are overqualified for their current jobs, the report finds. The Washington Post summarized the Brookings findings in a front-page report today, and found that some regional employers are increasingly favoring a foreign-born workforce. Some employers may say they prefer immigrants to native-born workers. When Samir Kumar needs to hire employees for his Northern Virginia-based IT business, he often looks overseas. Not only do workers from India and Ukraine have the required training, but their expectations are lower, he said.

“They actually don’t demand a very high amount of salary, and the expectations are kind of grounded and they don’t jump around so much” between companies, said the 39-year-old Ashburn resident, an immigrant from India. U.S.-born technology and business analysts are hard to find and hard to retain, he said, while immigrants with the same skills and education “are much easier to manage.”

It’s imperative to fully grasp the implications of the message in those words I’ve highlighted in red font. While this article pertains to immigrants the same criteria that drive some of these regional employers to seek low wage workers are what drive U.S multinational companies to outsource. Some employers shop for workers like you and I might shop for the best deal on a used car. This assault on wages, however, not only impacts American wages but those of European laborers and even the already low wages of the 3rd world nations as well.

Addendum (6/12/11):

Regional employers hiring H1-B visa employees are required by law to pay 100 percent of the prevailing wages. To protect the wages of U.S workers, employers are required to file several citations when hiring H1-B employees, one of which is a Labor Condition Application (LCA), Wiki explains:

The U.S. Department of Labor (DOL) is responsible for ensuring that foreign workers do not displace or adversely affect wages or working conditions of U.S. workers.

While an employer is not required to advertise the position before hiring an H-1B non-immigrant pursuant to the H-1B visa approval, the employer is required to notify the employee representative about the LCA …the employer is required to publish that LCA at the workplace and the employer’s office…by signing the LCA, the employer attests that: prevailing wage rate for area of employment will be paid; working conditions of position will not adversely affect conditions of similarly employed American workers; place of employment not experiencing labor dispute involving a strike or lockout

The LCA included in the H-1B petition is supposed to ensure that H-1B workers are paid the prevailing wage in the labor market, or the employer’s actual average wage (whichever is higher), but evidence exists that some employers do not abide by these provisions and avoid paying the actual prevailing wage despite stiff penalties for abusers.

Most employers are probably abiding by the law and paying prevailing wages but there is one certainty; for each H1-B employee hired is one more American that is not hired. And this increases the competition that confronts American workers. The following paragraph illustrates that powerful business and political leaders plan to expand the H1-B visa programs but on a false premise:

Mayor Michael Bloomberg and other business leaders (including Fox News owner Rupert Murdoch) have argued that the immigration system should shift away from the family reunification model, and give employers more leeway to attract high-skilled immigrants to settle in America and perhaps open their own businesses that would create jobs here.

Some naive Americans may fall for that line of crap but the false premise is that this might create more jobs here, but even if so, for whom? Based on this report it would not necessarily be Americans. It’s B.S when business leaders say they can’t find American workers with the required training. What they’re really saying is they can’t find American workers with low salary expectations, that don’t demand much and are easy to “manage.”

After reading that article and still fired up I read this report, Sexual Predators and Serial Rapists Run Wild at Wal-Mart Supplier in Jordan, According to New Report By Institute for Global Labour and Human Rights featured at Keep America at Work . The report “documents in great detail and in the workers’ own words how scores of young Sri Lankan women sewing clothing for Wal-Mart and Hanes have suffered routine sexual abuse and repeated rapes, and in some cases even torture” at a garment factory in Jordan:

Classic, the largest garment export factory in Jordan, sews clothing for Wal-Mart, Hanes, GAP, Kohl’s, Target and Macy’s. The garments enter the U.S. duty-free under the U.S.-Jordan Free Trade Agreement.

One young rape victim at the Classic factory in Jordan told us her assailant, a manager bit her, leaving scars all over her body. Women who become pregnant are forcibly deported and returned to Sri Lanka. Women who refuse the sexual advances of Classic’s managers are also beaten and deported.

The standard shift at Classic is 13 hours a day, six and seven days a week, with some 18 ½ hour shifts before the clothing must be shipped to the U.S. Workers are routinely cursed at, hit and shortchanged of their wages for failing to reach their mandatory production goals. To press the women to work faster, managers grope and fondle them.

On releasing the report, Institute for Global Labour and Human Rights director Charles Kernaghan said,

“The minimal efforts of Wal-Mart, Hanes and the other labels to monitor factory conditions at Classic have failed completely.”

This is horrible and so very tragic for those poor women. This is what happens with an unregulated ‘free trade’ in which U.S multinational companies pursue cheap labor around the globe. Many may think this can never happen here but there was a time when sweatshop working conditions and cheap wages were the norm. This history is being relived abroad but if we’re not careful we may repeat it here.

In December 2010 nearly 100 years after the 1911 Triangle Shirt Factory fire in New York a fire broke out at the Ha-Meen Group Garment Factory in Bangladesh, killing 25. Ha-Meen is the third largest exporter of clothing for the U.S, manufacturing for Wal-Mart and the Gap,  among others. Ha-Meen employs over 13,000 workers that today earn about .28 cents per hour making Gap jeans, for example, that sell in malls across the U.S for $26.95. Ha-Meen paid the families of the fire victims roughly $1,420. Bangladesh has over 4,000 garment factories that manufacture for Wal-Mart, Gap, JCPenney, Kohl’s, Tommy Hilfiger, Levi Strauss and others. The factories are concentrated in a region of Bangladesh known as the Chittagong Export Processing Zone. “The zone, southeast of Dhaka, houses about 70 foreign companies that mainly manufacture garments, shoes and bicycles, and employ about 150,000 workers.”

There are no labor laws protecting workers in these countries. At the time of the Ha-Meen fire workers were protesting and demanding an increase from .28 cents per hour to .35 cents but the factories prestigious customers refused. Local authorities forcibly squashed the protest. Bud Meyers, in America’s Race to the Bottom writes:

Many of you have heard about New York City’s Triangle Shirtwaist fire in 1911 in when 146 young girls died. Labor unions rose up and worker’s rights were born because of sweatshop abuses in America.

But atrocities are still happening all around the world today…this is how corporate America stays “competitive in the marketplace”, and why they outsource our jobs. Rather than set an example of decency and fair play, and show human respect, they abuse human rights and use slave labor for profits, all while putting Americans out of work and forcing them into poverty.

For over 40 years American corporations have exported American jobs to produce cheap products made from slave labor in foreign countries to import to the United States.

There were no laws protecting workers in the U.S. at the time of the Triangle Shirt Factory fire and sweatshop conditions were common then as now in Bangladesh and other areas like Jordan. Workers at the Triangle Shirt Factory earned .14 cents per hour and adjusted for inflation would today be about $3.15 per hour. By 1938 labor laws were finally enacted ending sweatshops in America. By comparison, workers in Bangladesh are still without laws to protect them; at .28 cents per hour earn 1/10th of that earned by the workers at the Triangle Factory over 100 years ago.

America’s companies are ambassadors representing our nation and the American people around the world. With crap like this occurring is it any wonder why so many people don’t like us?

Charles Hugh Smith observes in The bankruptcy of Corporate America

Corporate America is profoundly bankrupt. Not in a financial sense, of course; the Federal Reserve’s slow destruction of the U.S. dollar has boosted corporate profits most handsomely as the majority of their earnings and profits are obtained overseas; when stated in dollars, those outsized profits swell even higher.

No, the bankruptcy of Corporate America is not found on the bottom line; it is measured by altogether more profound metrics than mere money. Corporate America is bankrupt on levels which are difficult to describe; morally and spiritually bankrupt, not just in the pathologies that guide corporate goals and behaviors, but in the Potemkin shell of free enterprise they present to the world in ceaseless propaganda, and in the manner in which they have cut America loose from their corporate souls.

Corporate America only resides in America because it controls the machinery of governance and regulation here for pathetically modest investments in lobbying and campaign contributions. It would be impossible to replace the global Empire that protects and nurtures it, and so Corporate America maintains its headquarters in America, the better to shape policy and skim gargantuan profits from the Empire and its Central State in Washington.

In addition, and not to negate from the importance of these atrocious working conditions, I draw your attention to this statement in the Jordan report:

The garments enter the U.S. duty-free under the U.S.-Jordan Free Trade Agreement.

A while back I wrote Revisiting NAFTA where I document how Fruit of the Loom and other apparel companies successfully lobbied for tariff breaks in the late1990’s and noted:

“…the much coveted tariff break comes at a cost.” Eliminating duties on apparel from the Caribbean will run U.S. taxpayers at least $1 billion in lost revenue over five years–a figure that, by congressional rules, must be made up with cuts in other programs. (“Trade and Development Act of 2000”)”

Fruit of the Loom acknowledged realizing a $25 – $ 50 million windfall, at taxpayer expense.

And we wonder why the Fed runs such huge annual deficits. If American companies want cheap labor there may be little we can do about that, but they should not be granted special tax breaks at taxpayer expense. If they have their goods made abroad and imported to the U.S they should shoulder the expense from such a decision. I know the objections some might make to that; if companies have to pay tariffs they’ll pass it onto the consumer. My reply; we’re paying for it anyway, under either scenario. Like the U.S did over 100 years ago foreign governments should respect their own citizens more and enact laws that protect them. And the global community should hold corporations accountable as the U.S did over 100 years ago.

Mitch Gurney

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