The Corner

Wanted: Tech Workers at $1.21 an Hour

Last week’s revelation that Electronics for Imaging, Inc. (EFI) had paid imported Indian workers $1.21 an hour to install computer systems in its Silicon Valley headquarters generated a good deal of outrage. The workers were apparently brought here from the firm’s offices in India on visitor visas that do not permit employment, and were paid their Indian salaries, in rupees, for the several months they were here.

But the outrage missed two importantt points. First, in the words of computer-science professor Norman Matloff, “the industry lobbyists themselves, especially those representing the Googles, Facebooks, Intels and so on, LOVE such cases.”

Why?  Because it gives them a chance to say, “Yes, isn’t it terrible?  Congress should allocate more money to the Dept. of Labor for enforcement of the law — which the record shows that WE strictly adhere to” — deftly distracting attention away from the law itself, which is full of huge loopholes that the lobbyists put there so that their firms could stay legal while abusing the program.

In other words, the big tech companies prefer that attention be focused on “bad apples” rather than the harmful consequences from tech-visa programs themselves, even when users comply fully with the rules. In this vein is a new series from the Center for Investigative Reporting on how workers are exploited by Indian firms using the H-1B visa program.

But the justified anger at the EFI story also missed a second, broader point: What’s wrong with importing foreign workers and paying them $1.21 an hour? Yes, it’s a violation of our minimum-wage laws, but conservatives make a strong case against such laws, especially because they price out of employment people whose productivity doesn’t justify $7.25 an hour — teenagers, people with cognitive disabilities, ex-cons or recovering addicts trying to put their lives back together, et al.

The problem is that if you combine the elimination of minimum wage laws with the kind of open immigration that too many economics-uber-alles free-marketers call for, the inevitable result is what we saw at EFI. (George W. Bush put this position most clearly, calling for the unlimited admission of “willing workers” to take any job in the U.S. at any legal wage.) The two leading ideologists of open immigration in the U.S. policy debate, Alex Nowresteh of the Cato Institute and Bryan Caplan of George Mason University, explicitly welcome the idea of paying imported tech workers an hourly wage of $1.21.

In fact, for less-skilled work, there are scores of millions abroad — perhaps hundreds of millions — who’d work for room and board, without any pay at all, if only they could set foot in the United States. ​Needless to say, the Republic would not survive the immigration policy recommendations of the Cato Institute.

Such doctrinaire libertarianism is blind to the way human societies actually function, which is why open, unlimited immigration will always remain a dystopian fantasy. People are different from goods, something recognized by University of Chicago free-trade pioneer Henry Simons decades ago, when he wrote that ”Free trade may and should raise living standards everywhere. . . . Free immigration would level standards, perhaps without raising them anywhere.” 

But this does present free-market conservatives with a challenge. Since a free market in labor cannot be permitted if our nation is to survive, the question is not whether, but how, to limit immigration. Corporate lobbyists are correct in complaining that the means we use now, especially regarding labor migration (both permanent and “temporary”), are convoluted and excessively bureaucratic. I actually reject the need for any labor migration in a modern society (though the admission of genuine Einsteins can indeed benefit us). But if you think we do need continued labor migration, I’d opt for something like what Reihan Salam suggested on Twitter (here and here): relax numerical caps (he was specifically talking about H-1B visas) but require that those foreign workers hired be paid double the prevailing wage for their positions. If they’re truly the “best and brightest,” as the lobbyists keep telling us, then they’d be worth it, right?