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As if the prospect of losing control over personnel decisions and inviting intrusive federal scrutiny isn’t enough to render the H-1B program useless, the Gang of 8’s proposal goes further. Under current law, employers must pay foreigners the same wages as American workers. But the senators, including Democrat Dick Durbin of Illinois and Republican Lindsey Graham of South Carolina, want to require that foreign nationals be paid “significantly more.”
How much more? Essentially, the proposed reforms would eliminate the first tier of the four-tier formula that is currently used to calculate prevailing wages in an industry, Anderson says. This would mean that employers would have to pay foreign nationals who are just out of college the same wage as an American with several years of experience in the company. Anderson estimates that this could add up to $10,000 to $18,000 more for every H-1B hired.
Supporters of this formula say it would protect American workers from being replaced by younger foreign counterparts. In reality, it is aimed at pricing foreigners out of the labor market. Legally requiring foreigners to be paid more will also hand restrictionists potent new ammunition to whip-up anti-immigrant sentiment and further poison the reform debate.
More to the point, such labor protectionism will backfire. If the U.S. technology industry is forced to pay a premium for talent as well as open itself to government harassment, it will be more tempted to outsource operations to friendlier climes, hardly a recipe for job creation.
The proposed H-1B “reforms” will help neither workers — American or foreign — nor companies. The only winners will be labor bureaucrats who'll get new powers of harrasment. They deserve no place in the final law.
A version of this column appeared in Bloomberg View.