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Sunday, May 13, 2018

The Cheap Labor Loophole
OPT is the Name of the Game

Over the last three years I have been looking at the systemic abuses of F1 visa to OPT conversions. OPT, which euphemistically stands for "Optional Practical Training" is one of the major loopholes that large tech employers are using to circumvent the H1B visa caps while recruiting cheap and captive foreign workers residing within the United States. This loophole facilitates major layoffs of older (and more expensive) domestic employees and subsequently, replacement of these employees with cheap (entry level) foreign employees, using the OPT program for stay/work visa extensions.

Recently, the Pew Research Center published a comprehensive report on the subject of F1 to OPT visa conversion program. This program, driven mostly through the lobbying efforts of large High-tech employers continues to increase in size, completely unchecked.  The Mercury News outlet published a summary of this report in the latter part of this week. As you can see from the article referenced below and the PEW Research Center report, taking advantage of the OPT loophole, has become a standard operating procedure for many high-tech companies. The number of F1 (student visa) holders converted to OPT has grown 400% between 2008 and 2016, as shown in the chart below.

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Note that foreign workers who remain in the U.S. under the OPT program, are effectively, "indebted workers". They are being paid low wages and they are totally dependent on the graces of their employer, to maintain their residence and work permit. This makes them "ideal" target for exploitation. Employers would simply be "stupid" to not take advantage of this loophole to reduce the cost of labor. In the meantime, older domestic workers continue to be laid-off in droves.



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As can be seen from the chart above, Intel Corp. is one of the top companies taking extensive advantage of the F1 visa to OPT conversion loophole. Actually, as the chart above shows, Intel Corp. is No. 1 on the chart, leading all the employers listed above, including Microsoft Corp.

Without a doubt there is a price to pay when a company only focuses on cutting expenses and gets rid of its more experienced (however, more expensive) workers. In the case of Intel Corp. there is no reason to guess where this executive management policy fails. The writing is on the wall for Intel Corp. has been there since the 2015 mass layoff. Recent news about the 10 nm production line failures (see references below) serve as indicators of much more substantial problems to come. The company's ability to execute has diminished significantly, following the 2015 and 2016 massive employee layoffs.


The Mercury News outlet covered the OPT stay/work visa conversions loophole in a recent article, which is mostly based of the Pew Research Center report.

This is a quote from the Mercury News article referenced below:

OPT has caught the attention of critics pushing for reduced immigration. John Miano, a fellow at the Center for Immigration Studies, called the 2008 STEM extension a “scheme” by Microsoft to “circumvent the H-1B quotas.” The program started out giving work-experience opportunities to foreign students but has since been “transformed into a full-blown guestworker program whose stated purpose is to provide labor to American business,” Miano wrote in a September blog post for the center

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Clearly, the numbers shown on the map above speak for themselves. It is difficult to come to any other conclusion other than that the OPT program is pandering to the interests of high tech employers, by supplying access to cheap foreign labor, at the expense of domestic workers.

The Pro Publica article: CUTTING ‘OLD HEADS’ AT IBM, covers the multitude of ways in which older employees in the high-tech sector are loosing their jobs to foreign workers, through a variety of legal loopholes and shenanigans committed by Corporate America.   

When we examine the growing trends in the high tech industrial sector, of laying off older employees and replacing them with cheap and indebted guest workers, it seems that the OPT program lost its original purpose and de facto, under the intense lobbying of big business, was transformed into a U.S. Government sponsored, older worker mass displacement program!

--Dr. Flywheel

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