by Paul Craig Roberts, Paul Craig Roberts:
President Trump’s economic proposals, with one exception, constitute a coherent package. I will address his proposals in a later column. Today I address his bad idea that would cause the failure of Trump’s renewal of the American economy. That bad idea is H-1B and L-1 work visas. For the past three decades, American manufacturing, engineering, and design jobs have been moved offshore. US corporations use foreign labor to design, engineer, and manufacture the products that they sell to Americans. The consequence is to deny Americans the income from producing the goods and services that they consume. Wall Street and the corporations have imposed deindustrialization on the United States, thereby putting it on the road to a third world economy.
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H-1B and L-1 visas add to this loss of American employment and income from jobs offshoring. A minimum of 85,000 H-1B visas are granted each year. This means that 85,000 Americans are displaced from working in the IT and engineering sectors of the US economy. By the time the visas expire, the foreigners are integrated into the work force and are on their way to receiving green cards, Over a 10 year period, 850,000 American jobs have been given to non-citizens.
According to the US Bureau of Labor Statistics, in December 2024 there were only 1,083,000 people employed in the US in computer and electronic product manufacturing. Computer systems design and related services shows 2,545,000 US jobs. Obviously, of the jobs left in America, those on H-1B visas are taking a sizable chunk.
There is no annual limit on the number of L-1 visas. In 2019 there were 77,000 L-1 visas issued.
For three decades I have addressed the problem of the American work force being denied the income associated with the production of the goods and services that they consume. This policy was initially forced on American corporations by Wall Street. Today it is the source of high stock prices, executive “performance bonuses,” and the massive US trade deficit. Wall Street and a few executives have benefitted greatly at the expense of the American work force, city and state tax bases in former manufacturing states, and the US trade deficit. Trump mistakenly believes that America’s trade deficit is China’s fault. It is not. It is entirely the fault of the American corporations who offshore their production for the US market. When the US corporations bring their foreign produced goods and services back to America to sell, they come in as imports. Apparently, American corporations and Trump’s advisers have managed to keep the facts from Trump.
Part of the problem is that American economists are so incompetent that they think jobs offshoring is free trade from which everyone benefits. These economists would benefit from visiting the American cities from which manufacturing was moved offshore. Then they should go visit the cities hosting offshored manufacturing, and they will see who has benefitted. China’s rapid economic rise was caused by US corporations offshoring American jobs.
In actual fact American economists are as corrupt as all other professions, because they are paid to write the narratives for those with the money.
During the 30 years of American jobs offshoring, the large wage difference between the US and China, Vietnam, Indonesia, Mexico has accounted for the bulk of corporate reported earnings. To be clear, stockholders and executives have benefited from American corporations forcing the American work force into lowly paid jobs stocking shelves in big box stores with products made abroad.
There is no way that Trump is going to bring jobs back to America when he endorses work visas for foreigners that take away American jobs.
I have written endlessly about this to no effect. The political campaign donations from the offshoring corporations, every one a traitor to America, speaks more forcibly than my voice.
It is not only my voice that is not heard. It is also the voices of billionaires Sir James Goldsmith and Roger Milliken, both now deceased, and the voices of Ralph Gomery and Michael Teitelbaum of the Alfred P. Sloan Foundation. I think the reason facts could not be heard is that conservatives think in terms of business vs. government. Business is good and government is bad. Consequently, conservatives do not understand that government is what business uses to feather its own nest. Similarly, free market economists confuse free trade with business feathering its own nest. Thus, they dismiss opposition to jobs offshoring as an attack on free trade.
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