Businessweek Drops The Ball On H-1B Story
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A new Businessweek article and a sidebar [How the System Works]that accompanies it describe some of the fraudulent activities that occur in the H-1B program.
America's High-Tech Sweatshops U.S. companies may be contributing unwittingly to the exploitation of workers imported from India and elsewhere by tech-services outfits,[By Steve Hamm and Moira Herbst, October 1, 2009]
Unfortunately the article never explains that fraud isn't the worst problem with H-1B because most companies can use legal loopholes in the law to exploit workers. Fraud represents a very small percentage of the H-1B program but articles like this one make fraud seem like the only problem.

It is my observation that focusing narrowly on fraud is favored by the cheap labor lobby because they can make the following argument: "give us more H-1Bs and in return we will give you more enforcement". How about if instead of enforcement of a program we didn't ask for, they gave us our jobs back?

H-1B is a relatively small guest worker visa program and yet our government shows an inability to manage it. The program should be used as an example whenever employers ask for larger guest worker visa programs. One thing you can count on — fraud and government ineptitude will only get worse as the programs get bigger.

Overall the article has some good investigative journalism, but there are two pieces of misinformation that need to be discussed.

The first one tries to exonerate employers by implying that they don't know what their contractors do, and therefore bear no responsibility for the fraud. Don't believe it for a second — employers know exactly what is going on but they choose to give it a nod and a wink as long as salaries are kept low.

U.S. executives often have little visibility into the treatment of contract employees because several layers of companies are involved. One recruiter for a major U.S. outsourcing firm says there's no way his clients know how body shop workers are treated because, until recently, even he didn't know.
The second myth repeated by Businessweek is perpetrated by those who want to continue to flood the labor market with cheap foreign labor. They argue that H-1B is an indentured labor program (which is true) and that all the problems would be solved just by handing out green cards so that guest workers can become instant citizens. The "freedom" Businessweek espouses for these workers just means they will be as equally undesirable as American citizens because "Today's immigrant engineer will be tommorow's victim" (Richard F. Tax, American Engineers Association, 1993[PDF]).

Businessweek ignores the law of supply and demand which in this case means that salaries will go down as more workers enter the labor market. BW obviously understands these basic laws of the economy but they choose to ignore them in order to hide their real purpose which is to cater to the needs of their executive readership.

While American companies may overlook the treatment of contract workers in their midst, the workers are vulnerable because of government policies. When a foreign worker comes into the country on an H-1B visa, the visa is held by the employer, not the worker. If an employee complains, the company can terminate its visa sponsorship, forcing the worker to leave the U.S. Workers can't shift jobs unless they find another sponsor, which can be difficult. And while workers can gain their freedom with permanent citizenship, the wait even for high-skilled visa holders can be 5 to 10 years.
There's also a video report worth watching, which includes an interview with John Miano.
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