The Blue Card Scare

By Rob Sanchez
December 2007

The Chairman of Intel, Craig Barrett, recently made dire predictions that the next Silicon Valley will not be in the United States due to restrictive immigration policies and that a brain drain from the United States to Europe will cause an economic Armageddon. In his hypothetical scenario, the U.S. would lose out in the competition for talent as the best inventors and entrepreneurs migrate to Europe. This scaremongering is a smokescreen to hide Barrett’s desire to increase the labor supply, thereby slashing labor costs.

High tech industries such as Intel routinely make false claims there are shortages of qualified Americans. Anecdotal claims of shortages are touted in order to make the corporate case for increasing the number of H-1B visas. Several recent studies, such as one by the Urban Institute, prove that the U.S. is creating fewer high-tech jobs than the number of qualified people who are entering the workforce.  Intel’s claims that they can’t find enough talented workers is dubious, especially considering that Intel is eliminating thousands of jobs in locations such as New Mexico, California, and Oregon. If Intel is having such a tough time finding qualified workers, why are they firing so many workers already in their employ?

Barrett asks us to take a leap of faith when he warns that worldwide shortages of high-tech workers are endemic. He furthers his argument by saying that Europe will win the competition to attract scarce talent when the European Union institutes a new visa called the “blue card”. Like the H-1B visa in the United States, the blue card would be a temporary guest-worker visa that indentures each worker to the employer. Other similarities between the H-1B visa and the blue card include their not-so-subtle purpose of undercutting and replacing more expensive domestic workforces.  Both the blue card and H-1B visa offer temporary employment and after a set number of years a path to citizenship.

If passed, Europe would not be able to use blue cards to drain our human capitol because both continents have worker gluts, not shortages. There is an even more obvious reason why none of this is likely to happen — Europe doesn’t have a blue card program yet, and it’s just as likely that it never will.  

European labor groups have been resisting the blue card because they don’t want a fiasco like the H-1B program foisted upon them. They argue that blue cards, like H-1Bs, would accelerate the unemployment of their own domestic high-tech workforce. Olaf Scholz, Germany’s employment minister, implored employers to hire their own people instead of using blue cards to import foreign workers when he stated, "We have 3.5 million unemployed and that means that companies can find workers within Germany."

Socially responsible attitudes prevalent in Europe are sadly absent in U.S. government officials because public policy is driven by corporate agendas rather than the common good. Scholz’s humane attitude is in stark contrast to the views of our own Secretary of Labor Elaine Chao, who justified the expansion of the H-1B program in a Parade Magazine article by denigrating American workers as having bad body odor and substandard education and training. If that wasn’t enough, Chao blamed American workers for having lousy attitudes and she compounded the insults by saying they need anger management!

EU policy makers face many obstacles before the blue card becomes reality. One of the toughest is negotiating a uniform salary level among members who have large wage disparities. As currently proposed, visa holders would be required to earn at least three times the minimum salary of each host nation. That would work out to be about $4 an hour in Lithuania and $30 in Ireland. The EU claims this formula would prevent wage busting even though the potential for labor arbitrage is obvious. If the EU was truly serious about attracting elite professionals they would set the minimum salary much higher.

Intel does not hesitate to use the hackneyed corporate cliché that more employment-based visas are necessary to attract the “best and brightest” into the U.S. If Intel were sincere, their CEO wouldn’t be so worried about competing with Europe for $4 per hour computer programmers. Even if U.S. employers were allowed to compete with blue cards by importing foreign professionals that were willing to work for such pittances, we shouldn’t be so foolish as to agree to the wanton destruction of the American middle class.

Rob Sanchez is a Senior Writing Fellow for Californians for Population Stabilization (CAPS), www.capsweb.org . He can be reached at [email protected].