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‘Buy American and Hire American’ Order Is Just Rhetoric

An ode to his campaign rhetoric,“Buy American and Hire American” is the latest Executive Order by President Trump. Ironically, this was announced during the president’s visit to Snap-on Tools, a company that buys and hires Chinese, Argentinian, Brazilian and Swedish products and workers. 

The details of the order are to be determined in the next 60 days by the Secretary of Commerce and the Director of the Office of Management and Budget in consultation with a few others including the Secretary of State. Without many guidelines, it is difficult to presume what, in fact, will change, including policies regarding H-1B visas.

In the absence of substance, then, what we are left with is rhetoric. This administration has been masterful at simplifying complex and nuanced policies into tweet-able nuggets that are not always grounded in facts — at least not all of the facts.

Let’s look into the Hire American piece of the executive order.

First, it is unclear where the President stands on the issue of H-1B visas. During the campaign, he called for ending the program, arguing that it contributed to the decimation of American workers and wages. Since then, he has shifted his position, calling for a more merit-based system rather than the current lottery process.

Second, the notion that H-1B visas are a loophole for corporations to import cheap labor is misinformed. According to a 2016 study by Glassdoor with nearly 59,000 salaries, the average H1-B salary is 2.8 percent higher than a comparable U.S. salary. The study also highlighted that depending on industries, H-1B visa salaries were variable — some workers earned higher, some earned on par and others earned less than their American counterparts. And these are highly qualified workers who pay taxes and contribute to the growth of the American economy — people such as  Google co-founder Sergey Brin and current CEO Sundar Pichai.

Third, the technology industry, which is at the heart of the debate, faces a talent shortage. Several studies, including the Glassdoor analysis, indicate that lower salaries tended to be concentrated in technology. And this is the slice of the data that is widely cited by opponents as a validation for visas overall. Yet, the unemployment rate for computer and math professions is currently at 2.1 percent, which is considered a state of full employment by many economists. Additionally, the sector is growing at about 12 percent a year — increasing the demand for more jobs but outpacing the supply of qualified American workers. This means that in order to remain competitive and on the cutting edge of innovation, U.S. tech companies need to recruit and hire foreign workers who bring specific knowledge and skills commensurate with the sector’s evolving needs.  

Because of this demand-and-supply imbalance, there have been accusations of monopolized outsourcing and potential cases of misuse that contribute to wage gaps and inequitable hiring practices. It is important and necessary to look into these for the protection of both American and foreign workers.

The real challenge for the next 60 days is for the government to drive a reform agenda grounded in the facts while avoiding myopic political missteps that could compromise the lives of honorable visa workers and the competitiveness of American companies.

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