Lou Dobbs CNN Moneyline
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GUESTS: Ben Stein, Adel al-Jubeir,
BYLINE: Lou Dobbs, Shelia MaVicar, Peter Viles, Josie Karp, Bill Tucker, Rym Brahimi, Kelli Arena, Kitty Pilgrim, Christine Romans
LOU DOBBS, CNNfn ANCHOR, LOU DOBBS MONEYLINE: Good evening, everyone. Tonight, we continue our series of special reports, "Exporting America." This country's unemployment rate rose to six percent last month matching an eight-year high. Nearly nine million Americans are out of work. Many are bitter because their jobs are going to foreign workers who came to this country on special visas called H1-B. Kitty Pilgrim reports.
KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): Mike Roberts was laid off from his technology consultant job in California. He sold his house and is living in a hotel room with his family and plans to leave California for good when his daughter finishes the school year. He says the company he worked for brought in a wave of foreign workers on H1-B visas. He eventually was replaced.
MICHAEL ROBERTS, TECHNOLOGY CONSULTANT: They were bringing in consultants like one, two, three every week, all H1-Bs, so you start asking and then you start discovering they're all coming through just one or two agencies and you realize they're not even considering American citizens at all.
PILGRIM: Thirty-year-old Daniel Soong was making $160,000 a year but no longer. He lost his job to an H1-B visa worker. The former consultant now can't find a job and lives with his parents. He talks about a recent job interview that went nowhere. [Daniel Soong contacted ZaZona.com with a clarification: CNN made a mistake, he was making $60,000 a year, not $160,000.]
DANIEL SOONG, TECHNOLOGY CONSULTANT: They were just interviewing me in order to satisfy the equal opportunity requirements of the state so they wouldn't be discriminating against American citizens, but in reality they had no intentions of hiring me and they wanted to hire an H1-B visa candidate.
PILGRIM: The H1-B visa was born in the tech room of the early 1990s. There were not enough American workers, so employers asked for a special visa to bring in college educated workers from overseas to fill specialized jobs.
In 1992, the H1-B visa let in a maximum number of 65,000 workers, but by the end of the decade that number jumped to 195,000 every year and that doesn't count visa renewals. For example, in 2001, 342,000 people renewed their H1-B visa.
RON HIRA, IEEE-USA CHAIR: Usually in the technology area that you would bring an H1-B worker in temporarily. Unfortunately, the program has changed into instead of being a last resort the H1-Bs have become in some cases, you know, a first choice.
PILGRIM: Peter Bennett started a Web site complaining about the H1-B visas. Then it gets 1,500 hits a week on his Web site.
PETE BENNETT, NOMOREH1B.COM: Across the country, workers are being displaced wholesale. Entire teams are brought in to replace American workers and where they're being forced to train their replacements.
PILGRIM: Charles Corry did consultant work in Colorado Springs with many high tech firms that use the H1-B visa. He says to him it's clear that companies give preference to the H1-B applicants because the workers are willing to put in longer hours for less money, anything to keep their job in the states.
CHARLES CORRY, TECHNOLOGY CONSULTANT: They're a modern version of indentured servitude, the hours, the salaries typically much lower. I was probably getting twice what the H1-B visa people were.
PILGRIM: And the General Accounting Office is looking into whether the H1-B visa workers are moving American workers out of their jobs. They expect to come up with a report by mid-September, and that timing is critical because Congress decides on the limits on the number of visas the following month - - Lou.
DOBBS: They're studying whether H1-B visa employees are taking away jobs from Americans?
PILGRIM: They want to make a study, everything.
DOBBS: It seems like as they say a no-brainer.
PILGRIM: Yes. It pretty much is industry knowledge that they are but they have to make a study of it -- Lou.
DOBBS: How many are there now, H1-B visa holders in this country?
PILGRIM: There's no real clear number because some people go back. Some people stay. Some people stay without the status.
DOBBS: What's the best estimate?
PILGRIM: But they think about a million.
DOBBS: A million?
PILGRIM: About a million and the problem is that you can reapply. You can stay in the country for three years and then renew it and stay for six, so you can stay for a long time on this visa.
DOBBS: Kitty, thank you very much, fascinating, Kitty Pilgrim. Still ahead here tonight our "Quote of the Day" on a much needed boost for the economy. Then, we'll be talking with Congressman Peter DeFazio on why free trade is to blame for some of the problems our economy is experiencing and why free trade may be a misnomer.
Also tonight, Saudi Arabia the target of terror, Saudi Foreign Policy Advisor Adel al-Jubeir will join us to talk about his country's new approach. Stay with us.
DOBBS: This week we're focusing in our special series of reports on "Exporting America" on the reasons for the loss of jobs abroad. Democratic Congressman Peter DeFazio blames the loss of American jobs on poorly written trade agreements. The Congressman says one way to turn around that situation is to create a non-partisan congressional trade office. He says it would write smarter agreements that could uphold labor and environmental standards.
Congressman Peter DeFazio joins us now from Washington, D.C., Congressman, good to have you here.
REP. PETER DEFAZIO (D), OREGON: Thanks, Lou, appreciate being on the show.
DOBBS: The issue of free trade, membership in the W.T.O, (unintelligible), all of these agreements ostensibly a level playing field for lesser developed nations as well as industrialized. Why do you find it's not working?
DEFAZIO: Well, actually if you look back to NAFTA, the whole intent of NAFTA was to make the export of capital safe because the appropriations earlier in the last century in Mexico. So, it was really set up to protect capital exports, capacity exports by U.S. manufacturers and the other agreements are modeled on that.
They don't protect labor rights. They don't protect environmental standards, and they don't create a level playing field in any way. I mean U.S. workers can't compete with Mexican workers let alone China and others that they're being forced to compete with in this agreements.
DOBBS: As you know, Congressman, one of the facts is that jobs that were lost in this country to Mexico have subsequently been, at least a portion of them, lost to China which are now being lost to Vietnam. At what point does this Congress and this White House deal with the issue of real imbalances that are creating job losses and the exportation not only of capital and jobs but intellectual capital?
DEFAZIO: Well, we're hollowing out our economy, both our industrial strength and now our service sector, intellectual strength, and high technology which was supposed to be where the displaced industrial workers went. It is an extraordinary threat to the future of our productivity and I believe our national security. When does Congress wake up? I don't know. The American people have woken up. Even Alan Greenspan is speaking out strongly about the potential problems here.
The International Monetary Fund, controlled by the United States has said our trade deficit isn't sustainable. But inside the Beltway here there's this head in the sand attitude.
You know when we renewed the H1-B which your last segment talked about here in Congress, they lied to us. It was controversial when they renewed it even when the economy was booming. They did it after hours. They told us there would be no more recorded votes. People left and the Republican leadership brought it up and jammed it through and, of course, the Clinton administration was complicit in that.
DOBBS: The Clinton administration, you mean Democrats and Republicans alike lied to you, Congressman?
DEFAZIO: Well, I'm not sure what the Democratic leadership knew or didn't now but the Republicans did for sure because they told us no more votes. I left among others and no more bills coming up and they brought that through, passed it on a voice vote. So, it's not going to happen this time we would hope with the scrutiny that's now starting to come on this problem and this issue.
DOBBS: Well, the fact of the matter is that in the ten years since the H1-B visa was created, it has brought in a huge number of visa holders that are taking jobs whether one -- and as Kitty Pilgrim reported a study is underway. It doesn't seem to me to require a lot of studying to figure out that jobs have been lost to H1-B visa holders. What are you going to do about it?
DEFAZIO: Well, the conflict that Congress feels, and obviously this administration feels is that there are certain corporations that have done very well under this and they're putting counter pressure on against American workers and the American workforce.
I'm hoping that this will be a time when we're going to do one for the future of our country and for our workers and we can create enough inertia. They can't ignore this problem anymore. I mean all those displaced industrial workers were supposed to get retrained for high tech. Well, guess what, we brought in people to do your work and now we're starting to export it.
I mean the other thing, and I'm not sure she touched on it, is that a lot of times these people are brought in, trained in teams, and then sent back to India where they can pay them even less than here. Here they're paid less than American workers but over there they're paid less than half.
DOBBS: And is it your sense that anything will be done about this or is it -- because you talk about the corporations doing very well. The fact is whether one looks at this in terms of men and women, working men and women in this country who are simply being screwed, or whether one looks at it in terms of corporations who are benefiting, the fact is it is certainly not helping the American economy. Shouldn't Congress be taking a serious look at the interests of this country?
DEFAZIO: Well, absolutely, and I'm hoping to engage some of the Republicans, like Duncan Hunter on Armed Services. We're now -- the Chinese are within half a generation of us in high tech computer technology and chips. We're supposed to by national policy maintain a two generation lead. That happened because of U.S. exports of technology to China under their demands. I mean they demand. We export the technology there and then they'll provide the cheap labor.
This is an extraordinary threat to the future of this country and, you know, there certainly should be a national security concern. If people aren't concerned about our workers they got to be concerned about our national security.
DOBBS: Congressman DeFazio we thank you very much and we wish you luck as you move forward with your advocacy of a congressional trade office. Thank you, sir.
DEFAZIO: Thanks, Lou. Thanks for shining a light on this.
DOBBS: Tomorrow on this broadcast we continue our series, "Exporting America." We'll take a look at the tremendous pressure faced by U.S. companies that try to keep their operations in this country, and we'll show you what businesses and governments are doing to at least try to encourage them to stay. And we'll try to find out precisely what the trade policy is of this country on this important issue.