This story has been updated to include additional comment from Snap-on.
Standing before an American flag made out of wrenches at a Wisconsin tools company, President Trump on Tuesday promised “bold, new steps” to protect American workers and their wages and vowed to overhaul a decades-old guest worker visa program created to import “high-skilled” foreign labor.
But it turns out that Snap-on Tools, where Trump signed his “Buy American, Hire American” executive order to much fanfare, pays below-average wages to the handful of foreign workers for whom the company has sought H-1B visas.
The practice, critics say, has the effect of driving down wages for American workers. And Trump choosing to host an event criticizing H1-B practices at a company — far from Silicon Valley — that uses the visa program underscores how ubiquitous it has become, with over 460,000 positions across the country.
The tool manufacturer, based in Kenosha, Wis., sought H-1B visas for two tech workers in 2016 — a computer programmer and a computer systems analyst who were to work out of San Jose.
Snap-on said it would pay the computer programmer $75,000 a year, according to the application filed with the Department of Labor's Office of Foreign Labor Certification. That salary falls well below the average wage of $94,000 for a computer programmer in Santa Clara County, according to a Labor Department wage database.
What Snap-on is doing is perfectly legal — and it illustrates a key problem critics, including Trump himself, have with the H-1B visa program: the legal minimum companies must pay H-1B workers, known as the “local prevailing wage,” are set at levels well below the average of what most workers in similar positions in the United States earn. Under the program, the minimum wage for a computer programmer in Santa Clara County is $52,000.
Companies say they use the H-1B program to bring top foreign workers to U.S. jobs when there aren't enough trained Americans. The program is especially popular in the technology industry, where it draws the most workers from India.
But it allows companies to pay foreign workers wages below industry averages, which critics say is evidence that the visa program is actually being used to undercut American workers.
“As much as industry claims they are not using H-1B visas for cheap labor, in reality, this is what they care about — the lower cost,” said Ron Hira, a public policy professor at Howard University who specializes in the issue. “This is legal underpayment. Industry claims these are super specialized workers, so what gives?”
Snap-on’s computer systems analyst is paid $102,000, according to the 2016 H-1B visa application, below the mean wage of $115,000 for that job in Santa Clara County but above the minimum wage of $74,000 required by law.
In addition to the tech jobs at Snap-on, the company also sought to bring in foreign workers for two auditing positions in Kenosha in 2016, according to Labor Department filings. The internal auditor earns $54,000, below the mean wage of $82,000 but above the minimum wage of $47,000.
Rick Secor, a spokesman for Snap-on, said the company only employs a handful of workers on H-1B visas — “less than one-half of one percent” of its workers in the United States — so any changes coming down the pike would have “minimal” impact. “We will continue to abide by all visa regulations set forth by the U.S. government for the handful of people we sponsor,” Secor said in a written statement.
The company later emphasized that it "compensates its H1-B visa employees on the same pay scale as it does U.S. citizen employees in the same locations."
The minimum wage paid under H-1B guidelines for each occupation depends on where in the country a particular job is located and skill level required by the position, as defined by the employer. Trump could change regulations to set the minimum wage for H-1B visa holders at a higher level if he wanted, Hira said, though his action Tuesday fell short of that. The executive order directed various federal agencies to suggest reforms to “ensure that H-1B visas are awarded to the most-skilled or highest-paid” foreign workers.
Companies reliant on H-1B labor have successfully “gamed the system to set the wage floor so low so that it’s below the market wage,” Hira said. “They are paying below what you would pay an average American in that job. It lowers the wages for everybody in that sector, depressing what Americans can command.”
Trump, in Kenosha on Tuesday, vowed to use “every tool at our disposal” to end visa abuses.
“Right now, widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries to fill the same job for sometimes less pay. This will stop,” Trump said. “No one can compete with American workers when they're given a fair and level playing field, which has not happened for decades.”
Asked for comment on whether Trump plans to raise the wage floor, the White House pointed to a background briefing with a senior administration official aboard Air Force One following Tuesday's event. The official suggested that the random H-1B lottery would be replaced with a system that excludes “folks that are paid well beneath the market wage.”
Sens. Charles E. Grassley (R-Iowa), chairman of the Judiciary Committee, and Richard J. Durbin (D-Ill.), the Senate's second highest ranking Democrat, have for years introduced legislation to overhaul the H-1B system, including raising the wage floor, but so far they have failed.
“Raising the prevailing wage dis-incentivizes U.S. companies from importing tens of thousands of low-wage foreign guest workers to replace American workers,” Durbin said in a statement to The Washington Post. “It also ensures that the most highly-skilled workers receive a salary commensurate with their talent and experience.”