Accounting Firms Want to Join a Subsidy Program for Cheap Foreign Workers

It’s a typically incomplete (or maybe biased) story about an industry wanting to hire, at virtually hidden cut-rates, skilled foreign workers when there is a surplus of American workers.

This time it is the accounting industry making the usual argument that they need more workers than they can find in the United States, and all they want is an ever-so-slight change in the rules to give them these workers at a discount of 7.65 percent from what they would have to pay U.S. workers. (Of course, they never mention the subsidy.)

The program at risk is Optional Practical Training (OPT), an administrative creation of the Bush II and Obama administrations, which gives recent foreign alumni up to three years of legal work in the United States while still here on their student visas. (Congress did not create the program.)

The accounting industry, clever as it is with definitions, wants to define the concept of STEM (science, technology, engineering, and math) to include accounting, as it does not now. Why? Because with the new definition the prosperous accounting industry would be able to hire new alien alumni for a full three years after college, not the one year that OPT now offers to new accounting grads.

What continues to be irritating is the fact that even the generally competent Wall Street Journal, which broke the story, left out the variable of the subsidy, just as the employers would prefer.

The hidden subsidy relates to the fact that OPT defines the alumni as students (with F-1 visas) and as such they are not covered by payroll taxes. This means that an accounting firm that paid an OPT worker at $80,000 a year for three years would save $18,360 over the three years if it hired an alien as opposed to an American or legal permanent resident at the same basic pay rate.

With both the employer and the worker saving $18,360 each over the three years, this means a combined loss to the Social Security and Medicare Trust funds of $36,720 in that time period. This is a subject never mentioned by employers.

The Wall Street Journal does get credit for pointing out that according to the industry’s own statistics:

81,782 people received U.S. bachelor’s or master’s degrees in accounting in the 2013-3014 academic year … but only 43,252 of those degree holders were hired by CPA firms.

Now accounting does use numbers, as does math generally, but we are not dealing with academic concepts here; the industry is asking for permission to hire more foreign workers, at a discount, thus pushing aside Americans. One hopes that neither Congress nor Secretary Kelly agrees.

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