If there's a smoking gun for IBM great, fine $$$$$$$ IBM. But my personal anecdotal experience is that the companies I've worked for pay the same for HB-1 vs local. They don't look at it as trying to find cheap employees. They look at as trying to find qualified employees anywhere, world wide.
Companies I've worked for, Virgin Games (run by a British immigrant), Shiny Entertainment (also run by a British immigrant and seemed like > 50% foreigners). Naughty Dog had at least 5 or 6 foreigners of 30 employees when I was there. The owner even made a point of showing us the first hire's salary and asking us if we knew any locals that were qualified for the job that wanted the job so that he was sure he was above the law.
A few years later that hire went on to co-found Ready At Dawn which was founded by 3 immigrants. I have no idea how many of their employees are foreign.
I have seen one company, Interplay, abuse their power over a foreign employee by threatening to pull their visa support for him before if he didn't do X (I think X was stop some un-work related outside music activity). He ended up marrying his local GF and then got the hell out of that company.
The company I currently work for, as far as can tell, has a similar position. We'll hire anyone that applies that can convince us they can do the job. Finding them is hard. There may be tons of qualified people but either they aren't applying, they can't write a resume that makes it look like they're qualified, or they can't convince us in the interview that they are qualified.
The H1B issue is not simply salary as measured in absolute numbers. Naked salary numbers may be the visible tip of the iceberg but there are bigger issues to consider.
1. Most H1B workers are under 30, and most unemployed American programmers are over 35. This is by far the biggest part of the iceberg, made invisible by the fact that these people drop out of statistics.
2. Visa handcuffs are not slavery per say, but close enough. (If you think that's an overly dramatic statement, you are probably not an immigrant from some place you really don't want to be, like me, or someone whose family will quite literally starve if you don't send them money). People endure getting beat up by their husbands for 5 years straight for the sake of a green card, so there is no doubt they will endure long working hours and much more.
3. The whole "shortage of IT talent" hysteria is way overblown when you look at the actual numbers. Just one example, latest DICE salary report:
Technology professionals enjoyed their largest annual salary growth since 2008, according to the 2012-2011 Salary Survey from Dice, the leading career site for technology and engineering professionals.
... with the actual numbers:
After two straight years of wages remaining nearly flat, tech professionals on average garnered salary increases of more than two percent, boosting their average annual wage to $81,327 from $79,384 in 2010.
So, let's see. While the inflation is chugging along at ~3% per year, we get 2 flat years, followed by a 1% increase? So basically, we make less money each year?
Is the tech industry an economic miracle? Are programmers the one must-have product whose prices get lower when it's in short supply and the buyers have pockets full of cash? Or is there a simpler explanation?
Secondly, though L1 visas do not have a prevailing wage, they DO look at the wage and if it's much lower the L1 visa is NOT granted. Also note that L1 visas are ONLY granted to people who have already worked with the company for several years and need to have been in a managerial capacity for at least 1 year out of the preceding 3 years.
As @rada indicated, the cost savings aspect alluded to are more often than not the result of lower age ranges and NOT just from wage discrimination.
Also note that if salaries are lower than what one would expect, it's because the prevailing wage number is lower than one might expect, simply because is is defined as the median wage for that position across the STATE, which would explain why prevailing wages are often much lower that what's "prevailing" in metro areas like NYC. (disclosure: IANAL, and I'm not 100% sure this is still the case, but I think it is)
One more thing to realize is that H1B workers and L1 workers PAY TAXES in the USA, BUT have NO rights to unemployment if they lose their job, nor to retirement benefits later in life etc. UNLESS they make it to the 40 points limit. At 3-4 points a year, this will typically take 10+ years and thus makes it near impossible with max. duration of visas, even if you 'stack' L1 and H1B (years on L1 add towards 6 year maximum of H1B). In short: the H1B workers fill the coffers of all non-visa workers without the option to withdraw their contribution in the future, unless they become citizens or marry a US spouse. Note that even if they do 8naturalize or marry, they'll need to get to this 40 point level to obtain retirement benefits. Can't find a link, but have the notifications from the social security administration in my files somewhere.
I'll be honest: I would not wish an H1B job on my worst enemy. I consider it modern-day slavery because you are beholden to your employer. These days it's not as bad as in the early 2000's, where you were forced to leave within 10 days of losing your job, but it's still not an easy or secure life.
I am very confused. My source is a Dice salaries survey, and to refute said source, you link to a website trashing some guy named Mark Krikorian? Did you reply to my comment by mistake?
Sorry, I did. Read to the bottom of the page, re-read your post, hit reply.
The hardcore pro-immigration site I link to is to indicate that the "non-partisan" CIS is not non-partisan, which would be obvious too if you look at the CIS site which quotes mainly fox news segments. I don't necessarily agree with anything else they state.
I had to look this up, so I thought I would share for anyone else who was confused - the points in this case refer to Social Security's eligibility system. http://www.ssa.gov/pubs/10072.html
Visa handcuffs are not slavery per say, but close enough.
As a current H1B holder, I have to disagree with that. I've just completed my second visa transfer, to my third job since moving to the US. I have had zero problems doing so- it requires some patience on the part of your future employer and while I've been lucky with past employers and not had to worry, you can also file the transfer without telling your current employer.
Unless you are a permanent resident hopeful what you say is correct. For a lengthy period of green card process does not allow portability of the GC application. I can hardly imagine anyone who has H1B but not has a GC application in the process or about to make that application. At that point visa and the GC application becomes a golden handcuff. If shit hit the fan you are politely reminded of this. It did for me when I was caught in the middle of a power struggle in the company and asked of my loyalty. Employers are not stupid to remind you this (productivity tanks), generally it goes very silent, but if they have to they will remind you, don't worry about that eventuality.
Very true, but the way I see it is that I've been given ~4 years to find the 'right' position for me. Now that I have done that, I am happy to be "handcuffed" in order to get a green card, because I know my company isn't a ridiculous parody of The Office.
> 2. Visa handcuffs are not slavery per say, but close enough.
I can confirm this. A few of my former H1B coworkers described how an unscrupulous manager would take advantage of them by dangling a sponsorship carrot (for a green card if I remember correctly). None of them were very happy about it and most felt trapped.
Cry me a river. No one is forcing anyone to come to the US. I worked in China and Korea for over six years and employer-specific visas are standard operating procedure. Don't like it, simply go home. "Slavery" is such hyperbole. Slavery in America pays a hell of a lot more than 'freedom' in New Delhi.
> "Slavery" is such hyperbole. Slavery in America pays a hell of a lot more than 'freedom' in New Delhi.
If you read more carefully I never wrote that; I was only replying to it. Moreover you're exaggerating the original post. Anyways I'm just providing a different point of view, to which most people on HN are more open to.
> Cry me a river. No one is forcing anyone to come to the US.
Coming from the US middle class to work in another country is different from coming from the middle class in India (or another 3rd world country) to work in the US. They don't have as much economic freedom (or international mobility) as we do.
> Don't like it, simply go home.
That's the problem. Most of them like living here. Some of them don't really have much of choice either given how many family members they have to support. I'm sure there are a lot of companies and managers that treat them well here. Unfortunately I'm also pretty sure that there are a lot of companies and manager that take advantage of them as well (i.e. work extra hours under the table and I'll see about sponsoring you for a green card.) Having a hard time switching companies really sucks.
Given your work experience in both China and Korea, I would be surprised if you didn't experience some of that as well. However, unlike most H1B workers in the US; you probably have better options when you come back home.
Hyperbole, true, but it's equally silly to say that things just fine because it's the same situation in China and Korea. Why not compare to Japan where work permits are not tied to an employer and if you lose your job you generally have at least 3 months to look for a new one? Or many European countries with similar or better terms?
"tech professionals" usually bundles software engineers, system administrators, network administrators, and sometimes "business analysts" whose job it is to produce a report in Access.
Some of these sectors experienced severe declines, e.g., companies hosting their email with Google instead of advertising for an MCSE and Exchange administrator position, so the pay for some of the sectors adjusted accordingly.
See how juniors get raises, while seniors get flat-lined? That's the downward pressure of H1Bs as well as evidence of buyers' (hiring managers) actual purchasing behavior markedly different from "we can't find anyone who can do basic fizz buzz! we need people with skillz!".
Wouldn't this affect everybody across the board?
I think the senior salary flat-lining and junior salary growing is pretty much the law of nature in any occupation - there's a salary band for a given skill, and those who start at the bottom and are any good progress fast, those who start at the bottom and are no good drop out of the race and go do something else, and senior people pretty much know they're at the top of salary range and need to move into management or open up their own consulting firm.
Possibly yes in real dollars, definitely no in inflation dollars. At the very minimum, even with a flatline we should be seeing ~3% increases to compensate for inflation. Beyond the minimum, people still grow salary-wise in senior positions e.g. between $100k and $150k, especially if the whole dire shortage of talent thing were true.
I've seen many kinds of H1B employment. People with excellent skills and experience being paid competitive wages, people with reasonable skills being exploited at low wages at the clear expense of locals, and people who were hardly qualified to warm a seat being pulled in to pad up some contract as cheaply as possible. As usually when you paint with broad strokes you cover some dissimilar surfaces.
But at the core the employment market is about supply and demand. Increases in supply relative to some demand decreases what a rational party will pay. It doesn't matter how kind, qualified, equally paid, etc. The increase in supply weakens the employees negotiating position.
Are the employees entitled to the 'artificial' supply limitation created by national boundaries? Is it socially beneficial to reduce those barriers? Do increases in supply protect the industry and leave all employees better off in the long run and cause little harm because the demand is already so great? What policy decisions can mitigate the harm and maximize the benefits? These are interesting questions.
But I don't think there is any real room to question if H1B's— no matter how well managed— harm employees short to medium term financial interests.
A country is a community. Multinational companies don't want people to believe that, but it's true. A community is entitled to control its membership.
An H-1B is not just a contract between employer and employee. It is a contract between a foreigner and a community. We the community agree to make that person one of us. To educate his or her children at the public expense. To allow him or her to affect our elections. To protect him or her in case of war. To extend our limited social safety net in case he or she falls on hard times. We should not be strong-armed into taking on these obligations. We need to expand our community, but in an organized way that benefits the whole, not just in whatever way benefits multinational organizations that increasingly seem to see themselves as outside the community.
H1-B VISA has a limit of 6 years. H1-Bs get no social security benefits even though they pay social security taxes just like anyone else. Their children do not educate for free - they pay local, federal and city taxes just like anyone else. They aren't allowed to vote.
You are thinking immigrants not H1-Bs. Due to severe shortage of immigrant VISAs and due to MNCs not filing Green Cards for most H1-Bs - there is a small percentage of total H1-Bs that actually end up staying and becoming citizens.
But even in the context of H1-B: If an H1-B needs emergency treatment, hospitals won't turn them away because of their H1-B status. That's part of our social safety net. Education is paid via property taxes. Most H1-B's do not own their homes and thus do not pay property taxes. In any case, nobody who is living here six years is covering the cost of a child's education. It costs $15-20k per year to educate a child in most states. Very few people pay that much in property taxes per year. The system depends on long-term commitments--you pay property taxes during many years when you don't have kids, then get the benefit for the years your kids are in school.
My point is not to try and make distinctions about whether the average H1-B contributes enough to the tax base. I'm sure they do. But that's not the point. My point is that with any given H1-B, the community takes certain obligations to that person. It's not just a matter between the employer and the immigrant.
>Most H1-B's do not own their homes and thus do not pay property taxes
I see this ridiculous assertion everywhere now a days. If h1b's are renting an apartment, they are still paying property taxes because the building owner has to pay these taxes. Do you think that property owners really pay these taxes out of the goodness of their heart?
Typically the tax density per square foot is higher for middle class homes than for rentals. 100 $200k homes yield more property valuation (and thus tax) than a 100 unit trailer park that is worth $60k/ unit.
That's why outside of the largest cities, there isn't much high density housing for middle class folks -- it's not price competitive.
> H1-B needs emergency treatment, hospitals won't turn them away because of their H1-B status.
I am not sure what you are saying here. H1-Bs and their employers pay for medical insurance (this is at market rate - not subsidized by the taxpayer or anything like that) - I and dozens other I know did. That covers their medical emergencies. H1-Bs pay premiums for children and spouse too btw. If they lose their job - they have one week (that too is grey area) to leave the country. Why do you think H1-B emergency treatments are a) significant and routine and b) at a cost to citizens/permanent residents?
I can tell you one thing though - your assumptions about H1Bs being a burden on society is far from truth. If your theory is that they don't stay long enough to be able to buy a house and pay property taxes - that's hardly their fault. Plus not every citizen born here buys a house - many rent.
H1-B's are not required to have insurance plans nor are any employer insurance plans required to cover their dependents. Nor is their any guarantee that insurance will cover all the expenses.
I don't think H1-B treatments are a significant cost to citizens/permanent residents. That's not my point. My point is that our hospitals are required by law to treat anyone that comes in, regardless of status. That's an obligation our society has to every person within its borders. There are many other obligations like it. We as a community cannot be forced to take on those obligations, we must do so voluntarily.
Is there a law for residents/citizens that requires employers to have insurance plans that cover all expenses? Emergency treatments are not exactly free or paid for by tax payers. If a H1-B loses his job or doesn't pay for med insurance and goes to healthcare institution (are there any publicly funded ones here?) - they will treat him/her but slap a collection for the full costs. As far as I know that is a potential loss for the healthcare provider not the general public as they did not fund the private organization.
What's the relevance of such a law? The point isn't whether H1-B's contribute more or less than residents/citizens. The point is that letting something in the country creates a set of reciprocal obligations. The people in a community are entitled to exercise control over incurring these obligations.
You keep referring to obligations but I see no obligations society or community has to incur cost or resources for admitting a H1-B. If there were publicly funded hospitals that cared for H1-Bs, if there were publicly funded accommodations for H1-B offered for free or subsidized costs, if the government charged you in taxes for fulfilling their obligations towards the H1B - then what you are saying would be right. None of those are true - I paid for everything just like every other legal resident/citizen. You cannot make up corner cases that apply equally to H1-B and Citizens and claim that as an obligation - for the majority of H1Bs those are simply not relevant. You cannot also assume each H1-Bs children go to public school - mine didn't for a long time and when they did my wife volunteered there.
In fact think about this - the H1-Bs are degree holders educated by their own country at its expense - no American money was spent on their entire education.
First, I'm talking about immigration generally, not just H1-B.
Second, you seem to be conflating the term "obligation" with "burden." I'm not saying that H1-B's are somehow particularly a drain on public resources or they benefit from common public expenditures in some special way that citizens don't. That's not what "obligation" means. You point out that you "paid for everything just like every other legal resident/citizen" and I'm sure that's true. But would you say our community has no obligations to every other legal resident/citizen? Of course not. The society has obligations to everyone within its borders.
You say I'm making up "corner cases that apply equally to H1-B and Citizens" but nothing in my argument requires the community's obligations to extend to H1-B's specially. The community is obligated to everyone who lives here. For example, every single hospital in the US is publicly subsidized in some way. It's either a public hospital, a non-profit hospital, attached to a public university, etc. They all benefit from $30 billion in NIH grants, etc. H1-B's and Citizens benefit equally from that public subsidy. But that's an obligation of our society to both H-1Bs and citizens. We consider ourselves obligated to have a quality healthcare system for people who live here, including H1-B's. We don't turn away people from these hospitals just because they're H1-B's. The same thing with public education. It doesn't need to be the case that every H1-B goes to public school. That's not relevant. What's important is that our society makes a commitment--if you have a kid and need to send him to school, you will have a public school accessible. That's a commitment we make to everyone who lives here. We also commit to extend citizenship to your children born here. Again, that's something we commit to everyone who lives here, whether they take advantage of it or not. That commitment is the obligation.
Just because these obligations are extended uniformly does not make them not obligations. My point is not that we should have fewer H1-B's because they suck up American resources. It's not an argument about the number of H1-B's or immigrants we take. My comments were originally a response to someone questioning the validity of our exercise of any controls on immigration. That's what I'm replying to. I'm asserting that because our society extends obligations to everyone who lives here, we validly get to control who gets to live here.
But the society doesn't extend the same obligations or benefits. Non permanent residents and citizens are treated as second class citizens both in their financial prospects (paying the same taxes, not receiving the same benefits in SS, Medicare/aid, unemployment benefits, and especially federal financial aid among many others). Many immigrants never receive these benefits because they are forced out before they are eligible to realize them.
The penalties for any breach of the obligations also happen to be harder on many immigrants. For many, even those who are permanent residents, breaking a law that would result in probation or even a misdemeanor can result in deportation. For many, this is worse than prison. (For example, if deported I would be forced into the corrupt military of an anti-American country where 300+ people die annually from hazing alone and where I am barely fluent in the language).
The US totally has a right to control it's own borders but don't try to justify it. The immigration system of the US is at best broken, at worst inhumane.
The original point you were making though is undermined here - as he points out, the community is getting more out of H1-Bs/potential immigrants than it is necessarily giving back.
That goes against the narrative your are backing - i.e. societies subsidize care and education of all - including immigrants, and hence should have natural rights in controlling membership.
The way it is currently set up, there are several bars and challenges in being naturalized, and you really have to work at it if you want it.
I'm an H1-B holder who pays $10K annually in property taxes. Seriously, you're just making stuff up here. Everyone pays property taxes, either directly for homeowners or indirectly through rent. H1-B holders pay income taxes just like everyone else which is what pays for things like emergency rooms. H1-B holder also have jobs (by definition) and so are nearly guaranteed to have health insurance unlike most Americans.
If your point isn't that H1-B holders don't pay their way in society (because they do) then why mention all the points about how they're not paying their way?
I agree that a green cards (permanent residency) and citizenship involve significant obligations.
From a fiscal point of view H1-B's are all win for the Government. They won't take chronically sick or otherwise disadvantaged people. They don't take old people. They mostly (all?) get health insurance.
H1-B don't involve much more long term liability than tourist visa's.
Many (most?) H1B don't have kids. When I was an H1B I paid many multiples of $20K in tax and had no kids in school.
> It costs $15-20k per year to educate a child in most states.
I am wondering your source. I don't know where this money could go. Teacher student ratios are about 25 to 1 and teachers cost about $75k, so I figure it costs about 3K in basic salary plus about 1K in reasonable overheads + $6K in government waste.
Total spending is k-12 spending in the US is $526.1B (1)
Total children are 25.0 + 25.4 million (2)
>We the community agree to make that person one of us... To allow him or her to affect our elections.
No, this is wrong. A person on an H1-B visa is not one of us. They do not have the right to reside in the US if they lose their job, and the definitely don't have the right to vote.
I love the way you described this. The people disagreeing with you seem to have a completely different values system though.
They don't see themselves as part of a group with mutual responsibilities. "Atlas shrugged" off your inclination to see a community, where these people think everyone should be able to do whatever they want (and vice versa, to them???).
"Are the employees entitled to the 'artificial' supply limitation created by national boundaries?"
That's a very complex question. If you're talking about importing people then there is one set of answers, and if you're talking about outsourcing there's another.
Personally I think we should be more worried about the outsourcing. At least the people who come to the country in question and live there have similar costs, similar employment law and become part of the local economy. Where outsourcing happens there's no chance of competition at all because there's no such thing as health and safety in a lot of places.
"Are the employees entitled to the 'artificial' supply limitation created by national boundaries?"
I agree, this is a good question, but I do think that you can answer "no" while still disagreeing with the premise of the H1B program. Another way to frame this would be.
"Should the 'artificial' supply limitations created by national boundaries be enforced evenly across all sectors of the workforce?"
I'm actually ok with a "no" to this answer, though my answer would be "no, but proceed with caution."
I support a points program to emphasize skilled immigration, so clearly I am willing to bend on the "even enforcement" to favor certain types of workers. However, like I said, do this with caution. I think that as the magnitude increases and the target narrows, you increase the possibility of a bad market distortion. To some extent, I do think we've done this in the US - we have created a situation that deters young Americans from entering this field.
I think that the most innovative countries will succeed because they have both managed to attract the top talent from around the world while maintaining a strong pipeline of talent from their own population. If you lock out top talent from overseas, you're doomed. If your entire strategy depends on convincing talent from overseas to stay, you're doomed.
It seems to me that the H1-B was more a response to young Americans not entering various fields than the other way around. In machining, for example, companies all over the country from automotive to aerospace to medical to mom and pop machine shops are having trouble finding skilled workers. As many as 50-70% of respondents in major industry surveys are saying that a skilled worker shortage is a major problem for growth and expansion. [1]
A shortage of talent isn't just a problem in the software industry, it's becoming endemic to engineering. For example, there are a few dozen electrical engineering consultants that do most of the hardware work for many of SV's startups (including ones such as SpaceX) and I've heard stats (that I don't have official data for on hand) like Mexico City universities are graduating more mechE's than the entirety of the US and anecdotally, it's becoming very difficult to find talented hardware engineer in any industry (most of the non-software startups I know of are 25-50% immigrants).
The H1-B Visas are critical for experienced and knowledgeable workers and if you artificially limit the supply (which is already the case), you have cases such as foreigners coming to the US, getting their BS/MS/PhD, just to be kicked out of the country a month later. Meanwhile, employers can't get the skilled workers that they need. IBM's abuse of the H1-B is kind of irrelevant, as they're not even in the top 10 of H1-B employers [2]
"It seems to me that the H1-B was more a response to young Americans not entering various fields than the other way around."
I think it may be a self-reinforcing cycle. A short term "shortage" may prompt the visa program, but this may suppress the increase in wages that would attract more US citizens to the field. Which can lead to greater shortages, more visas, and so forth. Enough iterations of this process and you get exactly what you have described - a "shortage" that is endemic to the entire field.
While I appreciate your response, I do think you weaken your argument by talking about shortages without discussing wages. The argument that someone tried to pay "market rate" doesn't resonate much with me either - if there's a shortage, you'd expect wages to go up, sometimes dramatically. I see no reason for the government to step in and prevent this.
We also probably disagree about "artificially" limiting the supply. Most of what we call "engineering" in the US is not subject to regulatory capture, like law or medicine. Anyone can hang out a shingle as a software developer. And by creating very specific visa programs for STEM fields while leaving other fields controlled either by regulatory capture or the simple requirement of current US residency rights while vastly expanding the pool of engineers through visa programs, we may be "artificially" increasing the supply of STEM workers relative to the rest of the workforce.
Lastly, I agree with you that it makes no sense to kick people who have gotten degrees in the US out of the country. Terrible idea. But we should ask why US citizens have abandoned these fields to the degree that they have. Some people will claim that it is educational failures, especially in math and science. However, keep in mind that the RAND institute conducted a large study and concluded that Americans are avoiding graduate degrees in STEM fields largely because these fields have fallen badly behind the pay and stability of other careers - in short, the "shortage" is a very rational response to market conditions.
This is why I'm favor of general skilled immigration programs, but I'm very skeptical of public policy based on an assumed shortage of STEM workers. Overall, I don't think the evidence supports the claims of a shortage.
I don't think that the shortage was by any means short term. The 80s and 90s saw many many baby boomers start to retire, especially in the manufacturing and industrial fields, while vocational and STEM education paths became less and less popular with the younger generations. This also coincided with free trade "reform" and the beginnings of the outsourcing wave, which was very tech/industrial heavy and thus lowered labor wages here for competitiveness (whether or not it was necessary). Wages also vary extremely drastically, even across proximate geographies. I.e., in LA starting software dev positions were at $45-50k a year while in SV they are $70-80k. Having lived in both areas, the difference in cost of living is NOT that big.
While engineering itself may not be subject to much regulation, the H1-B process is. It is the equivalent of extraordinary ability but with a lower barrier to entry based on market needs instead of publications. As such it is very carefully regulated. As for "artificially" increasing supply... that's a weird way to put it. America is built on the backs of immigrants and having maximum quotas for the immigration of the highest skilled ones does not seem like artificially increasing the supply. The reality is that 90%+ of the world would gladly take a salary 30-50% lower than an American just to live here and the H1-B hinders such under cutting.
As far as engineering falling badly behind other fields... I don't see it. The Bay Area is obviously not representative but I don't know of a single engineer (not software) who is unemployed or has trouble finding consulting gigs for ridiculous $100+ an hour rates. Outside of the Bay, most of the employed engineers that I know are older and pretty much irrelevant skill wise. Machinists who know nothing about 5-axis or high speed machining, electrical engineers who can't do high frequency design required by so much of our tech now adays, mechEs who don't have much experience with design for manufacturing, etc.
"America is built on the backs of immigrants and having maximum quotas for the immigration of the highest skilled ones does not seem like artificially increasing the supply."
I mean artificially increasing the supply relative to other professions. If we "staple a green card to every STEM degree" but not other degrees, we will increase the supply of STEM workers relative to lawyers, MBAs, finance majors, and so forth. And trust me, those guys bill more than $100 an hour. Those guys will make that "ridiculous" rate look very reasonable.
I would actually support a specific emphasis on STEM workers if there were evidence of a shortage, but there isn't. Like you, I know people doing pretty well, but that's not going to override the conclusions of a careful study by the RAND institute, or other surveys that show that wages are not increasing anywhere the rate you'd expect.
Just to be clear - I am not opposed to general immigration or skilled immigration. Immigrants will come to the US, many will be skilled, and some of the skilled will be skilled in STEM fields. However, I'd need to see more evidence of a shortage before I'd support specifically tinkering with the immigration system to get a higher percentage of STEM workers relative to other types of skilled workers.
Although I totally agree with this sentiment, I think it too is a bit short sighted.
In manufacturing at least, the big technological drive (which we have seen in the last half decade) is towards flexible, low cost automation which fixes the problems of existing automation (extreme R&D and capital cost and total inflexibility). While lowering the barriers for getting things onto the market (which can be done just by reclaiming the manufacturing base taken by China), it will almost surely destroy the manufacturing based working class (which is about a tenth of the US's GDP).
Just as a side note: the green card is by no means stapled. It's an immensely difficult upward battle, with an emotional and financial expense the likes of which most domestic workers never go through.
The H1-B is not selective for a specific set of professions per se, it's selective for professions requiring expertise and at least a bachelors degree. Official USCIS requirements:
"-Bachelor’s or higher degree or its equivalent is normally the minimum entry requirement for the position
The degree requirement for the job is common to the industry or the job is so complex or unique that it can be performed only by an individual with a degree
-The employer normally requires a degree or its equivalent for the position
-The nature of the specific duties is so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor’s or higher degree." [1]
This begs the argument about allowing in only educated immigrants vs everyone which is a dangerous emotional slippery slope so I won't get into it. For the purposes of the H1-B, pretty much any position even remotely requiring an education can qualify so it's not artificially increasing the supply of one over another. It's just that few companies need foreign MBAs or lawyers in America (as domestic employees) and other professions such as doctors require American certification before becoming eligible.
As for the shortage, the data shows that there is none (or at least I have no statistical evidence otherwise). However, when it comes to excellence, there is a huge difference between a mediocre engineer (or lawyer, doctor, w.e) and a great one. The reason Russians, Germans, Jews, etc. have been so prevalent in science in the US is because the best from these countries get to actually immigrate here. (Not totally true but close enough). Americans don't need to compete on wage, they need to compete on competency and that's like asking a community college class to compete with a class from MIT. There will be geniuses in the CC class more often than not but MIT selects for genius (or grades) and will have a higher concentration. This is one reason why we have quotas in the first place (part of the historically rooted fear of foreigners in throughout US history).
Edit2: To clarify the above comment about competing based on competency, I'm talking mostly about legitimate uses of the H1-B. There is obviously cases of abuse, but from my experience I think those are in the minority.
I was referring to proposals to "staple a green card" to STEM degrees (currently in the Senate), not the current reality which I will agree is very daunting.
In spite of my misgivings about what I think is a contrived shortage, I would support this legislation, mainly because I think it is extremely destructive to kick out highly educated people who have studied at US universities, and I'd much rather see green cards than visas that I think are indentured in nature. It does frustrate me, though, to see this happening only in science and engineering. Why STEM? Why not law, or medicine, or even trades like plumbing? I just paid $100 an hour for a plumber (and want to be sure I'm not perceived as complaining, plumbers are skilled workers who deserve good compensation).
I think it failed more because of political bickering than anything else.
Law firms have been in crisis for at least several years from what I know. I even remember having to go through a prospectus for a legal services outsourcing firm at work a while back.
Finance - I know for a fact that post 2008 a large number of firms went bust, and the recession was brutal - lots of people returned to their home countries after finding no work.
And it was the financial sector that added to the STEM shortage by hoovering up those students. Science and Math types that can demonstrate good math and organizational ability are the ideal rank and file for Financial modeling and its related task set.
On top of that there is no shortage of natural finance types either.
S0 those two sections of the economy are almost overstaffed, and one of those sections is dying.
With regards to plumbing - thats a guild oriented job and aside from the usual complaints about collusion and what not, its also expensive because its likely not that attractive.
I think of all the reasons, STEM poaching by other industries was probably one of the larger issues which should be reduced now.
Still, your system is strongly aimed at attracting and retaining the best talent in the world.
The issues people are complaining about are because they feel job searches have become a zero sum game - the presence of a competitor reduces the size of the pie for everyone.
The solution is to make more pies, but that is beyond my ability to detail out.
I definitely think that the instinct in increased supply = lower prices is a good starting point.
But, there's some danger in overly simple economic thinking, especially when we talk about labour markets. For example, you would think that around a hub of science & engineering universities* there would be an oversupply of engineers. Someplace where there aren't many engineering schools would be the place with the highest salaries. That's clearly not the case.
Demand for some professions (like doctors) is fairly fixed. For other things it appears to spring up around supply.
*This assumes that the universities are not themselves a market reaction.
Please take into account that not only does the supply of labour increase, but those people earn money that they will either spend or invest. Thus increasing the demand for labour as well.
>> the companies I've worked for pay the same for HB-1 vs local. They don't look at it as trying to find cheap employees. They look at as trying to find qualified employees anywhere, world wide.
My experience is very different. I was on H-1b for 4 years before getting my green card and EACH of my 3 employers (including big Finnish cell phone company) paid me MUCH lower than my market salary. Each time they told me that they had additional costs of:
1. Filing for my H-1b
2. Filing for my green card.
Almost everyone I know who's on H-1b is dreaming about getting their GC. Pretty much the only legal way to get it is through your current employer. Employers know about that and leverage when it comes to salary negotiations. The result - H-1b's get paid MUCH less than people with US passport or GC.
In my family's experience, we have had both situations. The H1-B can become a massive expense, especially if the State Department get's more involved in the process (sometimes called a "security check") and many tiems, the entire H1-B to GC process can cost in excess of $30-40k (The management overhead/legal fees are huge, well above the $3k filing fees), especially after you factor in risk of turn over to the employer.
Between my parents and all of our friends (Russian born engineers mostly), we don't know of more than one or two cases out of dozens where someone was paid more than 10% below market wage
It may not be true for smaller companies hiring the fastest guns in the West (or the East, as may be). But I assure you that the "visa discount" is real. The most common form is to hire someone who really should be at level N at level N-2 instead, and get as much level N work out of them as you can. For example, an architect working as a draftsman, or a managing editor working as a reporter.
I've seen people with 10+ years of experience having their pay cut from $17/hr to $15/hr, and told that they should be grateful to have a job. Again, this may not be common at small companies who need rarified skills, but it does happen.
I work in the SAP space, My experience is most of the abuse is handled through 3rd parties. You will never be able to pin it on an IBM or an HP directly, but their will be 3rd party resourcing companies that will pull visas and force project members to live 2 to a room in a 2 bedroom apartment to save costs.
Hi! SAP'r here too! Yup, this is pretty much consistent with what I've seen too.
IIRC, there was a situation where an IBM/Accenture (I forget, they're all the same) technical outsourcing group in Malaysia brought a few of the guys over to Europe and had them stay in a van instead of a hotel...
There is a whole eco-system of products and functionality and thus specialized skills. The term "SAP" can be used to describe R/3 or the company or the collection of products referred to as the Business Suite.
http://en.wikipedia.org/wiki/Anecdotal_evidence
The expression anecdotal evidence refers to evidence from anecdotes. Because of the small sample, there is a larger chance that it may be unreliable due to cherry-picked or otherwise non-representative samples of typical cases.[1][2] Anecdotal evidence is considered dubious support of a claim; it is accepted only in lieu of more solid evidence. This is true regardless of the veracity of individual claims.[3][4][5]
I'm currently involved with immigrating to Canada as a skilled worker, and I've previously worked in the US on multiple J1 visas, and applied for a H1B.
My take on all of this is that bringing in foreigners in this way destroys the whole supply and demand setup of jobs and employees.
As an example, let's say company A wants to hire a salaried employee for $x. After 6 months of not finding anyone, they should offer more money, etc. until eventually someone is found. If this is across the country for a given profession, then more students will be educated in that field, and the supply of employees will match the demand that has grown and salaries will go up and down in relation to how well the supply matches the demand.
With programs like the H1B and similar, when Company A doesn't find an employee for $x, they don't have to offer more money, they just bring in someone from overseas. In this way Company A is getting employees for less than the supply/demand equation says it should be able to in their local country.
This means Company A makes bigger profits, and people inside the given country are now earning a lower wage than they otherwise should be if Company A had to raise salaries because of a lack of supply of employees for the demand in the given field.
Here in Canada it happens all the time. All the big players (McDonalds, Wal-Mart, KFC, etc.) have an agreement with the govt. where they don't even have to go through the process to hire a foreign worker, it's automatically rubber stamped. When they can't find a local to work for minimum wage, they just bring in a foreigner to do it. So now even though there is not a supply of Canadians willing to work at KFC for minimum wage, KFC can fill those positions, have higher profits, and there are thousands (millions?) of people living in Canada with a standard of living below that which the average Canadian will accept. In my town tehre are lots of foreigners living 10 to a house because they don't earn enough money to do it any other way.
This is not a good thing for a country, or the people in it. It is a good thing for the big companies that now make bigger profits, thanks to being able to get employees at a lower salary.
The problem is that reality is messy. There are a lot of factors that gunk up a good theory. Higher demand can lead to higher wages if we restrict immigration, but if American students raw out of highschool are not thinking 5 to 10 years into their future when they pick a major, supply is not going to jump like the growing industry needs it to.
The issue is compounded when popular media artificially lowers the level of "glamor" in the industry. Shows like The Big Bang Theory are entertaining, but I don't think many people watch them and say "that is what I want to be a part of".
Now, of course individual companies can spike their salaries and pull in talented programmers, but I think most of those will be cannibalized from other companies. If supply is dwindling then raising wages can work for individual companies, but not I think for the industry as a whole.
> If supply is dwindling then raising wages can work for individual companies, but not I think for the industry as a whole.
It's interesting you look at this from the perspective of benefiting the companies. My discussion was about the lack of benefit to the employees and people in the country in general.
> supply is not going to jump like the growing industry needs it to.
Industry only needs supply to jump fast so that profits can jump fast. Let's face it, if Apple can't get enough Software Engineers fast enough, iOS 7 might be delayed and profits might be reduced, but they're not going to fail because they can't get enough good employees fast enough.
The approach of bringing in foreigners absolutely supports faster growth for the companies, and higher profits for the companies, but it's not doing anything to help employees or the people in that country on the whole.
Is it really worth lowering the overall wages and standard of living of people in your own country so that the companies can make higher profits faster?
Have you spent any time in developing and undeveloped countries? Do you have any idea what would happen to your life if we averaged out the standard of living across all countries?
After living in Ecuador, Bolivia, Peru, etc for years, I honestly believe the majority of people in the developed world would die if they were forced to live like that.
> The immigrant will either spend or invest his pay.
This is flawed logic for two reasons:
1. As I'm an immigrant here myself, I have a lot of friends that are also immigrants, although most are of the kind I discussed, working minimum wage for the Wal-Marts of the world. I can guarantee you, they send every penny they can spare to their family in their home country, and themselves live in second world conditions (10 to a house, eating rice for every meal, hand washing clothes, absolute minimum heat in the winter etc. etc.) so they are spending extremely little. A local person earning that same money would be spending/investing more.
2. These immigrants are earning $x, likely minimum wage. So they only at most $x to spend or invest. The employer would have had to increase wages to $x+y to attract a local, so that local would be spending or investing $x+y, which would be better for the economy.
Bringing in people to work for less money than a local person would do it only helps the company increase profit.
About 1: Either the money comes back to the US eventually, or if it doesn't, the Fed can just run slightly looser monetary policy.
About 2: The solution is of course, to set up a second firm to compete with the first one. The wages saved should thus eventually go away from being excess profit to making prices cheaper for the consumer.
> Either the money comes back to the US eventually, or if it doesn't
That may be the most superfluous statement I've ever read.
> The solution is of course, to set up a second firm to compete with the first one. The wages saved should thus eventually go away from being excess profit to making prices cheaper for the consumer.
And it will put every local person out of a job, or force them to work for a wage lower than they were willing to accept in the first place, thus driving down minimum wage. That's a great way to turn your country into a developing one.
> And it will put every local person out of a job, or force them to work for a wage lower than they were willing to accept in the first place, thus driving down minimum wage. That's a great way to turn your country into a developing one.
I can't tell if you're trolling or not, either.
I hope, you know, wages are high in the rich world because of high productivity (in sectors that produce tradeable goods)? Not because we have _not_ allowed foreigners to come in. (And if I lived in a country where that was the case, I'd be off for a less fragile economy within days.)
Immigration used to be much easier in Europe and the USA in the 19th century. When those countries first became great.
Full disclosure: I am leaving Europe for Singapore. A country with a very business-friendly immigration policy.
> That's a great way to turn your country into a developing one.
Poland and a few other countries to the east of Germany joined the EU. Their inhabitants now have the right to work everywhere in the EU. Did wages in the rest of the rich parts of the EU fall down to Polish levels? No.
They did not fall significantly at all (although in some countries wages stagnated much like in the US). Self-employed wages (plumbers being a common example) may have fallen, but salaried rates did not seem to in aggregate. I hired many people from Poland, as they were very good and well qualified, but did not pay them less. Offshoring still pays less, so that is common too, but then the cost of living is still less in those countries.
Thanks, Justin! Yes, e.g. German wages haven fallen due to the EU expansion. If at all, the German labour market is stronger than before. (But there are other confounding factors, like broader labour market reforms that provided some much needed flexibility. Also Germany did not really have a minimum wage, and now they introduced something like it. (I'm not too current on that. Wikipedia probably knows more.))
I'm also working with lots of Polish people. (And I won't even escape them in Singapore.)
>> Either the money comes back to the US eventually, or if it doesn't
> That may be the most superfluous statement I've ever read.
To elaborate: Either the money comes back into the US, then it doesn't matter for aggregate demand that it was sent out as remittance first. Or, if the money doesn't come back, then the Fed can just react by printing more money. (And the American public profits by getting some labour just for some pieces of paper---or more accurately, for some entries in a database.)
Tech companies and their approach to labor is just sickening. They complain constantly that we don't let in enough H1B's. Are they offering to indemnify the government in case they need healthcare, unemployment; their children need public education, etc? They complain constantly that the publicly funded universities don't graduate enough STEM graduates to meet their needs. Think about that--they complain with no hint of irony that the public doesn't train enough workers for them at the public expense!
And let's not even start on collusion to keep down salaries, non-competes and other bullshit.
They complain constantly that the publicly funded universities don't graduate enough STEM graduates to meet their needs. Think about that--they complain with no hint of irony that the public doesn't train enough workers for them at the public expense!
At the same time, our esteemed corporate chieftains want the government out of their way. Our great economic miracle involves shifting the costs of production elsewhere. This is called putting the doctrine of individual responsibility into practice.
H1Bs residing in the US pay the same tax (including social security and medicare) as the citizens.(so if their kids need public education, they are also paying for it in a way)
H1Bs are not entitled to unemployment benefits (or any form of government sponsored healthcare). In fact, technically, they are supposed to leave the country the same day they are fired otherwise they are illegally staying.
After having paid the taxes with no safety net, the constant risk of deportation hanging over their heads, aaand a ridiculous green card process that can take a decade or more. (My parents are a biophysicist working for NASA and a mechE working for a printer company and it took us FOURTEEN YEARS).
14 years of taxes is quite a bit at an effective 35% rate without the promise of social security of any kind.
The point isn't whether immigrants pay the same taxes. The point is that society makes certain commitments to everyone who lives in the US, and everyone who lives in the US makes certain reciprocal commitments to the society. A society legitimately controls immigration into the country by virtue of those reciprocal commitments.
At a most fundamental level, a nation is a group of people who commit to protect each other in case of attack. If you're in the US, we'll protect you from foreign invaders whether you're a citizen, legal resident, or H1-B holder. Because we make that commitment, we get to decide who crosses our borders. We get to decide based on whatever factors we want whether we want to let someone emigrate.
"H1-B is a big step towards green card status for many people, and green card holders are entitled to all of these things."
No that is the point. With this statement you are justifying the fact that Visa holders don't receive the same commitments as PRs and citizens because they may or may not receive a GC in the future. Many H1-Bs have to leave the US before they even get a chance to get a GC (all the while paying their taxes and not receiving much of the benefits).
You seem to be seeking the moral high ground for justifying a country's exercise of its ability to curtail immigrants.
As the responses are showing, the moral high ground is largely unavailable for this particular motion.
On the other hand, a country can do what the heck it pleases on letting people in, which is generally the bedrock of its powers anyway, so why is this an issue.
All immigrants know that they are the mercy of a bureaucracy they have to please. Not at the mercy of some high minded ideal system.
> H1-B is a big step towards green card status for many people
It is a big step, but it's still hard to get green card status unless you really luck out with both the company you work and the manager(s) you report to.
It's disingenuous to say that they're offering to pay to do the training. They're offering to pay for marketing incentives to get people to do STEM.
"Microsoft is not simply trying to solve the immediate worker shortage. The software company proposes boosting the H-1B visa fee to $10,000 to raise money for a STEM-version of the Race to the Top federal grant program spurring education reform in schools."
$10,000 pays for about one year of K-12 education in the cheapest states, and about 6-7 months in a state like NY.
Here is my modest proposal for how to handle the H1B issue.
In order to hire an H1B worker, you have to post a significant bond. The worker arrives and has a fixed number of years in the USA. Once the worker arrives, the worker has absolutely no legal obligation to the hiring company.
In other words rather than ask companies to swear up and down that they can't find American workers, while they have every incentive to lie, make the company prove with its actions that there are no Americans available. And rather than believe the company when it says that they are paying the market rate, let it prove it by paying the worker enough that the worker does not immediately jump ship to a competitor who will pay the prevailing market rate.
Of course nobody wants to see a system like that, because the current system is all about getting companies cheap labor while hypocritically pretending that this isn't what the system is about.
H1B transfers require the new employer to go through a significant amount of paperwork, and have all of the usual lags that anything to do with the government does. As a result the requirement to deal with this is a significant impediment for changing jobs. Particularly for very small employers that may not have people dedicated for this kind of paperwork.
What I'm describing is, "Oh, you're in the country on a valid visa? Come work for us tomorrow, at the same rate under the same rules that a US citizen faces!"
I've been through an H1-B transfer myself, the lawyers didn't seem to think it was a big deal. From application to acceptance I don't think it was even a week.
I think if your idea was implemented there would be little change in H1-B mobility. Fact is, a foreign worker just has fewer options in the host country for lots of reasons and paperwork is the least of it. The foreign worker probably has no professional reputation outside their own company. Their degree and experience may not be understood or respected. Worst thing is that you're not allowed to have any significant period of unemployment - and even in the cases where you can, family and friends unlikely to be able to help you through a rough situation.
As you may or may not be aware, I'm personally aware of you and value your opinion significantly more than an average HN commenter.
Therefore let me just say that one of the reasons that I would suggest the bond from the initial company is to cover the potential government obligation in the case of a significant period of unemployment. Does this not seem to be an important difference? If not, then it would seem that the H1-B status is not as different from a regular citizen as I thought, and employers of H1-B visa holders do not have as much control as I thought that they did.
In theory it could be abused -- as long as you could support yourself, and could pay off the host company in some way, you would be pseudo-immigrating to the US. That said, I kind of think that should be allowed anyway. I live in Canada, where we have free trade with the US, but not labor mobility, which to me seems nuts.
After losing the job, H1-B holder is supposed to find a new job or go home within the grace period of 90 days. There's no "significant period of unemployment". Where are you getting your facts from?
If you re-read that, the possibility of a significant period of employment is part of my suggestion, and is supposed to be a difference from the current status quo. Therefore I'm aware that this is not how things currently work.
I've been through 2 H1-B transfers, and my experience is similar to neilk's. Last time it took a record time of 2 weeks between offer acceptance and starting work for new employer.
I must be doing something wrong, do you have a quick help-to guide to make this significantly challenging, the way you're describing?
You're right though on the small employers, but that's why labor immigration lawyers exist, any type of legal activity (divorces, class actions) also involves complicated paperwork, and people who will happily take care of it for a fee.
Companies get cheap labor and foreign workers get great opportunities. Protectionism may appear to help local workers in the short term but it will damage the entire country in the long term.
I don't think this is discrimination against Americans: it's just discrimination against people who price themselves higher. H1-B workers are glad to be in the US and are willing to accept substantially less cash compensation as a result. Americans already have US citizenship and want to be paid in money. Companies don't like spending money but the government allows them to spend "citizenship points" on employees instead, so they do and here we are. (And, you can threaten employees you don't like with deportation, which is much scarier and perhaps more motivating than "you're laid off and will have to collect unemployement while waiting for your new job to start. remember to get out of bed for a few hours a day so you don't get bedsores!" It certainly prevents people from asking for raises, equity, etc.)
Ultimately, you get what you pay for. The problem is that the market hasn't figured this out yet, since good programmers are so few and far between that most programming-related projects fail anyway. If you're going to fail, you might as well fail with cheap labor that won't talk back instead of with expensive labor mixed with cheap labor, right?
Where I worked, there was a massive pay disparity among non-immigrant workers. People hired out of college would be making $45,000 a year, while people that had been at the company for a few years and hired away from a well-paying job would be making $150,000 a year. (Raises were basically given via counter-offer matches, as far as I could tell.) There's then plenty of leeway to pay your H1Bs $60,000 a year, which is a rather low programmer's salary, while still paying some Americans less.
I think the key loophole is that you have to pay a certain average amount based on region and job code, but that region includes the suburbs and rural areas and the job code includes all of "senior architect" and "test engineer intern". So you can pay someone a "suburbs" salary instead of a city salary, and pay them a non-financial-services-firm salary even though they work for an investment bank, and then pay them like the lowest-level "computer programmer" American regardless of their job responsibilities.
Anyway, if my previous employer's goal was to attract the best talent by paying great salaries, they failed. I still have nightmares about the time I had to explain to someone with "10 years of experience" what an array was. (He wrote something like: if day == 0: return "Monday" elif day == 1: return "Tuesday". But I digress.)
Please consider the following two points. What's the difference between them?
1. The US pushed free-market + lower tariffs for imports of products into other countries. This lead to lower production in those countries, replaced by imports from the US. Leading to lower employment in many cases. [Today that's replaced with imports from China]
2. Other countries export 'services' to the US, in the form of BPOs/KPOs, or H1Bs. This leads to lower production of services in the US, resulting in lower employment in the US.
On the face of it, both are similar. Except one affects workers in the US and the other affects workers in the third-world.
So to balance free-trade, why not free-labor?
I would appreciate thoughtful replies on why free-trade and free-labor are not two sides of the same coin.
Corporations are using free trade to introduce foreign-made goods at huge margins, while at the same time trying to prevent consumers from practicing price arbitrage.
If corporations were not artificially inflating the cost of living for the US consumer (through the cost of medicine, software, textbooks, food, clothing, etc), then there would be no issue with an open labor market.
But the corporations want to have their cake and eat it to. Free-trade means we get to sell you foreign-made goods at higher margins. Free-labor means we get to hire foreign workers are lower cost. Neither of things things are good for the US consumer, only the US corporation.
It's like the senior discount on a grander scale. Your typical old person on a fixed income can pay less than someone still working, so you split the market into two segments and do a pricing strategy that gives maximum profit in both - you keep the high margin on the young but increase the quantity the old can afford more than the price cut. You keep people from moving between the segmented markets by setting an age break.
Same goes for the international vs. the American market - there's no way you're going to be able to charge $150 for a textbook, $200 for a Windows license, or thousands a month for HIV meds in Africa and get any reasonable number of customers. Since the marginal cost of both is low, companies can cut their prices to close to the amount it costs them to make a unit and make it up on the massively increased volume.
Any time you segment a market like this you have to keep it apart somehow. Sometimes it's natural - a senior discount seems fair and few will make false claims of being elderly - but sometimes it's not. Clearly everyone in the US would prefer to pay 95% less for their medication than they are, but the pharmaceuticals wouldn't like it and probably wouldn't be able to survive on that. So they make it very difficult to do any kind of arbitrage.
If you're an individual you can probably get away with it with a lot of effort (I got a lot of Indian textbooks (Identical to US versions) because I was desperate and put a lot of work into finding someone who wouldn't refuse to ship to the US.) If you try to break the segmentation on any kind of scale you'll get a legal smackdown. Maybe it's completely legal, but it's hard to prove, and the possible losses are so great most companies will go to war over this.
I guess that the irony is that third-world wages are allowed to compete more often than third-world prices. Maybe there's something valid to that - if
HIV meds cost everywhere what they cost in the cheapest country, then there would be no new ones, or at least an end to wildly cheaper versions - but that's the grievance.
(Don't know if third-world is the right term, so let me just say when I say that I mean "places significantly less economically developed than America")
If the american's could get medicines, books, degrees at much lower prices, maybe medical research would not be so costly in the first place... The cost of medical research is primarily composed of paying doctors, nurses, lawyers, politicians, clerks, programmers etc artificially inflated salaries so that they can afford education and healthcare. Maybe these corporations will drop the price of healthcare and education to compensate for lower incomes as more people become unemployed by competing with other countries.
Medicine is charged at significantly higher prices in the USA compared to even other developed nations, such as most of europe or Canada
Software and media is often charged at different discriminatory prices. DVD region codes point to this fact. You can buy identical gray market 'international edition' textbooks in English often at prices less than half of the US edition.
Clothing is often charged at many multiples of the real price it cost to produce, design and market. A market in Asia will show you how different it really is.
The thing is, I would say the cost of production of Coke is less in India too.
In other words, even though I believe price arbitrage happens, I dont think that would be the main culprit.
I would say the lower standard of living in a particular country puts the country in a good vantage position to export more goods (or services). For eg:- A person from a developing world might be in a good position(financially) when he decides to return to his home country for good, even if he has saved what an American would call "not much".
Now, I think true globalization which means (tariff free import and export of all goods including groceries) might eventually solve this problem. But before that happens- that might eventually mean a hard life for people currently living in the developed world.
AND, they want to be able to restrict flow of goods bought abroad into the US, so they can keep US profits artificially high. All of the benefits, none of the liabilities.
This. Inside the US, consumers have to pay the "rich tax" on products they buy. Outside the US, you get a discount. It is no wonder companies want to hire foreign workers that do not have to pay this additional cost.
Living in the US could be very cheap if there was actually free trade for goods such as medication. Instead, due to this global price discrimination, US workers face a high cost of living that makes them uncompetitive for jobs such as manufacturing.
A very simple solution used here in Europe is that the VISA does not tie you up with the employer! This was the employer has all the expenses and work to bring you but if your wage is not competitive you can just leave the company and enter in another one who pays you the market price. The problem in USA is that the foreigners are totally under the control of the hiring company, so sure you create an artificial lower-wage group.
This is simply not true, throughout most of Europe your work permit is tied to your employment until you qualify for permanent residence permit (typically after 3 years).
I'm in the UK under a Tier 1 (a points based, highly skilled migrants visa) and can work almost without restriction (I can't be a doctor or professional sports person).
Even under the working holiday maker there were no restrictions to your employer.
The Tier 1 was a different, independent visa - I think varjag is referring to the UK work permit system which works as described (except for the time length, which used to be 5 years but is now only 2 years) and has been that way for many years.
The Tier 1 doesn't actually exist anymore, basically the only way you can work in the UK without EU citizenship or an ancestry visa is via a sponsored visa.
In fact the rules just changed recently for the worse - if you are working in the UK under a sponsored visa, the time no longer counts towards settlement. Under the old work permit system, you were still tied to a company but at least after 5 years you could apply for indefinite leave to remain (which is exactly what i did a few months ago).
I don't know why anyone in their right mind would work in the UK with (a) the inability to easily change employers and (b) the inability to settle after X number of years. Obviously not a problem for EU citizens or ancestry visa holders, but for the rest of us...
It's obviously a populist move; making life complicated to skilled workers is perhaps the worst way to fight illegal migration. I've been to the UK last year for friends wedding; obtaining even a visitor visa was a humiliating process only a cavity search short from prison experience.
So many people in EU/EEC somehow hold this idea that getting residence in their country is as easy as simply applying for it: probably the outcome of public debate where some points of view are very selective and simplistic.
I'm from the UK, and despite having interests in government I paid little attention to our immigration process until I started to look into that of the USA.
The problem is simple to sum up: highly skilled workers aren't going to sneak across the Channel Tunnel/Rio Grande very often. They'll stick to as-legal-as-possible means because generally they're respectable tradesmen, who've invested a lot of time/money in their skills and want to use them as best as they can.
Unfortunately, these government-encouraged means of immigration/foreign-workers are the easiest things to stop. Hence an 'immigration clampdown to save the jobs of the natives' really consists of blocking the vast majority of the foreigners you might actually want to move to your country.
You basically summarized the entire immigration debate in one post. Well done.
I think it should be required for anyone arguing immigration policy from either position to go through an immigration system first. When you experience the hoops you need to go through to get into a country you begin to understand why making it harder only negatively impacts the people your country wants.
UK is in many ways a special thing; as un-European as a EU country can get.
I am in Norway and have a number of migrant friends throughout Scandinavia and mainland Europe. It's all very similar, with exception of Swiss (where permanent residence for a worker is nearly unobtainable).
That change would certainly make a big difference and yet sadly most can not see the gains from having a more open visa. Reason being that such a change in the common mans eye's will look like more errosion of job prospects than one which locks the competition to one company so to speak.
Then I'd expect IBM have a situation that any idle workers with visa's landed (landed - not sure if that IBM term means they have a visa and can fly over or have a visa and already in the country ). That if they don't use them then like budgets not fully used up they lose them next year. Given that no new visa's are available until next year, then things can only get better.
But IBM are certainly cruising for a law bruising fine.
All of the arguments in this thread are true. In areas where specialized knowledge is required, H-1B visas give you access to the global labor pool. You need that access because there may be only a few hundred of these specialists globally.
IMO, the big abuse of foreign workers takes place in big enterprise environments.
So bank X or government agency Y hires IGS or some other contractor to do something to some ancient COBOL application or monstrous J2EE thing. They go out and recruit from a body shop, or from IGS India if you pay extra. They justify using guest workers by submitting one of those classified ad style "compliance advertisements" in InformationWeek magazine.
I've worked at places that required disclosure of employee compensation -- the body shops that specialize in filling those drone titles bill $35-45/hr, and pay the workers 40-60% less, depending on the number of subcontractor layers. A US FTE is paid $40-55/hr inclusive of benefits, and a contractor anywhere from 40-60% more.
I find this extremely hard to believe. I completed two internships at IBM in my undergrad years when I was here on an F1 visa (international student visa). While I was on my F1 visa, I was making more than a lot of my American counterparts and lesser than others who were doing internships as well. The only things that factored into pay were the number of credits you completed in college, and whether you were a returning employee. Nothing else.
I worked for IBM for almost 12 months before I got out of undergrad. There were 4 hiring managers and a senior VP in a hardware unit who was personally vouching for me. Yet, IBM didn't hire me because they were ridiculously careful with hiring H1-B visas because of a snafu they had in the early 80s when the immigration dept cracked down on them. At least IBMs engineering divisions were only hiring H1B folks only if you had 2 years of experience with a Bachelors, or a Masters. I was extremely pissed at the time because I felt like I had more credibility based on merit and my time at IBM than many other interns who were getting offers left and right after spending most of their time playing counterstrike in the labs. They were being ridiculously paranoid about sticking with the books on this one. And sure enough, after I got my Masters I did have and continue to be able to get offers from IBM.
Like some folks said, this probably has to do with third parties who place folks at IBM. Keep in mind, I'm not trying to support them (I'm still sour about my undergrad days and not getting a job purely based on immigration status), but I'm just refuting the whole point about IBM hiring H1B folks just to save money. Just ask around your H1B friends who work at Fortune 100 companies (I'm sure most of you have many). The only ones that I've heard of doing shady things with H1B candidates are small consulting shops and third party staffers.
IBM has nearly a half million employees. I would suspect that their stance on visas is not completely consistent across all areas of the business. For example, I would only have to assume that GTS is much more inclined to go for H1B folks than say, GBS.
Nothing to do with credibility, certain positions are indexed by the Department of Labor which require a base salary and base experience. Highly likely that you did not meet the requirement as a fairly new employee or the base salary was too high for them to justify hiring you.
Tough economics questions: To what extent would these people still be willing to work for cheap if we let them immigrate and become legitimate Americans with a simple, easy process? Are they just willing to work for less in general, or is there a pattern of monopsonistic exploitation or other similar exploitation due to the legal process surrounding the H1-B process and how it is attached to an employer sponsor? If the latter, how can we procure evidence and measure the effect?
As a former H1-B (coming from France, and now living in Japan) who used to work in a Hedge Fund in NYC, I would say that there are three factors at play:
• an H1-B holder doesn't have much leverage for negotiation if she really wants to stay in the US, as resigning (or be let go) foolishly means going back home,
• US salaries in IT jobs are much much higher than salaries for equivalent positions in Europe, so even if you are making less than Americans you are usually happy,
• more personal and somewhat related to the first point: foreigners (at least the non native english speaker ones) tend to stick with other foreigners. Not by choice, it tends to happen very naturally from what I observed, and in my opinion has a lot to do with speaking abilities. If you don't know American workers, you don't know their salaries, so it's somewhat harder to know your actual market value. And by the time you expand your network to American people you are well under way to get your Green Card...
I think the freedom aspect is critical in any policy change. The 'freedom', or lack thereof, is tied to what the sponsoring employer controls - the green card process. I would propose something along the lines of:
1) If a person receives an H1-B he/she is free to work for anyone they want [Open Work Permit]. This kicks in immediately - no waiting period. On a job change the H1-B holder sends a job change notice to USCIS. This freedom applies for the duration of the H1-B which I think should be extended from 3 to 5 years.
COMBINED WITH:
2) Some process to migrate smoothly from H1-B to green card. Perhaps you get a green card if you can show employment in your field ("Information Technology" for example, rather than something title specific like 'software developer') for a total of 4 years. No additional job related procedures required - just the usual security and medical clearances.
Will a company sponsor someone on H1-B if the risk of the candidate changing jobs is high? Would they be better off hiring and training local candidates?
1.) Your H-1B isn't tied to your employer except during the application/renewal process. The rest of the time you're free to move around. However, every prospective employer will want to know about your visa status, and that new employer will have to work on your H-1B renewal. You're at the same negotiating disadvantage, because you only really compete with other H-1B holders.
2.) There already exist smooth processes to move from an H-1B to a green card. Unfortunately, that's usually tied to your employer. Changing jobs may restart the clock on you.
Re point #1) this is definitely new. This was NOT the case during the first bubble in 2000/2001, when H1B holders were forbidden to solicit new employment. Slavery was alive and well then.
Also, contrary to popular belief, there is NO grace period after losing ones job. If you are on an H1B, you have to find another H1B job and file for a change or extension while 'IN STATUS', or at least have the new employer apply for a temporary I-129 work permit().
Note: Some say the explosion of outsourcing to India after the first bubble was actually a result of hordes of South Asians, familiar with the US business climate, who were fired and sent back to India, resulting in a humongous braindrain.
>... except during the application/renewal process.... new employer will have to work on your H-1B renewal.
>... Unfortunately, that's usually tied to your employer... restart the clock on you.
[I am picking some of the still occurring pain points in your statements]
It is for these reasons (and a few others) that I am advocating BOTH steps. I want to get control out of the employer and into the employees hand and also reduce the burden on the new employer.
1) Use an 'open work permit' - your permit is not tied to any employer. The permit has a date range (5 yr) during which it is valid for any employer without any additional burden on the new employer.
2) Remove the concept of a 're-startable clock' and multiple labor certs - those create burdens to job mobility. Lets whittle it down to experience gained while in H-1B status regardless of employer. Or some other metric that cannot be reset on employer change.
With apologies for repetition from my earlier post.
The pay difference between working locally in India and working remotely in India is apparently very attractive, so working locally in America would need to be very attractive as well (which doesn't help businesses).
This sort of thing is also harmful for native IT development for an outsourcing destination such as India. Since the motive of work channeled to India is simply cheaper costs, good software engineers have a limited run. One of the direct fallout is time-based promotions instead of merit-based. Some salient points:
a) Average entry salary(0 years exp.) for an IT worker is about $6k. After applying PPP(purchasing power parity) of 2.9(source:http://www.thehindubusinessline.com/opinion/columns/harish-d... amounts to $18k. In the US the average is about $60-65k (http://www.whatsalary.com/us/salary/SOFTWARE-ENGINEER-T6812....). TLDR:Entry level, India($18k after PPP) vs USA($60-65k).
b) Why is the above data relevant to this discussion?
H1B is a red herring basically saying, "Look we tried looking for locals alright. They are just not qualified. Look at the Indians we got, they work all the time." I don't think the 800-900 workers IBM imports translate to a huge savings compared to 100,000+ workers it employs in India. While in India, the H1B is a carrot for workers to continue slogging on.
c) How is it bad for India?
It's bad for India for exactly the same reasons. There is no desperation for innovation as a software job is easily available. This is also the reason India has not produced even a single Google or a Nokia.
Recently I was offered a contract job. I quoted the global market rate(after applying PPP). The response I got back was shocking and humiliating.
"India's GDP is $3700. Why is your quotation so high?"
I apologized for earning more than India's GDP and refused.
If the carrot makes more people invest in skills than actually leave the country, India will easily profit. Also the ones who leave often send remittance, and may one day come back with new skills.
> This is also the reason India has not produced even a single Google or a Nokia.
There are other things wrong with India (and Nokia nowadays, too).
disclaimer: It's possible that I end up being an H-1B worker eventually, I'm a foreigner working in the US, and I'm working on a website that helps people like me.
> H-1B workers are cheaper than Americans — "and the cost difference is too great" for IBM not to look for foreign workers first. The H-1B statutes are designed to allow employers to legally pay H-1B workers less than Americans and IBM (and a lot of others) is taking full advantage.
This is interesting, because the H-1B process costs about 5k in processing and lawyer fees, plus an additional 2kish fee for larger companies.
In addition to this, companies are required to pay the prevailing wage for that profession and location to foreign workers, so that they can not undercut Americans (or at least that was what was intended).
Prevailing wages are determined by the Dept of Labor, the same guys who set minimum wages. Unless this data is way off-base, H-1B workers are by definition not cheaper than the average worker.
What I see as being likelier is that H-1B workers are an easy-to-hire pool of workers (the average H-1B worker is super happy to get a job / visa), who are willing to work hard for just above prevailing wage.
Not to mention that if there is a lack of supply of american workers who are working for around prevailing wage (because they already have jobs and can't be hired), it's easier to hire people from abroad than to wait until those workers are available or more workers come in.
P.S. The CIS is known for its slightly odd conservative stance on immigration, which is something like "we don't want foreigners to come in if they can compete with Americans (who were also immigrants), but otherwise we're pro-immigration (under these very stringent requirements)"
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edit: Now that I think about it, it's likelier that a ton of these workers come in L-1 visas. These are for intra-company transfers for multinationals. These have no prevailing wage requirements. So IBM india can hire a worker and move them over here for the same wage. And it still allows dual-intent, so you can eventually get a green card via L-1.
In addition to this, companies are required to pay the prevailing wage for that profession and location to foreign workers, so that they can not undercut Americans (or at least that was what was intended).
I have no idea how prevalent it is, but the mechanism I've heard for getting around these rules is to hire someone at a lower title than what they're qualified for, and then pay them the prevailing wage for that position, with the informal expectation that they'll do higher-level work in actuality (if for no other reason than to avoid boredom). For example, you hire someone at a game company into a QA position, but they're actually a graphics programmer, and once they're hired they sort of start doing more graphics programming even though it's not in their job description.
This makes sense. But the company can get into pretty big trouble for doing that.
The nicest punishment is that they will be marked a willful violator and have to provide additional documentation for each H-1B. Or they can get debarred from getting H-1Bs. This makes no strategic sense for H-1B heavy companies.
Doing a project at Apple in the IT dept(big SAP shop). Feels like 99% of heads are staffed directly from India. There are some folks on L1's. Majority of them are rooming up to afford the cost of living in SV. No diversity whatsoever.
I personally have known people who do software development for as low as 35k/year. I have also known people who have attained wages as an engineer for as high as 250k/yr. Given this continuum I suspect it's very easy for a well heeled employer to keep the costs on the lower end of that spectrum.
It is also possible to become an H-1B dependent employer if you have over 15% H-1Bs, which requires you to provide extra attestations for each H-1B employee:
If your job is to put butts in seats so you can bill for them, yeah.
If your job is to deliver products, you'll find you get what you pay for, I work with some guys who maybe make 10k less than they could because of their immigration status but it's not a difference between 150k and 60k or something.
Depends on the place and where the H1-B is from. I have seen situations where H1-B works make half of the American worker. One tactic I have seen is that the American companies tend to basically lock in the workers by paying legal fees and dangle the green card sponsorship carat. The H1-B individuals typically will put up with this for the chance at perm residency. While not all of them, make no mistake there is a real new indentured servant class.
In cases where the job description is something like "Business Analyst" or "Software Engineer", the difference between an American with 10 years of experience and an H1B with "10 years of experience" can be extremely high.
This also isn't the equivalent work of say a Startup. A lot of it is simply a butt in the seat performing some form of labor.
the biggest flaw in this articles - which mind you isn`t backed up with any sort of proof that serves to validate his allegations of IBM being the number one "misuser" nor can we be really sure this email exchange is for real.. Is the assumption that Landed Resources come on H1B - thats plain wrong. The difference between H1B & landed resources is that H1B employees can work in the US and get paid above a certain level. Landed resources are those who get visas for projects through their companies and head to the US to work on these projects while still getting their salary at home. Its important to understand and acknowledge this difference since H1B is a way for good people who are needed to get employed - and mixing it up with a loophole that allows easy intra company transfers or extended project visits only serves to tarnish its image.
Absolutely horrible state of affairs, I understand that because of the economic incentive that this will and does happen all the time.
I feel that the only way to stop this is to take away the economic incentive to hire foreign workers. If there was a tax that required the difference between market for the position to be paid to state and federal government we would solve this problem overnight.
I also think part of this problem is the general attitude that business has that everyone is generally a replaceable cog in a machine. Don't get me wrong I have meet and worked with H1-B holders that were superstars, but many of them are not perfect candidates and end up costing more in productivity and efficiency then a Grade A local engineer. A ninja developer can be 20x more productive then someone who is not if you believe the hype, I think companies should focus on getting the right people then just thinking about the people who are cheap. While the ninja might still be an H1-B, we should have a level playing field where the best guy wins. Its better for the company overall, but unfortunately many people are too shortsighted to see that.
I'm generally suspicious of any visa program specifically designed to address "shortages" of workers in particular fields/professions. I wouldn't have a problem with a points system for general, skilled immigration though.
However, that appears to be unlikely at this moment. If I had to tinker with the system, I'd say that the two biggest problems are 1) the visa gives the employer too much control over the employee's right to reside in the US, and 2) the "prevailing wage" requirement isn't effective.
The "indentured" problem is easily solved, just award the visa directly to the employee with full rights to reside in the US for the duration of the visa.
The "prevailing wage" problem is a little more complicated. The first big problem is that this requirements is easily circumvented. At my organization, there are different salary tiers for programmers. It would be trivial to hire an expert at a lower level and claim you are paying the prevailing wage.
A more fundamental problem is that even an honest attempt to pay the "prevailing wage" can still lead to wage stagnation across the field. Generally, when a "shortage" occurs, wages rise and new people are attracted to the field. One reason for the "shortage" of software developers is that US citizens with the talent do this can find equal or greater wages with better career stability in other fields.
Wages need to rise to draw them back into software, but if employers are able to use visas to pay "market rate", this increase may not happen - or if it does, the rate of increase may be diminished.
To solve this, I'd instead use a pay index that includes fields outside of programming, and set a high floor for visas. For instance, you might decide that 120K+ a year is the minimum salary allowable for an H1B (necessary, not sufficient). I know many employers will object vehemently to this, but keep in mind, they are arguing for a specialized visa that bypasses the normal immigration system, justified by the claim that these are highly educated, critical workers that employers can't find at any price. Hard to believe that these highly educated workers are really so hard to find if you object to paying 2/3 of what a 24 year old out of a top law school would earn (yes, I know, that's only the top law grads, but nobody is claiming that there's a shortage of middle tier law grads, we're talking about a shortage of critical, highly educated workers.
As a recent STEM graduate (Masters in CS), what irks me is the relentless focus on job experience. I don't even get interviews for jobs requiring a high school/GED equivalence + 3 years of experience. There seems to be little faith in our STEM programs among tech recruiters/companies.
That's the important point is being missed. Despite what they say, this industry doesn't care about technical education. You will see people with masters doing the same work as people without a Bachelors, and the same for PhDs. As a result, there is no point in getting more education if the companies will not even consider it. Additionally, this is also tells me that what you need to advance is these companies is how politically savvy you are, instead of how much education you have.
I don't think it is lack of faith, just the fact that college was never meant to be vocational training in the first place. While it is an amazing achievement for you, I'm sure, it doesn't mean much to the rest of us.
Additionally, it is so easy to gain experience in this industry, just take a month or two to publish your own application and watch the job offers start rolling in, I would imagine these companies consider not having any a bit of red flag. Maybe you can put some of the code you wrote while in school up on GitHub or something to demonstrate that you actually really do have experience? (it doesn't necessarily had to have been for-profit to still count as experience)
Hopefully this doesn't come off sounding harsh, just trying to provide some perspective.
I definitely agree. It just seems that if these companies and recruiters were really that desperate they would consider a Master's in CS as even a second-tier substitute, or at least someone who could ramp up quickly.
I feel the reality is that there really is not a shortage of programmers in general, just a shortage of programmers who have extensive experience in technology X, Y, or Z that is presently in demand. If a company has to fall back on "second-teir" talent, I expect the pool is vast and the competition is stiff. I'm not sure where to find data to back that up, unfortunately, but the anecdotes I see do support it.
My bet is that even if, say, you spent many years writing Ruby on Rails applications and you are the best there is at it, you still wouldn't get a call back for a job writing telephone systems in Erlang, even if you have enough experience and ability to quickly get up to speed to do the job well.
This seems like also a good explanation for the sharp decline in over-35 programmers. The technologies they grew up on are no longer in fashion, so they are, in general, relegated back to lower-teir talent pools and have to struggle to find work along with everyone else.
Contributing to open source projects, particularly well-known ones with strong communities, is another way to get resume experience and network with people.
An interesting point here is that the client was asking for an immigrant hire. Here we have a conflict between human nature and the law. It is human nature for Americans to perceive immigrant hires as cheaper. It doesn't matter if pay is actually the same or not. For someone looking to minimize labor costs, an immigrant hire has a better "brand" when it comes to price.
Here's a thought experiment. Suppose hypothetical Product X was mandated by law to sell at the same price no matter what the store. Now suppose this fact was not widely known and not even rigorously enforced. Some people would insist on buying Product X at Wal-Mart because they perceive Wal-Mart's prices to be cheaper. It doesn't matter if the prices are actually the same, or not.
The upshot is that some people with hiring power will insist on getting some of that "cheap immigrant labor" whether it actually exists or not. I have no doubt that this harms American workers' pay.
After reading the section below from the WTO site I can't understand how such a practice of discriminating against foreign workers is compatible with free trade espoused and taken advantage of by developed countries. Protectionism in terms of differential pricing of goods in many cases to protect local industries and jobs is considered against free trade. This to me seems like a very opportunistic interpretation of free trade.
http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.h...
2. National treatment: Treating foreigners and locals equally Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents. This principle of “national treatment” (giving others the same treatment as one’s own nationals) is also found in all the three main WTO agreements (Article 3 of GATT, Article 17 of GATS and Article 3 of TRIPS), although once again the principle is handled slightly differently in each of these.
National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax.
P.S : I am from India, I have no intention now (or ever before) of emigrating to find better opportunities. So this comment is not borne out of any bitterness. It is out of genuine curiosity to know why this point of view is rarely mentioned in any such debate.
Protectionism in terms of differential pricing of goods in many cases to protect local industries and jobs is considered against free trade
-- People have associated liabilities, (human rights, etc) unlike goods (unecumbered economic assets).
That is why there is not free-trade in people. Goods do not come with the need for educating, healthcare, housing etc. The thrust of your argument is correct, in that yes this is a form of protectionism. But its more an issue of political economy than economics in the narrow sense. The narrow sense economic argument is, therefore, arguably misplaced in this context. Its conclusions do not follow.[1]
But it's not a bad question, and certainly one that deserves a good answer and careful consideration at all levels. Hope this helps.
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[1] Think of similar narrow-scope-argument: why don't we buy/sell people like commodities? Instead, we find it politically acceptavle to have a market for ony the labour. Etcs.
Thanks.
I appreciate the difference and understand the need for taking other things into consideration for allowing immigration.
But most of the arguments made in this thread and other similar debates - the main point is about the economics associated with it. By not allowing companies to pay lower wages to foreign workers the wages of the local market is being protected.
In the short term bringing down the wages would be unfair to the employees in the local market - as they have probably paid a higher price to acquire education, healthcare, housing etc. But in the longer term those inefficiencies would also get addressed.
The same argument applies to opening up the markets for goods and services. In the short term the local producers of goods are subjected to competition which will result in many of them going out of business which indirectly effects the people employed by them.
Again, these are good points. As i like to say, there are two kinds of political economy.
1) <Political Policy> that supports the Economy (in general);and
2) <Economic Policy> that has been Politicised to supports a particular group of people
Nations are always looking out for themselves, but then so too are politicians (and their $supporters). =D
It is usefull, though, to seperate them. In that sense, the default logic of economics in a politicised argument should not (IMHO) be deferred to [just because]. It should be viewed as critically as a political policy (ie Art, not 'Science'...its not objective etc). And also debated thus and put into perspective also.
That's why many debates on immigration, etc get so far off track and/or are difficult to conclude with much progress. Folks conflating the two ideas and the standards of judgement, performance, opportunity cost, etc.
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On the substance of your point:
By not allowing companies to pay lower wages to foreign workers the wages of the local market is being protected.
The answer is yes, it is being protected. But this is a normal thing. Also what is being protected is the political Atom of <citizenship>. This is not something that should, in general, be commoditized. Thus, the "permeability" of the body politic (at the level of citizenry) is a legitimate debate, but its a political one, not a one-dimensional one in terms of wages/pricing etc.
So, to advance the debate, the question needs to be reframed a bit: what is the optimum level of social-permeability desired to grant title: citizen (or: greencarde, etc) for a nation state? And the you have to address issues of other kinds.
For example, do you care more about well to do foreigners than your less well-off existing compatriots? This is sort of an empathy argument (vs. efficiency). And in part its a longer term argument (are citizens more efficient working with some safety net underneath them?)/etc.
Right now in the usa, "merit" is not really a big goal of immigration policy. Can't say I agree with this, but the policy was revised to be more about human-right/family etc. So, if you are an immigrant general labororer US citizen it might be you get your cousin a greencard. But a regular no-strings PhD in astrophysics or whateve is not at any advantage vs the cousin of the general labourer (in fact just the opposite).
But family and the like is the ultimate sort of political argument. On the one hand, its very emotional (for those involved). And on the other hand, their are very specific special interests at play (important, process wise). So, you can see this is not something just totally possible to ignore, intellectually or practically.
Each country is different, though, in these ideas. Places like Australia have been know to offer more open merit-based immigration. Canada too, I believe.
I went to college and graduated in the US on a J1 visa, I paid my fees and when I worked I paid my federal, state taxes + my social security contributions. After graduation I left the US as obviously it makes sense to take my money, teach me skills and then tell me to leave?
Why are graduates not being allowed to stay ?
I want to move to the US, pay taxes and generally be a good citizen.
My main two options are:
- Marry an american girl (not as simple as it sounds, takes a long time)
- H1B which has a route to citizenship over 10 years
Sadly as this article shows H1B is being abused and with the cap being filled quickly every year its very hard to get one.
What happened to the country built on immigration?
> I went to college and graduated in the US on a J1 visa, I paid my fees and when I worked I paid my federal, state taxes + my social security contributions. After graduation I left the US as obviously it makes sense to take my money, teach me skills and then tell me to leave?
I think the US should encourage smart people stay in the country by fast-tracking the citizenship process for graduates with J1 visas. H1Bs might be good for short-term corporate profits, but increasing the number of smart people who have roots in the US is good for the country's long-term health. Reverse brain drain with more brains. :)
I heard a stat that US IT unemployment is -3% (note the negative) so perhaps a step back from the idea this is outright deliberate fraud it's perhaps more a symptom of this long running state of the pool of available candidates?
I'm surprised none of the top-comments has mentioned that this causes problems for startups legitimately trying to hire the best people they can find globally.
On of the many things USCIS doesn't understand about young (pre series-A) startups is that the compensation is often a mix of equity and a below market salary that is bumped up significantly upon raising money.
My lawyer tells me that H-1B denials have been piling up in the last few months. Perhaps it is the USCIS response to practices like the one described in the article.
If you're wondering if H-1b (and E-3) workers are paid less than American workers you can find out for yourself. The US Government publishes the employer, location, title, and salary of every H-1b application (whether accepted or declined). It's also a good source of information about how much large tech companies are paying for new hires this year.
In addition to this, companies are required to pay the prevailing wage for that profession and location to foreign workers
Part of the game, then, is keeping market prices low/stable by managing shortage. I think this is being overlooked. Lots of H1B coming in will keep prices from rising, by impacting the depth of market at the Bid/Ask. Sort of Econ 101. So the "cost difference" can also be understood as the difference in higher base-costs being avoided. =/
From a pure market perspective, doesn't the regulation actually attempt to force a pricing inefficiency? If there are international candidates willing to work for less, why doesn't the average salary drop for local workers to the point where they also become competitive?
I love how websites like this have a headline on the top saying "Low immigration". So, leaving the contents of the article completely aside, it's clear they'll only present evidence that supports their worldview and their worldview will not be influenced by any data whatsoever. That does not make it correct or incorrect, but the approach is flawed.
From my very personal experience, large companies may save some money, but in the first place, they're willing to deal with the burden of H1Bs. Small companies I chatted with were mostly (but not always) "OMFG, H1B, no, we don't have that much time and money" irrelevant to the experience.
Setting the issue of worker treatment aside for a sec, what IBM and it's many clients are doing is a wide-known shady practice that's been around for a long time - hourly rate dilution. Dilution as in mixing different elements (hourly rates in this case) to lower the concentration of something. Customer love it, IBM loves it (when they can pay close to nothing for their H1B workers - and they do) and american workers rarely actually find out. Frighteningly close to a perfect white-collar crime. EVERYONE in consulting does this, small and big. There's no "American IT Workers Union" so this is not going away anytime soon.
The alternative is massively shipping jobs out to India, and be clear, jobs once moved out are not coming back. H1Bs stay back in the country and spend a portion of their income in the country, thus helping local economy. IBM already employs more than a third of their work force in India, so does accenture, oracle etc. The fact is capital is free to move in search of cheap labor; if labor is not accorded the same flexibility, regional imbalances will soon surface wreaking the local economy. Just like what happened when manufacturing shifted to China.
Doesn't anyone else feel that the solution should be enforcing equal pay and removing loopholes that allow the cost difference to exist rather than reducing or controlling H1-B visas?
That would automatically make it (or at least bring it closer to) a merit based system rather than a cost benefit.
As far as I know, these kind of abuses happen only in "consulting body shops": where they need to fill up number of workers working on a contract. But since IBM is now pretty much consulting company I see how they have incentive to cheat on H1B and L1.
How can h1b employees be cheaper ? Arent they required by law to get the same amount of pay as american counterparts ?
I think IBM would be breaking the rule of not paying them the legally required amount or circumventing that.
They're taken advantage of when it comes down to deciding a salary. It's a situation where an H1B has to take the lowball offer, or leave it and be completely screwed.
The problem here is that H1b people are being preferred over others because its is assumed that they are being paid less. There are laws to not let this happen.
The lowball offer if it is not prevailing wage is illegal. They are not allowed to work for less (there is a specific clause just for this) , just like other employees.
And if the lowball offer is not less it aint no lowball offer.
I was thinking on going to SF after several offers, but if I am going to participate in making a country richer, after this kind of things, I will not do it on America.
(Of course I am sarcastic, but hope you get the point).
Maybe IBM is just a shitty company, but finance doesn't work this way. All the H1-B holders I know make a lot of money and have freely switched jobs multiple times.
As a Canadian who will be going to work in the US through a TN Visa. I wonder if Canadian hires are also seen as a "cheaper" alternative to hiring locally.
The barrier to getting another TN for Canadians for another employer is too low to allow for these kind of shenanigans. Having to move back to Canada isn't that horrible either, and they don't get the foreigner isolation effect that ESL people have.
the class of status (TN) is less important than the mindset of your new employer.
No visa class requires you to be paid under market (some even require that you are paid a wage comparable to an american)
If an employer is trying to "maximize profits" through non-american workers, they will do it regardless of what status you hold.
If an employer is simply trying to find the somebody to "do the job" regardless of status or citizenship then it is unlikely you will experience any difference in treatment.
On a personal note, I had been on a TN for 2.5 years and was paid at (or slightly above) market rate for the entirety of the time.
At no time did my employer seek to use my TN as a way of leveraging down my pay.
We hired quite a few americans as well (half a dozen or so, it was a small company).
If we could have found more qualified candidates, we probably would have hired more
(american or not, we scoured github for candidates as this tended to provide the best candidates. since github user profiles generally do not provide citizenship information, we had to be open to hiring local or possibly non local if we found somebody who looked promising).
I worked in the US on an E3 Visa, which is pretty much like a H1B that is only available to Australians.
As I understand it, both of those require you to be paid at least the 'prevailing wage', and before the job is offered to you:
"This Form ETA-9035 needs to be posted in “two conspicuous locations” at the work site for 10 consecutive days where the H-1B (or H-1B1, or E-3) nonimmigrant will be employed. You must post the entire LCA, including the instructions and the portion containing information on the prevailing and offered wages."
ie, your employer has to post the fact that they're going to employ someone at a certain wage within the office.
That leads to fun times when your visa is up for renewal and the company is obliged to tell everyone what your wage is.
In my case I believe I was being paid more than some of my roughly-equivalent colleagues and there was some concern that the posting might ruffle some feathers. When I decided i'd had enough of the US and that it was time to move on I was told to pick anywhere in the world and my employer would pay to move me there and set me up so I could keep working for them. I was the complete opposite of an exploited foreign worker.
I was in the US working on a TN for 1.5 years. At that time, TN's were not tied to the employer. I'm not sure if this is still the case. You just had to have a job in the field that you came in on. That said, you couldn't apply for a greencard while on a TN. For that you needed to get an H1B.
For our company I was paid the market rate, no different than a local hire.
Companies I've worked for, Virgin Games (run by a British immigrant), Shiny Entertainment (also run by a British immigrant and seemed like > 50% foreigners). Naughty Dog had at least 5 or 6 foreigners of 30 employees when I was there. The owner even made a point of showing us the first hire's salary and asking us if we knew any locals that were qualified for the job that wanted the job so that he was sure he was above the law.
A few years later that hire went on to co-found Ready At Dawn which was founded by 3 immigrants. I have no idea how many of their employees are foreign.
I have seen one company, Interplay, abuse their power over a foreign employee by threatening to pull their visa support for him before if he didn't do X (I think X was stop some un-work related outside music activity). He ended up marrying his local GF and then got the hell out of that company.
The company I currently work for, as far as can tell, has a similar position. We'll hire anyone that applies that can convince us they can do the job. Finding them is hard. There may be tons of qualified people but either they aren't applying, they can't write a resume that makes it look like they're qualified, or they can't convince us in the interview that they are qualified.