I'm an Australian who recently became a Canadian Permanent Resident using a "sponsorship" process not unlike the H-1B. I've also had a few work visas for the USA, and applied for a H-1B (The rules changed before it could even be looked at).
I personally think the idea of bringing in foreign labor is a very bad thing for the sponsoring country.
For example, where I live in Canada has a very high cost of living (very far North), but stupidly the minimum wage is lower than other parts of Canada. Many local businesses pay $14-$18 / hr as a starting wage for menial jobs, even though minimum is legally ~$10/hr, because otherwise nobody would do the the job up here.
When Walmart, McDonald's, KFC, Canadian Tire, etc. (who all have a pre-approved process with the govt. BTW) want to hire someone cheap, they just bring in a foreigner from a second world country. Those foreigners live 20 to a house and make $10/hr. They can't work anywhere else, and if they quit they are deported. So those business can bring down the overall standard of living here by paying less than an average Canadian would actually be willing to do the job for.
If supply/demand was allowed to run it's natural course, those companies would have to pay a little more ($14-$18/hr), their profits would go down a little, but Canadians would be employed and the overall standard of living would not decrease.
Make no mistake about it, bringing in foreigners lowers the quality of life for the original citizens, and only helps increase corporate profits.
(Yes, I know I'm not supposed to bite the hand that feeds me, but I think I have a good perspective on the situation, given that it just happened to me)
You have just nailed it. I used to work construction in western North Carolina. The large crews paid far, far less than the crew I worked on. Nobody who didn't live in a home where all the bedrooms were shared could make a living on the wages offered by these large crews.
The big argument is whether the cost savings passed onto the people buying the homes (construction is a notoriously low margin business) benefit the economy more/less than the wage reductions for the people building them. In this part of the country, the homes were huge mansions for the 1%ers. I doubt it is a net gain for the economy, and certainly results in neighborhoods where there are not-quite developed world living conditions.
But what about produce? American born citizens are not willing to pick produce for the wages currently offered, so farmers turn to illegal immigrants. (Why pick vegetables all day when McDonalds pays more per hour?) If farmers were forced to use Americans, they would have to pay significantly more per hour in wages. This cost would be passed on to consumers. Not sure how much more tomatoes would cost in this scenario, but it would be more.
Personally, I think I'd rather have significantly higher wages for a larger portion of the population combined with marginally higher prices for a huge portion of the population, rather than the opposite, which is in effect the WalMart model.
When money gets concentrated into a smaller and smaller percentage of the population, you start to get similar effects to a Soviet style planned economy. Rich idiots who delegate management of their money to the Morgan Stanleys of the world, while the working classes can't make enough to start a savings account and maybe start a business one day.
The idea that increased labor costs would be passed onto consumers glosses over the relevant economics. In reality, the increased labor costs will result in both increased prices and decreased corporate profits, with the precise split being determined by demand elasticity.
And even to the extent that increased labor costs are passed onto consumers, we have to ask ourselves: what does the economy need? Cheaper products or better-paying jobs?
Drucker famously said that the price of something has nothing to do with it's cost. The market doesn't care how inefficient you are at picking tomatoes. The fact is, you'll be out of business because there will be other farms that can and will get cheap pickers. Also, consumers idea of a fair price of tomatoes does not factor in how much it cost to pick and ship, as is true with anything they buy.
Not sure by your comment, but you and I agree. Although you are right that I glossed over with the old "passed onto consumers" part. I majored in economics, but I forget that on HN people actually know what elasticity is, and therefore I shouldn't dumb down my comments. :)
>I'm an Australian who recently became a Canadian Permanent Resident using a "sponsorship" process [...] Make no mistake about it, bringing in foreigners lowers the quality of life for the original citizens, and only helps increase corporate profits.
Beyond the hypocritical aspects of your argument ("the ladder I used is too easy to climb, take it away now"), you're also leaving out a few minor benefits that accrue to "original" citizens in your scenario:
1. Increased profits help shareholders.
2. Profits are subject to tax, and increased tax receipts fund more public programs.
3. Lower costs are at least partially passed to customers.
So it's not as simplistic as you make it sound. Also maybe it's just me, but saying things like "those foreigners live 20 to a house" sounds rather xenophobic.
> Beyond the hypocritical aspects of your argument ("this ladder I used is too easy to climb, take it away now"),
Absolutely, no doubt. I'm very aware that's what I am saying, but yes, that is what I am saying. (hence the don't bite the hand that feeds me comment)
> 1. Increased profits help shareholders.
So the rich people get richer. Not what the world needs.
> 2. Profits are subject to tax, and increased tax receipts fund more public programs.
Not for the big companies that get around it with off-shore stuff (apple, google, walmart, etc. etc.)
> 3. Lower costs are at least partially passed to customers.
Do we need more cheap stuff (Walmart) or higher paying jobs for everyone?
> Also maybe it's just me, but saying things like "those foreigners live 20 to a house" sounds rather xenophobic.
I agree it does, but the fact is it's true. Being an immigrant here myself, I go to the weekly immigrant social night, and tons of my friends are those '20 to a house' people I speak of. The cost of living up here is so high it's impossible to live on $10/hr., which is why no Canadian will do the job and where this mess comes from. The truth hurts sometimes.
> Who are you to decide what the world does and does not need?
Presumably a citizen of a democratic state, with the responsibility to oversee and manage its government, including, inter alia, deciding which ends it should serve.
McDonald's prices go up in response to increased costs for things like beef and regulatory compliance (insurance for when someone sues them for hot coffee), not to mention simple inflation. McDonald's would happily sell burgers for $1 if the economics remained the same as they were back when they did.
That's unrelated to the statement I addressed. If McDonald's could pass savings on to their customers and keep the same profit margin, thus selling more burgers, and generating a higher total profit, they would.
I worry that our quality of living is unsustainable. Maybe 20 to a house is really the only rational way to live in the coming years. Maybe we can only sustain the life we have now, because we do so at the expense of other nations.
That said:
2. Profits are subject to tax, and increased tax
receipts fund more public programs.
So are wages, and... well... everything.
3. Lower costs are at least partially passed to
customers.
I really don't see that happening. Consumers don't look at a company's overall costs and conclude "your profit margin are way too high, give me a better deal."
It's not the same system. Fast food companies are using temporary foreign workers and they wouldn't be able to transition to becoming permanent residents.
> I personally think the idea of bringing in foreign labor is a very bad thing for the sponsoring country. [...] They can't work anywhere else, and if they quit they are deported.
It sounds like a vicious cycle:
Immigration is bad -> Limit immigrants or deport them on a hair trigger -> Employers leverage/exploit the circumstances -> Bad results -> Immigration is bad.
I'm saying that bringing in foreign labor to keep wages low and therefore manipulate the local market to increase corporate profits is bad. Very bad.
Where I live, there can be a genuine shortage of labor (i.e. there are just not enough people living up here to do all the jobs - it is -40 in the winter after all)
So in that case, it makes sense to try and recruit from within Canada, at a wage that Canadians are willing to do the job for ($14-$18/hr. right now). If you still can't get enough people at that, then go to immigration, but critically, you MUST pay them the $14-$18/hr.
The controls and rules around how much immigrants are being paid are extremely lax, and in my experience, are grossly exploited in the very vast majority of cases, because it leads to higher corporate profits, which at the end of the day is the goal of all this anyway.
I think I've being unconsciously viewing it as such, and I think that's almost the way our culture treats it.
It's strange, the more productive we get as a society, the more unbalanced we become, as if there's less to go around. Shouldn't we reach a point where people are on average working 4 hours a day instead of 8?
> they just bring in a foreigner from a second world country
Since the end of the Cold War, the "Second World" (which was a geopolitical rather than an economic distinction) is largely meaningless (First and Third World, from the same model, have sort of migrated to mean "developed" and "less developed".)
That's to say, the second world referred to the Soviet Union and the Warsaw Pact nations. None of which really exist in that form any more. Being from Australia/Canada, the OP was still part of the First World by the old nomenclature.
I'm wondering what would be the pros and cons of having an immigration bill that functions on a tit-for-tat basis like the following:
Your company gets one H-1B visa for your company for each
unemployed American that you retrain and employ. The catch
is that the American you retrain and employ must be out of
work 6 months or longer. If an American worker you retrain
and employ doesn't work out, you can fire them, but only
after you have replaced them with another out-of-work
American.
Another interesting approach is to make companies inelligible for H-1B visas for a probationary period following any layoffs in excess of X number of employees or Y percent of your workforce. e.g. if you layoff 1000 employees or more than 5% of your workforce, you cannot receive any H-1B visas for 1 year following the termination of the last of the 1000 employees. The only exception I can see conceded here would be the divestiture of an entire business unit from soup to nuts (as opposed to a layoff comprised of a general workforce reduction across all business units)
The main thing I want to see fixed in the H-1B process is making it easier for H1-B holders to change jobs after about 1 year of employment with the original sponsor. Right now H-1B visas are like handcuffs that leave the H-1B holder in a position akin to that of an indentured servant.
This article embodies a sleight of hand: it assumes that the jobs the companies want to hire immigrants to fill are the same ones they've laid people off from. Is there any evidence that is the case?
There is evidence from my remaining friends at Cisco that they are targeting the 'longer tenure / higher paid' segment in their layoffs of 4000 to reduce overall salary costs. Unlike last time when they offered "early retirement" where they acknowledged they got the 'wrong people.'
But in fairness, Cisco layoffs are not uncommon. One former employee likened them to a humpback whale, feeding on 'krill headcount' from acquired companies while squeezing the excess out through their baleen filters. Looking at their history suggests that this has some truth to it.
HP, at least at the Boise, Idaho printer unit, has reliably been reported to do this, and has even been caught trying to recruit H-1Bs for these jobs Americans won't do....
True, but they are related though. Both worlds don't happen in a bubble, eventually the consequences affect all of us here. We have one part of the nation axing millions of people without any intention/need to hire again, and another set saying they are in dire need of employees. Logically the companies would look at the existing labor pool, and try investing in training for the most capable of that set whether its 10% 20% or even 2% of that pool.
However none of that is happening. Companies do not want to do that of course, and why would they? The government subsidizes the training through college. The loans are unaffordable, and the returns are not even there for anyone other than the brightest/most capable (however that's scored) 20%. Companies don't care, they aren't on the hook for those costs. Now that that pool is nearly exhausted, companies are lobbying Congress for immigration reform that will bring cheaper younger talent over. Companies assume minimal risk in the current format. And by forcing the # of the visas up, they can suppress wages, there was an article even on IT wages last week about that. This current format is bad for US Citizens, Green Card Holders, and a substantial set of Visa Holders as well.
The training for these jobs takes years. Even if companies were to "invest in training" (I'd argue they already do), that wouldn't address their need for workers now.
You are correct there is an unfair assumption in the article of some 1:1 conspiracy of firing 1,000's of Americans with intent to replace them through some as of yet Immigration reform. However, to answer your question, yes there is evidence to suggest companies want to hire immigrants to fill the same jobs that Americans were laid off from.
This is a link to a case of first impression (lawsuit) for this kind of discriminant practice, firing Americans for foreign workers, showing American's were kept on board to train their foreign replacements, then fired without cause.
http://www.dailykos.com/story/2012/01/16/1055249/-Discrimina...
Ironically, the discovery in the lawsuit tends to show that the foreign workers were more expensive, because more had to be hired to replicate the productivity of the "skilled American workers".
More evidence, but a stretch, is the Immigration reform proposed by "the gang of 8" which allowed for the corporate demanded H1-B's but created strict regulations (protections for the American workers before allowing the foreign candidate to be hired; for example the H1-B employee would have to be paid more than their American counter-part), which was opposed by these very same corporations. http://blog.heritage.org/2013/05/20/immigration-gang-of-eigh...
Even if it were the case, does it matter? Competition is becoming increasingly globalized. I don't think that's inherently a bad thing. Protectionism in the form of onerous immigration regulations is a losing battle and only delays the inevitable.
>Even if it were the case, does it matter? Competition is becoming increasingly globalized. I don't think that's inherently a bad thing. Protectionism in the form of onerous immigration regulations is a losing battle and only delays the inevitable.
The same can be said of building anything. Towns wither, companies close, empires collapse, etc. "Delaying the inevitable" is what a society is all about.
But more importantly, thinking of societal issues as "inevitable" is a regression to the magical pre-political thinking of societies before democracy.
There's nothing "inevitable" about how the world works: people, and their actions, make stuff happen or not happen.
As for competition becoming "increasingly globalized" is a bad thing, because it is a race to the bottom. It's not even good for countries at the bottom, because it makes their position transient and will turn around to destroy them as soon as they start to rise.
What we need to do is build a global middle class and protect middle class where it exists, so that more people can afford products and the economy marches on for more companies and larger endeavours, instead of letting an even smaller number of companies and people profit enormously short term by destroying their future customer base. After all their owners and managers won't be around in 30-50 years, be societies affected by their actions will be.
The question is really, what is a government for? If it is not to look out for the best interests of citizens, why are they paying its taxes snd obeying its laws? It is not protectionism at all to level the playing field, America was built on immigration, but the H1B is indentured servitude.
Preventing the importation of labor is not going to solve the problem. All it does is cause the company to move operations offshore. If that was made illegal, then foreign owned companies would then outcompete domestic companies. I suppose you could then put a tariff wall around the country, but historically that hasn't worked out well (Smoot-Hawley).
The thing is, you cannot wish or legislate away the existence of skilled labor from outside the country.
> If it is not to look out for the best interests of citizens, why are they paying taxes?
It's in the best interest of the person who has to compete with the immigrant, but it's not in the best interest of anyone else - citizen or otherwise. Immigration benefits other citizens in the form of cheaper products and services. Immigration also benefits the immigrant (if it didn't, they wouldn't be trying to get in).
This issue is somewhat personal for me because I have foreign friends who are good engineers and would like to work here, but can't because of the regulations.
> It is not protectionism at all to level the playing field
This isn't leveling the playing field, this is refusing to let other (potentially better) players on the field because we have less capable players (who happened to be here first).
I don't consider myself bitter or cynical. Just realistic. Who has the most influence in Washington? What do they use that influence for? In the middle of all that whirlwind of money in Washington, how much mind space do you think they really give to their constituents when it's not an election year?
I'm acquainted with a state Senator. He's a well meaning guy, but he acknowledges just what a corrupting effect the truckloads of money has on national politics.
I've read that there are over 10,000 pages to Obamacare. Who wrote all that? How much insight into the health care field does it take to put in so much detail? Who else could have possibly written it other than the health care field itself?
We talk about regulatory capture like it's some horrific thing akin to Stalinism. But it's reality, today, in every single economic field that's more complex than hairdressing. How could we possibly provide meaningful oversight over the passing of a bill that fills a shelf? The only thing we can do is debate meaningless talking points that don't address the critical reality. Industries are regulating themselves, and we're just letting them frame the discussion while they sell out the public under our very noses.
> I've read that there are over 10,000 pages to Obamacare.
The widely-available bill[1], which takes all of five seconds to find with Google, is 906 pages with legislative (huge margins) formatting. Consider not getting your "facts" from people with an axe to grind.
Pay figures suggest otherwise. If someone truly is a) a world-class expert and b) desperately needed, you would see H1B pay outstrip that of locals, and fair enough. But in fact you see that IT wages across the board have been stagnant since the dot-com crash, allowing for inflation. That is pretty strong evidence there is no shortage and may already be a glut.
I would argue it's very unclear if it is in the best interest of everyone else.
Immigrants send money home (out of our economy). Companies may produce more/cheaper, resulting in possibly lower prices. But maybe they just spend the extra revenue lobbying Congress for preferential treatment. Maybe it results in more money shipped offshore to tax havens.
And if indeed immigrants are just cheaper replacements for their American counterparts, it takes away money (which, remember, is equivalent to speech) from citizens of this country.
Its a losing battle in the long term, but that's doesn't mean its not worth fighting. Yes, the future is reduced standard of living for Americans as the rest of the world catches up technologically and educationally. But we can postpone the inevitable, and reduce the pain by delaying the process while living standards in India and China increase, reducing the disparity in worker expectations.
It's interesting how many of the people railing on corporations and the "1 percent" have no problem denying opportunities to people less fortunate than Americans.
I'm an American. I care about the Americans I see every day walking to work in Philadelphia. Income inequality in the US hurts them. Income inequality between the US and other countries helps them. Very simple.
It's only hypocritical under the presumption that people care about income inequality simply on its own. But by and large, people care about income inequality for what it does to their communities, their political processes, etc. That rationale for caring about income inequality is entirely consistent with caring about it in the U.S. but not between the U.S. and other countries.
When judging what's 'fair', people tend to look upwards. At best they look to their peers. No one ever looks downwards. Which is why you have people with medical care, housing, and college educations protesting against the 1%.
> Protectionism in the form of onerous immigration regulations is a losing battle
So is maximizing profit by replacing expensive workers with less expensive ones from abroad. At some moment the situation becomes untenable, causing a social rupture and eventual reorganization, sometimes very painfully.
Surely at least some of the fired could've been retrained and given a second chance? I agree it would be more fair to include also the number of retrained people (ie. that were retrained and saved from being laid off). Unfortunately, the article also fails to mention the demanded immigration levels.
Retraining would possibly be more expensive than hiring from abroad speaking short-term, but probably more beneficial to the economy as a whole.
> Surely at least some of the fired could've been retrained and given a second chance?
Experience has probably shown employers that its cheaper in the long term to just lobby for an immigration-centered subsidy, so they prefer that option.
If American government is serious about protecting the interests of American workforce; implement the following simple rule.
1. Let H1B be independent of the employer. Current H1B rules are modern day equivalent of bonded labor. Let a person obtain H1B from the employer for the first time, after that make it independent of the employer. For example a person on H1B may resign on day 1 and simply join another American company.
Remove all the nonsense about salary limits and so on.
This already exists as a practical matter. According to current rules (specifically, the AC21 act), H-1B workers can start working at a new employer as soon an H-1B transfer application is filed by their new company. There is no need to even wait for the application to be approved. Applications to transfer H-1B visa are not subject to the cap, so there isn't that issue either.
H-1B employees are currently quite mobile. I have many friends who've switched jobs repeatedly during their H-1B period because it's so easy to transfer the visa. I honestly don't know where this whole "indentured servitude" idea comes from.
The part of the system that's fubared is the green card process, which can stretch for up to 10 years if you're from India or China. During a part of that time (not the entire duration), you can't switch jobs unless you want the green card process to be restarted, which affects mobility. But that is not related to the H-1B, and the solution to that is to fix the green card process.
Additionally not all H1B's are underpaid. I'm currently in the minority on the engineering team, being one of the few American citizens actually born in America. From discussions with my peers from India they don't make that much less than me. The cost of immigration is factored into their salary of course, but for the most part are on par with market wages.
But the company was also founded by immigrants so this may be an exception rather than the rule.
There is definitely an underbelly for software industry and we do not know how it function. For example I have a friend who has H1B but no job and is working for cash at a superstore for $40 a day.
Comprehensive immigration reform, at least the Senate bill, will implement green card sponsorship portability, which will fix this problem.
You're completely right that H-1B portability was implemented, which happened in 2008 with the America COMPETES Act.
The indentured servitude view is lingering, but it's also still unfortunately valid when it comes to the H-1B dual-intent EB-2/3 green card applications, as many try to follow that pathway.
Even simpler would just be eliminating most economic non-visitor, non-treaty-based visa categories in favor of a single, category for all non-prohibited entrants who either are not qualified for a family, political (refugee, victimization-based, etc.), etc. visa, or who are qualified for such a visa in a category for which there is a waiting list to enter and remain prior to moving to the head of the list, which carries a substantial basic annual fee and requires supplemental income tax on any wages income earned in the US during the period they are present on the visa.
I'm already paying you for social security and medicare that I will probably never be eligible to benefit from, and you want me to pay extra 'fuck you' taxes as well? Thanks but no thanks.
Aside from that, this wouldn't be simple at all because changing the visas available would in many cases involve renegotiating the deals that they made with other countries that got those visas created in the first place. Sure, it would likely be possible to tell all the other countries to get stuffed, but good luck getting US citizens a visa to travel anywhere if you keep doing that.
> I'm already paying you for social security and medicare that I will probably never be eligible to benefit from, and you want me to pay extra 'fuck you' taxes as well?
This was in response to a suggestion about what the government would do if it was interested in serving its citizens. If you would be paying the fees, serving you is very much not the point.
Though I'll point out that, by moving from employee sponsorship and charges (and pay limits, etc.) on employers for things like H-1B to charges to the prospective entrant, it means that the entrant has substantially more freedom (and potentially greater net income after charges, too, since instead of the employer paying a fee and dealing with wage limits, the employee pays a flat fee and a share of income, but isn't burdened by salary limits.)
> Aside from that, this wouldn't be simple at all because changing the visas available would in many cases involve renegotiating the deals that they made with other countries that got those visas created in the first place.
By definition, changing the non-treaty visas, as I specified, would not require that, and many economic visas (including the H-1B) are not treaty-based.
Obviously treaty-based econonmic visas like the H-1B1 (Singapore or Chile), TN/TD (NAFTA), E-1/E-2 (Treaty Trader/Treaty Investor) etc. are a separate issue, but at least in theory the government is serving citizens interests with those because of the reciprocal benefit US citizens have with regard to economic entry to the countries involved.
Sorry - I missed the 'non treaty' mention in your post. Doesn't that pretty much mean H1Bs (and maybe all the investor visas)?
While I agree that it would increase employee freedom to have them bear the cost and not be tied to the company, I doubt that it would end up with increasing income - in theory, all the Silicon Vally companies are already paying as much as they can to attract talent.
edit: actually, there is of course also O, L, P and I. I'm not sure how much you'd gain by folding them into a single category - there's very little relationship between,e eg, whether Nadal should be here for the US Open and how many programmers should be coming here. L perhaps has some overlap.
> Sorry - I missed the 'non treaty' mention in your post. Doesn't that pretty much mean H1Bs (and maybe all the investor visas)?
> edit: actually, there is of course also O, L, P and I.
And the immigrant E series Employment-related ones. There's a few others that might fit into the general description I laid out depending on exactly where you draw the line on transitory (non-immigrant H-2A, for instance, could be argued either way.)
(I specify immigrant/non-immigrant, because there's a handful of categories designations used for both immigrant and non-immigrant classes where the use between the two classes has no real relationship; E is one of these.)
> I'm not sure how much you'd gain by folding them into a single category - there's very little relationship between,e eg, whether Nadal should be here for the US Open and how many programmers should be coming here.
"How many" isn't really an issue, since the whole idea of folding it into one class is that its a class that is open to any non-banned entrant and isn't numerically limited, instead its open-for-pay.
Anyhow, I'd think Nadal for the US Open be a non-immigrant B-1, which is transitory by any reasonable definition, and certainly isn't in the scope of what I was proposing.
You'd have to include some form of protection for the employer on the expenses associated with H1B process, otherwise it's not really worth the risk - imagine if you paid say $15k for the filing and waited 6 months. Then the person you hired comes in and asks for a 20% raise or he/she walks on day 1.
No. Employer should not get any protection at all. That is the whole point.
Consider the scenario.
1. You hire a person for 100k, file H1B for her. On the first day of her job she asks for 20% raise.
2. You say "you are fired" to her.
There are two cases here:
- She walks out searching for a job. She does not find a job which pays here more than 100k, she comes back to you and beg to be taken back. (Remember that she is likely to know her self worth and hence will not leave the job in first place if she knows that no one else can pay her more than 100k).
- She walks out searching for a job, she finds a job that pays 120k. This means you hired her because you found her "cheaper" than American counterparts. So you are penalized. Hence next time you wont hire a employee worth $120k for $100k. You will prefer a $120k American girl over $100k Indian girl.
Well, if you want to kill the H1B program completely, sure.
However, if the idea is to have it survive and, dare I say it, be used for the beneficial purpose of bringing vital new blood to the country's workforce instead of being a cheap source of labor, then employers need strong incentive to spend the money needed to get someone into US without fear that they will simply walk off.
It's not what I want as a US employee (my self-interest is to have as few people of the same skill as possible in order to command highest salary), but it is something that would be needed in order to get some sort of a chance at having such rules pass.
> You'd have to include some form of protection for the employer on the expenses associated with H1B process, otherwise it's not really worth the risk
I thought increasing the risk in the H-1B process (and thus making not choosing that over spending resources retraining domestic workers) was exactly the point of the suggestion.
If you gave the employers some kind of protection for training outlays, they might bother to train locals instead of hold out for unicorns to land in the factory fully trained.
No, they need to provide incentives to people who are able to make a difference and currently aren't. Like they give tax credits for hiring veterans, and other similar programs to manipulate the behaviour of employers for the benefit of potential employees.
Increased immigration is just another one of the public subsidies to which corporations think they're entitled.
The demand for subsidies is easy to see with oil companies, who lobby for tax breaks and for the U.S. government to fight foreign wars to maintain their access to foreign oil sources.
However the basic dynamics are present in the tech industry too. How often do tech companies talk about the need to produce more STEM graduates? Throwing aside the warm fuzzy ideas attached to public education, this is a naked demand for subsidy: train more workers for our industry at the public expense.
Increased immigration is in the same vein. It would be expensive to retrain all those expensive workers (this goes to pg's point elsewhere), so better to let India and China subsidize the education, and the U.S. subsidize the process of acculturating and integrating the new immigrants.
I'll offer a potentially controversial statement: immigration policy should have nothing to do with transient labor demands. It is simply an orthogonal issue. Immigration is deeply and inextricably tied up in questions about culture and acculturation, democracy and the composition of the body politic, the long-term, sustainable, growth of the population, etc. Immigration limits and the countries from which we take immigrations should be based solely on those issues.
Immigration limits and targets should not be based on what particular industries want as labor inputs. That's a sop, that's a subsidy. That's the public undertaking an obligation in order to subsidize private profits. It's a long-term fix to a temporary problem. This is not an opposition to immigration, mind you, but rather an opposition to the criteria being used to evaluate how much immigration we should have.
First: selective removal of a barrier that applies to everyone is indeed a form of subsidy. I highly doubt American companies are asking for completely open borders, allowing citizenship to anyone who can physically make it to the U.S. Instead they want us to keep most people out, but let in specific people that help their specific bottom lines.
Second: immigration limits are not an artificial barrier. One of the basic purposes of a government is to establish and defend borders. Allowing immigration is an affirmative action on the part of the existing citizenship of a country to admit new members into its fold. It's an affirmative action to not just admit those new members, but to integrate them culturally, allow them to participate in the public life of the country, and allow them a voice in political affairs that affect all citizens, new and old. It's a commitment to defending them in case of attack and extending to them and their progeny, in perpetuity, the essential privileges of being a citizen of the country.
> immigration limits are not an artificial barrier. One of the basic purposes of a government is to establish and defend borders.
Even if one accepts the second sentence, for the sake of argument, it in no way supports the first. Even if it might support the claim that immigration limits are a policy reasonably related to a "basic purpose" of government, it doesn't in any way challenge the idea that they are still an "artificial barrier".
Say the government allowed the big banks to skim a little off the top of each account, legally. Since governments are artificial constructs, and the property rights they create are artificial constructs, you could say: "well that's not a subsidy or special favor, it's just the lifting of an artificial barrier." That's right in a narrow technical sense, but not a very useful use of the word "artificial."
Rather, because enforcing property rights are deeply intertwined with the purpose of government as we understand them today, it's more sensible to think of those barriers as not being artificial but rather naturally implied by the existence of government.
> Say the government allowed the big banks to skim a little off the top of each account, legally. Since governments are artificial constructs, and the property rights they create are artificial constructs, you could say: "well that's not a subsidy or special favor, it's just the lifting of an artificial barrier." That's right in a narrow technical sense
No, its not, but the ways that it is wrong have nothing to do with the "artificial barrier" issue:
Well, I could accurately say its the lifting of an artificial barrier, sure.
I couldn't accurately say its not a special favor, since its a privilege granted to select entities in particular circumstances, nor could I accurately say that its not a subsidy, since it is directing resources currently held by one group and allowing them to be used by another.
The fact that its an "artificial barrier" is irrelevant to whether it is in other categories that are not mutually exclusive with "artificial barrier".
> Rather, because enforcing property rights are deeply intertwined with the purpose of government as we understand them today, it's more sensible to think of those barriers as not being artificial but rather naturally implied by the existence of government.
No, its better to address issues like "special favor" or "subsidy" that are completely orthogonal to the "artificial barrier" categorization without reference to that irrelevant categorization.
If you want to make the case that the specific immigration limits currently in use are an appropriate use of government power, its probably better to do that than to argue about whether they are (as they clearly are) an artificial barrier to the free movement of people and free commerce.
> immigration limits are not an artificial barrier. One of the basic purposes of a government is to establish and defend borders.
I think this is probably the kernel of our differing views. I do view them as artificial. My hope is that, in the future, an individual's ability to relocate becomes more a function of their means and less a function of nation-state legality. I have some anarchist strands woven in my ideology ;-)
Yes, from an anarchist principle my statements likely don't make sense. But corporate America isn't run by anarchists. They want a government, they want the enforcement of contracts, they want enforcement of property rights, they even want defense of the borders, mostly. They just want exceptions to all of the above in specific cases when it benefits them.
Corporations themselves are artificial. Looks like an artificial thing wants a change in another artificial thing, then. Either way, the change has externalized costs that the corporations themselves won't have to bear in a society that upholds the laws that allow them to exist in the first place. To me it sure sounds like a subsidy.
This statement is non-sensical. The concept of citizen is inherently bound. Similarly, the concept of citizen is inherently a human (political) one. As a result, your premis is flawed, and your allusion to economic analysis perfunctory (at best).
Alice and Bob wish to associate in some way, but they live on separate planets. The spaceship tech required to span the distance is either prohibitively expensive or hasn't been invented yet. This is a natural barrier.
Alice and Bob wish to associate in some way, but Eve forbids it and she'll beat them up if they disobey. This is an artificial barrier.
The H1B visa actually requires that the immigrant applicant being paid no less than American employees for the same type of position. Of course there could be loopholes, but the high cost of going through the immigration process currently places immigrants in a disadvantaged position in terms of financial costs to employers.
If you believe in free market, this is unhealthy to the economy. American companies should be paying duties to country through tax, not hiring discrimination against nationality.
Yes, it's common in game companies to hire people with strong engineering experience into basically QA positions, where they—surprise—end up "helping out" on stuff above their pay grade.
A way of avoiding this would just to be to have an absolute salary threshold. Say, all H1B job offers must have an $100k+ salary. That would allocate them to the parts of the economy where workers are actually severely lacking, and valuable enough to the companies that they're willing to pay premium prices to get them. Alternately, make it a bidding system instead of a fixed number: there are 50,000, or 100,000, or whatever H1B visas, and they go to the companies that offer the highest salaries (thus indicating the highest demand).
If you claim that there is a lack of workers in an area but you aren't willing to pay more than $60k, then I'm going to be skeptical about just how much of a critical skills shortage there is.
Hmmm, perhaps it was less of an coincidence that the very smart Jamaican EE who I worked with in 2001 at Lucent was in QA. He was making $48K to my $80K (we all knew the former because it had to be posted).
True but the H1B scheme is used by companies to drive salaries down across the board. I would argue that this is its primary goal. So if American workers want $60k for a position, but you have a stack of pending H1Bs, you can offer it at $50k and then when no Americans take the position you hire an H1B instead. But now the standard rate for that position in your company is $50k and that's what Americans would have to work at, so technically there is no discrimination. Do that at enough companies (look at the list of signatories) and you can redefine the salary range of an entire industry. Someone should (I can't find any references) calculate what the true, competitive salary for programmers in SV would be without companies using H1Bs to drive down prices. I would bet it would be significantly higher than it is now.
My wage as an E3 (ie, it's just like a H1B, but only for Australians) employee in the States was quite a bit higher than the prevailing wage at the time, FWIW.
Note that the wages being offered are supposed to be pretty much common-knowledge:
"On or within 30 days before the date the LCA is filed with ETA, provide notice of the employer's intent to hire H-1B, H-1B1, or E-3 workers. The employer must provide this notice to the bargaining representative of workers in the occupation in which the H-1B, H-1B1, or E-3 worker will be employed. If there is no bargaining representative, the employer must post such notices in conspicuous locations at the intended place(s) of employment, or provide them electronically."
We did spend a fair bit of time looking for the least conspicuous of all conspicuous places within the office to post my wage though. :)
You are assuming that the industry can fill all such positions with immigrant workers. In reality, the supply of immigrant workers is no where near to satisfy that assumption especially if you consider the annual quote for H1B approvals (often than not such quote was exhausted the first couple of weeks when it became available).
There's also this fee among a lot of other fees while applying:
In 2007, the US Department of Labor, Employment and Training Administration (ETA), reported on two programs, the High Growth Training Initiative and Workforce Innovation Regional Economic Development (WIRED), which have received or will receive $284 million and $260 million, respectively, from H-1B training fees to educate and train US workers. According to the Seattle Times $1 billion from H1-B fees have been distributed by the Labor Department to build up US workforce skills since 2001.
Just at a time when ... "The income gap between America's richest 1% and the rest of the country widened to a record last year. The top 1% of US earners collected 19.3% of household income in 2012, their largest share in Internal Revenue Service figures going back a century."
Well, if the philosopher kings at The Cheesecake Factory say so, I guess we have no choice.
More workers and more customers both raise the price of assets. The same Walmart that served 25,000 people in an area will do even better serving 30,000. That's the basic thinking, though at some point it will break down and hurt (almost) everyone, not just workers and customers.
There are really two different types of H-1B employees: those who've studied at a US university but are foreign citizens, and workers brought in from outside the country directly to fill a position.
There is very little distinction made in the public discourse about the difference between these two categories of employees, but they are very different.
The overwhelming majority of H-1Bs directly employed at large American companies will be of the first type: they came to the US to study or at an early age, and were hired while they were already in the US. These employees are likely to be treated identically with American citizen employees and paid exactly the same in the same roles. They are not "cheap foreign labor" -- they are employees who just happen to be foreign citizens. They are very mobile because their skills are in high demand, and other employers are more than eager to transfer their visas over.
However (and this is where the rhetoric comes in), the majority of H-1B visas go to outsourcing/offshoring companies that bring in workers by the thousands to fill mostly lower-end positions in IT or back office departments at American companies. These workers fit all the H-1B stereotypes: low-paid, bound to a single company, living 10 to an apartment etc. There are significant violations and gray areas in the way these workers are brought in and paid.
The problem is that both sides of the H-1B debate do not define which group of workers they are talking about.
Google, Microsoft etc are correct when they say that they do not want more H-1Bs for cheaper labor. In the employee pool they are looking at (foreign citizens already in the US), this is true: they pay all employees identically irrespective of whether they are foreign or US citizens.
The opponents of more H-1Bs are also correct when they say that H-1Bs are being used for cheaper labor: the types of employees that offshoring companies bring in are indeed being chosen because they are willing to work for lower wages than workers already in the US.
The solution is clear: have separate visa categories for employees brought in directly from outside the US, and foreign citizens who are already in the country. Make it as easy as possible for the latter group to stay in the country, through a quicker green card process or other methods; at the same time, have higher scrutiny for the separate category of visas that apply to foreign workers brought in directly from outside.
It sometimes amazes me that even on a relatively knowledgeable forum like HN, this distinction isn't made often or at all.
"It is difficult to understand how these companies can feel justified in demanding the importation of cheap labor with a straight face at a time when tens of millions of Americans are unemployed," writes the Center for Immigration Studies
Maybe the Center for Immigration Studies should fire the person who finds this difficult to understand. If they have a hard time hiring a replacement who does understand it, they should be open to hiring someone on an H1B visa.
The number of layoffs the article mentions is worldwide numbers. Not just inside US.
H1b employees are cheaper, decently trained. A lot of companies favor such employees which add to the local workforce which in turn means shipping less jobs to India and China.
Why do companies use the H1B process if they can use the Green card process? Is it just that they have more control over the employee? Or the process is actually easier or cheaper?
> Why do companies use the H1B process if they can use the Green card process?
The immigrant visa ("Green Card") process for employment-based categories, as for family-based categories, uses both global and per-country limits which apply after candidates are qualified (including having a sponsoring employer!) but limit the rate at which visas are granted, which means that for countries from which there are the most qualified applicants in many categories face the longest delays from the date they become qualified to the date they actually are granted a visa. The most oversubscribed source for employment-based immigration, India, has categories in which the delay is 10 years, and there are certain categories where the delay for any country is over 3 years. (And this is still better than family-based immigration, where the longest waitlist country/category combination is 23 years!)
I personally think the idea of bringing in foreign labor is a very bad thing for the sponsoring country.
For example, where I live in Canada has a very high cost of living (very far North), but stupidly the minimum wage is lower than other parts of Canada. Many local businesses pay $14-$18 / hr as a starting wage for menial jobs, even though minimum is legally ~$10/hr, because otherwise nobody would do the the job up here.
When Walmart, McDonald's, KFC, Canadian Tire, etc. (who all have a pre-approved process with the govt. BTW) want to hire someone cheap, they just bring in a foreigner from a second world country. Those foreigners live 20 to a house and make $10/hr. They can't work anywhere else, and if they quit they are deported. So those business can bring down the overall standard of living here by paying less than an average Canadian would actually be willing to do the job for.
If supply/demand was allowed to run it's natural course, those companies would have to pay a little more ($14-$18/hr), their profits would go down a little, but Canadians would be employed and the overall standard of living would not decrease.
Make no mistake about it, bringing in foreigners lowers the quality of life for the original citizens, and only helps increase corporate profits.
(Yes, I know I'm not supposed to bite the hand that feeds me, but I think I have a good perspective on the situation, given that it just happened to me)