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Comment by nopinsight | Hacker News Reader

A simple rule change that seems fair and will improve the view of American public towards H1B is visa bidding based on salary (as opposed to first-come, first-served).

Since H1B is supposed to bring in rare foreign talents to do the jobs not enough Americans are available to do, salary should reflect that. If only the highest paid people receive the visa, then the public would not complain as much about replacing American workers for wage reason.

(Even startups with limited budget often can afford $80,000 these outsourcing firms pay their top 25th percentile H1B employees. [1] For a technical co-founder role in a Bay area VC-backed startup, it should be higher still.)

Why has this obvious modification not been implemented? I suppose it does not need Congressional approval. Is it because the change would be against certain major corporate interests?

[1] Relevant infographics http://www.nytimes.com/interactive/2015/11/06/us/outsourcing...

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Response to objections:

Objections below regarding salary differences between fields (scientists vs bankers) and costs of living in different areas can be addressed by considering average salary in each field and area. For example, how much higher, in percentage terms, the minimum salary of the proposed H1B is, compared to the average of comparable positions in the same area. (Details need to be worked out, but the same is true for other important systems.)

Assistance to startups can be given using a point system (like Canadian visa) that grants extra points to applications from smaller companies. This extra benefit would also help level the playing field in terms of overhead costs which is a much larger burden for these companies.

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This is exactly the right move:

The H1B abusers all have the same business model:

Pretend like they can't find an American to do the job (when in reality they can but their client is willing to pay enough) and then fill it.

In the end, everyone loses, because you just get a non-exceptional immigrant in place of an exceptional immigrant.

I've got co-workers who are brilliant guys who have had to go back to their country, while Tata, Wipro, and all the other parasites land H1Bs so they can place a SQL Server admin who works for $45K a year and is afraid to take vacations.

Except these are wages, not POS goods on ebay. Wages are typically set months in advance of sponsorship, and the volatility from an auction would deter most from even hiring during OPT. Lottery volatility is already making it hard, but an auction favors employers like the H1B shops who have more market signals and tips it in their favor.

Since the bidding is a solution to a problem caused by the cap on # of H1B visas, why not just do away with the cap?

The best part about the auction model is that you could have it monthly, and then the winning bid would be fairly well known in advance. Say it's 80k for a software developer, you know that you need to pay the guy 81k or don't bother. This also massively reduces the power of the wipros of the world that employ thousands of people and apply for all of them every year, filling up the quota for people that don't already work for an outsourcing company.

Again, why not just remove the cap?

If you're rearranging the application process to solve problems created with the bidding, which is to solve problems from created from cap, why not just solve the original problem?

The review process and due diligence for H1B takes months, so signals are still only available in large intervals, which creates volatility that favors high quantity employers like H1B shops.

Because the cap is a response to the US desire to not allow in an unlimited number of foreigners.

An unlimited amount of foreigners can't qualify for the H1B visa.

The H1B is specifically for educated & highly skilled immigrants, who has a sponsoring employer and is paid more than the average U.S. citizen for the same job in the same area.

Except that the outsourcing firms game this system so that this isn't at all true.

Take a look at the publicly disclosed H1B data. Walmart hired people under a lower paid category with the job title 'Data Scientist' for $70K a year.

Let's talk about India, since that's where over half of H1Bs come from:

Educated: Yes, if you want to call a degree from an institution that most likely taught rote learning instead of critical thinking, with massive numbers of students cheating because the culture favors cheating if you can get away with it.

Highly Skilled: This is where the rote learning comes in. Shops which simply pirate some particular enterprise software product, train people how to use it (SAP anything, Business Objects, Microstrategy, Informatica, you name it) and then profit. You then end up with a resource who comes to America knowing Informatica and/or datastage, but suddenly you find out they don't know SQL. Yes, this happened.

What are you talking about?

The median Wal-Mart data scientist H1B salary in 2015 was $140,000 [1]. There are lot of Indian H1B immigrants who are educated and highly skilled - are you sure you just don't have a passive racial bias?

[1] http://h1bdata.info/index.php?em=WAL-MART+ASSOCIATES+INC&job...

I looked at the raw H1B data, rather than relying on this aggregator website you are using.

Littered throughout the data are jobs which are advertised as "Data Scientist", but the official name for the job is something quite different, like "Programmer Analyst".

However, the job description involves building predictive models, working with Apache Spark, Python, and R.

The website doesn't even have a working search function, but let me go ahead and provide a link which supports my point:

http://h1bdata.info/index.php?em=ORACLE+AMERICA+INC&job=DATA...

Do you really think that $46,000 is a reasonable salary to pay a DATA SCIENTIST??? Please, by all means, explain this to me.

And fuck you for trying to call out a racial bias. My anger at the H1B scammers is strictly based on the fact that I have good friends from India, Malaysia, and Russia who had absolutely bad-ass skills that are incredibly hard to find. They all were turned down for H1B courtesy of the nitwits like Tata bringing in talentless hacks. Talentless hacks are a universal phenomenon in all cultures: they go where the easy, reliable money is. It just so happens that the Indian outsourcing firms have a business model that works very well for talentless hacks. Not unlike the bond trading boom in the US in the 80's.

The website is built off the publicly available, raw OFLC disclosure data for LCA applications. I'm sure you're just not remembering correctly about WalMart.

>Do you really think that $46,000 is a reasonable salary to pay a DATA SCIENTIST??? Please, by all means, explain this to me.

Chill dude. For a lower level data scientist in Westminster, CO, that's appropriate. Notice they have a higher level data scientist getting $76k. Not accusing of cherry picking, but really, this is the second time you've done it.

That is a broad brush you're using to paint a picture of a country with over 1.2 billion people.

Disagree about the broad brush. The quality of H1B workers has gone down so dramatically over years these days anyone qualifies. I have seen people with Phd not get visas because a Java developer fresh of the school who can barely write to code qualifies for the same H1B program. Its one of the most misappropriated use of resources. Much of these admin and coding work can be done by anyone in USA if trained. Thanks to the misuse of H1b visas not one american will be trained by our Fortune 500 companies. At the pace of changes in technology with new acronyms thrown around daily there never will be enough STEM engineers as per this gamed system. But unemployment will always be high and jobs hard to come by. I cannot understand how it is worthwhile to educate your self in this country if you will not find jobs. its shameful that no one cares for the locals in this country.

Removing the cap would be a boon for employers but would seriously undermine wages for software devs here, I imagine.

India and China each graduate many times more software engineers each year than does the US. Many, perhaps even most, would love to work and stay in the US.

With a massive influx of engineers in a short span of time, I can't see how wages would remain where they are now in areas like NYC and SF. This is probably exactly what the Facebooks et al want, I guess.

>seriously undermine wages for software devs here, I imagine.

How? They can only be approved if they're getting paid the same or more than existing software devs.

> they're getting paid the same or more than existing software devs.

Ha. Look at some writeups of the SoCal Edison outsourcing, for example. U.S. citizens making $95K were replaced with H1-B workers earning $60-65K, and that's generously estimating the lower salaries. Tata and Infosys might pay their workers closer to $40-50K.

https://www.google.com/search?q=socal+edison+h1b+wages

That's a non-issue.

They're currently under investigation for violating the immigration labor laws surrounding the H1B [1].

It's a different problem than the cap or the problem in the article. You're always going to have agencies trying to abuse a system regardless of whether there is a cap or not, and they will be investigated and penalized accordingly.

http://www.natlawreview.com/article/commentary-tata-consulta...

How can you say it's a non-issue when it's the exact thing that we've brought up as concerns? Especially when there's plenty of evidence that, not only does this happen, but it would happen more if the cap was removed?

Because the fact that the USDL is currently acting on Tata's and Infosys's attempts to break the H1B laws shows that the system is enforcing the rules.

Meaning if there was a cap (or no cap), there would still be enforcement making it a non-issue.

Until we actually see punishment happen, and happen to the level where this behavior would be discouraged in the future, you cannot say that it is a non-issue.

These proceedings take longer than several months, so you're certainly welcome to hold that burden of proof as your own personal opinion in the meantime.

Until something significant happens, and not just a slap on the wrist, my statement is the accurate one.

Something significant has happened and is still happening. Again, your opinion according to your burden of proof.

> seriously undermine wages for software devs here

Not really.

Competent devs are not cheap anywhere. In order to noticeably lower wages in the US you need to bring a lot of software developers from other countries.

But the supply of software developers is quite limited.

Besides, as soon as wages start to move downwards, software development products start going down in cost (or go up in quality). That increases sales of software and increases demand for more software developers.

This is not true I am a dev and have been doing development for 15 years till I was forced to change my career. Reason not one big IT shop or Consulting companies want to hire anyone with experience. They want to hire the cheapest H1b's to do coding. Since they accept such low salaries and everyone claims they are a coding expert. In reality it is bodies vs the rates. So if the clients are willing to pay 100 dollars per hour and it costs you 30 dollars per hour by hiring a H1b. You pocket the 70. Since these guys do such a bad job now you can milk the client for all the bug fixes etc for the crappy job. Since there is no easy proven way to evaluate quality other than the number of tickets closed it just does not matter. At no point am I referring to companies in silicon valley like Google, FB, AMZN etc. This is for the consulting industry in the rest of the country where this gets completely misused.

I have seen most of my fellow programmers change their career since having 15 years of experience is bad thing because we are not willing to work for 60K.

What did you (and your friends) change your career to?

Is it to management of lower skilled developers?

I have no qualms about removing the cap but one simple condition: Pay rate is at least 90th percentile for the company or the industry as a whole, which ever is greater. The more you hire (and if your company is a consultant company), the higher the salary gets pushed up because according to the corporation, it can't find skilled workers to do the job. Well, if you can't, then they must be quite valuable, so you should then compensate them and pay for it. It'll be a bit costly, according to the company, is worth it because there's no one else to do the work.

> Again, why not just remove the cap?

Because flooding the market with indentured $60,000 technical workers isn't good for American workers or America?

Or, in the interests of compassion, the indentured workers.

As I've said before, H1B approval requires that employers pay more than the average wage of U.S. citizens working the same job in the same area.

In theory, yes. In practice, this is worked-around pretty easily. Why do you think outsourcing companies even bother to hire lots of foreigners, if they could have just as well hired locals for less?

Because there isn't enough local talent to fill demand, which is what the H1B system addresses.

While that might be true in a few cases, in most it flatly isn't.

Correction: Local talent willing to work at lower wage rates.

The "prevailing wage" of an IT worker at these outsourcing firms (Tata, Infosys, etc) is precisely $60k. These $60k workers will replace salaried employees at many firms making twice that much.

So a company doesn't need to hire H1Bs directly. They can just setup a contract with one of these outsourcing firms to supply workers. That's precisely what Disney did when they replaced a huge number of IT employees with H1Bs.

The cap on the number of H1Bs prevents Disney from setting up their own little H1B shell corporation to perform the same function which is why they (along with many other big corporations) complain to Congress about the cap. If the cap weren't there they wouldn't need to outsource to Tata et al in order to completely screw over American workers.

Disney recently recanted their layoffs and are keeping their workers [1], and Tata and infosys are under investigation by the USDL [2].

You always have people trying to break rules, and the H1B is no different. H1B wage violators are a separate issue to the cap & lottery issue in the article, and being addressed accordingly.

[1] http://www.nytimes.com/2015/06/17/us/in-turnabout-disney-can...

[2] http://www.natlawreview.com/article/commentary-tata-consulta...

The wage violations are in no way a separate issue.

Care to elaborate?

Cap (or no cap) doesn't influence a select group of employers from breaking the H1B visa rules and being disqualified.

To support this point, in the area where I live, Tata Consultancy has been awarded H1B visas for the positions Data Warehouse Engineer with a base salary of $60,000 a year.

I work at a company where we are trying to hire a data warehouse engineer in the same geographic region. We absolutely can't hire anyone that is remotely qualified for less than $80K a year. Typically we're talking about at least $90K.

It blows my mind that the government isn't able to properly track an average wage for a profession when they have tax data coming in annually from every working American.

Lots of laws require lots of things that, in reality, simply don't materialize.

"why not just do away with the cap?"

Because there are far, far too many low wage foreign programmers driving down wages already.

Why not abolish the program entirely? That's far more palatable.

Are you aware that there are companies which "take money" from Indians to sponsor them H1B, bring them to USA, run fake payrolls while this chap works at local restaurant as a bus boy for below minimum wage ?

This is the answer. Lottery is so much of BS. Sort by wage guarantees that person is not kicking out any american and he/she is good enough for the company to paid him that much. But instead of having one big array of all jobs together, having separate arrays base on industry and occupation is better. And the gov can adjust the size of each array base on what kind of talent they need at that time.

BTW, I've heard some indian people submit multiple applications thru multiple companies. It looks like USCIS is not very good at catching it.

Starting with a market mechanism and then "tweaking" it by adding "corrections" by field and "points" for startups is a surefire way to end up where you started.

The solution is not to bid via salary or total comp package or other BS metrics (also gameable), but to place bids directly on the visa slots - ie, the government simply holds an auction for N visas in sector X and collects the market clearing price as income.

Visas will then flow to companies that can productively use them (ie, high delta between the cost of the visa + salary, and what they figure the employee produces in value. No bias towards high-salary, low-surplus occupations). A low price for visas in a field is also a handy sign that there is no actual "shortage".

Defining a sector is problematic. To narrow and you can just bid for jobs in the "systems administration" sector and then move them to software engineer after hire. To broad and we miss companies that produce non-monetary value like biotech or chemical research.

It's not really necessary to segment by sector; you can simply have one pool of visas. The efficiency implications actually work better that way - a "shortage" of workers in a non-productive economic sector isn't really a shortage.

If you think an industry has non-economic benefits or positive externalities the correct response is to help them capture that directly, not futz with the labor market to give them an implicit subsidy.

I'm thinking not of industry, but of academia and research. It's not going to work to just give blanket subsidies (like say, 20k to all Postdoc researchers) - you need a system that allows in foreign researchers, and my point is it's hard to differentiate academic research from industry research. Also, everything discussed is "futzing" with the labor market - it's not like setting up a government run auction is some sort of pure free market.

I tend to agree that there is no need to control for sector. In fact, I'd say one reason that a "shortage" exists in certain fields (such as software development and especially science) is that the people capable of going into these fields have better options elsewhere. A lot of people are surprised to learn that in San Francisco (ground zero for the tech "labor shortage"), the median salary for application developers is only a whisker higher than for dental hygienists and considerably less than for registered nurses[1]. That's fine by me, but if H1Bs for nurses come in at a higher level than for software developers, why wouldn't we let in all the nurses in first, and the allocate the remaining spots to the software developers and dental hygienists? What's wrong with that?

[1] http://money.usnews.com/careers/best-jobs/rankings/the-100-b..., drill down to salary details which will show salary by region. This is a roundup of BLS data. You can query that directly at the BLS site, with more than just the median. Interestingly, software developers do earn more than nurses at the 90%ile for both fields, but only by a small margin. At all lower percentiles, registered nurses out earn the equivalent percentile for software developers.

Every time I mention this, someone points out, reasonably enough, that nurses are hard working, smart, valuable people. I think they may be worried that I am implying that it is unfair that nurses make more than software developers. I assure you I have no problem whatsoever with higher salaries for nurses, I think they deserve them! I just see absolutely no reason to help corporations pay a lower value type of worker (software developer) the lower wages they deserve.

There's also a data problem - anyone is allowed to call him or herself a software developer (or even engineer), whereas there are controls on who is allowed the title "registered nurse." Keep in mind, though, higher paid nurse specialists and physicians are not in those numbers either, nor are the lower salaries for nurse orderlies. So I do acknowledge the data is not as simple as I have presented it. What I do think this suggests is that trying to set up separate categories doesn't make much sense (imagine if you could set the H1B minimum pay for a radiologies by averaging it in with the nurse orderly category).

If H1Bs end up going to finance and health care, well, fine. That's a good sign that there isn't a shortage of high tech workers in the first place. If google and netflix want a visa for a $275k a year worker, they'll get one. If someone wants to pay someone $60k a year to update payroll information with .NET and SQL Server and the visas go to better paid nurses and financial analysts, how on earth is that a problem?

There should be bias towards high salary occupations. What do you think salary is? It supply demand signal.

Some people think that occupations should just earn a certain amount. But that's not how markets work.

If a mechanic has rare skill to fixing a rare machine. Than that guy is worth a lot. People have to accept that.

Instead people make their mind he's worth 60k, and refuse to pay above. Then claim theirs a skills shortage. That's not how markets and prices work. There's no predetermined price in occupations.

If you change it to visa bidding based on the cash value of total compensation, you can eliminate some of the startup penalty without a huge bureaucratic nightmare. A startup would first hire a noncitizen remotely and give them equity, and then by the time they're ready to bring the remote employee on-site (maybe after a B round or so), the value of that equity will have skyrocketed, making their total comp competitive with big tech companies.

Startups that aren't on that growth curve shouldn't be hiring remotely, or hiring at all really.

I'm not certain that a COL adjustment is necessary either. The higher COL in the Bay Area and NYC reflects the higher productivity of workers in firms in those regions. If you want to allocate foreign specialists where they will generate the most economic value, it makes sense that they go to tech hubs with high average salaries and high costs of living. It also solves the "domestic worker displacement" problem, which seems to be more of an issue in Kansas City than in San Jose.

Also, such a change would be in the interests of major tech companies like Microsoft, Google, and Apple. They already pay their H1Bs close to market rate, significantly more than Wipro/Infosys/TCS pay theirs, and so they would win a lot more of the H1B visas under this system. Someone (any insiders here?) should let their public policy teams know; they may be useful allies.

> The higher COL in the Bay Area and NYC reflects the higher productivity of workers in firms in those regions.

What do you base this on?

The definitions of those statistics, median wages of employees in those industries, and the pricing behavior of highly inelastic goods like real estate.

Productivity is defined as output/employees, where output is measured in dollar terms as the firm's revenue. You can run the numbers yourself, but the tech industry in Silicon Valley and the financial industry in NYC have consistently high productivity numbers. Google has consistently run at $1M+/employee for the last 10 years, for example, and Apple makes about $2M/employee. Goldman Sachs is similar.

Strong competition between firms within an industry in those locales means that workers can capture a decent share of that productivity. It's not unusual for a senior engineer at Google to pull in $300K+/year in total comp, and Goldman Sachs was famous for having a mean salary of $630K+/year during the height of the financial crisis.

When you have a large number of people in a region with lots of disposable income to spend, it tends to push the price of basic life expenses higher. One or two rich folks is not going to move the price of housing: they buy one or two houses (or maybe 5-10, max), and nobody else can charge more. However, a hundred thousand people that can afford a $5M mortgage is definitely going to push the price higher. They all need housing, and landlords realize that they can demand higher prices and they will find a willing buyer. Hence, cost of living increases.

tl;dr: Firms in these areas hold monopoly positions that let them extract a lot of money out of customers. Employees at these firms hold competitive bargaining positions which let them (as a group) extract significant amounts of money from their employers. Widespread availability of money in the region makes prices rise.

One possible explanation could be that the areas with high COL are also the areas contributing higher to the overall GDP which in turn implies that there are lucrative industries with relatively better enriched workforce. FWIW, Bay Area + NYC metropolitan regions alone make up roughly 15% of the overall US GDP.

This would be completely counter-productive to bringing in foreign talent. The most talented and highly-skilled jobs are typically buried in the mid-range salaries. People on the higher ends of the salary range are your armchair grey-haired CEOs, armchair real estate owners, and Wall Street analysts. People on the lower ends of the salary range are your service industry personnel.

Doctors, startup founders, software engineers, rocket scientists, professors, world-class musicians, and everyone you actually want to be importing foreign talent for, typically gets a modest, medium-range, middle-class salary in the US, at least when they start on any new project. Even Nobel laureates and Pulitzer prize winners usually get very mediocre salaries.

Having the H1B admission be based on salary would probably just fill up all the H1B quota from Wall Street, not serve as an effective talent filter.

Or could it put upward pressure on salaries for those who are high talent but mid salary?

This is such a crappy argument.

You're acting like cost of living at work location couldn't easily be tied in, as well as incorporating average salaries at said locations.

If a company needs the talent they will pay for it.

Do not worry about CEO's and C-levels outsourcing themselves. Either the H1B will go unused or the salaries will be paid. Either way the market will find out what the 'natural' need for outside talent is. There are other approaches but a salary floor plus an open work permit would be a decent start.

Not everyone has the money to pay market salaries, especially early-stage startups running on meager angel funds. Add to that investors who still actually think you should bootstrap yourself on ramen before trying to get any investment to properly pay your team members and employees. There's simply no way a talent-hungry startup could possibly pay anything close to what Google, Facebook, et al. offer. People who choose to work for the startup instead are doing it because they identify strongly with the problem or market, want to have a voice, or want equity. Those people also tend to be highly talented folks who value their opportunities to apply their talents much more than the monetary compensation.

Freedom, ego, and voice have always been a bigger attractant for talent than salary, assuming basic life necessities are met. I've turned down multiple $300K+ job offers just because they were too boring, and simple brain rot would drain me of all the abilities that I have invested time learning and accumulating over the years.

> Not everyone has the money to pay market salaries

Then they can't compete in that market. Market salary is not a high bar, it's the expected fair wage. If you can't pay market salary, you don't belong in business.

Market salaries are currently distorted by the easy money available right now. The fact is most companies who pay market salaries can not afford it either, they're just placing a bet with investors' money and they will go out of business sooner than they could have in a more sane market.

I think it's shortsighted to just throw up your hands and say "because free market" in this kind of scenario. The fact is if "market" salaries for software engineers are based on unicorn thinking and the salaries that Apple, Google and Facebook can pay, then there won't be much of a long-tail of interesting companies, we will all end up working for mega corps.

If anything market salaries are artificially low because of the power imbalance between employers and employees.

All the current H-1B debacle does is increase that power imbalance even further.

That is the nature of business, those salaries are not distorted, they're what's in demand. Those companies pay that because they must to capture the amount of dev supply they require. If they blow up because they can't afford to maintain it, it'll correct the situation and release some supply back into the market. Salaries are high because supply is low, not because there's too much easy money.

Supply of developers that meet the high (whether justified or not) bar of those companies is low.

Not at all.

Supply of developers that both meet the high bar and are willing to accept poorer economic futures (see eg housing costs that have doubled in the last 5 years, expensive childcare, etc) is low. My experienced mid-career engineering peers keep moving to Austin, Seattle, and various cities in the midwest because being able to get a house for $300k, $500k, or $250k, respectively, massively changes their financial outcomes.

What if the company is in the Midwest where I am assuming the market salary would be much lower than SF, so they cannot get the talent they need.

Midwest programmers don't cost as much; market rates vary per market. And if they can't pay what midwest programmers demand, then they should rightly go out of business.

Welcome to capitalism - If you can't afford the going rate for staff the your start-up is not a viable business and should never have got funded.

It's funny to see anti-capitalists encouraging employers to pay below market wage.

> People who choose to work for the startup instead are doing it because they identify strongly with the problem or market, want to have a voice, or want equity.

So very true; but if you're looking to make a quick buck you shouldn't join a startup [1] or want to checkout from work 5-6 pm everyday (BTW, there's nothing wrong with that) With the insane valuations that exist today, a decently funded startup can at least match a base salary with an established company.

[1] https://www.cbinsights.com/blog/startup-failure-post-mortem/

If the "most talented and highly-skilled" people only get "very mediocre salaries", it sounds like there is not actually a dire shortage of them, then, unlike what H1B proponents claim. Either that, or the market's price signals are not working properly for some reason (due to downward wage pressure from something else, like collusion?).

> If the "most talented and highly-skilled" people only get "very mediocre salaries", it sounds like there is not actually a dire shortage of them

It's not always black and white. The same argument has been used against mexicans in low paying jobs. However you kick the mexicans out, farms and restaurants will collapse.

I don't think anyone would argue that there is a shortage of service-sector labor. The debate there is purely over prices: there are business models designed around having large quantities of $7.50/hr-and-no-benefits labor available (in some cases, $5/hr under the table), and they are averse to having to pay more. But pretending that their unwillingness or inability to pay $10/hr means that there would be a "shortage" of unskilled labor at that price is disingenuous. There's plenty of it available, but maybe only for "fairly cheap" rather than "dirt cheap". That might just mean that certain business models are not very good business models.

In any case, that's not what the H1B program is officially about: the purpose of the program isn't supposed to be to keep wages down in sectors where wages would otherwise get too high for businesses to afford them. Instead the argument is that businesses literally can't find workers in these areas, so H1Bs constitute talent filling a critical national skills gap. My argument is that, if that were true, the wages in these critically-lacking sectors would rise accordingly.

I agree the H1B program is abused, but I dont believe there is enough local talent to replace the tens of thousands of h1b workers.

It will result in a lot of small and mid size business closing down. Unfortunately I dont have any suggestions on improving the h1b program.

If the h1b program were closed, I think companies would miraculously discover how to (1) pay more (moving to sfbay is a ludicrously bad economic decision for most families), (2) train employees, and (3) stop leaking women, minorities, and parents out of their companies. In other words, they'll figure it out just fine if forced to do so.

You're not thinking this through: they'd set up more operations abroad.

You apply tax sanctions against them then. It's done constantly to level the playing field between domestic and foreign industry.

> farms and restaurants will collapse.

because they have based their business on illegal practices.

I agree its based on illegal practices. But quite a few of the businesses (not all obviously) do it for survival because that is the only way for them to stay in business.

No, not in the slightest. Take strawberries: an additional 5 cents per pint would increase picker wages by 50% [1]. Businesses minimize worker pay both because they can, and because there is a collective action problem that needs to be solved by the government. Wages for fast-food employees are similar. viz the raise in minimum wages in Seattle which, contra all predictions from conservatives, has not driven restaurants out of business. See eg study suggesting a minimum wage of $15 for fast food workers would increase customer prices by 4.3% [2].

[1] http://www.ufw.org/_board.php?mode=view&b_code=res_white&b_n...

[2] https://www.purdue.edu/newsroom/releases/2015/Q3/study-raisi...

Then they should go out of business?

Your business is not a business if it's survival depends on treating workers as slave labor.

Because in early stage startups, you accept to forgo a market rate salary for equity that still has low value. You do that because you expect, or you bet on the equity value to go up. Risk, reward, it's simple.

A bidding system for H1Bs would in effect prevent earls stage companies to apply for visas. Many actuall do apply for their own founders. A large proportion of startups have foreign founders, and these people need a visa.

Those startups at least claim to be paying market-rate salaries, because the H1B visa category can't be used to hire employees at below-market salaries.

Doctors, musicians, and professors often come in on an O-1 visa . (Professors can start on the H1-B path too, though. This would push many more people into the O-1 path, which is more expensive and may be suboptimal.)

Top CEOs/analysts can already probably get in on L/O/E-2/EB-5 visas, which all have separate caps -- if they qualify under those visas they probably wouldn't try for the H1B lottery.

When I read through your comments that you added in response to the objections below, I wonder if you consider what a bureaucratic nightmare this would be to administer? You're also creating a thicket of new calculations and regulations that could all equally be used to game the system.

Some small nit-picks as an example: H1-B's are not locked to a specific location, so it would be easy enough to bring in employees for the Kansas City office, then immediately relocate them to the Bay Area at the same salary. Changing this will be really hard since free travel across the country is a fundamental US right.

> I wonder if you consider what a bureaucratic nightmare this would be to administer?

Except that minimum salary thresholds for H1B's are already set (for each region). We're talking about just increasing these thresholds (e.g. 55K --> 85K and so on...).

You don't address his question though - which was, if you set the new threshold to 85K a company can bring in a H1B at 85K in Kansas city and then relocate him/her to SFO at the same salary. This is gaming the system again - the company gets a cheap resource without having to pay Bay Area salaries.

Now we have to talk about cost of living adjusted thresholds.

As I replied to the parent comment, this is not how H1B works. H1B is given for a given LCA which is location specific.

It can be trivially amended without change in salary - you don't even need to wait for the amendment to be approved before you can move the employee to the new location. In any case the point still stands that there would need to be location specific minimum salary requirement.

Not legally they can't. I changed location from South Bay to San Francisco within the same company (a move easily within commuting distance) and they had to file a new LCA and an amended H1-B.

So? Did you have to wait until it was approved? Not sure what you're disagreeing to here.

Well in my case it was approved in 15 days via premium processing, months before I started working.

But in general you're correct that employees can change work sites while the H1-B petition is pending (because without premium processing that takes months), but only after the new LCA is approved. And the LCA is what determines the prevailing wage for the new site. So you can't move someone from Bumfuck, Nebraska to San Francisco and continue paying Bumfuck wages.

If you think the processing time is too long - I totally agree. 15 days should be regular processing time, not "premium".

Right, and these H1B shops are getting by that by telecommuting. It's exactly why Disney was able to find immigrant IT workers who could do the same job for less.

Actually, H1B already addresses that. H1B is based on Labor Condition Application (LCA) which is location specific. If the employee changes location (even for the same employer), they are required to file an LCA with USCIS (They don't have to go through the whole H1B process). However, this rule is very poorly enforced. I have personally seen cases where USCIS has rejected the H1B renewal if they found out that you changed your location without filing a new LCA.

Many of these H1B shops game this through a consulting model. They claim the immigrant is living/working in one low wage location, then have them consult in the more expensive locations.

If you create a bidding war and localize it, the H1B shops are going to exploit this even more.

> If the employee changes location (even for the same employer), they are required to file an LCA with USCIS (They don't have to go through the whole H1B process)

I changed location from South Bay to San Francisco within the same company and they had to file a new LCA and an amended H1-B. It basically is the whole process again, minus the lottery. (Since I already had an H1-B, I'd already been counted against the yearly quota.)

> I wonder if you consider what a bureaucratic nightmare this would be to administer?

I think many of the "nightmare" issues are already present and already being managed just as well (or badly.) The marginal addition in complexity shouldn't be that high.

This is exactly the right idea.

1. It makes H1B sweat-shops unfeasible

2. It motivates employers to train American workers whenever possible

3. It makes it significantly more likely that the visa will go to the most in-demand skills than the current lottery system does.

To those of you complaining that this is pay-to-play: there is something unpleasant about it on the face of it. The way I look at it though is that we are using salary as the best proxy we have for scarcity of a given skillset.

> It makes H1B sweat-shops unfeasible

Calling a $60k job in tech in the US a "sweat shop" really trivializes the term.

The employees at the types of places that the parent post is referring to are often in a situation that amounts to indentured servitude. They're locked to one employer for a long period of time in one location. They have almost zero control over their situation. They're not stitching soccer balls in Vietnam, but they aren't really free either.

Does it? $60k in a high cost of living area is a very small amount of money. In these tech chop shops they are usually working 12+ hour days doing shitty work.

The only reason it's worthwhile for the worker is the worker is supporting family and/or setting themselves up back home.

The same reason workers work in actual sweat shops.

Yes, $60k is not a "sweatshop" amount of money.

http://www.sfrealtors.com/US/Neighborhood/CA/San-Francisco-D...

San Francisco Median Income Over 65 $57,502

That's the median income for folks over 65. Most of whom are retired. I'm not sure why you didn't post the median incomes listed right above that:

  Median Income 25-44	$78,810
  Median Income 45-64	$80,875

Do these retired people have sweatshop income?

> Median Income 25-44 $78,810

That's not much higher than $60,000 Which means that about 35% of workers get "sweatshop" income of $60,000 or less.

> That's not much higher than $60,000 Which means that about 35% of workers get "sweatshop" income of $60,000 or less.

Three things:

1) Many of those 35% are living in rent controlled housing which is a maybe $20k/year subsidy.

2) Its also about more than just income. Working 70-80 hours for $60k is very different from working 40 hours for $60k. (Or in the case of retirees working 0 hours for $60k).

3) Many of the working poor in San Fransciso are working in sweatshop conditions. Having to work 3 jobs, having to work 80 hours weeks, having very little job security or savings etc, just to get by is horrible.

Are you suggesting that Indians have better working and living conditions in India than what they have when they come working to San Francisco?

What is your solution to that? Take away these "sweatshop" jobs from people who do not have any better options?

> Are you suggesting that Indians have better working and living conditions in India than what they have when they come working to San Francisco?

Many of them? Yes. But it's usually worth it for them. The difference between our local market and most of India is incredible. The absolute pay difference is like 10x.

To put it in perspective: It's like if you could move to a very expensive location (Richville) and get worked like a dog, but they paid you $1.5 million/year.

Of course a house costs $20-$30 million. And sending your kids to a good school would set you back $500k/year. And you are having to share house with 4 other people you don't really like to afford the rent. And you have very little free time because of all the hours you work. Etc etc. But by living cheaply you manage to save 15% of your salary ($225k USD).

In Richville that isn't even enough to get your kid into a good school, but when you go back to the US you will be very well off.

> What is your solution to that?

Change the h1b system to be an auction based bidding system. That problem with the current system is you distort the local market and make the locals worse off.

Why not let the market set the salary?

The H1B program sets salaries using a "central planning" model, and changing the rules for the central planners won't really fix the problem, because employers will learn how to game the new rules.

A better approach is to remove the "you can only work for one employer" restriction from the H1B, and let the employee take their H1B visa with them to any job they can get. This would give the employee the same negotiating power as other employees, which will allow them to get raises or take higher-paying work for another employer.

The problem with that approach is that the sponsoring employer has borne the cost of the Red Tape, and now the employee has increased negotiating power as they are in the USA.

Using a market within the central planning of the visa program is still an incremental improvement in the efficiency of the policy and therefore a worthwhile reform to consider.

> The problem with that approach is that the sponsoring employer has borne the cost of the Red Tape, and now the employee has increased negotiating power as they are in the USA.

Which is why you better pay them market rate.

This is also the exact reason for the golden handcuffs idea. Toss them a bunch of stock at the 1 and 2 year marks.

That's a feature, not a bug. It incentivizes the sponsor to offer a compensation package that won't be sniped.

I was under the impression there already is a requirement similar to this yet the general tactic is to hire someone for a job far, far under what they are actually going to be doing. For example, hire someone with a PhD and years of experience to be a "web designer" (a very highly paid one, making 70k!) on paper but who actually does complex distributed systems that happen to serve web pages.

Honestly I'd favor an absolute minimum limit. Hiring someone through this kind of visa should be an extreme method you use to find talent you simply cannot find here at any price (not sidestep the American job market and devalue labor) since their visa is contingent upon them willing to work for you -- it's nearly indentured servitude. So you should have no problem paying them at least $200,000/year.

> since their visa is contingent upon them willing to work for you

Which is part of the problem. Why can't a visa holder just say screw you to these companies and go out and get a new job without a huge amount of risk and stress.

The good ones mostly do and switch to their client companies so effectively a large portion of the TCS/Wipro/Infosys cadre end up at the right places that pay the most. The bad ones suck it up and stick around. So the offshore companies purposely don't hire the best ones.

>hire someone with a PhD and years of experience to be a "web designer" (a very highly paid one, making 70k!) on paper but who actually does complex distributed systems that happen to serve web pages.

I worked at a law firm that specialized in immigration and that's exactly what happens. They deflate the title and experience and claim much less than they could/should. The employee doesn't protest because they are still coming out ahead from where they were. All the biggest tech companies are doing this too.

>> If only the highest paid people receive the visa, then the public would not complain as much about replacing American workers for wage reason.

Not true. The public will complain about how we are rewarding foreigners instead of locals. They will lament that about poor schools, and companies not wanting to train local talent. They will cry about how the "imported workers" are taking their high wages/dollars and sending it out of the country.

I will like to see every company that get's a H1B worker mandated that they must hire two paid interns. The idea behind this is that as they pay H1B workers, they also get to train younger workers who will not be hired for "lack of experience."

> I will like to see every company that get's a H1B worker mandated that they must hire two paid interns. The idea behind this is that as they pay H1B workers, they also get to train younger workers who will not be hired for "lack of experience."

The (big) companies that aren't abusing the program (Google, Microsoft, Amazon, etc...) already do this. They hire loads of interns and then give offers to anyone who is up to their standard. It's a win/win system.

So again, seems like we are back to the crappy outsourcing consultants.

I'd prefer a system without a "magic number" of people allowed in.

http://johnhcochrane.blogspot.com/2014/06/the-optimal-number...

Population density is not the limiting factor--the rate at which people can be assimilated into American culture is. Immigration is great--I am an immigrant and am incredibly thankful for the opportunity. But what makes America an attractive place to immigrate to is ultimately rooted in its culture: low corruption, high tolerance for free thinking, low tolerance for racism and classism, respect for the economic contribution of women, directness and honesty, etc. You can't maintain culture with unrestricted immigration. The idea that you can is based on the ridiculous assumption that there is something special about America the place. There isn't. What's special is America the people.

It costs our public education system over 300K to educate an American child K-12. Why not reap the benefits of pre-educated, highly skilled persons who want to make a life for themselves in America?

There are only 65,000 H1-B visas per year. Surely the fabric of our country wouldn't dissolve if that number were doubled or even tripled.

I was responding to the point in the article linked by 'davidw: the optimal number of immigrants into the U.S. is over 2 billion (i.e. to match the population density of the U.K.) But I will also note that just because someone is educated does not mean they share American values. I have met very educated people who defend practices such as requiring women to be chaperoned in public. Where I come from (south asia), coming out as gay is still unacceptable, even in educated upper-class circles. I'm willing to pay $300k educating a kid here in the U.S. if we can use that opportunity to inculcate the proper values.

> the optimal number of immigrants into the U.S. is over 2 billion (i.e. to match the population density of the U.K.)

You should read beyond the first few sentences.

Edit:

> coming out as gay is still unacceptable, even in educated upper-class circles.

I think it would be difficult and dangerous to try and use the immigration system to select for, say, Obamas over Scalias.

The biggest American value is its diversity, which create the liberal values and progressive society that you guys have (otherwise American will just fight to the death if they don't accept each other values). Claiming something to be "American value" and then use it as a mean to cultivate a homogeneous culture seems to be a good way to turn conservatives.

> The biggest American value is its diversity, which create the liberal values and progressive society

Correlation, meet causation. Lots of countries are more diverse than the USA but are doing far worse when you look at crime/corruption/QoL statistics. Lots of countries are far more progressive and far less diverse.

You are attacking a strawman. I did not claim that diversity is a sufficient condition for progressive values, I did not even claim that it's a necessary condition. There are many sets of values that will go together to create a "good" society (for any subjective definition of good). For the case of the US, diversity is one of those values. It is entirely possible for a country to not have much diversity and still be a progressive country. In other words, I guess "create" in the quoted sentence should be replaced with "strongly influence".

Essentially, if you're claiming that diversity isn't one of the more defining cultural value of the US, and without it the States would be the same, then I would like to hear your reasoning.

Putting it another way, you are advocating leeching off of the educational systems of poor countries to save the USA a cost that it rightly owes its citizens regardless? Which is going to be spent anyway, regardless of whether that USA student later becomes an employed taxpayer?

In any case, this position only makes sense if you think people are a fungible, replaceable commodity. It does not address the parent's comment at all, which is about culture.

If you can add taxpayers who are already passed the point where you spend huge amounts of money on them then you win. So if you can snatch up people straight out of undergrad into high paying (highly taxed) jobs and have them contribute as young single workers then you should do it.

> There are only 65,000 H1-B visas per year. Surely the fabric of our country wouldn't dissolve if that number were doubled or even tripled.

In a way, it's already 6 times higher, because H1-B is not a yearly visa, but (potentially, simplifying here) a six-year visa. 65k is only for "fresh" applications, not the concurrent limit.

The difficulty about focusing on values is that the American value system is "fuck you, I've got my own value system".

There are millions of people in America who don't think women should have rights. There are millions of people in America who are uncomfortable with free thought. We've got racists, classists, and people who don't think that parents should be allowed to make all of the decisions about their children's upbringing. We've got corruption at all levels, and the only thing that vaguely keeps it in check is something probably fifty million Americans hate hate hate, Federal authority over the states.

You can try to claim these are marginal views, but they're really not. America may have some great things going for it, but cultural unity is not one of them.

>>America may have some great things going for it, but cultural unity is not one of them.

As an immigrant who has lived in both coasts as well as "flyover country", I totally agree. The claim that unlimited immigration would ruin American culture is laughable, because there is no such thing as "American culture". America has always been a melting pot of different cultures, much more so than any other country in the history of the world. That is what makes it unique.

> The claim that unlimited immigration would ruin American culture is laughable, because there is no such thing as "American culture". America has always been a melting pot of different cultures, much more so than any other country in the history of the world. That is what makes it unique.

This same claim gets made about Canada, and I always found it particularly offensive to anyone who isn't an immigrant with a foreign culture. It's a riduclous statement anyway. The south doesn't have their own culture? East vs west coast? Europeans were pointing out yesterday that Americans have different expectations for housing (bigger housing, suburbs), is that not a part of the culture?

Isn't the idea that we are welcoming to foreign cultures, and actively embrace multiculturalism a part of the culture?

That's exactly what I am saying: there is no homogeneous "American culture." It's a combination of many different cultures and cultural elements, some originated in America (e.g. jazz), others brought by immigrants and recalibrated for America (e.g. Tex-Mex). This cultural diversity is what makes America, America.

Compare this to, say, Norway, which is significantly more culturally homogeneous, so a sudden influx of a great number of immigrants would actually noticeably erode or at least dilute the native Norwegian culture.

While our culture is certainly more diverse than Norway's, I absolutely think that there are American values that, while certainly not held by all, do define us as a nation. Among them I would include:

- Pluralism

- A belief in the value of hard work

- A strong commitment to individual rights / individualism

- A certain degree of puritanism

- A belief in American Exceptionalism

- A belief that fairness should always be aspired to

- A fairly strong commitment to market capitalism

- A healthy dose of skepticism that government intervention is the solution to many problems

- A commitment that the "American Dream" is something that we should always strive to make real for everyone

None of those are American values or uniquely American. The belief in the value of hard work is a Puritan value, for instance. And everything else you listed is, to a certain extent (sometimes exceedingly so), shared by many other cultures. You think only Americans are skeptical of government intervention? You should travel to Turkey sometime and talk to some of my countrymen about what they think of the Turkish government. :)

Individual items in this list are certainly not unique, but I think that the list as a whole (with probably an addition or three) combined in the particular way that America does it is unique.

Yeah, but if you're willing to admit that these values are not universally or uniquely held by Americans, what is the problem?

If the Average American only holds 6 out of 10 of your imaginary Core American Values, what does it matter if we invite in a hundred million New Americans who also only hold 6 out of the 10, because they were from a different culture? Where is the assimilation problem?

(Also, "free market capitalism" and "skeptical of government intervention"? Really? Are you living in a bubble or just willfully pretending that the last 100 years of American history don't exist?)

The difference is when you say there are "millions of people in America who don't think women should have rights" you're being facetious and equating not having the right to an abortion with not having any rights at all. But applied to some countries that statement wouldn't be facetious at all.

Oh, I am not being facetious at all.

There are millions of Americans who believe that women should not be working outside the home, should not be "taking up space" in higher education, should not be associating with men they aren't related to or married to, shouldn't be dressing "provocatively" and "enticing" men to harass or rape them. There are millions who don't think women should serve in the military at all, let alone in combat roles. Disowned for dating or marrying the wrong boy or girl.

I will happily admit that the US is not the worst place in the world. Honor killings and throwing acid at people doesn't really happen here, even if spousal and partner abuse still flourishes and murder by an intimate is (one of) the most common sort of murder.

The equality and respect for human rights you can find in the US is fantastic, and I'm glad pop culture promotes it as a given, but it is not a universal aspect in American culture and in many places it is just a thin veneer over some very ugly deviations, held in place by the continuing hard work of dedicated activists.

That really depends on where people are coming from.

But what if your start up is a Mongolian restaurant, and what you really need is a cook skilled in traditional Mongolian cuisine? It's completely plausible that such a candidate can only be found in Mongolia, but what startup restaurant can afford to pay a cook $100k ?

That's technically illegal anyway. Can't discriminate by race/nationality.

eh? Parent didn't say anything about race/nationality - "what you really need is a cook skilled in traditional Mongolian cuisine? It's completely plausible that such a candidate can only be found in Mongolia"

You can say "I need a cook skilled in traditional Mongolian cuisine" but saying "such a candidate can only be found in Mongolia" would technically be against the law in the United States (if you have 15 or more employees). Freakonomics had a whole podcast about this.

Analogy doesn't really work is TMT work is the same world wide - and that's not counting the nice opportunities for kickbacks that would obviously occur.

The answer is that you pay to train someone in mongolian cuisine before you start the business, find local mongolian cuisine talent for under 100k, or you fail.

Who starts a business without the person that makes it possible in the first place on staff? If you dont have a buisness without someone you cant afford to hire, you dont have a buisness to begin with.

It was just a hypothetical example. Why would a H1-B have to be a techie making a 6 figure starting salary?

The H1B program is aimed at bringing in exceptional talent. If you are paying low wages then either the talent is not exceptional or you are not paying a fair wage to the talent. In some parts of the tech world 100k is average in others it's slightly above.

https://en.wikipedia.org/wiki/Financialization

A pure market based approach to immigration will create an overly financialised economy. Who can afford to participate in visa auctions? Financial companies!

If tech companies can afford to participate right now, it's only because they are funded by financial companies. Half of tech companies aren't even profitable...

You definitely want more Mongolian restaurants, not just tech startups dependent on cheap money. Because when the money stops, only one of those will still be in business.

That would tend to concentrate all the H1-Bs in high cost of living areas and in high-salary fields, but other than that, it seems like a reasonable modification, provided that the companies are bidding on the minimum salary they'll pay, not the precise salary (to allow them some flexibility on the upside, but to still make it a market).

Is there a standard cost of living adjustment that the government tracks (how are federal salary scales determined for the same job in SF vs DC vs wherever)?

If so, you could weight the H1-B salary auctions in the same way. Wouldn't solve the weighting toward high-salary fields, but should make weighting toward $3000/month for a closet areas like SF less of a problem.

Yes. The gov has both cost of living (COLA) and avg pay per field per location (Locality) tables.

Isn't concentrating them towards high-salary fields exactly what should happen? The stated point of H-1Bs is to solve skill shortages, and fields with relatively low wages presumably have no skill shortage, or the supply/demand imbalance would have driven the prevailing wages up.

Though I love the market system in general, it's pretty clear to me that neither salary and skills nor salary and societal good are anywhere near linear (or even monotonic for that matter) across fields.

School teachers, nurses, and regional pilots are three fields I can think of where we may well have skill shortages despite fairly low wages. (in the third case, I think it's because of low wages, but no matter...)

Skill shortages 'despite' low wages doesn't make sense. "Even though we don't pay them much, people aren't flocking to do it!"

That's fair and I agree. I should have said "and" rather than "despite".

That's because people won't pay. Those professions should be paid more, but there not because of the whim of some administrators deciding what the wage should be.

Exactly what were trying to avoid here.

A proposal that money buy privilege? In the land of the free and the home of the brave? Its counter to everything we're supposed to stand for.

Why not? The market, at least, is signalling that some skills are more valuable than others. How else will we decide?

Bureaucrats and politicians picking interest groups? That's why technology workers are exempt from overtime rules

>How else will we decide?

Opening up the archaic caps on talented H1B labor. Clearly there is demand for it.

Your still rationing. Who works out who is and who doesn't come?

My ideal solution would be a gradual removal of all barriers to entry. However that isn't possible.

So why not make H1B open to all types of workers(not just on job titles/industries), and build in a bidding system based on salary. Maybe a system if you pay a substantial amount of salary, you're allowed unlimited.

Why even implement a bidding system at all?

The auction is a solution to the problem that the cap creates. Remove the cap and you don't need an auction.

H1B visas traditionally have been for skilled labor, under the assumption that these educated workers will help stimulate the economy. This is good as long as the workers don't drive down the wages for citizens working the same jobs, so an immigrant already has to make the same or more than U.S. citizens. Isn't that wage enough to achieve the goal of H1B visas?

No because its easy bypass. List exotic skills no one has, say you can't find anyone then list abroad. That's what happens.

Second you are inhibiting wage growth reducing the incentive for people to train into those professions

H1B isn't capped by skill or position, only by total visas, so I'm not sure what you're talking about with exotic skills.

H1B applicant wages must be higher than existing U.S. citizens, so if anything it's increasing average wages for educated labor and further incentivizing citizens to train for these skilled positions.

To use h1b you have to prove you have no native applicants. You get around that by putting stupidly specific skill in the job spec.

It would cap wage growth for people in the sector, because instead of increasing salary to attract candidates they search abroad for the same wage. It's a cap on wage growth.

>To use h1b you have to prove you have no native applicants

Completely wrong.

It's not capping wage growth. If anything it's incentivizing wage growth by making positive growth more liquid than negative growth.

"If anything it's incentivizing wage growth by making positive growth more liquid than negative growth." I'm sorry but most evidence says it reduces wage growth that particular area of employment.

It may increate economic growth overall, but those particular workers targeted get screwed.

This is why I think it should equally open for every sector, (Everybody gets screwed equally, which means prices will stay down) or bidding.

"The auction is a solution to the problem that the cap creates."

The cap is a solution to the problem the lack of other controls -- like an auction -- creates. With an auction to allocate the visas to companies that need foreigners with actual rare and highly paid skills, we could drop the cap to a more reasonable level like 10,000 per year instead of the ludicrous and destructive 60k.

That doesn't solve the problem outlined in the article.

Price is a supply demand measure. Companies are saying there is a supply issue, while not paying up. Is it really a supply issue?

This would solve that.

There's already a visa that does exactly that, the E-2: http://www.uscis.gov/eir/visa-guide/e-2-treaty-investor/e-2-...

You are much better off focusing on industry's than job titles. Otherwise you get into companies submitting for a junior developer with 15 years experience. Or calling a heart surgeon a doctor to avoid the pay premium.

IMO, there is an advantage to importing world class talent, but subsiding companies that don't want to pay the going rate for a junior dev is a real issue.

I would add one thing, that the quota be issued throughout the year for immediate use. So you get a better signal of the winning compensation thresholds and so that people with serious job offers for highly skilled jobs have a chance at starting work within a couple of months, regardless of the time of year.

This is a terrible idea.

All employers will be incentivized not to sponsor H1B visas because it will become a bidding war. It's not a 1-day event - most of the sponsored immigrants have been already working for the employer for months through temporary OPT or CPT.

The solution is to finally open up more H1B visa seats and do away with the lottery system. To be approved for the visa the immigrant already needs to be making the same or greater than the average U.S. citizen salary in the same area anyways.

Edit: The problem with a bidding war isn't the price as many of you are thinking, it's the volatility. Employers are setting these wages when they hire immigrants many months in advance, and they won't do it if there is a risk they will be outbid later.

If all employers will be incentivized not to sponsor H1B visas, then the salary needed to get an H1B will fall to zero, and all employers will be incentivized to sponsor H1Bs since they can trivially get foreign labor.

That's the mark of a successful market system: negative feedback loops so that the more out of equilibrium the system gets, the more incentive there is to bring it back into equilibrium.

Yeah but the number of H1-Bs per year (65000, some of which are reserved for Chile or Singapore) isn't set by the market, but arbitrarily by the government. Why is that number set in stone regardless of economic climate? It was obviously more than enough during the 2009-2012 slump, when there was no lottery, but not enough now.

Political reasons. There is a segment of America that believes that's already too much immigration for a group of people that don't share their skin color and will be making more money than them.

I'd rather see the caps disappear too, but changing from a lottery to an auction seems politically achievable (particularly since it helps Apple/Google/Facebook, all of which have strong lobbying arms, while hurting TCS/Infosys/Wipro, who most Americans would be happy to see disappear), while declaring open-season on tech immigration would engender strong resistance from people who have nothing to do with tech.

I just find it weird that every year, the US gives 55,000 green cards to random people with high school education via the green card lottery, compared to 65,000 temporary work visas to much more educated people, yet it's the latter that's contentious!

My girlfriend has a PhD from an ivy league university, and even she didn't get an H1-B!

The DV lottery is a good thing. It keeps America culturally rich by giving folks from countries that usually don't emigrate to the US an easy path to citizenship.

This American Life had a good show about a DV winner from Somalia:

http://www.thisamericanlife.org/radio-archives/episode/560/a...

The majority of the House voted to eliminate the DV lottery and release the H1-B cap on graduates of American grad schools. There's currently an extra 20k H1-Bs for foreign grads of American schools and that cap would be lifted.

That would be a great compromise. Ph. D.'s instead of high school grads is a good trade. But it was lost among the politics of higher profile illegal alien amnesty negotiations. And then the amnesty didn't go anywhere either.

I think Trump may have mentioned this compromise at the last debate -- even he liked it.

>the salary needed to get an H1B will fall to zero

Except the job market isn't limited to immigrants, and not all immigrants are equal in quality. The bottom isn't zero, it's the average wage for U.S. citizens, because otherwise you'll drive down the wages for U.S. citizens.

You will get H1B shops opening in remote, rural locations and then using the immigrants to consult in other, more expensive locations. The goal is to get qualified immigrants to work directly for companies at those company locations.

So don't adjust it for cost-of-living, as I proposed in a sibling comment. The reason cost-of-living is higher in the Bay Area and NYC is because firms there are more productive; if you want to maximize economic value from highly-skilled immigrants, they should be working for those companies in those locations.

Then you'll drive down wages for U.S. citizens in those higher cost of living locations. The H1B shops won't open up in rural locations, they'll open up next to door to the companies and put the U.S. citizens out of jobs.

The effect will be basically to add an extra 65,000 workers to the tech labor force available in big tech cities.

Speaking as a tech worker in Silicon Valley, I don't care. Everybody who works in tech here makes enough; indeed, one of the reasons why the cost-of-living is so high is because there's broad-based prosperity among techies that drives up the cost of basic necessities like housing. If tech salaries fell, that would actually put less pressure on the non-tech population here, who are the ones who are really hurting.

It'd be far less disruptive than the current system, which puts that pressure on software engineers working for big companies in say, Minneapolis, where the average software engineer salary isn't much more than the general population.

It would be way more disruptive than the current system. You'll get more stories about companies laying off IT workers for cheaper immigrants, like at Disney (who recanted after public backlash).

Maybe your employer values you, but I'm guessing someone can do your job for less, especially if there is a H1B visa value added to it.

The whole problem is that H1B shops are gaming the system, and with a national auction, it gives them more leeway to game it further.

I think you would end up with a balance. Consultants aren't going to want to pay 120k a year to an H1B engineer, companies in SF or the big companies outside it (Amazon, Microsoft) have no problem doing that for an experienced engineer. Adjust the cap so you don't end up with 5 people per slot and costs should stay reasonable.

Then price would go since there's less demand, and people would start bidding again.

Exactly how its meant to work.

> Employers are setting these wages when they hire immigrants many months in advance

That's not how people are hired in exceptional circumstances, as is the stated intention of the H1-B law. That IS how people are hired for outsourcing body shops, which should not survive this change.

Wrong. OPT and CPT are programs that many typical H1B immigrants are hired through by regular employers throughout the year.

The H1B chop shops are typically hiring just for the lottery that happens once a year.

"All employers will be incentivized not to sponsor H1B visas"

That's the ideal benefit. Skilled Americans should be employed when available and their salaries should be high and rising. The more incentives not to use H1-Bs, the better.

The ostensive goal of the program is to provide workers with skills that aren't available in the USA. If they really aren't available, a few disincentives aren't going to slow them down, but we know that a large majority of applications are fraudulent. They exist to replace American jobs with low paid indentured foreign labor. There's no good reason to promote that.

Rather than a corporate conspiracy, your suggestion won't be implemented because it would exclude most scientists from the program in favor of bankers.

It would also increase the compensation of scientists (who also have other options than the H1B visa, such as the O1).

Scientists applying for academic positions do not count against the H1B limit. That only applies for academic position though, not work in private industry.

The thing about your example is that if a startup is hiring an engineer at 80k in the bay area, then they are underpaying and it is no wonder they can't find a US citizen interested in the job.

Which is the issue with your proposal. None of the individuals interviewed would be able to compete with the large corporations if a salary were taken in to account. Which I think is fine because none of them actually sounded like the jobs the foreigners were doing were all that special and the talent could definitely be found within the US borders as long as the right price is willing to be paid.

But according to the article the large corporations are bringing workers in at the minimum $60k salary which is why it's worthwhile to do so. If they have to pay market rates or higher and that influences their chances of getting a visa, their business model disappears.

While this is a pretty clever idea the industry and area specific version is so subject to gaming that it drains much of the appeal of the proposal. On the other hand, the objections that lead to the modification also have some strength. So, I'm not sure it is a fruitful avenue to pursue.

The law already has a provision to identify these abusive filers -- "H1B dependent employers". As the article notes, Congress let a special fee for such employers lapse. If it cared to, it could easily forbid such employers from filing further applications. Problem solved.

There is an easier way - put an absolute cap on larger companies, or make the fee increase exponentially. This way, smaller companies can still get the talent they need, larger companies can't abuse the system. There already is a clause for "H-1B dependent" companies - if your employee pool is over 15% H-1B, you get classified as one of these. There are additional attestation requirements, but apparently not enough of an impediment.

Large companies will create smaller companies to do the hiring or will work through proxies.

+1 "You tell me the rules and I'll tell you how I'll beat the system" - Statement above the entrance to almost every Law School in the world.

Put in an general avoidance rule like they do for tax and/or have the IRS sign off on all H1B as they have an interest in maximizing the tax take.

> Objections below regarding salary differences between fields (scientists vs bankers) and costs of living in different areas can be addressed by considering average salary in each field and area.

I would also point out that this requirement is not without precedent and the data is already there, because there is exactly such a requirement for O-1 visas (well not exactly a requirement, but you get extra consideration if you are).

That would be incredibly unfair for companies in less profitable markets. H1-B is about being able to bring in individual with skills that you have a hard time finding in the US, not necessarily about finding "incredibly profitable software engineers that we can afford to pay $150k".

Let's say an university want to bring in a Vietnamese teacher to teach about South-East Asian's studies. The university simply could not find someone with that kind of knowledge in the US, hence they want to bring in someone from a foreign country to take the role, and that person is very qualified for that role. Should their application just be dismissed because they can't offer wages that compete with big tech companies offering $200k salaries to foreign engineers?

When comparing h1-b applications to fulfill jobs that are of similar position in similar markets, then comparing salaries make sense, but it doesn't make sense to compare wages across different markets and positions, as it gives a HUGE advantage to profession in more profitable markets like big tech/big pharma.

> Let's say an university want to bring in a Vietnamese teacher to teach about South-East Asian's studies.

Most universities (maybe all) are not subjected to the cap. Non-profits in general are not subjected to the cap.

The proposed change should only be for the non-cap exempt jobs anyway (which tend to be at for profit places).

>The proposed change should only be for the non-cap exempt jobs anyway (which tend to be at for profit places).

This still doesn't solve the issue. You are just giving the advantage to high paying industry, rather than give the advantage to companies who actually have a very specific need that they have a hard time fulfilling by hiring locally (which is the point of H1-B).

Let's take for example a very profitable industry, like pharmaceutical research. Let's say for a sec that the average pharma researcher makes $200k a year. Let's also assume that there's a decent pool of people in the US that have the necessary skills to work in pharma research. Now, let's say those pharma companies would rather get foreign researchers and pay them $150k a year. Those pharma companies will still have a much easier time getting those H1-b visa compared to another company that really CAN'T find the employees they need locally due to specific need (but are still not in a industry as profitable as pharma).

For example, let's say you work in a marketing firms that does international projects. For example, you want to promote American sporting apparel in a foreign country. The profile you are searching to fill : Speaking the foreign language, familiar with the foreign culture, experience in sport marketing, management experience.

You can't find someone locally, but it would be pretty easy to find someone with this exact profile in the foreign country you are targeting. Unfortunately, now, you can't get that person except if you are willing to pay him the same wage as someone with a Ph.D in pharmaceutical research, because you are auctioning for the same spot. Now let's say you go for it because it's essential to the success of your project, you might end up having to pay someone 3-4 time his "market" value, making it unfair to his "locally hired" colleague that have the same amount of experience and responsibilities, but don't have the right profile for a specific project.

> let's say you go for it because it's essential to the success of your project, you might end up having to pay someone 3-4 time his "market" value, making it unfair to his "locally hired" colleague that have the same amount of experience and responsibilities, but don't have the right profile for a specific project.

If you are critical to an important project you get paid significantly more. How is that unfair?

That's the system working as intended.

Bring them in on a different visa category then.

Are you suggesting the government should create a new visa category for each possible positions in each possible industry? And how do you suggest they decide of the number of visa to allocate to each category? In what category would you put very specialize positions?

I'm saying if you want a visa category for exceptional staff that are actually impossible to find locally then have a specific visa category for it. Don't try and piggyback on the h1b visa.

Honestly given your examples you should be more annoyed than most given the current h1b system. When these giant consulting firms get 100,000 h1bs that is 100,000 spots taken away from unique roles.

Lets assume that your plan works first year and there is almost zero gaming the system. Companies like BoA or Wells Fargo, the ones who are clients of TCS/Wipro etc, what do you think they will do to account for the change in landscape (and still keep their profits high), there will be lobbying in foreign countries, and, they may make it easier for BoA or Wells Fargo to setup offices in India and move some less important divisions there if not the most important divsions? Here its hard to predict whether common sense solutions will solve the problem, because you dont know what the Nash equilibrium solution here is or you dont know how other rational actors will adapt to this rule.

So the govt will have to go back and forth to get this right, the energy is better utilized in the big ticket job items that have costed america millions of jobs (not a few 10 thousands like in this one).... see my other comment on this topic.

There actually is a salary condition in the requirements. In order to apply for the visa, the company needs to submit a job description along with the salary to the DOL, who then either approves or denies it. The salary for the position has to be above average for the position in the US. Yet this does not seem to stop any of these companies.

The article describes a loophole by which companies like Tata can pay their H1B workers anything north of $60,000 instead of market rate for the position.

$60k sounds fine, it just should have been indexed to CPI back when the law was passed (I think in 1994?)

http://www.ecfr.gov/cgi-bin/text-idx?SID=019f28cb2b081515d27...

In 1994 dollars, that's about $96k.

I wish that they had more detail on that "loophole" - every H-1B application I've seen has to meet the prevailing wage determination for the place where the person will be employed. Perhaps they use a rural location.

Fudging job duties is what I'm use to.

They will have job duties broken down for the lowest paying position, with a 5% other work, but on the job they will be doing work of a better paid position, with that 5% other work constituting 90% of what they are doing.

Which is not actually a loophole, it's illegal. If a job is substantially different from what it was supposed to be, you're supposed to get it reclassified.

Illegal actions become a loophole when the means of enforcing the law is far too weak to catch most attempts at breaking them.

Imagine if the only punishment for theft was having to pay back 200% of what you stole. As long as you don't get caught half the time, it is profitable to steal. That would be both something which is illegal and also a loop hole in the law.

Sure, I understand that lack of enforcement is the issue, but technically that is not a loophole.

https://en.wikipedia.org/wiki/Loophole :

"In a loophole, a law addressing a certain issue exists, but the law can be legally circumvented due to a technical defect in the said law"

That would only benefit companies like IBM, Microsoft, etc.

Startups wouldn't be able to afford such high salaries (many rely on equity or even founding engineers).

Software engineers that work in startups are different from the corporate ones.

So why does a startup need to bring in (theoretically) high skilled talent on a work visa, especially if they cant afford it?

Why not, if both parties are happy with the arrangement?

Because Paul's dream of open immigration for startup employees is a giant negative externality for the rest of us.

> Because Paul's dream of open immigration for startup employees is a giant negative externality for the rest of us.

How is that? The more talented, hard-working people, the merrier!

Also, by "us", you are not referring to "those of us on HN", but "those of us on HN who had the good sense to have been born in the US", correct?

Also: https://en.wikipedia.org/wiki/Lump_of_labour_fallacy

Lump of labour nonsense -- a claim I certainly didn't make -- is your response to VCs/large employers doing their best to leverage h1bs to reduce wages for software engineers? If that's the best you can do, let's just call that you conceding the point.

You didn't make much of any point; you simply claimed there was a 'giant externality', without saying what it is.

The thing most people complain about are how software developers will be reduced to penury if people from other countries are allowed in the US. Were you referring to something else?

People could go to a startup in exchange for equity, if they were willing to bet that the startup would succeed and expand. Others might want to go to a startup that they think will change the world, giving them non-pecuniary rewards.

Because the total equity+salary package might have a future value that is much greater than say $200k.

Plus, the question really is 'why not?'. Access to H-1Bs could foster early growth in startups and, in the long-term, increase employment.

Because people is early-stage companies are compensated with equity more than salary, and bet that their equity value will go up dramatically.

Plus a lot of startups have foreign founders and these people need visas. So-called entrepreneur visas an not suited for companies that take investment.

Why not make people bid for the permits themselves? This would select the applicants who are most differentiated compared with their American competitors.

It still wouldn't fix downward pressure on American wages, and it also increases the negotiating leverage of employers vs. their H1B employees.

If employers bid for the permits themselves, there'd be a large fixed-cost component to employing an H1B, but then no incentive (indeed, an extra disincentive, since the company had to shell out to get them to the U.S.) to pay them well afterwards. And since H1Bs are sponsored by their employer, they have limited job mobility and can't just go work for a competitor, particularly since the competitor would then have to shell out even more money to win the auction for the visa. That'll put downward pressure on immigrant salaries, which in turn will put downward pressure on American salaries for workers who do the same job, as employers could substitute a one-time fixed cost to "lock in" an H1B rather than paying prevailing market wages.

It would reduce downward pressure on wages, because the permit cost would be bid up until there was an equilibrium (based on the present cost of all potential wage savings on the future). This would serve two purposes; first, there would be more transparency, and the number of visas available could be adjusted to find the 'right balance', and second, employers would be most willing to pay a high premium for talents unavailable in the domestic market.

To be clear, I think all these restrictions are terrible, and am an open borders advocate, but find the design of these programs very interesting (and near impossible).

I personally like idea of bidding for the visa, as a foreigner I would even go as far as paying to increase the bid to acquire the visa.

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