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Comment by adrenalinelol | Hacker News Reader

The purpose of H1B Visas is to supply talent that CANNOT be found domestically. They are not designed to suppress the wages of locals at the benefit to the owners of capital. This is no different than a company whining about a tax-loop hole being closed and throwing around rhetoric like: "it'll come at the cost jobs and innovation!" The IT workers cited from the article in question are not uniquely skilled over their american counter-parts, they are simply being used by corporations to lower wages.

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As a European who regularly hires people from outside the EU (including Americans), it always seemed to me that the American H1B Visas were deliberately designed to suppress wages.

Any other skilled migrant visa system I know of has a very explicit and fairly high wage minimum to prevent such abuse.

As a result, the stereotypical underpaid Indian engineer is a rarity in Europe. Indian engineers that do end up here are usually amongst the higher skilled and better paid workers.

Hell, it's even common for skilled migrants from outside the EU to get a higher starting salary than their local counterparts (especially those from poorer EU countries) just to meet the wage threshold.

And what country is this? Because I've been approached by European (German and Dutch) companies and the compensation was way below my expectations. If I'm not mistaken the minimum required in those countries to get a visa is only about €45k/€50k a year.

Which is the median salary in those regions. While an argument can be made it should at least be in the 75% or something, this definitely doesn't disprove the original statement that at least it won't suppress wages (to something like Indian or eastern European levels).

Edit: I guess I might misunderstand the word suppress actually. If it means keep wages constant then I guess expanding the worker pool at the median salary level would probably do that, and the effect of not having any restriction would depress them!?

I don't know what you call abuse but I see the this sort of thing here in Germany. In one of the teams I have dealings with, there are two non-EU developers who get unusually low wages (I don't know the exactly what). They both put up with it because the german residency permit is valuable to them.

There might well be a salary limit, but it's obviously not very high, at least not by the standards of engineers. These guys are getting decent salaries by the standards of oridnary working Germans. I suspect it is a similar story for H1B in Aemrica.

Any other skilled migrant visa system I know of has a very explicit and fairly high wage minimum to prevent such abuse.

The US State Department (who initially adjudicates the visa requests) works with the US Department of Labor to determine a range of compensation that is "standard" for a given job description. Unfortunately, that range is national, with the result that you see a lot of people hired in the Bay Area at wages that would be generous in West Garbut, AR.

You are saying that the additional price for local talent has to be infinite? Because otherwise I don't totally understand this position. You could almost always find local talent, at prohibitively high costs. Pay enough and people will retrain, too. This sort of thing is dynamic, and what doesn't exist at one price point does at another.

Of course, I also don't think forcing higher costs on everyone in the name of favoring certain groups of people over others is a particularly laudable goal.

This is called supply and demand. The most flagrant abusers of the H1-B system use it to artificially increase supply of workers to depress costs. If the costs rise to the point where retraining is considered an appealing option I don't see how that is a problem.

I'd say the supply of workers is artificially being kept low; there's nothing "natural" about immigration restrictions.

Of course, I also don't agree with the use of "artificial" as a synonym for bad (or good).

Sure it's natural. Just about the first thing any social mammals do is figure out how to control group membership and access to shared resources.

In the abstract, sure, but the whole edifice of legislation of citizenship, visas, etc is as artificial as it gets.

That's like saying that eating is artificial because we do it at Chipotle. The mechanism is highly artificial, but the basic function is natural.

Actually, since control of one's borders is one of the core principles in the definition of sovereignty, it seems that immigration restrictions are quite natural to how we have organized our societies. Like it or not, we define our societies and nations around very simple us/them constructs and eliminating the desires of the bulk of the population to control what portion of "them" gets to become "us" is not going to change any time soon.

We can restrict H1-B visas and increase other visas or make the citizenship path shorter/easier.

> Of course, I also don't think forcing higher costs on everyone in the name of favoring certain groups of people over others is a particularly laudable goal.

Isn't that the point of sovereignty though? To favor the locals over foreigners? It's why we have governments and borders.

It's ethical too: Because the locals are your (long-term) tax base. It's better to pay locals a higher wage than to import temporary cheap labor in most situations because the gains from the cheap labor wouldn't necessarily make their way (i.e. "trickle down") back to the locality. Especially not in a global economy and especially not with virtual goods like software and IT services.

Adding to the supply will always lower prices. That is basic Economics. If the program is "designed" to do that or not doesn't matter.

> they are simply being used by corporations to lower wages

That's bit conspiratorial. I think of it more as they need more engineers to get more work done. This lowers the wages of the native engineer population, but raises them for the imported workers. The net result is a bigger population of highly productive high income earners, that is quite good for the overall American economy.

>That's bit conspiratorial.

No, believing otherwise is naive. Zuckerberg isn't lobbying for more H1Bs out of the goodness of his heart and a profound belief that labor arbitrage will make the world a better place. Labor is Silicon Valley's biggest expense, you had better bet they're trying to reduce that cost.

If we're going to allow foreign workers, they shouldn't be shackled to employers like H1B workers are.

> No, believing otherwise is naive. Zuckerberg isn't lobbying for more H1Bs out of the goodness of his heart and a profound belief that labor arbitrage will make the world a better place

That's a silly caricature of what I said.

> If we're going to allow foreign workers, they shouldn't be shackled to employers like H1B workers are.

Agreed.

The H1B workers are still less shackled than those L1s. If that makes any H1Bs feel better.

> I think of it more as they need more engineers to get more work done.

They can easily get more engineers by simply increasing salaries.

Let's say I'm a bright student deciding whether to study software engineering or plumbing. When I graduate, my salary will be driven by supply and demand. As a software engineer, I will be competing for jobs with other software engineers, many on H1B visas coming from countries where education is less expensive than in the US. So those software engineers can comfortably accept a lower salary. No such problem with plumbing, so it is rational for me to chose plumbing.

Now Zuckerberg and co can justifiably say "look, there is a shortage of software engineers, let's lift H1B cap".

In the short run, increasing salaries will only get you a greater share of the existing engineers. Importing workers solves the labor scarcity issue today.

I love how imply that foreign engineers have some sort of advantage over you because schools are cheaper where they come from, ignoring how much poorer those folks are. But actually that's nonsense - if you really wanted to pay low prices for foreign schools (out of yours/your parent's American income), you would have. Plenty of foreigners do attend Indian colleges, it's pretty straightforward to do.

It's quite popular among Africans. From what I'm told, African colleges are terrible, UK/US colleges are expensive, so India is a great middle ground.

I'm not implying anything, but speaking from first-hand experience. As a foreign engineer who got decent education outside of US for free and then came over on H1B, I did have clear advantage over my US counterparts. I had no student loans to service, so could afford to accept a lower salary and get the same disposable income.

There is no labor scarcity issue. I switched fields away from software engineering but if you pay me enough, can switch back just as easily. It's not rocket science.

Of course there is scarcity - not everyone has as many software engineers as they want. That's true even if people who left software come back.

Again, you ignore the fact that if an Americans wants a cheap foreign education, they can buy one. The difference between $0 in loans and $5000 in loans is negligible.

Scarcity only exists at a price. When the prices is higher, the scarcity goes away. If I only want to pay $10,000 for a new car, and I can't find any, then is it fair to say that I am facing a shortage of Mercedes?

You are conflating the concept of scarcity and shortage. They aren't the same thing.

Scarcity = not everyone who wants something can have it. This means that some sort of rationing mechanism must be used (e.g. price) to distribute that thing.

Shortage = the price of a good is $X but not everyone willing to pay $X will receive the good.

Shortage is a market condition, usually a symptom of a broken market. Scarcity is just a fundamental fact of counting. It is not fair to say there is a shortage of Mercedes, but it is fair to say that Mercedes are a scarce resource.

> In the short run, increasing salaries will only get you a greater share of the existing engineers.

That's how the market works. If you are Google or Facebook and you need 10000 more engineers, just pay enough to attract them. You'll get them from lower paying companies, which in turn will raise their salaries as well (but not as much), and so on. At the end of the chain, the companies which are the lowest paying and cannot hire anyone anymore will simply remove those positions. In time, more and more people will train to be software engineers, and salaries will shrink.

And in the short run valuable software engineering work doesn't get done.

I understand that your primary goal is avoiding economic competition with people vastly poorer than you, but lets not lose sight of the fact that the economy as a whole suffers when valuable work doesn't get done.

> I understand that your primary goal is avoiding economic competition with people vastly poorer than you, but lets not lose sight of the fact that the economy as a whole suffers when valuable work doesn't get done.

Actually, I am Romanian, I was in the US for 6 months on a J1 visa at a top company, and now I'm looking for a job in Europe since it's so difficult to emigrate to the US.

I just disagree with the principle that if you study philosophy, it's your fault that you can't get a job, whereas if you're a company and want to hire a software engineer for $70k and you can't find any, it's the government's fault, not your own. I would prefer to let the market do its thing.

Also, I think that if suddenly there would be only 100 visas per year allowed, companies would learn to deal with that, either by opening remote offices or being more remote-friendly.

Of course it's the government's fault - they are threatening you and your prospective employer with violence if he actually hires you. You would find a job in the US if it wasn't for (potentially) violent actions by a third party.

In contrast, no one wants to hire the philosophy major. There is no one else to blame because no third party is preventing him from behind hired.

>I understand that your primary goal is avoiding economic competition with people vastly poorer than you, but lets not lose sight of the fact that the economy as a whole suffers when valuable work doesn't get done.

You aren't wrong. But one does wonder why technical professions must be maximally subjected to "competition with people poorer than them" while lawyers, doctors, teachers and government workers seem to exempt from such competition.

> At the end of the chain, the companies which are the lowest paying and cannot hire anyone anymore will simply remove those positions.

Don't forget: they will also whine incessently about how there's a "shortage of engineers".

Or by spending money to train engineers engineers.

> The purpose of H1B Visas is to supply talent that CANNOT be found domestically. They are not designed to suppress the wages of locals...

If this is really the intention, then changing the format to an auction (based on salary) instead of a lottery would help.

The problem with auctions is that employers in areas with high cost of living would get away with bargains while everyone else would get nothing or very expensive employees. This would result in some perverse market incentives and unintended consequences. Not so dissimilar to the unintended effects that the H1B visa created in the first place.

Win win. That means states couldn't do a race to the bottom of wages to poach tech companies. Sounds good to me.

As an employee with unique skills, I have found that my pay does not depend on cost of living.

As someone that's lived (and hired people) in both low-cost and high-cost areas, the pay doesn't scale the same as the costs. There are tradeoffs for those areas that go beyond the costs. Usually people think of climate or culture but there were a couple other non-obvious ones that I ran into:

1) Companies that are doing well and growing in a low-cost area tend to suck up all of the available talent in that area, and they need to relocate or increase salaries to incentivize people to move there.

2) Low-cost areas generally have fewer jobs for highly educated and highly skilled people, so as an employee I'm taking a huge risk by moving there. If the job doesn't pan out or the company takes a dive, then I may need to move to a different area to find another job in my field.

Further, with e.g. public state university funding being gutted while large corporations receive never-ending tax breaks, one might argue that, in the larger picture, the same entities are creating the shortages that they then seek H1-B's to "solve".

Only... I believe the disconnect occurs before this point. There are U.S. candidates. Companies -- for reasons of cost, control, lack of reciprocity and commitment, ageism, etc. -- simply don't want to hire them.

I've watched very competent U.S. staff replaced by inferior foreign staff. This is often NOT a matter of "the most qualified candidate".

It should bring talent and diversity. Bringing ideas from multiple cultures and occupations, to establish connections and interchange with those. Right now many H1B are used by Indian IT companies.

Also, they are the most abused on the green card process since they have to wait years because of the huge backlog.

Edit: Seems like my argument is being misunderstood. The HB1 program should bring talent from many different countries not only India. It should bring different talent for different occupations not only IT.

The diversity argument falls flat when you replace your entire IT workforce with H1Bs from the same country (India). This holds true when companies replace entire divisions or departments with outsourced H1B labor as well.

This is the argument. Currently H1B are not bringing diversity. They should.

It's dastardly to use "diversity" as a smoke screen when you're talking about hiring someone for less money than an equivalent citizen salary.

I agree with your edit. This is my big problem with the H1B visa. But how is what you are describing different from general immigration then? The US takes in approximately 1.2 million immigrants a year, and these immigrants are (by and large) free to pursue a career path in response to their personal interests and market signals. If they like flexibility, career stability, and helping people, they might choose to become a dental hygienist (paid at the median almost as well as a software developer in San Francisco). They might go to med school, sell real estate, open a sandwich shop, or try to make a go of it as an artist. If they like coding but don't want to work in a large open office with back visibility, micromanagement through scrum, age out at 35, and spend most of their time debugging javascript to get the drop down menus on the corporate payroll site to display properly, well, then they may decide to code as a hobby and do something else, or demand a lot more money, at least.

My problem with the H1B is that it allows employers to coerce employees into these jobs, under the notion that there is a shortage. Well, maybe there's a "shortage" because these are unpleasant jobs, or because the people who are capable of doing these jobs are also capable of doing other, better paid jobs with better working conditions. As long as employers can coerce people into these jobs by controlling their right to live and work int he US, they will remain unpleasant and/or underpaid jobs, because the market mechanisms that would improve them are subverted through corporate control of the immigration system.

To me, what you're describing would be more akin to creating a random lottery and allowing in an extra 65,000 citizens, without a corporation telling them what educational path they are allowed to take, what whiteboard interview questions they are required to answer, what projects they are allowed to work on, or what city they are allowed to live in. You know, free citizens.

That, I don't really have any problem with either. But personal freedom for immigrants is the opposite of the H1B.

Hear hear. The two times my company has used it were just for that reason. In both cases, it was a clear win for both the individual and the company, because we just couldn't find a match in the US.

I am 100%, in theory, for this legislation, even though I haven't read it and fear what will be added to it or changed in it.

If you want to keep it so that locally grown talent isn't undercut in price, tax foreign labor do that the effective price of foreign labor is on par with domestic labor.

So if the median salary for skill X in locale Y is 150 and foreign labor is willing to accept 120, apply a 30 tax to the company to neutralize any difference, someone accepting 100 the company pays the 50 difference, etc.

I wonder about a variation of this for companies that would reduce the taxable revenue of companies by the amount spent on salary + benefits of citizens, but not by H1B.

> So if the median salary for skill X in locale Y is 150 and foreign labor is willing to accept 120, apply a 30 tax to neutralize any difference.

I wish that every single individual who on this site rants against H1B, understood one thing about H1B (or any law in general):

The intent of a policy isn't always the real usage of a policy.

Or in more general, the art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

I can clearly see how you approach this problem. You see these economics and incentive problems as some sort of equation, where you notice that foreign labor undercuts local labor in terms of wages. So your solution is: "Lets make it expensive for companies to hire foreign labor", but that's incredibly naive.

The elements of the equation you're missing is:

* H1B is a path to immigration, not just some mechanism (as stated by the policy) to acquire labor. The stated reason is how it might have been sold to the American people, but at the end of the day, it's how high skilled immigrants come to America.

* The foreign labor is much larger, and (economically) diverse than you think. If you put a 30 tax on a foreign labor who is willing to accept 120, then some other foreign labor who is willing to take 110 would find himself in demand.

* H1B regulations make it difficult for the foreign labor to easily change jobs, this results in them being more 'loyal' (that is, they work for a company for longer than their local counterparts), which means it's worth investing the training time on foreign labor (which means they would hire a 100K foreign labor for a job which needs a 150K local talent, pay 30K and train him).

* The reason why local talent can't be paid what they are asking for, is because not every product has the same 'gross profit margin'. People are willing to pay $600 for a smartphone which can be produced for $300(gross profit margin 100%), but they are not willing to pay $300 for a smart watch which is being produced for $150. However smartwatches could be sold if they were available for $250(that is if they carried a gross profit margin of 60%). Lower profit margin means that the local talent who demands $150K may not be available for hire.

> H1B regulations make it difficult for the foreign labor to easily change jobs, this results in them being more 'loyal' (that is, they work for a company for longer than their local counterparts), which means it's worth investing the training time on foreign labor (which means they would hire a 100K foreign labor for a job which needs a 150K local talent, pay 30K and train him).

I think this claim is BS. I've worked in enterprises large and small for about 18 years and I've never seen any company invest in training H1Bs, specifically. If a company offers training (which most don't these days) it is offered to all employees. Not just H1Bs.

Also, why invest in training H1Bs when by definition they're "temporary"? Most H1Bs are employed by the likes of consultancies (e.g. Tata, Wipro) and are brought into companies for terms of six months to two years (sometimes three) and I'm sure the majority of the contracts are at the shorter end of the scale (six months to a year). It doesn't make sense to spend three to six months training someone only to kick them out the door six months later.

Training is an investment. Why would you spend money on that if you didn't expect that investment to stick around for very long? It explains a lot of what's going on in IT these days where employees are treated as expendable and interchangeable.

> I think this claim is BS. I've worked in enterprises large and small for about 18 years and I've never seen any company invest in training H1Bs, specifically. If a company offers training (which most don't these days) it is offered to all employees. Not just H1Bs. <

There have been many incidences where American employees had to train their H1B replacements. [1]

There are many other ways this 'training' is implemented, When I say training, I mean the task of converting a less skilled employee into a higher skilled employee. One way of doing it is, a third party sponsors H1B, does the whole headache of hiring a foreign worker, and then they send those people to client location. The third party often exaggerates the experience of their employee, and most of the time there is a quick and fast training program in place (this training program is a proper training program).

Many times these H1Bs are blatently lying about what they know or for how long they know, and most clients have a rough idea of how this works, they also know that these noobies are really under pressure to learn according to what they're claiming and that they are cheap.

Consider it to be this way, imagine if you have a bunch of friends who currently work as a waiter, bus boy, chef, and dishwashers. You get them to join your company, you make them go through code academy style bootcamp, train them into knowing every crazy thing about Jenkins CI tool, and then send them to clients by claiming that you have a guy who is a Jenkins expert.

Great business plan right? Maybe not, but this is exactly what Indian IT companies do, except the people they pick all have engineering degrees and decent Mathematical training in high school (otherwise they'd have never gone to Engineering school).

> Most H1Bs are employed by the likes of consultancies (e.g. Tata, Wipro) and are brought into companies for terms of six months to two years (sometimes three) <

The main job of Tata and Wipro is to train these people to be good enough so that they can work at a client location. If an employee fails, then they just send him to more training.

1. https://www.conservativereview.com/commentary/2016/02/disney...

The company would always pay 150, regardless of what the foreign worker accepts. The company is taxed on the difference. So for someone accepting 90, the company pays 60, for someone accepting 140, the company pays 10, for someone demanding 160, the company pays 10, etc.

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