Hacker News Reader

Comment by shas3 | Hacker News Reader

I'm not sure about the bidding war. I've been in situations where companies are looking for people with specific skills (e.g. working with specific microbiology techniques) but would never be able to outbid what Facebook or someone in Bay Area would pay for generalist skills in another field. There is nowhere close to 100% elasticity in wages to make an auction system fair.

Also, this would handicap companies in low-cost-of-living regions of the US. This includes a massive chunk of the economy in solid economies with low costs of living like Michigan, Minnesota, Ohio, Texas, Arizona, North Carolina, and Georgia.

View on HN

I'm not sure that I'm sympathetic to employers who want to pay less. Keep in mind, the US takes in well over a million immigrants a year, and has a huge internal workforce. The H1B was created to help employers find critical and highly skilled workers that are in desperately short supply in the US.

"Oh, but we can't afford to pay them a lot of money, that's not fair!" isn't the sort of argument that tends to evoke much sympathy. We're talking about empowering corporations to bestow US live and work rights on an employee of their choosing, in an end-run around normal immigration procedures.

Honestly, if the salary isn't really high, I'm skeptical about whether this visa is being used properly.

"if the salary isn't really high..."

How high? Why is 100k a magic number? 100k isn't even a big deal in SF or NYC. While a high skilled scientist working in say, Corning, NY at Corning Corp or Niskayuna, NY at GE's research labs, 100k enables a king's life. How would you adjust for experience? Perhaps a company sees immense potential and cultural fit in an employee and wants to groom them for future roles? The wages of a 30-year industry veteran would kick the promising young star out of the H1B pool, etc. etc.

Setting a wage threshold without considering other factors is unfairly simplistic.

Besides, companies pay wages based on industry and market averages. You can't suddenly expect them to peg wages to outbid competitors on H1B. Why would Procter and Gamble or Dow or Caterpillar pay university, Facebook, McKinsey, or hedge fund wages? Why should they?

You shouldn't adjust for cost of living; remember, the causality flows the other way. SV and the coasts have a higher cost of living because they've found a more value-generating use of the labor that allows workers to bid up prices. [1] If the system favors them, that seems like it's working properly.

Caterpillar shouldn't pay hedge fund wages; they should pay high-for-the-area wages to draw Americans out there rather than use up competitive slots reserved for the most economically valued immigrants.

[1] Of course, there are land use restrictions etc.

> How high? Why is 100k a magic number? 100k isn't even a big deal in SF or NYC. While a high skilled scientist working in say, Corning, NY at Corning Corp or Niskayuna, NY at GE's research labs, 100k enables a king's life.

Highly skilled workers do not receive cost of living adjustments. I've been recruited for jobs in low cost of living and high cost of living areas. The pay is the same in both when there is a true shortage of labor.

This is why the auction system is great. If Company A wants to pay Engineer X $500k and Company B wants to pay Engineer Y $50k then clearly Company A has a greater need.

Outside of a small handful of areas (SV, Seattle, NY, a few others), it's very difficult to find anything in the $300K+ "total package" range. In SV all you have to do is get yourself hired by one of the top firms and then stay in the saddle while your stock vests and not suck too bad. Voila, 400K a year (much of which you will pay in taxes, but nonetheless). I challenge anyone to find a non-manager software engineering job that pays mid six figures in the Midwest.

There are lots of companies in the Midwest that will pay mid six figures for a non-manager SWE. I will concede that there are fewer such jobs in the Midwest.

I'm not convinced that jobs in the Midwest generally pay less than in California because of cost of living. It may well be that SWE openings in the Midwest are generally for less-skilled SWEs precisely because it's not worth paying California salaries for those roles.

This rings true to me because, well, there are companies in the Midwest that will pay mid six figures.

Could be. I just couldn't find any such jobs, even after 8 years at Google, which tends to improve one's chances of finding a top paying job.

Which companies pay ~500k for a non-manager SWE in the Midwest?

The only example that I know of in support of vostok's statement are a couple of HFT trading firms in Chicago. If you have the right chops, your comp _starts_ at 500K there, and then quickly goes up to about $1M/yr. But you do need elite chops, and you do have to live in Chicago, and you do have to work in an HFT firm, which is, shall we say, not for everybody.

I am not aware of trading firms that start at $500k, but this is, broadly speaking, correct. The pay is similar to the high paying tech companies, but the mean is higher as the left tail is chopped off due to somewhat higher requirements for hiring.

Obviously a mom and pop flower shop will not hire a fulltime developer and pay them $500k. They just don't need to pay that much to meet their requirements.

This is total liquid comp, not base salary. I hope I didn't mislead you.

If you're still interested, I suggest that you speak to a headhunter. It's their job to place people and I'm not interested in breaking anonymity.

> Highly skilled workers do not receive cost of living adjustments. I've been recruited for jobs in low cost of living and high cost of living areas. The pay is the same in both when there is a true shortage of labor.

Policy cannot be determined by anecdotes.

> Company A wants to pay Engineer X $500k and Company B wants to pay Engineer Y $50k then clearly Company A has a greater need.

Hardly a forgone conclusion, there are numerous confounding factors. For example company B might not have the resources/revenue to outbid company A.

Another counterexample of many for why an auction system is terrible: employee y could be a research scientist in industry contributing to the foundation of a new industry. An auction system would give their visa to a fullstack developer hired by a startup flush with funding.

> For example company B might not have the resources/revenue to outbid company A.

If Company B doesn't have the resources to outbid Company A then we've decided, as a society, that whatever Company A is doing is more important that what Company B is doing.

> Another counterexample of many for why an auction system is terrible: employee y could be a research scientist in industry contributing to the foundation of a new industry. An auction system would give their visa to a fullstack developer hired by a startup flush with funding.

That sounds like a problem with the way that we fund science and not a problem with immigration.

Also, anecdotally, there is no shortage of scientists. I know plenty of people who had to go into tech or finance because they couldn't find science jobs.

then we've decided, as a society, that whatever Company A is doing is more important that what Company B is doing.

Congratulations, you've invented oligarchy!

Many tech startups are able to bid up wages not because they're "creating value", but because they have access to the pockets of a small number of venture capitalists. Which means that if you make VC-backed high salaries a necessary part of doing business, you've handed those VCs the literal authority to regulate commerce and decide who does and doesn't get to be in the market.

And last I checked, "have a small group decide which businesses are allowed to exist" is not considered a free market.

>Many tech startups are able to bid up wages not because they're "creating value", but because they have access to the pockets of a small number of venture capitalists. Which means that if you make VC-backed high salaries a necessary part of doing business, you've handed those VCs the literal authority to regulate commerce and decide who does and doesn't get to be in the market.

Very true. That's why we need to tax the VCs very highly and break up monopolistic firms.

All of which has nothing to do with the immigration system for skilled workers on temporary visas.

> If Company B doesn't have the resources to outbid Company A then we've decided, as a society, that whatever Company A is doing is more important that what Company B is doing.

The question being - has that been decided in a fair manner?

Would it be fair for the candidate to not get the highest wage possible? I don't see how this problem is any different than trying to get non-immigrant labor. Company A is offering a significantly higher salary to a citizen than Company B, they'll probably get the candidate.

Capitalism is not about fair, it's about diminishing returns.

VC's don't have access to a significant chunk of US GDP. Sure, some things are over allocated, but Wall Street is limited to the amount of money invested by other people.

> Perhaps a company sees immense potential and cultural fit in an employee and wants to groom them for future roles?

As previously stated, the intention of H1B is for ALREADY SKILLED workers in short supply. If they want to groom someone, they should be hiring a US citizen, not going to the H1B pool to find a low-cost foreign alternative.

Eh? Nothing precludes grooming skilled workers! Also, obviously, new hires can be highly skilled. Someone already skilled may fit better in one company than another, etc. etc.

H1Bs are intended to address skilled worker shortages. They exist so companies can fill important roles now. If someone is being groomed than they lack the skills required for the position they're being groomed for. Companies should either hire an H1B with the skills already, find someone local they can train or use a different visa to hire someone they can train.

have you already seen a few job offers in tech? The range of skills needed is very often pretty daunting and having a set of skills and hence being a skilled worker does not mean you will be abble to do 100% of the job without having the grooming part. whats the point for someone to go to a job where he will learn nothing? please...

So what exactly is the mythical groomed position that you envision that both can't be filled by an American worker and requires an extremely skilled H1B visa worker?

For 65,000 people and bidding based on salary, 300k sounds about right IMO. Think brain surgeons and the worlds best security experts not just DBA's.

Security experts are not paid like surgeons or developers. I wonder what you mean with "just" DBAs.

I know some security people in the 450+k/year range, and I hear 8 figures is possible.

As to just DBA, like programmers there is a long tail salary range but, the majority make under 150k.

PS: At various times you hear things like the Teaching shortage, or the Nursing shortage. But, that just supply and demand working as intended when a job does not pay very well few people are going to do it. However, when a job does pay well and you can't find people that's a separate problem.

This is goes back to a more philosophical question. Is it fair that some get payed more than others even though they are equally skilled or maybe even contribute more to society? How do you even define being skilled?

Politicians only want to allow high skilled immigration, since low skilled immigration takes away jobs or at least constituents seem to think so.

For the purpose of a green card application you actually have to show that you tried to recruit a US person for the position, but that system is slow and easily gamed as well: You just make requirements up that only one person in the world can fulfill, the person you are trying to hire.

If you define it based on salary you exclude people who are skilled but in locations, industries or professions that don't pay well, say barbers or teachers as an extreme example. Is that fair? I don't know.

Also, the system kind of takes a simplistic view that there are X number of jobs and Y number of people who are qualified to do that job. It doesn't consider that some people are better at the job than other and that job requirements can be fluid.

> If you define it based on salary you exclude people who are skilled but in locations, industries or professions that don't pay well, say barbers or teachers as an extreme example. Is that fair? I don't know.

Shouldn't this be first class evidence that there is no shortage of barbers or teachers? If there were a shortage then you would pay them more.

The same could be said for anyone who is payed less than 100k, right?

Yes. There is no shortage of anyone who is paid under $100k.

Why shouldn't they? Salary is proportional to economic value. Shouldn't we be trying to maximize the economic value generated through the H1-B program?

Not necessarily. We should also be trying to make sure that it isn't used as a cheap replacement for citizen labor.

>How high? Why is 100k a magic number? 100k isn't even a big deal in SF or NYC.

Good point. How about high-skilled scientists get paid double that! Besides, the government has to run itself, including the immigration authorities, by taxing these salaries. Best they be high.

Why is it OK to pay a cheap wage for work done by an outsourced employee not in the U.S. for the benefit of a U.S. customer; but suddenly not OK when that person is in the U.S.? If the answer is merely, a critical plurality doesn't like that market outcome and has voted to legislate an alternative outcome, well OK. That's the system we have. But on principle, this must be admitted to be protectionism, it's the anti-thesis of a free market solution (which doesn't make it wrong, just call it for what is is). And protectionism is basically saying the local market is overpaid, that's why it needs to be protected.

That's there and this is here. For better or for worse, I and other American voters are more responsible for our country than for others. If you think this way, and I think a lot of voters do, then accepting someone into your society carries a higher bar than buying something from a society.

Because h1b visas are not immigration. The foreign workers have almost no leverage and have to leave the country if they were fired and unemployed for a few weeks. Even if they start with market rate salaries over time they will earn less on average than an american citizen because they can't just leave their current employer and switch to a better paying job.

Outsourcing results in rapid salary increases in foreign economies, but low wage workers depress US salaries. So they are not apples to apples comparisons.

US workers be they foreign or domestic benefit from US infrastructure like relativly low corruption, clean water etc. Companies want to benefit from that without paying the associated costs.

It's protectionism to be sure, the enemy of progress.

Economic liberalism got too far ahead, and failed to distribute the wealth back to society as was promised.

Finally stung, the people turned their back on economic liberalism (for now), and will continue to until they can say "Yay, we destroyed those jobs, now no one needs to do them!".

If you want to go down the route of protectionist laws you need look to further than the copyright and patent systems. Isn't that anti-free market in the same way accept more to the detriment of consumers as opposed to firms? It seems we live in a nation that has rules that govern our markets and everyone is fine with that, until you wish to use that very same system to protect workers in some way.

Its stupid to begin with, if you can't fill a skill, train somebody, the federal government does this for gigs that require security clearance. You never need to go outside the country for talent. The h1b program enables age discrimination, once you hit 40 you are pushed out for young immigrant labor, the position was occupied but they want to save money so out you go to poverty just when the IRS was counting on you hitting your peak earning power. Now people peak out at 28 in earning power with the extreme levels of age discrimination we see today.

> You never need to go outside the country for talent.

I'm a natural-born citizen with plenty of friends who were unlucky to be born elsewhere. I want to work with them.

Can't the government accommodate my simple desire to work with my friends locally?

You know, as an American citizen you are more likely able to get a work visa to go and work close to your friends.

There are plenty of citizens who desire to have work. Can't the government accommodate their simple desire to be able to support their families?

How long will it take to "train somebody" if you need to translate technical documentation from English to Japanese?

Some of foreign countries have free education. Why not hire their best graduates? They don't have to pay back student loans and can therefore comfortably accept lower salaries than their US counterparts.

"You never need to go outside the country for talent" The simple fact that you are selling on a global market means that YOU DO need outside talents...

Agreed.

Isn't the high salary the corporation would have to pay a local worker just a sign of supply and demand in action?

Why do we now want to interfere with the high-demand worker's ability to negotiate a really freaking high salary? Isn't that exactly the thing we want, for people to be able to charge a lot for their rare and unique skills?

I'm not afraid of regulating business, but this just seems laser-focused to screw the American worker, no matter how you cut it. At the end of the day, if a business can't afford to pay the going local rate, then they don't have a viable business model.

FYI, something like 85% of those million immigrants are non-employment based (~65% family based, ~20% refugees). But I generally agree, body shops spoil the system for everyone. I don't agree with require higher salaries than what the company pays similarly ranked employees tho as that is unfair to employees already there + creates resentment within the workforce.

I think exceptions for small businesses of 3-10 employees would be a cool idea, but otherwise I completely agree. We need more small businesses. Wasn't Apple, Facebook, MSFT, Goog, AWS .. didn't they all start as small businesses?

> We're talking about empowering corporations to bestow US live and work rights on an employee of their choosing, in an end-run around normal immigration procedures.

What is wrong with that ? Honestly I dont see why getting Indian and Chinese workers as cheap labor is bad either.

Whatever regulations drove out manufacturing sector from USA mgiht drive out tech from USA too.

The entire justification for the H-1B visa system is so that we can bring in highly skilled labor to fill positions that cannot be filled with citizen talent for a reasonable price. If you're hiring H-1Bs at below market, your failure to fill the position is as likely due to your underpaying as it is an actual labor shortage. You cannot reasonably justify the need for H-1Bs if you're underpaying.

Further, if you use H-1Bs to fill positions that you could have filled with local talent, then you're taking that visa away from another company that might legitimately need it. Making H-1Bs dependent on bidding or pay seems a plausible way to ensure that they are going to companies with real need and not just companies that are trying to undercut the labor market.

Manufacturing didn't really leave the US, the jobs are just done by robots.

H1-B workers are generally mostly used as programmers and brought in by large tech companies to use instead of native labor. I'm not really sure what manufacturing has got to do with this unless programming was made obsolete by robots already.

Another option would be to put in place a system where companies could be have their H1-B applications automatically approved if they maintain a certain ratio of citizens/green card holders to H1-Bs within the desired salary band and classification. Say, for example, you want to hire an H1-B engineer at $160k/yr and the required ratio is 4:1. If your engineering workforce within the $150k-$175k salary band is already greater than 4-1 non-H1-B, you should be allowed to hire an H1-B. But companies that try to abuse H1-Bs, either by hiring too large a percentage of their workforce or by underpaying them would have to use the lottery system, provided there are any H1-B slots left.

Such a system seems like it works for the large Facebooks and Googles of the world as well as smaller startups and companies in areas of the country with lower CoL. It also works for citizens, green card holders and H1-Bs, since it encourages employment of non-H1-B employees and similar wages for all types of employees. It would only penalize the body shops, those that underpay H1-Bs and those companies that rely on too large a percentage of H1-Bs for their workforce. The only thing you'd have to do is ensure that the local employees are roughly the same job function as the H1-Bs, so that companies couldn't offset underpaid H1-B engineers with similarly-paid customer support or similar gaming of the system.

I like this idea. It also helps immigrants with integration into their new society, instead of forming pockets of foreigners.

You could index wage to some cost-of-living metric set by the Department of Labor. That would control for regional differences between company. It'd also further incentivize "outsourcing" to domestic locales with cheaper costs of living. That's arguably a good thing since places with cheaper costs of living would benefit more from the workforce bump than those with high costs.

The Bay Area could truly benefit by some reduction in the H1B workforce. The influx of foreign workers contributes greatly to the housing shortage that's hurting everyone right now.

p.s.: Just in case you're wondering, I'm an immigrant and I left the bay area exactly for the reasons I'm highlighting.

Bay area's housing shortage is entirely self inflicted by its residents who refuse to allow more housing to be built. All this to maintain some arbitrary idea of character. A character that is frozen at some random point in time.

There is no good reason for most of the bay area to be strip malls apartments and 2 story apartment complexes. There are more than enough examples of cities(Barcelona, Paris) with character, history and more vertical housing.

Preaching to the choir, but reality is it won't change anytime soon. I voted with my feet and left, I miss the area but I couldn't justify anymore how much of a hassle it was living there lately.

Do you have any stats to back that claim up?

yes. In 2015 it was more than 50k people. Even if they all share rooms, it's a lot of demand on an housing stock that grows slowly.

One more datapoint: between 2013 and 2014 the net change in population in the bay area was 100k, we can assume things are more or less the same as before meaning that H1B immigration counts for ~50% of the total change. If you can find more recent numbers (took me 30 seconds to find the links I added) then we can redo the math and see if there's major problems with my statements, but I really don't see how that could be the case.

https://ww2.kqed.org/news/2015/03/26/youre-not-crazy-the-bay...

From your link:

> About 10 percent of the LCAs approved last year, or 53,500, were for jobs in Silicon Valley and San Francisco.

But, it also adds that:

> More than one employee can be attached to an LCA, and there’s no limit on how many a company can submit. As a result, the number of LCAs accepted by the Department of Labor often far exceeds the number of H-1B visas issued.

Furthermore, when a person on H-1B already living in SJ or SV change jobs, they file a new LCA. This gets counted in the 53,500 number from the article.

Thus, IMO, it is incorrect to claim that "more than 50k people" moved into Bay Area on H-1B in 2015. Please correct me if I am wrong.

I think it's adventurous to think the number would much lower. Let's say that the number is 50% lower, that brings us to 25k new individuals just from the H1B program alone.

You're also skipping over the fact that H1B people have families and tend to bring family members into the area.

Overall I'm comfortable to say the number is still probably in the right ballpark until I'm shown evidence of the contrary.

> Overall I'm comfortable to say the number is still probably in the right ballpark until I'm shown evidence of the contrary.

We have to agree to disagree on this, I guess. I find no evidence to support the claim that H-1B workers have any significant effect on the Bay Area housing situation.

I forgot to add a link:

http://projects.sfchronicle.com/2016/visas/

I don't buy that argument.

H-1B is supposed to be for hiring top notch people with valuable, specialized skills. Those people should be making a lot of money.

H-1B is not meant to bypass the regular supply and demand of the job market that usually helps adjust salaries.

Auctions are also predicated on some random, arbitrary number that has little relationship with reality. And, I'll add, is currently absolutely dwarfed by the number of people coming in on other visas; mostly family ones, IIRC.

...bummer? This is already the situation with US based talent willing to relocate (which is a fair benchmark since H1B workers are relocating no matter what).

I don't see how. If you absolutely need that skill, then you need it, cost of living based salary be damned.

What I would have done is divided out the number of slots on a state-by-state basis (proportional to population, say) and had an auction in each state.

I'm not convinced there would be a huge demand for H-1b visas if companies couldn't underpay them relative to people with green cards or citizenship. Certainly on the margins there are companies that are looking for specialized skills, but for the most part the industry likes high H-1b caps because they depress wages.

I'd also be curious how this would affect startups - I very much doubt you can factor in some equity into that equation, so you're looking at a high upfront cost no matter what.

That's why there's also L1, EB3, etc. The problem with H1B is the volume and relatively weak definition of what a "skilled employee" is.

Really glad for your comment. I was agreeing with him until you made such a concise argument for how that makes no sense.

Reply on news.ycombinator.com