Wow, that's a really important point. I'm so in the tech-news bubble that I'd never heard anybody say that before - thanks for pointing that out!
The point of H-1B is when salary is not the problem.
PS: Remember, someone on an H-1B can leave your employment. Paying market rates is supposed to keep that from happening, thus the intent is to remove a shortage not lower pay.
IMO, that's the crux of the issue. Yes, the clearing price for some jobs mean people are expensive; making some business nonviable. But, that does not inherently mean there is a shortage.
The CEO of the theoretical company is always welcome to put in an extra 30 hours a week and reap the extra economic value.
We live in a capitalist society where price is how you communicate demand. Now, if you are willing to pay X times median wage in the US and still can't find people then perhaps there is an argument. But, saying you can't find people when you are not willing to go that far suggests you are not willing to pay market wages.
PS: And yes I chose an undefined X, because there is no clear point when that happens. However, a reasonable lower bound for that X is probably ~3-5.
And then what? Yes, an Alabama community collage can't pay for a language teacher, that's a fairly normal problem for community collages. It does not suggest there is somehow a market failure.
PS: I think you miss understood my upper bound. I doubt people want an immigration policy based on filling any jobs that pays more than ~30k/year.
I don't see what "market failure" has to do with the H1B at all. Just because the market worked correctly doesn't imply that the outcome was desirable.
Some distant collage may chose to pay for such a teacher and then gain students from the community collage who want that instruction. So, in that context your community collage bringing in the H-1B may end up costing an American a job. It could also depress wages for teaching that language discouraging other students from learning it thus extending the shortage over time. Alternatively, the demand may simply not be there for the language at which point the collage is better off paying for a different type of instruction that more students want.
In the end your H-1B is clearly a boon for that collage. However, if may end up hurting the country overall.
The H-1B system short circuits that mechanism. The salary doesn't rise, and young people are savvy enough to realize once an industry starts using foreign workers it never will.
Voila! Permanent shortage of Americans willing to do that job.
It might be a better outcome for native translators who see higher demand increase their salaries. The market has to be fair for all participants. Salary will never increase with demand, if increases in demand are always undermined by bringing in H1B workers.
Uh, or you know, you can't afford it?
The supply of gold is huge if I am willing to pay above market rates. If I want a conductive metal I am going to chose something other than gold in the vast majority of cases because of price. In the case of gold the price is based on both demand and resource extraction costs.
Moving to the workforce, students pick jobs in part because of what they will pay. Over time this feedback loop combines with demand and other factors to set a clearing price for the industry. If a job pays less than 100k that's a very big sign that people are choosing to do something else because of pay not the jobs inherent difficulties.
Now what happens if you try and subsidize an industry with H1B's. Let's say you add 50% as many H1B as people working in the field for a huge effect. Well in the short term wages fall and people either find something else, but more importantly students study something else. Fast forward 20 years, the market price is a little lower but not by that much even though lots of H1B's are now doing that job' you still need to entice a lot of US workers. Meanwhile close to 1:1 with those H1B's, US students have moved into other fields.
Thus, unless you are going to have most people in an industry be H1B's trying to help out an industry shortfall with some H1B quota is not that useful and simply subsidizes an industry for minimal benefit.
PS: Even defining things based on job is tricky. I need a Doctor what's the price for that, type: surgeon, type of surgeon: cosmetic. Now a hospital that can fill out generalist one level up can get a discount. Even industry gets tricky as a school may need a doctor for example.
If, on the other hand there is no difference, then the visa is justified.
You can't explain things based on an entire economy without taking into account the entire economy, and all it's parts and interactions; much like, say, blood-sugar levels in the body involve multiple organs.
If you focus on one area of the economy, you must avoid those 'non-local' attributes, unless you are willing to do this. If you analyse the attributes of any local economic part enough, you will eventually hit upon a non-local attribute; Hence, any analysis eventually hits this roadblock.
Back to context, the specific effect of H1B visas, on national salary is complicated, because salary not only is non-local, but involves the silent interactions of supply vs demand across and outside the nation. You'll hit all sorts of GM-like fallacies if your analysis is too shallow.
This is why it is necessary to take it, almost as 'faith', in the mechanics of the market; A true analysis of market principles is a complex process indeed, most people can only take them on faith at some level. Even mathematicians accept some (personally) unchecked axioms.
[1] https://en.wikipedia.org/wiki/Parable_of_the_broken_window
Median personal income in the US is $30k, so I don't think it's fair to assume every job is like tech and has market rates in anywhere near the same place.
The entire point of capitalism is not everyone get's what they want and price how that is decided.
But you don't appear to have data to back up that particular number for all jobs with no specialization whatsoever, and as far as I can tell the administration doesn't either.
That's the point of around a six figure wage floor. It prevents people from understating the requirements then bringing in a H-1B. I could just Advertise for a secretarial job, then only accept people that happen to speak Farsi.
Why would the optimum H1B wage floor for every industry that suffers from a lack of local talent just happen to be the one that makes sense for tech? And why would it make sense for it to be the same everywhere when wages and living expenses vary so much with location? You're proposing actively ignoring the market wage, not taking it into account.
The H-1B program is a tiny fraction of the overall workforce and if you want it to stick around you need to justify it. Saying industry X needs workers for wage Y, falls on deaf ears. No, it really does not because for the most part it get's by without them as there is just not a lot of H1B workers in any industry.
Having said that, at the societal level we can talk about gaps that a H-1B program can fill in the short term. If there is a sudden demand for people in machine learning then giving the US access to a wider talent pool has value. But, at the social level each industry needs to compete with every other industry or your talking about soviet style planned economies which don't work.
How do you separate companies wanting cheaper workers from gaps society is better off fulfilling? Well wage is by far the strongest indicator. If the oil drilling industry goes though a boom and can pay 200k for people working oil jacks for a few years then they should get most of the H1B pool as they may need it more than every other industry combined.
However, as the demand is met internally wages will fall then some other industry may have a larger demand.
Now the US is a horribly corrupt society with groups with a lot of power use it to get more power. Thus, the actual H1B program looks very different from what I described. But, again I am only saying there is a justification for an H1B program with a very strong salary floor not anything like our current system.
PS: Anyway, understating the requirements and advertising a job that's below market rates is one the main problems with the H1B system that's most often gamed. I have seen more than one advertisement for a junior job title with 5 years of experience and a masters degree. Lying on a form is easy, lying with money is harder.
You can even get an Indian worker in Mexico and import the results free of charge. But, limiting immigration is one of the fundamental functions of government, and it's not going away any time soon.
PS: I also somehow doubt you would be OK with al qaeda corp setting up shop an then importing large number of people.
You can even get an Indian worker in Mexico
You mean protected capitalism - protected by artificial minimum wages put in place by government?
The first cultural, linguistic, or otherwise geographically-constrained job in the list is #84, "Foreign Language And Literature Teachers." "Interpreters and Translators" is down at #131, with a grand total of 268 applicants - practically a rounding error after 300,000 tech applicants. Whatever_dude's example seems so appropriate, that it's shocking to see it so far down the list.
Where does that page say anything about large companies?
Not every company operates like that. I know it's hard to believe, or even comprehend, in the tech world.
The problem with a hard salary floor is that it doesn't account for differences in cost of living at all. It would very quickly become the visa of coastal cities and little else.
If the aim of the H1B program was to bring in the highest possible paid workers, you'd be correct. But it isn't. These programs are designed in such a way that all states can benefit from them, and a variety of professions.
"The H-1B program applies to employers seeking to hire nonimmigrant aliens as workers in specialty occupations or as fashion models of distinguished merit and ability. A specialty occupation is one that requires the application of a body of highly specialized knowledge and the attainment of at least a bachelor’s degree or its equivalent. The intent of the H-1B provisions is to help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce by authorizing the temporary employment of qualified individuals who are not otherwise authorized to work in the United States."
https://www.dol.gov/whd/immigration/h1b.htm
You will note that the word "salary" does not appear in that description.
Unless fashion model is a legal euphemism for someone at the top tier of new tech or skills? edit: Like, some sexy new JavaScript framework or some ancient functional language.
I think they're referring to real fashion models, though, amazingly.
It is to make it possible for foreigners to provide work to US organizations when no local person is available.
I have hired many many people on H1s. It was always a hire of last resort: when we could not find someone local. It always cost us a lot more than a local person: in both legal fees and procedural fees (you need to verify that the salary you are paying is not lower than the prevailing wage, which is totally fair) not to mention that it takes a while to get the person so while you're messing about you have nobody to fill the job. Some people are unusually distinguished (perhaps expert in a particular machine or language) but lack the appropriate degree, and they are even harder to bring in.
I have a hard time complaining about that (and I'm an immigrant myself). I think it's totally fair that the system should be biased towards locals. But the system does need an escape mechanism when nobody local can do the work.
There are problems. The big outsourcing companies (not just Indian ones but IBM) flood the lottery early. Also somehow they apparently/allegedly pay below market rate, which I don't understand. As usual it's the startups that get screwed.
Note this H-1 is to bring someone here. If I could outsource I would (to Alabama or Amadebad, it would be all the same to me). When we can get away with a distributed team we hire people where they already are.
I submit that there is no work in the US that can't be done by a US citizen. The problem isn't "finding someone" the problem is "finding someone at the below-market-rate wage we want to pay"
In another thread to this article I gave an example of a teacher for a German school -- native speaker, experienced in teaching the German state curriculum. A few such people have moved here and indeed we hired them, but mostly they had to come in on H-1.
There are certainly medical specialties for which there is a shortage of available doctors or nurses, in particular outside the cities.
And you really believe that there is a US citizen expert in every possible discipline in every possible location?
> The problem isn't "finding someone" the problem is "finding someone at the below-market-rate wage we want to pay"
In the very comment to which you were replying I just said we pay more for H-1 workers, in both time and money (and salary -- the labor conditions verification makes sure that's the case. Why do you assume they come in at below market wages? Have you ever hired one? In my experience it's impossible to do, at least for a startup.
discipline, yes, but location is the same as wage - people can move if offered enough incentive.
I don't have a problem with hiring foreigners as long as they pay a fair sum to the taxpayers for thier diminishment of citizen's welfare. This is because immigrant is a potential drain on the welfare state and also uses resources that otherwise would be enjoyed by citizens.
Also I do believe most h1bs are paid below market rate because they are hired by large IT contractors like Infosys. They have the people and presence in India to make hiring in H1b cheap- they contract to US firms and pocket the difference.
For small business in the US I would agree that h1b is expensive.
For example, Disney of Florida replaced 250 American IT workers in US using immigrants with H1-B Visas. They in theory could have saved more money by sending that operation overseas but they chose not too.
Computer operations today are way too mission critical to most organizations to risk problems by moving tech overseas at least in operational settings.
I think that's the problem here - those on H1-B visas aren't immigrants.
It is a dual intent visa and most outsourcing firms keep it strictly in the non-immigrant category.
Until they get a DoL clearance & get into an I-140 approval process, they're "temporary workers" who can be dispensed with any day.
Perhaps that's Trump's plan.