If I have some work that is profitable at a cost of labour of $100k/year and no American wants to work for less than $120k then I can either hire an H1B for $100k or abandon the project. It doesn't benefit anyone to have the latter outcome occur.
Mercedes and the economy are missing out because of the commerce not being transacted right?
The idea that work that's profitable at $100k and not at $120k -- that means that the work isn't profitable if the market cost is $120.
Everything is profitable if the cost of inputs is less than the sales price. It's an absurd argument.
Essentially, your statement singlehandedly destroys minimum wage arguments. "If I could pay less, then I could be profitable, otherwise I am not profitable and thus won't hire anyone."
But you are also admitting that the purpose of H1 isn't to fill shortages -- it's to fill shortages of people willing to work at a rate below what the market dictates. It's like the illegal immigrant advocates that claim that Americans don't want to pick fruit -- at $5 per hour, probably not. But at $15 per hour, suddenly there isn't a shortage.
Except in rare cases, H1s are not used to fill actual shortages but to lower costs. A junior level Tata engineer isn't filling a shortage of skills, they're filling a shortage of engineers willing to work for $50k per year.
Yes, it does. Minimum wage laws are not good economics. We would be better served scrapping them and instituting a basic income to ensure a quality-of-life floor instead.
Yes. That statement shows exactly why minimum wage is economically unsound in the long-term. e.g. why else would McDonald's feel the need to automate their cashiers?
It sucks, but that's the way it works.
Also, this applies to the skills of the employee. If your skills aren't good enough that people would pay top dollar for them, then you should find something else to do.
it sucks, but that's the way it works.
There’re places outside US where you can find top-notch people for less than $100k.
Companies can cut costs by dumping waste in a river and burning garbage, too, but we don't let companies do that any more. If a company wants to operate in a country then they need to obey the laws of that country.
But in this case it doesn't suck for the rich management and shareholders (they'll manage just fine without doing the project at all) it mostly just sucks for the taxpayers who get less tax revenue, the community that has one fewer consumer, and the foreigner who has to stay put in his country working at something even less productive making $25k.
I assume the purpose is to select only those who are going to be employed securely enough at a high enough salary that they're extremely unlikely to ever go on welfare or otherwise be a net burden on the US.
For a thought experiment: imagine if the price of a haircut was fixed by law at $500 (or that 99% of barbers suddenly died and the price naturally surged to $500). Enough people would start cutting their own hair at home that the entire haircut GDP and employment of the nation would go down. Even though the lucky few who still have jobs have excellent wages and there is still a steady supply of haircuts to rich people willing to pay $500 a pop.