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Comment by cashmonkey85 | Hacker News Reader

Crazy that an increase of supply depresses the price in a market. I have not been this outraged since I discovered water was wet. Competition makes our world prosperous. We should welcome it

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Not in this case and this is not very hard to understand. The H1bs who come to US are exploited by companies and are paid less than market salary. The reason most companies give is because they have to bring the person from overseas they have made significant investment in time & money and therefore pay them less.

There's the baby, which is highly talented people educated at elite universities overseas. Then there is the dirty bathwater, which is seat warmers hired at the lowest possible wages by "body shops" that bill them out to government and corporate customers. The first does create prosperity. The second, not so much.

There are several possible fixes: Auction visas with a high minimum. Disallow contracting-out workers on visas. Etc. It's a system that would be easy to fix at zero cost, and maybe even could be made into a source of revenue.

Or would could enforce the law. The H1-B Visa program was intended to fill jobs for which there were no Americans with those skills desired.

There should be some sort of approval process from an institution or firm that does not have a conflict of interest with the firms applying for H1-B Visas.

The problem is that the law as written, while it sounds like it should not allow body shops to hire phalanxes of seat warmers, has been lawyered-around (and by that I mean there are lawyers specializing in fitting your favored candidate to an H1-B visa): Post a job description that's impossible to fill, and then arbitrarily accept that the H1-B applicant meets the job criteria. Short of litigating every case, how do you stop that?

> Competition makes our world prosperous.

Competition only increases efficiency if the price of a good is currently inflated.

Labor is likely under-priced as a good relative to other expenditures, like property and the means to production, so an increase in competition for jobs does not necessarily equate to a more highly functioning society.

You're ignoring the creation of new goods via reinvestment of profits.

In any case, for a given good if there is any profit at all being made (which...well, there should be otherwise the producers wouldn't exist) then the price of the good is (I will borrow your language) "inflated" and has room for competition to be brought down.

There's a lot of stuff wrong with your claims, I don't know where to begin...

Profits aren't automatically inflated margins. There are healthy margins, and there are inflated margins. There are even margins that are so thin that it's unhealthy, as in the airline industry.

Now, to loop back around to your point about investment; either party having additional capital will allow that party to further invest.

That is true in the case of formalized businesses, like the ones your thinking about, who can further invest in capital goods.

However, it's also true of more informal businesses that you're ignoring, specifically, the employed individuals themselves.

Employees are in the business of services -- they perform some labor, be it mental or physical, and are paid for that labor. Formalized businesses are their customer.

Profits that those employees obtain are also capital which can be invested -- whether that investment is in their health, their happiness, their residences, their educations, buying tools, the stock market, creating new businesses, affording time to raise and educate their children, and so on.

Theories of economics which ignore that the employed are also themselves informal businesses are disjointed, and fail to explain the totality of economic growth and investment.

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