Comment by tiziniano | Hacker News Reader

Comment by tiziniano | Hacker News Reader

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I mean it is economics 101 that H1B's depress wages. I'd say especially since the demand for technology is relatively more inelastic that the increases on labor supply. There is a lot of money involved in masking this fact, but let's agree on something. There is always a tension between what part of economic surplus workers get and what part capital (shareholders) get. The sky high returns on capital in tech are possible in no big part due to the relative ease of bringing in new people. Successful companies will still make money but the actual return on the invesment will depend more on how high of a salary they have to pay. Take for instance FB, they make about 18Bn in net income, have 52K employees. About 350K per employee, imagine suddenly they were facing hiring engineers, they could easily spend a lot more on keeping them, but there's no need. Thanks to their lobbying through FWD.us among others, they can always import more people.

I mean they have desperately tried to get more people into CS, but even that has had little results. Biggest bang for the buck is lobbying and marketing for more H1Bs. What's a couple hundred million here and there

It's not actually obvious in "Economics 101" that wages are depressed by the best and the brightest coming to the US.

What you're not taking into account is the relative efficiencies of scale. When there's more talent in a particular geography than somewhere else, high value global companies can grow in a way they can't elsewhere. A precondition of that is lots of raw material - people - who can be repurposed by the highest bidder. Limit the raw material, and the industry might not even be located on the West Coast.

If supply was enough to depress wages, the US would have the world's lowest cost developers. In fact, it has the most expensive, because of the valuable companies that are able to grow in SV, which each bid up wages.

Economics teaches us about winner effects. The best attract outsize rewards, far larger than their proportional increment in ability or effort. SV attracts the best of the best because it's the best place for such people to be rewarded. It's a virtuous circle in multiple, compounding dimensions.

People are a fixed cost in the economics of software development. That means scale is king; it's the divisor on those costs. Scale isn't just on the sales side, though; it's on the talent side too.

Reducing skilled immigration is the kind of shortsighted approach that kills the golden goose in the long term.

Exactly, even though the economies of scale were making the economic value of the company much higher, this extra will just keep disproportionately going to the shareholders. In fact, the bigger the companies, the more power they hold in wage negotiations. Think about an efficient market with many, many buyers and sellers. What kind of equilibrium does it reach? Now think of a few big companies, hiring from an ever increasing supply. The companies grow bigger, but the wage that laborers receive, will decrease. At some point it becomes this question, why should American workers give up an ever bigger part of their wage to shareholders and other immigrants?

In spite of their best efforts, most of the software development still occurs in the US. Think Microsoft hasn't tried to offshore as much as possible to India and China, building dev centers there? Or Google and FB?

Even then, just look at what kind of workers end up being imported through this programs. Not always the best and brightest. Many do entry level jobs not even in software development, for outsourcing companies.

I'm not saying outright ban immigration but better control is needed. (And saying this as a non-American living in the US). Something that struck me as particularly interesting and President Trump recently commented, is how about making companies bid for a fixed number of visa slots. Whoever pays the highest salary, gets the visa. This would certainly make companies be able to bring the brightest, while raising wages in general.

It's not actually obvious in "Economics 101" that wages are depressed by the best and the brightest coming to the US.

These "best and brightest" are unencumbered by student loans and voluntarily put themselves in a very bad position at the negotiating table for the salary. If that doesn't depress wages it's hard to say what would.

I can introduce you to someone who sells Eiffel towers and used bridges. You can trust him. He is my cousin.

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