We vote for these people and pay their salaries. Who exactly is it that is supposed to be looking out for us?
"Yes, there are options to combat that decline, but contrary to what many people believe, we do very poorly in opening up our borders to skilled immigrants. Our H1-B visa restrictions are a disgrace. Most high-income people in our country do not realize that their incomes are being subsidized by their protection from competition from highly skilled people who are prevented from immigrating to the United States. But we need such skills in order to staff our productive economy, so that the standard of living for Americans as a whole can grow."
https://www.theglobalist.com/globalist-interview-with-alan-g...
Google's 2nd quarter financials show a 64% operating profit. Arguably there isn't enough money from these companies going back to the people who actually did the work to generate that success. They could start paying everybody double and still be making more money than any other market sector could dream of.
Depressing the wages of software engineers doesn't mean increased standard of living for Americans, it can only mean increased profit margins for stockholders.
Why does the company have to exist in the US for us to get any benefits of increased productivity?
Immigration restrictions are economically like any other kind of import barrier. It will boost the money to be made in the sector in question, while being bad for the US economy as a whole. In the long run we are all better off from free markets, no matter who is impacted by the short-term disruption.
In a free labor market, workers are free to choose a field in response to market conditions and their own personal preferences. Job Factors may include salary, flexibility, job stability, long-term career stability, up front investments, probability of success, prestige, the opportunity to do good and work with people (or not have to work with people).
If people with the freedom of choice prefer to be a lawyer in NY city over becoming a software developer in silicon valley, that's the market's answer. If tech companies want people to make decisions differently, they need to change the incentives.
...or, they could have the government ask the market on their behalf. The H1B visa is immensely restrictive, essentially allowing employers in a few narrow segments of the economy to decide who is allowed to live and work in the US and the circumstances under which they are allowed to remain. If the would-be immigrant doesn't like it and quits and can't find a new corporate "sponsor", they have to leave and may lose their spot in a long wait for a green card.
It's nearly impossible to reconcile the H1B visa with the concept of free labor markets. It didn't lead to freer and more efficient markets, it created market distortions that decreased the desirability of software engineering and a few other fields relative to other fields.
To be clear, I'm cool with skilled and general immigration. But once you start talking about corporate "sponsors" who control a would-be immigrant's right to live and work here in a few narrow fields, you're a long, long way from anything even faintly resembling a free labor market.
As you note, it is a really sucky form of immigration. And Greenspan agrees, he said we should just let high skill individuals come in and become part of our workforce without the weird restrictions.
Instead we have a complicated system that is broken at many levels.
For an example - suppose all produce imported to the US faces 100% tarries. Then one day, congress declares a shortage of lemons and decides that there will be no import tax on lemons.
Lemon growers object, and the answer is: free trade makes everyone better off.
Well... ok. But we don't have free trade, we have a situation where almost all produce other than lemons is subject to extreme import restrictions. Under this circumstance, you'd expect overseas farmers who would like to export to the US to increase lemon production, and you'd expect US based farmers to shift production away from lemons.
I think this is very much what we created with decades of the H1B. We left most professions and trades restricted, but created special visas specifically designed to expose US citizens and permanent residents in STEM to augmented competition in the grounds that there is a "shortage". Even without the employer control over the visa, you would expect an action like this to cause more people who would like to access the US job market to study STEM, and cause people who already have that access to study something else. And I think there's strong evidence that exactly this has happened.
In the absence of these restrictions, would immigrants to the US study STEM or engineering? I'm sure many would. And while some would settle in the valley, many would work elsewhere. many would also choose to become coffee shop owners, surfboard shapers, brick layers, hod carriers, mortgage brokers, tax lawyers, itinerant musicians, nurses, dishwasher repair technicians, and so forth. In fact, the 1.2 million immigrants who enter the US legally without these restrictions every year do just that. They don't seem to think that becoming a STEM worker in a place where a small rundown ranch house by the freeway costs 1.5 million sounds any better than many people who were born with US citizenship do.
That is exactly why the tech companies don't really like freedom-based immigration. Free people can choose not to be developers in the valley. That's actually how free markets work, the whole freedom thing, and in the end, it's hard not to conclude that corporations just don't really like it very much. So the lobbied for - and got - control over who is allowed to live and work in the US and the circumstances under which they are allowed to remain.
The amazing thing is that they somehow managed to position themselves as "pro-immigrant", and label people who think that immigrants should be free to determine the circumstances of their own lives as the "anti-immigration people".
If Google's profit margin could be 80% instead of 67% because it had no US engineers and only engineers in developing countries - this is only good for Google's shareholders.
Whereas Google employs >100k US citizens paying on average >$200k - plus close to as many contractors (it doesn't pay particularly well).
It's hard to argue that enriching mainly a handful of High Net-worth shareholders is better for the US economy "as a whole". High Net-worth Individuals have a low propensity to spend on the "real" US economy.
We already tax capital gains at a low rate - and because of that companies do share-buybacks to reduce the tax burden on their shareholders.
There would be far less tax dollars and far less spending in the "real" economy.
This certainly seems like only a win for the high net-worth individual.
Sure - if you want to do that and then socialize the benefits - I guess that could be better. It wouldn't happen. And also, instead of your population being productive and gaining skills and getting smarter - they're doing what? Just living off welfare? Doing the same work for less pay?
That seems like a loss, too.
Your belief that I'm making any such assumption is a mistake on your part.
I'm saying that it is good for Americans in general to allow Google to bring good people into our labor market, so that their spending goes into our economy. Which circulates money that goes where? Mostly to Americans! Instead we force Google to create those jobs where those people happen to be.
Now the USA actually allows a lot of immigration. In fact nationwide a bit over 10% of the population is foreign born. But when you look at productivity growth, it is no accident that California is both one of the top states for long-term productivity growth, AND has over 1/4 of its population born elsewhere.
My belief, based on well-established economic theory, is that allowing more immigration of smart people would increase California's productivity even more. Which, long-term, will result in more money for all of us.
See https://www.bls.gov/lpc/state-productivity.htm for productivity growth, and https://www.ppic.org/publication/immigrants-in-california/ for the immigration statistic.
With that said, that might be changing - it might be shifting more towards overall worker outcomes over just the stock market.
What is this ‘economy’ that they are such great stewards of? Who owns it?
But oddly enough not PE teachers, who tend to be the highest paid public employees in the state -- https://247wallst.com/special-report/2020/09/21/these-are-th...
Football coaches bring in literal millions in revenue, your Alabama example costs 8MM/year in salary but returns around 150MM in sponsorship/ad revenue/donations/etc.
https://www.businessinsider.com/schools-most-revenue-college...
And people wonder why there's a STEM crisis. When your society had decided it's more important to employ multiple full time extra curricular activity coaches for a high school while cutting STEM investment (and thus outsourcing the function) you're on the fast track to the bottom of the pile.
The reason they are paid highly is because they carry the majority of responsibility in the success of sports teams, which generate revenue (in the hundreds of millions in the case of Football and Basketball) for the athletic departments of these universities. That revenue is used to fund literally every other collegiate sport, and provide scholarships to tens of thousands of students nationally. These positions are unique because they are simultaneously extremely competitive (most coaches are fired within 5 years) and tied (loosely) to a public entity.
To call them PE teachers is a ridiculous presumption, no matter how overpaid you believe they are (and rightly so).
$1k+/day compensation for the elementary school 'art teacher' is far above reasonable. But politicians get power by robbing Peter to make Paul rich!
In New York state average pay shoots up to highest-in-the-nation $85k (source: https://worldpopulationreview.com/state-rankings/teacher-pay...). Maybe someone with a lot of experience in certain specific areas could make $120k, but it's not going to be common.
https://libn.com/2012/06/13/long-island-teachers-highest-pai...
The game changer for teachers is that you really can’t beat their vacation time and pension package, there’s no ageism, and there is no shortage of work. You are good until you retire. There’s no teacher trying to retire at 40 from burnout.
From the above link:
The average elementary school teacher in Nassau and Suffolk counties earned $90,560
90k to teach 5th graders, think about that for a second.
One of the big deals with teaching is that it's one of the only careers you can have in the US that's really parenthood-friendly—I specify the US because in, say, the EU, most or all jobs are far more parenthood-friendly than the average job in the US, so teaching's advantage isn't nearly so strong. I think that's an under-appreciated factor in why people choose it.
As for the Summers, lots of teachers work then to make ends meet. Financial comfort as a teacher may mean marrying someone who's not a teacher, or having a second job or successful side-hustle—even min-maxing your teaching career to optimize comp, you aren't making anything like those end-of-career figures for your whole career, and at times you're shelling out a lot of money (and spending a lot of time) for advanced degrees to get those final-years numbers so high.
> There’s no teacher trying to retire at 40 from burnout.
No, but only because they don't make enough to retire at 40. They leave before retirement all the time for tons of reasons, though, including, not at all infrequently, burnout. Abusive management, abusive co-workers, abusive parents, abusive students(!), not being able to handle year after year of watching kids with mental health issues hurt themselves and sometimes commit suicide, learning about horrible family situations (there's... so much abuse going on), actually giving-a-shit leading to workaholism for little to no reward or appreciation, and all kinds of other causes. This totally separate from people who decide they just fundamentally don't like teaching at all.
Also, in lots of districts, teachers receive gradual pay cuts if they don't work toward at least a master's (it used to be easy to find districts that'd at least partially pay for education, too, but that's gotten much harder now) because you top out on the years-in scale for a bachelor's really early, the annual "CoL" increases outside that scale are under the rate of inflation (yes, seriously, it's outrageous) plus they freeze wages not-infrequently, then pretty much never make up for those "lost" years of growth.
> In California the school teachers are exempt from social security.
They are in my state, too, because the state pension plan opted out of social security (back when that was still possible) and the money goes there, instead. They don't also get to count that toward social security contributions, though, for calculating their eventual social security payments.
Base Salary $125K
SS Payment $6k
Family Health Insurance $20k (lifetime!)
Pension $35k
Total $186K
... of course, I'm sure that both of: 1) they'll need to attain a PhD first, to have a shot at those numbers, and 2) this'll turn out to be somewhere with double or more the cost-of-living of where we are now, and probably 5x or more like-for-like housing costs.
Those are averages, from almost a decade ago!
https://libn.com/2012/06/13/long-island-teachers-highest-pai...
But if you think you can apply for and get one of those jobs, that's not how it works! Most openings are filled though nepotism. They'll have a few candidates come in for interviews, but they already know who is getting the job. And it's the niece of a school board member or something like that.
For context, Nassau and Suffolk are the highest paid area in New York at ~100k mean salary. That's below the median household income in Nassau ($115k) and Suffolk ($101k) [0], which are among the richest in the US. NYC and the US are both at ~$63k median income.
For comparison, NYC is ~$80k mean salary, which will include both new hires and tenured teachers. If you read the salary schedule[10] for NYC, you have to have 6-8 years of experience to make $80k (depends on your education level [11]). To reach $120k, they must have 20 years of tenure in the NYC school district.
I made $90k in salary alone as a new CS grad, and $120k in total comp (excl. benefits). This doesn't seem like a huge overpayment to me. It makes sense to me that wealthier areas pay teachers more, and I don't think that teachers getting well paid in one county should demand wage cuts in other counties.
[0] https://www.census.gov/quickfacts/fact/table/US,NY,suffolkco...
[10] https://www.uft.org/your-rights/salary/doe-and-city-salary-s...
About that. Some of the best funded school systems and best paid teachers are in wealthy (republican) areas. Why? Wealth drives tax revenue, quality of teachers drives quality of school system, and quality of school ultimately causes that suburban McMansion to go up in value faster. In wealthy areas in my state (Indiana), charter and private schools flourish in impoverished, urban areas and public schools are extremely good in wealthy area.
They want to be taxed less (cause the people in power actually want to privatize in order to achieve maximum gain on critical sectors)
I mean... if Greenspan has been the chairman of the Federal Reserve then almost his entire career has been focused on disempowering you and keeping you in your place.
Why would helping and empowering tax payers be something anyone in government would ever want, you'd lose your slave class if they could actually build wealth and be in control of their own destiny.
Much better keeping them living paycheck to paycheck and scooping off the cream then chip away at their savings while you're at it to keep those from stacking too high too.
Subsidies are one such tool. Tariffs are another. He was right, you know, and fortunately the H1B helped with the growth of the American tech economy - which benefited all Americans far more than if it had been delayed (or worse, taken from us by others).
There is a ride in the affairs of men, and they managed to take it at its flood.
Doctor salaries are massively inflated by limiting supply even within the country. That must mean that the entire medical industry has already moved to India.
And yes, the doctor supply limit is costing the country substantially. It’s a tax on everyone else that is then distributed to a certain professional class.
It is no surprise that that professional class lobbies for it. But it’s bad for the rest of us.
Radiology has experienced a bit of outsourcing... complete with its own set of challenges.
They are looking out for buisness-owner interests (capital interests)