The role of high-skilled foreign labor in startup performance
papers.ssrn.com
papers.ssrn.com
Or many times the founders simply can't even make it into the US even though they have much needed skills.
Skilled immigration into the US is much harder and way more uncertain than other nations. Massive amounts of paperwork (so much that you need a lawyer), lotteries, long wait times and in the end highly dependent on whichever immigration officer sees your application.
I think Canada is an english test away, Australia should be not too hard.
The US: just the whole thing stresses me. I d rather stay in Hong Kong forever than move to the US with all their weird paperwork, conditions etc. They dont want me, I wont insist :D
Or French test.
This implicitly assumes that startups need to happen in the U.S. Another option that may be more preferable to some founders is getting access to appropriate capital and resources in their home country, or in another country of their choice. Getting rid of the exploitative H1B system is only a solution for some people and having every founder move to the U.S. isn't necessarily good for the rest of world.
I spent most of my childhood in Russia, and I am stuck with a Russian passport. Russia is a mafia state I absolutely don't want my children to grow up in. It's absolutely out of the question for anybody of talent, or ability. My parents personally knew a number of dollar millionaires who lost all their livelihoods to the mafia. No way I'm going back.
So, what is the crowd of us expat entrepreneurs from 3rd world countries do have as an option?
1. Startup visas: largely open to people from first world countries only. Paperwork requirements make it effectively impossible to prove ones background as an entrepreneur, or a graduate of a high profile university.
2. Freelancer visas: a bit easier, most countries just want a proof of substantial income, or an LLC documents. It's still a perpetual visa program, without a way to settle down in most of these countries. Dubai PR was ever given to just few thousand people. Singapore PR is possible, but again not the lowest effort around.
3. Create a business in your home country, cook books, and establish a subsidiary in a developed world: explicitly illegal, but widely practiced to the point of getting some semi-official recognition. A patently absurd scheme normalising a nominally illegal behaviour.
4. Investment immigration, and such: investment immigration to the West is plainly out of reach financially to the most people whom I can genuinely call entrepreneurs. Western world's investment immigration programmes are both dysfunctional, and expensive, as they mean to steer you into bad investments.
5. Go from one 3rd-world mafia state, to another which is less of a mafia state; Have hope, and pray: pretty much the only option opened unconditionally to the widest number of people. 3rd world countries are very hungry for just any money, and their investment programmes are largely "anything goes," as well as having the least of inspections/scrutiny/enforcement.
It's the toughest option, but the easiest to get into one. India will sell you a PR for 15 lakh USD, Indonesia for 8 lakh, Bangladesh for 75 thousand, and Pakistan for just around 35k-30k given the extreme PKR depreciation in recent years.
I think it's the best option for anybody in the factory business, and 5-7 years experience actually running things, despite the South Asia's well known problems like extreme bureaucracy, and overt corruption.
Example: Venezuela has a trade deficit against the US. [0] Lots of Venezuelans work in Miami.
How many American computer science graduates go unemployed because of H1B's? It seems like a lot of entry level work is now either completely outsourced or performed by consultancy companies that hire largely non-citizens.
The problem doesn't even solely target new grads: https://m.economictimes.com/tech/ites/tcs-faces-us-trial-in-...
> Or many times the founders simply can't even make it into the US even though they have much needed skills.
It points to a very obvious solution: Don't go to US to start a business. There are megatons of "startup visa" programs, government backed accelerators, and generally much healthier tech ecosystems than the US around the world.
> Skilled immigration into the US is much harder and way more uncertain than other nations.
Yet, the American Dream is still a such potent image, US still ends being the world's No.1 migration destination, unless you take the EU as a whole.
Canada has lowered its immigration threshold to the point of almost every professional with some degree, and English knowledge can move there by themselves in their late twenties. Yet, they the immigration digits are not driven now by the cutoff threshold, but by the number of applicants.
Canada is a heck of a good option to immigrate to, except for the job market. It's easily in the top 10... yet.
In my case, after living in Canada for 6 years, and getting a kick to the butt due to LMIA, I don't want to go back. First, because I don't want to beg the same government which delivered me a kick to the butt to give me a work permit; Second, the job market in is just that weak.
> In our sample of VC-backed startups, we observe that winning more H-1B visa lotteries enhances startup performance. Specifically, a one-standard-deviation increase in the likelihood of winning an H-1B visa lottery increases the number of VC financing rounds in the three years after the lottery by 7.1%, the number of patents filed by 6.2%, the number of claims per patent by 9.7%, and the likelihood of an IPO by 8.8%.
That is an entirely different question than if that is better on the whole for society.
Foreign workers usually already have a relevant degree or experience (knowing atleast the basics) and don't have as much student debt.
It's like when manufacturing complains about labor and skill shortages but the wages are terrible. When you need labor and can't find it, lots of times its just that employers aren't meeting the market rate for said labor. Hence their desire to get it on the cheap via importation or outsourcing.
Also, because it is a new application, your old one does not expire, so you can always continue your current job till you sort things out. And you can always file a third application with a third employer if things don't work out with your RFE. Changing jobs isn't as crazy as people make it out to be, unless you really don't meet the minimum.
PS: Been doing it for more than a decade without any problems
If you’re a truly high skilled worker, then US is not the only place that you can have a good life in therefore if you’re underpaid, you go somewhere else. On the other hand if your skill is not on par, then why would the companies go through the trouble of H1B and hire you while they can hire low skilled domestic labor with lower wage demand (not implying that domestic labor is low skilled, just pointing out that it’s available)
2. Immigration is a Network effect. You would prefer a country where you already have acquaintances, friends or family over starting your social life from scratch.
3. Soft power plays a huge role. In many societies being able to go to US has much higher prestige than say Germany, Netherlands or Japan. So many people don't see immigrating to these countries as an actual upgrade in social status back home even if the life might be better
2. The network effect is more important for low-skilled immigrants and those planning to make the destination country their new home. High-skilled immigrants typically have an expat mentality. They leave the people they know behind and move to a new place for a specific opportunity. Their country of residence is not their home but a place they happen to be living in at the moment. They are also prepared to move again, should new opportunities arise.
3. The prestige argument is also more important for low-skilled immigrants. For high-skilled immigrants, a more likely reaction is your friends wondering how you can put up with the bureaucratic BS of living as an immigrant in the US. (As an example, because H-1B workers are formally visitors instead of immigrants, most of them are currently unable to visit their friends and family in their home countries.)
The immigrant/emigrant question is a matter of perspective. An immigrant to one country is an emigrant from another.
H-1B is a dual-purpose non-immigrant visa. When you have obtained/extended your H-1B status and are applying for the entry visa required for international travel, you are required to provide a permanent address outside the US. Once you enter the country, the immigration officials really don't like it if you claim you are living in the US. And because H-1B workers are not US residents from immigration perspective, most of them are currently banned from entering the country if they have visited places like the UK, Schengen area, or India in the past two weeks.
I think herein lies the crux of difference in our opinions. Most immigrants I know don't immigrate just for mere job opportunity, they go in with the intention of changing their lives and settle forever. They are not treating this like a Working Holiday Visa
> And because H-1B workers are not US residents from immigration perspective, most of them are currently banned from entering the country if they have visited places like the UK, Schengen area, or India in the past two weeks.
F1 visa is technically a non-immigrant visa and yet they are allowed entry. The entry ban has nothing to do with whether your visa is immigrant or not
I don't think I've ever met highly skilled immigrants like that. Many people first move to a new country in search of better life and then become highly skilled there, but those are not the kind of immigrants this discussion is about.
The highly skilled immigrants I know switch jobs once in a while, and sometimes the new job happens to be in another country. While they are building new lives in their current country of residence, they are not truly committed to remaining there. Some stay long enough to get citizenship and some even retire in the country, but the reason to move again may come at any time. The first international move is usually the hardest. After that, you have accepted the idea that switching countries is possible, and international moves are no longer that different from domestic moves.
It's labor-economics 101.
It doesn't matter what the job is, if you pay enough then someone will take the job (and become qualified if needed).
ex: I'd scrub the shit out of sewage pipes with a toothbrush if you paid me enough, but most companies would just say that there is a "skilled labor shortage".
[0] https://www.glassdoor.com/research/h1b-workers/
[1] https://www.pewresearch.org/fact-tank/2017/04/27/key-facts-a...
The sad thing is that workers - and we see this in this very thread - end up attacking immigrant workers (who are merely trying to improve their lives), rather than employers who are exploiting workers on employer-tied work visas (both in terms of up-front pay, but often in terms of kickbacks and the like) to drive down local pay and conditions.
The answer would be that if there is a genuine labour shortage in local skills, the work permit should be in that industry/skill set, not employer tied. That would allow migrant workers to better their lot (and, given that many support extended family on remittences, whole communities) while allowing them to avoid being exploited by agencies or shitty employers; it would also avoid migrant labour being mis-used to depress local terms and conditions.
Unfortunately it seems easier to convince people to vote for anti-immigrant, often bigoted, political platforms than to convince workers to see their common interests.
This number is too high, even if you include 1st and 2nd generation immigrants who have greencards/citizenship. Did you work for a company that underpaid its employees by only hiring foreigners?
There is the network effect in hiring - as in, referrals from already existing employees, who are H1-B (or once were H1B). If I was once a H1B , and my employer is looking for a Software Engineer, there is a larger network (compared to my American colleague) of possible referrals that can originate from me. This results in a higher likelihood of H1-B getting a job offer - in spite of the higher documentation and process.
Company hiring policies have usually leaned towards "ready made" candidates - candidates who know Programming Language V1.4 (say) and Web Framework XYZ - H1Bs are more motivated and better prepared with these exact requirements compared to American domestic/citizen candidates. So, on paper a H1B checks all the boxes. In some cases (or many cases depending on point of view) these paper qualifications don't transfer to reality.
Also hiring of Grad Students on Student Visas - 75% of Grad Students in STEM are usually foreigners, these enter into the H1B pool (after 2 years of CPT visa).
(Often not very well, but this is the internet, and that's a different issue.)
I'm a hiring manager in one of the big tech companies and let me tell you, H1B labor is NOT cheap. We not only have to pay them market rates, but a lot of foreign nationals with specialized skills are getting paid more than market average (it's part of the process that DOL enforces to make sure we don't abuse H1B). I think the study references "startups", so there is a chance that it is biased, but within that bias, accurate.
H1B Labor might not be cheap if you're truly innovating, but let me tell you- there's a reason why credit card companies pay so little across the board, and it's no coincidence that they rely heavily on H1B labor.
I'm one of these high-skilled foreigners (phd, 5 years experience in applied ML). I make market rate salary in local currency (~35k USD/year) plus substantial bonuses (75~90k USD/year). I work for a major corp, and I think at least a couple dozen folks make similar money with similar experience.
I'm not posting to brag; just to contextualize (and agree with parent) that, yeah, maybe that money would hire a recent grad in California and gets my phd+exp here, but I wouldn't say we're "cheap"
I know you're discussing H1Bs and I'm talking remote work - just feel like it's worth poiting out that the same set of people fill both roles; so if remote salaries are X I can't see how you could pay less than X to a H1B. Why would I move to a much higher COL for same/less money?
I mean, maybe some folks for the express purpose of leaving their country, but still - remote work should push H1B salaries up for skilled foreigners, right?
I've changed to that from https://www.sciencedirect.com/science/article/abs/pii/S03044..., which doesn't give access to the paper.
* = Compared to the average American, the average H1-B holder has substantially less purchasing power, before immigrating. Moreso in the case of unskilled immigration, whose quality of life improves substantially.
So? Is America's immigration system supposed to serve the interest of foreigners, or Americans?
Whatever might be the political climate but US is still the country to come if you want to make your dreams come true.
I should know, I've lived here for 14 y years (and, no, I'm not 14 years old).
"Every batch of immigrants provide the fuel for growth and innovation."
So the people already in America are useless? As an immigrant I feel someone should have told me that my children will become sloths.
"Whatever might be the political climate but US is still the country to come if you want to make your dreams come true."
That's really little more than regurgitating a slogan.
Anyway, the duty of the American government is to Americans. My home country's government's duty is to me, and my duty to my home country's government (that's why I refuse to become American - I'm not ready to pledge the oath of allegiance against "foreign enemies" that might include my home country).
Or why are Americans the only people in the world not allowed to have a government and a State that looks out for their interests?