Comment by hackthemack | Hacker News Reader

Comment by hackthemack | Hacker News Reader

I find the topic of the morality or effectiveness of having a H-1B a little bit intractable to reason about rationally. Consider a simplified model of the system.

You have 2 countries, C1 and C2.

Scenario 1: C1 has enough demand for 100 tech jobs. C1 only has 50 qualified natives for 100 tech jobs.

The wages of C1 go up because there is more demand than supply.

Scenario 2: C1 has enough demand for 100 tech jobs. C1 only has 50 qualified natives for 100 tech jobs.

Now you put in a H1-B visa program that will pay the same as the prevalent wage as a local native. C2 has enough candidates to fill the other 50 positions.

The wages of C1 will NOT go up because now supply matches demand.

Is Scenario 2 fair? Who gets to decide what fair is? Given the above system, I think I would argue that H1-B visa programs cause wage deflation in C1, even if it is filling jobs that would not be filled and even if the jobs paid the exact same as someone working in the native country.

I am not dogmatic about that though. Willing to hear a counterpoint to scenario 2.

Scenario 2 now has country C1 with 100 tech workers, and they got their pick of the 50 best workers from (lower paying) country 2.

Country 1 is now a better place to start a new company or expand your existing company because all the best workers in the field work in country 1. Starting the same business in country 2 will almost certainly fail.

This is literally why the Bay Area became the world’s most important tech hub and isolationism will allow (and is allowing) Chinese tech to jump ahead of the US. The government doesn’t care about losing a literal arms race, largely to reduce the political power of California. By no longer educating and welcoming the world’s brightest engineers the USA is going to be reduced to support and manufacturing roles where its large workforce will have to compete with everyone else and salaries will tumble.

It's not so simple because:

1. Companies can hire overseas. There's some cost to it in terms of added friction, but if wages rise enough in C1, then it's worth the friction to hire in C2 instead.

2. Workers also consume and invest, raising demand for other jobs. Employment is not a zero sum game, especially at the macro scale.

Scenario 2 makes sense. I think the counterpoint people bring up is to just stick to Scenario1 and let the salaries go up and let people jump ships every now and then for a raise but they forget that C1 is a ultra-capitalist country.

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