H-1B visa use cuts U.S. programmer, software engineer wages by up to 6%
computerworld.com
computerworld.com
First, the authors say: "In this paper, we simply sought to dispel the myth that globalization generates no losers." In my experience, If you start out seeking to confirm your biases, you generally will.
Second, all their evidence is correlation not causation. I'm sure the correlations are strong, but there is no way to prove that H-1B workers actually caused wages to go down. There are too many external factors.
Finally, unless there is some relation shown between the companies' profitability and the wages they're paying, you can't rule out the possibility that the less expensive H-1B workers and lower wages for American workers didn't actually save the American worker's jobs by keeping costs down and their employers in business. Lower wages and more H-1B workers could just mean that the company is doing what it has to do to stay afloat. Less pay is better than no job at all. That's just one of many possible scenarios.
The paper isn't out yet, but as of now, their argument seems pretty weak.
I have no desire to see San Francisco become the next Detroit.
That 6% number --- which is misleading on its face --- also ignores the fact that many H1Bs are FTEs for body shop firms that lease them to big companies.
we should allow more foreign workers into the united states for the same reason we should let automobiles overtake horse and buggy - it's more efficient.
It's a market inefficiency for companies to be allowed to "capture" employees and artificially suppress their wages by keeping them off the open employment market under threat of deportation.
I don't really want to argue about immigration on here. Suffice it to say I welcome any skilled people who want to contribute to the GDP and body of technical expertise in my country.
The point I was hoping to make is that even if a glut of talent depresses salaries it's worth it in order to stay globally competetive.
It's not simply that a Bulgarian or Thai developer will do the same job for less money; it's that the system is rigged so that they essentially have to work for less money.
I know that's not what you meant, but it's the same syndrome that contributed to the downfall of Detroit auto workers. They all said "But this is Detriot, the home of the Big 3! United States Auto Town, we can't fail" Meanwhile the rest of the world was busy building cars cheaper and better everywhere else while the folks in Detroit tried to protect their salaries without improving the product.
Find a place where your rent is cheap, your staff is cheap and you can build something fantastic (and then pay everyone more) without worrying about what the next 'hot' place to live or have an office is.
Silicon Valley: A few big companies and thousands of small companies who's existence is founded and maintained almost entirely on innovation.
Valley startups no longer represent the cutting edge of computing innovation at large [as they did in the 80s], they have mostly escaped competition by hiding in relatively narrow niche of "English-speaking consumer Internet" very much like Detroit has been hiding behind big SUVs. And "release early, release often" web sites are no different from body-on-frame SUVs: their tech is so well understood and simple that Chinese can produce cheaper and faster copycats of facebooks and twitters in a matter of months within an original launch.
When they'll learn to market them properly, they will build their own data centers in San Antonio, TX and the similarity with Detroit will be complete.
That English speaking "niche" currently represents the vast majority the potential revenue. It's a lot harder to innovate than it is to internationalize your software, which virtually every successful company does.
The idea that the value of Twitter or Facebook is in the 5,000 lines of Ruby or PHP that it took to create them is seriously mistaken. Anyone (Chinese or not) can easily clone Twiter or Facebook. Just like almost any competent artist can clone a great painting. That's not the hard part.
So, to add more pessimism (for fun)... we don't have the bargaining power that the UAW had, and I don't think we have any members of congress that will consider software professionals to be a serious constituency. So, without legislation, we would definitely spiral down faster as an industry.
SO in this case, you'll get your 6% pay cut and the outsourcing of an industry - all under the guise of making sure that talented foreign engineers are allowed to come to the US and create wealth (which is an indisputably wonderful thing for the US and would be possible without all this abuse if the system were reformed).
I don't care where my competitors were born; I want to get job offers and win contracts based on my merits, not based on my mother's geography. If there's a guy in Thailand or India that is better for a position than I am, then he deserves the job and I want him to have it.
Literally everybody I know that has a H1-B visa is making this country better. If I had to make a prioritized list of people to throw out of the country, most of the people on the list would be American citizens. If I got to choose 10 things to change about this country to increase my net income, the H1-B visa program wouldn't even be a consideration--it doesn't make sense to complain about an speculation of a 6% cut due to the H1-B program when the government is taking 6% (sales tax) + 6% (state income tax) + 40% (federal income tax) + 2% (property tax) and when we are paying a huge percentage of our income to insurers who turn around and rip us off when we make claims.
I hear Lake Wobegon is nice this time of year.
But I don't see why our salaries should be kept at a high level, at the expense of both employers (and thus businesses and consumers) and other humans.
Also, it seems to ignore the demographic problems that society is starting to see. Without a broader base of employed people, we can't keep paying retired people their Social Security and Medicare. An influx of employment-age people is necessary to keep these systems afloat. So in the long run, having these Visa workers will help ensure that I get out of those systems at least some of what I'm putting in.
As for the whole "dispels the myth that globalization generates no losers," thing -- that's not really how globalization works. Labor and capital mobility, along with low impediments to trade allows for specialization, which may hurt specific industries like manufacturing in the developed world but helps others like services.
The extra programmers that were hired because they were 6% cheaper brought a lot into the US economy, and they brought a lot more to their home countries in forms of remittances. For some of these developing countries remittances are 25%+ of GDP, meaning that they are completely dependent upon them.
And of course, there is no discussion of methodology nor data.
IMHO that is why the wages are lower - would you give your employee a raise if you knew that he had absolutely no way to quit your lousy job for something better?
However changing jobs does slow down your Green Card process as some of the paper work has to be redone when you join a new company.
Incorrect. You can transfer your H1-B quite easily. However you can't transfer an L1-B (intra-company transfer from a foreign country). But even in that case, you can apply for an H1-B while you are in US and then change jobs once you have received your H1-B.
Also, all the H1-B holders I know get very good salary - often higher than 'the market'. When you leave your home, get a visa and come to work half-a-world away, you are not going to dick around. You are going to do everything you can to maximize what you came here for.
The H1Bs who work at Google probably get paid a pretty decent wage (though even then, the restrictions on how and where they can work, as well as the difficult in changing professions, probably does still drag down wages relative to what they would earn if they were totally free agents).
The H1Bs at the body shops are often paid miserable wages, and these visas are used without question to fire Americans and replace them with foreign nationals. Keep in mind that 7 of the top 10 users of the H1B visa are actually Indian Outsourcing companies.
Here's a link to the story about the usage of H1B (the link is msnbc, but the original story was on businessweek) http://www.msnbc.msn.com/id/17048048/
Here's a link to an NPR segment
http://www.npr.org/templates/story/story.php?storyId=1424156...
According to Ron Hira (from the NPR) link:
"infosys was certified by the department of labor meeting the prevailing wage requirement to bring 100 computer programmers in at $9.15 an hour. HCL America got 75 programmers at $24,000 a year."
The real debate is how prevalent the two camps are - Microsoft and Google insist that the H1Bs are exceptional engineers who couldn't be found "at any price" in the US, and who create huge amounts of wealth. They would tend to claim that the abuses are minor, the kind of thing that happens in any complex system.
Opponents, on the other hand, tend to say that the abuses are widespread, and that very talented engineers are a small minority of the H1B workers.
For the record - I believe that talented engineers from overseas are exceptionally valuable to the US and should be allowed in without all the indentured crap. However, I believe that recent evidence demonstrates that the abuses are extremely widespread, and that the H1B has greatly reduced the appeal of engineering careers at a time when the US desperately needs to ensure a steady supply from within its own population.
In fact, the INS would check that the green card applicants were getting paid market wages. When an employee reached that point in the process, his salary was actually increased as appropriate. But for those of us that had no such immigration issues, we never got such an upward adjustment.
(Things may have changed since then. That was the early '90s, the time of a big downturn in the industry)
I got paid a little extra to do technical interviews for this purpose. A green card applicant had to prove that there were no available US citizens that could do the job, so we'd run an ad in the Times, soliciting applicants for that job. I would then give them technical interviews so difficult that they couldn't pass, thus proving that our employee was the only one qualified.