Companies lay off thousands, then demand immigration reform for new labor
washingtonexaminer.com
washingtonexaminer.com
I personally think the idea of bringing in foreign labor is a very bad thing for the sponsoring country.
For example, where I live in Canada has a very high cost of living (very far North), but stupidly the minimum wage is lower than other parts of Canada. Many local businesses pay $14-$18 / hr as a starting wage for menial jobs, even though minimum is legally ~$10/hr, because otherwise nobody would do the the job up here.
When Walmart, McDonald's, KFC, Canadian Tire, etc. (who all have a pre-approved process with the govt. BTW) want to hire someone cheap, they just bring in a foreigner from a second world country. Those foreigners live 20 to a house and make $10/hr. They can't work anywhere else, and if they quit they are deported. So those business can bring down the overall standard of living here by paying less than an average Canadian would actually be willing to do the job for.
If supply/demand was allowed to run it's natural course, those companies would have to pay a little more ($14-$18/hr), their profits would go down a little, but Canadians would be employed and the overall standard of living would not decrease.
Make no mistake about it, bringing in foreigners lowers the quality of life for the original citizens, and only helps increase corporate profits.
(Yes, I know I'm not supposed to bite the hand that feeds me, but I think I have a good perspective on the situation, given that it just happened to me)
The big argument is whether the cost savings passed onto the people buying the homes (construction is a notoriously low margin business) benefit the economy more/less than the wage reductions for the people building them. In this part of the country, the homes were huge mansions for the 1%ers. I doubt it is a net gain for the economy, and certainly results in neighborhoods where there are not-quite developed world living conditions.
But what about produce? American born citizens are not willing to pick produce for the wages currently offered, so farmers turn to illegal immigrants. (Why pick vegetables all day when McDonalds pays more per hour?) If farmers were forced to use Americans, they would have to pay significantly more per hour in wages. This cost would be passed on to consumers. Not sure how much more tomatoes would cost in this scenario, but it would be more.
Personally, I think I'd rather have significantly higher wages for a larger portion of the population combined with marginally higher prices for a huge portion of the population, rather than the opposite, which is in effect the WalMart model.
When money gets concentrated into a smaller and smaller percentage of the population, you start to get similar effects to a Soviet style planned economy. Rich idiots who delegate management of their money to the Morgan Stanleys of the world, while the working classes can't make enough to start a savings account and maybe start a business one day.
And even to the extent that increased labor costs are passed onto consumers, we have to ask ourselves: what does the economy need? Cheaper products or better-paying jobs?
Yes they are. Robotics engineers stand ready to pick every vegetable in California
Coming next: Soylent Undocumented Guest Worker.
Beyond the hypocritical aspects of your argument ("the ladder I used is too easy to climb, take it away now"), you're also leaving out a few minor benefits that accrue to "original" citizens in your scenario:
1. Increased profits help shareholders.
2. Profits are subject to tax, and increased tax receipts fund more public programs.
3. Lower costs are at least partially passed to customers.
So it's not as simplistic as you make it sound. Also maybe it's just me, but saying things like "those foreigners live 20 to a house" sounds rather xenophobic.
Absolutely, no doubt. I'm very aware that's what I am saying, but yes, that is what I am saying. (hence the don't bite the hand that feeds me comment)
> 1. Increased profits help shareholders.
So the rich people get richer. Not what the world needs.
> 2. Profits are subject to tax, and increased tax receipts fund more public programs.
Not for the big companies that get around it with off-shore stuff (apple, google, walmart, etc. etc.)
> 3. Lower costs are at least partially passed to customers.
Do we need more cheap stuff (Walmart) or higher paying jobs for everyone?
> Also maybe it's just me, but saying things like "those foreigners live 20 to a house" sounds rather xenophobic.
I agree it does, but the fact is it's true. Being an immigrant here myself, I go to the weekly immigrant social night, and tons of my friends are those '20 to a house' people I speak of. The cost of living up here is so high it's impossible to live on $10/hr., which is why no Canadian will do the job and where this mess comes from. The truth hurts sometimes.
This is a very complicated issue and it's not useful to speak in such sweeping generalizations.
Presumably a citizen of a democratic state, with the responsibility to oversee and manage its government, including, inter alia, deciding which ends it should serve.
There are fewer shareholders in a company than employees, and trickle-down economics is a sham.
2. Profits are subject to tax, and increased tax receipts fund more public programs.
Wages are also subject to tax, and the poor and middle-classes have fewer tax-avoidance options available.
3. Lower costs are at least partially passed to customers.
This is a giant leap of faith. How many times has McDonald's reduced the price of it's menu, despite all the advances in efficiency it develops?
That said:
2. Profits are subject to tax, and increased tax
receipts fund more public programs.
3. Lower costs are at least partially passed to
customers.
It sounds like a vicious cycle:
Immigration is bad -> Limit immigrants or deport them on a hair trigger -> Employers leverage/exploit the circumstances -> Bad results -> Immigration is bad.
I'm saying that bringing in foreign labor to keep wages low and therefore manipulate the local market to increase corporate profits is bad. Very bad.
Where I live, there can be a genuine shortage of labor (i.e. there are just not enough people living up here to do all the jobs - it is -40 in the winter after all)
So in that case, it makes sense to try and recruit from within Canada, at a wage that Canadians are willing to do the job for ($14-$18/hr. right now). If you still can't get enough people at that, then go to immigration, but critically, you MUST pay them the $14-$18/hr.
The controls and rules around how much immigrants are being paid are extremely lax, and in my experience, are grossly exploited in the very vast majority of cases, because it leads to higher corporate profits, which at the end of the day is the goal of all this anyway.
It's strange, the more productive we get as a society, the more unbalanced we become, as if there's less to go around. Shouldn't we reach a point where people are on average working 4 hours a day instead of 8?
Since the end of the Cold War, the "Second World" (which was a geopolitical rather than an economic distinction) is largely meaningless (First and Third World, from the same model, have sort of migrated to mean "developed" and "less developed".)
Your company gets one H-1B visa for your company for each
unemployed American that you retrain and employ. The catch
is that the American you retrain and employ must be out of
work 6 months or longer. If an American worker you retrain
and employ doesn't work out, you can fire them, but only
after you have replaced them with another out-of-work
American.
The main thing I want to see fixed in the H-1B process is making it easier for H1-B holders to change jobs after about 1 year of employment with the original sponsor. Right now H-1B visas are like handcuffs that leave the H-1B holder in a position akin to that of an indentured servant.
Which is why it'll never change, as the companies with clout sure as hell wouldn't want H-1B to be anything else.
But in fairness, Cisco layoffs are not uncommon. One former employee likened them to a humpback whale, feeding on 'krill headcount' from acquired companies while squeezing the excess out through their baleen filters. Looking at their history suggests that this has some truth to it.
However none of that is happening. Companies do not want to do that of course, and why would they? The government subsidizes the training through college. The loans are unaffordable, and the returns are not even there for anyone other than the brightest/most capable (however that's scored) 20%. Companies don't care, they aren't on the hook for those costs. Now that that pool is nearly exhausted, companies are lobbying Congress for immigration reform that will bring cheaper younger talent over. Companies assume minimal risk in the current format. And by forcing the # of the visas up, they can suppress wages, there was an article even on IT wages last week about that. This current format is bad for US Citizens, Green Card Holders, and a substantial set of Visa Holders as well.
This is a link to a case of first impression (lawsuit) for this kind of discriminant practice, firing Americans for foreign workers, showing American's were kept on board to train their foreign replacements, then fired without cause. http://www.dailykos.com/story/2012/01/16/1055249/-Discrimina...
Ironically, the discovery in the lawsuit tends to show that the foreign workers were more expensive, because more had to be hired to replicate the productivity of the "skilled American workers".
More evidence, but a stretch, is the Immigration reform proposed by "the gang of 8" which allowed for the corporate demanded H1-B's but created strict regulations (protections for the American workers before allowing the foreign candidate to be hired; for example the H1-B employee would have to be paid more than their American counter-part), which was opposed by these very same corporations. http://blog.heritage.org/2013/05/20/immigration-gang-of-eigh...
The same can be said of building anything. Towns wither, companies close, empires collapse, etc. "Delaying the inevitable" is what a society is all about.
But more importantly, thinking of societal issues as "inevitable" is a regression to the magical pre-political thinking of societies before democracy.
There's nothing "inevitable" about how the world works: people, and their actions, make stuff happen or not happen.
As for competition becoming "increasingly globalized" is a bad thing, because it is a race to the bottom. It's not even good for countries at the bottom, because it makes their position transient and will turn around to destroy them as soon as they start to rise.
What we need to do is build a global middle class and protect middle class where it exists, so that more people can afford products and the economy marches on for more companies and larger endeavours, instead of letting an even smaller number of companies and people profit enormously short term by destroying their future customer base. After all their owners and managers won't be around in 30-50 years, be societies affected by their actions will be.
The thing is, you cannot wish or legislate away the existence of skilled labor from outside the country.
If this worked, then we wouldn't be having this visa discussion.
It's in the best interest of the person who has to compete with the immigrant, but it's not in the best interest of anyone else - citizen or otherwise. Immigration benefits other citizens in the form of cheaper products and services. Immigration also benefits the immigrant (if it didn't, they wouldn't be trying to get in).
This issue is somewhat personal for me because I have foreign friends who are good engineers and would like to work here, but can't because of the regulations.
> It is not protectionism at all to level the playing field
This isn't leveling the playing field, this is refusing to let other (potentially better) players on the field because we have less capable players (who happened to be here first).
I'm acquainted with a state Senator. He's a well meaning guy, but he acknowledges just what a corrupting effect the truckloads of money has on national politics.
I've read that there are over 10,000 pages to Obamacare. Who wrote all that? How much insight into the health care field does it take to put in so much detail? Who else could have possibly written it other than the health care field itself?
We talk about regulatory capture like it's some horrific thing akin to Stalinism. But it's reality, today, in every single economic field that's more complex than hairdressing. How could we possibly provide meaningful oversight over the passing of a bill that fills a shelf? The only thing we can do is debate meaningless talking points that don't address the critical reality. Industries are regulating themselves, and we're just letting them frame the discussion while they sell out the public under our very noses.
The widely-available bill[1], which takes all of five seconds to find with Google, is 906 pages with legislative (huge margins) formatting. Consider not getting your "facts" from people with an axe to grind.
http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590enr/pdf/BILLS-11...
The only purpose of H1B the legal construct is to erode workers rights.
Immigrants send money home (out of our economy). Companies may produce more/cheaper, resulting in possibly lower prices. But maybe they just spend the extra revenue lobbying Congress for preferential treatment. Maybe it results in more money shipped offshore to tax havens.
And if indeed immigrants are just cheaper replacements for their American counterparts, it takes away money (which, remember, is equivalent to speech) from citizens of this country.
So is maximizing profit by replacing expensive workers with less expensive ones from abroad. At some moment the situation becomes untenable, causing a social rupture and eventual reorganization, sometimes very painfully.
Experience has probably shown employers that its cheaper in the long term to just lobby for an immigration-centered subsidy, so they prefer that option.
1. Let H1B be independent of the employer. Current H1B rules are modern day equivalent of bonded labor. Let a person obtain H1B from the employer for the first time, after that make it independent of the employer. For example a person on H1B may resign on day 1 and simply join another American company.
Remove all the nonsense about salary limits and so on.
H-1B employees are currently quite mobile. I have many friends who've switched jobs repeatedly during their H-1B period because it's so easy to transfer the visa. I honestly don't know where this whole "indentured servitude" idea comes from.
The part of the system that's fubared is the green card process, which can stretch for up to 10 years if you're from India or China. During a part of that time (not the entire duration), you can't switch jobs unless you want the green card process to be restarted, which affects mobility. But that is not related to the H-1B, and the solution to that is to fix the green card process.
But the company was also founded by immigrants so this may be an exception rather than the rule.
You're completely right that H-1B portability was implemented, which happened in 2008 with the America COMPETES Act.
The indentured servitude view is lingering, but it's also still unfortunately valid when it comes to the H-1B dual-intent EB-2/3 green card applications, as many try to follow that pathway.
Aside from that, this wouldn't be simple at all because changing the visas available would in many cases involve renegotiating the deals that they made with other countries that got those visas created in the first place. Sure, it would likely be possible to tell all the other countries to get stuffed, but good luck getting US citizens a visa to travel anywhere if you keep doing that.
This was in response to a suggestion about what the government would do if it was interested in serving its citizens. If you would be paying the fees, serving you is very much not the point.
Though I'll point out that, by moving from employee sponsorship and charges (and pay limits, etc.) on employers for things like H-1B to charges to the prospective entrant, it means that the entrant has substantially more freedom (and potentially greater net income after charges, too, since instead of the employer paying a fee and dealing with wage limits, the employee pays a flat fee and a share of income, but isn't burdened by salary limits.)
> Aside from that, this wouldn't be simple at all because changing the visas available would in many cases involve renegotiating the deals that they made with other countries that got those visas created in the first place.
By definition, changing the non-treaty visas, as I specified, would not require that, and many economic visas (including the H-1B) are not treaty-based.
Obviously treaty-based econonmic visas like the H-1B1 (Singapore or Chile), TN/TD (NAFTA), E-1/E-2 (Treaty Trader/Treaty Investor) etc. are a separate issue, but at least in theory the government is serving citizens interests with those because of the reciprocal benefit US citizens have with regard to economic entry to the countries involved.
edit: actually, there is of course also O, L, P and I. I'm not sure how much you'd gain by folding them into a single category - there's very little relationship between,e eg, whether Nadal should be here for the US Open and how many programmers should be coming here. L perhaps has some overlap.
> edit: actually, there is of course also O, L, P and I.
And the immigrant E series Employment-related ones. There's a few others that might fit into the general description I laid out depending on exactly where you draw the line on transitory (non-immigrant H-2A, for instance, could be argued either way.)
(I specify immigrant/non-immigrant, because there's a handful of categories designations used for both immigrant and non-immigrant classes where the use between the two classes has no real relationship; E is one of these.)
> I'm not sure how much you'd gain by folding them into a single category - there's very little relationship between,e eg, whether Nadal should be here for the US Open and how many programmers should be coming here.
"How many" isn't really an issue, since the whole idea of folding it into one class is that its a class that is open to any non-banned entrant and isn't numerically limited, instead its open-for-pay.
Anyhow, I'd think Nadal for the US Open be a non-immigrant B-1, which is transitory by any reasonable definition, and certainly isn't in the scope of what I was proposing.
- She walks out searching for a job, she finds a job that pays 120k. This means you hired her because you found her "cheaper" than American counterparts. So you are penalized. Hence next time you wont hire a employee worth $120k for $100k. You will prefer a $120k American girl over $100k Indian girl.
However, if the idea is to have it survive and, dare I say it, be used for the beneficial purpose of bringing vital new blood to the country's workforce instead of being a cheap source of labor, then employers need strong incentive to spend the money needed to get someone into US without fear that they will simply walk off.
It's not what I want as a US employee (my self-interest is to have as few people of the same skill as possible in order to command highest salary), but it is something that would be needed in order to get some sort of a chance at having such rules pass.
I thought increasing the risk in the H-1B process (and thus making not choosing that over spending resources retraining domestic workers) was exactly the point of the suggestion.
The demand for subsidies is easy to see with oil companies, who lobby for tax breaks and for the U.S. government to fight foreign wars to maintain their access to foreign oil sources.
However the basic dynamics are present in the tech industry too. How often do tech companies talk about the need to produce more STEM graduates? Throwing aside the warm fuzzy ideas attached to public education, this is a naked demand for subsidy: train more workers for our industry at the public expense.
Increased immigration is in the same vein. It would be expensive to retrain all those expensive workers (this goes to pg's point elsewhere), so better to let India and China subsidize the education, and the U.S. subsidize the process of acculturating and integrating the new immigrants.
I'll offer a potentially controversial statement: immigration policy should have nothing to do with transient labor demands. It is simply an orthogonal issue. Immigration is deeply and inextricably tied up in questions about culture and acculturation, democracy and the composition of the body politic, the long-term, sustainable, growth of the population, etc. Immigration limits and the countries from which we take immigrations should be based solely on those issues.
Immigration limits and targets should not be based on what particular industries want as labor inputs. That's a sop, that's a subsidy. That's the public undertaking an obligation in order to subsidize private profits. It's a long-term fix to a temporary problem. This is not an opposition to immigration, mind you, but rather an opposition to the criteria being used to evaluate how much immigration we should have.
Removal of an artificial barrier isn't a subsidy.
Second: immigration limits are not an artificial barrier. One of the basic purposes of a government is to establish and defend borders. Allowing immigration is an affirmative action on the part of the existing citizenship of a country to admit new members into its fold. It's an affirmative action to not just admit those new members, but to integrate them culturally, allow them to participate in the public life of the country, and allow them a voice in political affairs that affect all citizens, new and old. It's a commitment to defending them in case of attack and extending to them and their progeny, in perpetuity, the essential privileges of being a citizen of the country.
Even if one accepts the second sentence, for the sake of argument, it in no way supports the first. Even if it might support the claim that immigration limits are a policy reasonably related to a "basic purpose" of government, it doesn't in any way challenge the idea that they are still an "artificial barrier".
Rather, because enforcing property rights are deeply intertwined with the purpose of government as we understand them today, it's more sensible to think of those barriers as not being artificial but rather naturally implied by the existence of government.
No, its not, but the ways that it is wrong have nothing to do with the "artificial barrier" issue:
Well, I could accurately say its the lifting of an artificial barrier, sure.
I couldn't accurately say its not a special favor, since its a privilege granted to select entities in particular circumstances, nor could I accurately say that its not a subsidy, since it is directing resources currently held by one group and allowing them to be used by another.
The fact that its an "artificial barrier" is irrelevant to whether it is in other categories that are not mutually exclusive with "artificial barrier".
> Rather, because enforcing property rights are deeply intertwined with the purpose of government as we understand them today, it's more sensible to think of those barriers as not being artificial but rather naturally implied by the existence of government.
No, its better to address issues like "special favor" or "subsidy" that are completely orthogonal to the "artificial barrier" categorization without reference to that irrelevant categorization.
If you want to make the case that the specific immigration limits currently in use are an appropriate use of government power, its probably better to do that than to argue about whether they are (as they clearly are) an artificial barrier to the free movement of people and free commerce.
I think this is probably the kernel of our differing views. I do view them as artificial. My hope is that, in the future, an individual's ability to relocate becomes more a function of their means and less a function of nation-state legality. I have some anarchist strands woven in my ideology ;-)
...and government of the people by the corporations and for the corporations, shall not perish from the Earth?
Alice and Bob wish to associate in some way, but Eve forbids it and she'll beat them up if they disobey. This is an artificial barrier.
If you believe in free market, this is unhealthy to the economy. American companies should be paying duties to country through tax, not hiring discrimination against nationality.
"the immigrant applicant being paid no less than American
employees for the same type of position"
A way of avoiding this would just to be to have an absolute salary threshold. Say, all H1B job offers must have an $100k+ salary. That would allocate them to the parts of the economy where workers are actually severely lacking, and valuable enough to the companies that they're willing to pay premium prices to get them. Alternately, make it a bidding system instead of a fixed number: there are 50,000, or 100,000, or whatever H1B visas, and they go to the companies that offer the highest salaries (thus indicating the highest demand).
If you claim that there is a lack of workers in an area but you aren't willing to pay more than $60k, then I'm going to be skeptical about just how much of a critical skills shortage there is.
Note that the wages being offered are supposed to be pretty much common-knowledge:
http://www.dol.gov/compliance/guide/h1b.htm
"On or within 30 days before the date the LCA is filed with ETA, provide notice of the employer's intent to hire H-1B, H-1B1, or E-3 workers. The employer must provide this notice to the bargaining representative of workers in the occupation in which the H-1B, H-1B1, or E-3 worker will be employed. If there is no bargaining representative, the employer must post such notices in conspicuous locations at the intended place(s) of employment, or provide them electronically."
We did spend a fair bit of time looking for the least conspicuous of all conspicuous places within the office to post my wage though. :)
In 2007, the US Department of Labor, Employment and Training Administration (ETA), reported on two programs, the High Growth Training Initiative and Workforce Innovation Regional Economic Development (WIRED), which have received or will receive $284 million and $260 million, respectively, from H-1B training fees to educate and train US workers. According to the Seattle Times $1 billion from H1-B fees have been distributed by the Labor Department to build up US workforce skills since 2001.
http://en.wikipedia.org/wiki/H-1B_visa#H-1B_fees_earmarked_f...
Apparently they want more - no surprises there.
More workers and more customers both raise the price of assets. The same Walmart that served 25,000 people in an area will do even better serving 30,000. That's the basic thinking, though at some point it will break down and hurt (almost) everyone, not just workers and customers.
There is very little distinction made in the public discourse about the difference between these two categories of employees, but they are very different.
The overwhelming majority of H-1Bs directly employed at large American companies will be of the first type: they came to the US to study or at an early age, and were hired while they were already in the US. These employees are likely to be treated identically with American citizen employees and paid exactly the same in the same roles. They are not "cheap foreign labor" -- they are employees who just happen to be foreign citizens. They are very mobile because their skills are in high demand, and other employers are more than eager to transfer their visas over.
However (and this is where the rhetoric comes in), the majority of H-1B visas go to outsourcing/offshoring companies that bring in workers by the thousands to fill mostly lower-end positions in IT or back office departments at American companies. These workers fit all the H-1B stereotypes: low-paid, bound to a single company, living 10 to an apartment etc. There are significant violations and gray areas in the way these workers are brought in and paid.
The problem is that both sides of the H-1B debate do not define which group of workers they are talking about.
Google, Microsoft etc are correct when they say that they do not want more H-1Bs for cheaper labor. In the employee pool they are looking at (foreign citizens already in the US), this is true: they pay all employees identically irrespective of whether they are foreign or US citizens.
The opponents of more H-1Bs are also correct when they say that H-1Bs are being used for cheaper labor: the types of employees that offshoring companies bring in are indeed being chosen because they are willing to work for lower wages than workers already in the US.
The solution is clear: have separate visa categories for employees brought in directly from outside the US, and foreign citizens who are already in the country. Make it as easy as possible for the latter group to stay in the country, through a quicker green card process or other methods; at the same time, have higher scrutiny for the separate category of visas that apply to foreign workers brought in directly from outside.
It sometimes amazes me that even on a relatively knowledgeable forum like HN, this distinction isn't made often or at all.
Maybe the Center for Immigration Studies should fire the person who finds this difficult to understand. If they have a hard time hiring a replacement who does understand it, they should be open to hiring someone on an H1B visa.
The immigrant visa ("Green Card") process for employment-based categories, as for family-based categories, uses both global and per-country limits which apply after candidates are qualified (including having a sponsoring employer!) but limit the rate at which visas are granted, which means that for countries from which there are the most qualified applicants in many categories face the longest delays from the date they become qualified to the date they actually are granted a visa. The most oversubscribed source for employment-based immigration, India, has categories in which the delay is 10 years, and there are certain categories where the delay for any country is over 3 years. (And this is still better than family-based immigration, where the longest waitlist country/category combination is 23 years!)