Free the H-1Bs, Free the Economy
techcrunch.com
techcrunch.com
1. Every Spartan citizen has to join the army and train since childhood to become the best fighter possible. Weaklings are killed at birth.
2. The currency of Spartans was changed to heavy iron bars. Prevented folks from other neighbouring city-states from doing business with Spartans.
This made Sparta very independent. And their citizens became the best fighters the world had ever seen. People looked up to them in awe. Poems are written about them.
But these same protectionist rules that made Sparta glorious for little time, led to Sparta decline in the long run.
Populations declines. Wealth declines. Progress declines.
Moral of the story has always been: protectionism brings short term benefits but long term doom.
But yet we'll always see the majority of the people rooting for protectionism for short term progress.
(I'm pretty sure I'll be slammed for this post because there is no direct relation or parallels between Spartan policies and American policies. Time was different. Threats were different. Rules were different. But I had to write it to make a point against general protectionism. And not against any specific American policy including the one being talked about here - restricting H1-Bs.)
What did for the Spartans was all dying glorious deaths before having enough kids. The Spartan economy, operated by the Perioikoi and Helots, was strong enough, but it relied on there being a critical mass of adult male Spartans to maintain it. Protectionism was little to do with the fall - the Perioikoi could trade with whomever they pleased.
2. The Perioikoi could trade with whomever they pleased - but - but no one wanted to trade with them because of the iron slabs being used as currency of exchange.
Dig a little deeper into the motives as to why such rules were made by the Spartans and you will see that it was pure protectionism.
I imagine it should be easy compared to uncovering the motives of living politicians in information societies.
Spartans, basically, eschewed possessions, apart from their personal weapons. They didn't want to grow soft and weak, so they made luxury impossible. An adult male Spartan owned some land, which was farmed by Perioikoi or Helots, and he was responsible for providing his share of food to the barracks in which he lived, but he could not "profit", ever. Perioikoi (permanent residents of Sparta but not Spartiate themselves) could and did get rich. Even Helots (slaves from conquered enemies) usually lived materially richer lives than Spartans.
What they should have done was announced that glorious deaths didn't count until a Spartan had had so many kids, that would have made everyone happy.
The relationship between wealth & compliance is complex.
And Spartans sucked anyway, not leaving much to the history except barracks sodomy, heroic deaths and a handful of 2nd grade poets. Must have something to do with all the weaklings they gotten rid of.
Alright, but millions of Americans could be starting companies as well, but are not.
In fact, America is _not_ as an entrepreneurial country with lots of little small business owners as we'd like to think. That is the propaganda bullshit we get fed on every election cycle "we got help America's small business. We gotta help Joe The Plumber...blah...blah."
In fact America businesses are mostly large behemoths employing tens of thousands of minions.
There was just a recent report from the Center for Economic and Policy Research ( http://www.cepr.net/index.php/publications/reports/int-comp-... ) that compared employment in small businesses among the developed nations. US is consistently at the bottom when it comes to self-employment or employment in business with less then 20 people. The biggest reason -- the high cost of health insurance.
So I don't buy the bullshit about "if immigrants could only start their companies, then our economy would boom..." Unless, of course, the author is implying that immigrants are going to run sweatshops where employees don't get health insurance...
But those same startups have to jump through a million hoops just for the right to exist in our borders. So this effect is real. I don't claim to know to what extent our economy could be affected positively or negatively, but it is real.
> I don't claim to know to what extent our economy could be affected positively or negatively, but it is real.
The question then is, who are we trying to help here? Do we want to help the immigrants or the American economy?
Unless, we can show how the hassle of immigrants trying to setup startup is seriously damaging our economy, then this starts to look more and more like we just want to provide some convenience for the immigrant workers. Of course, we should provide convenience, and should certainly not make it difficult on purpose, but that is not a top priority. We shouldn't be called xenophobes if we don't push this task to the priority of our things to do at the moment.
These aren't mutually exclusive. I was an immigrant from Canadian (first on TN, then H1), started a company with an American co-founder, provided opportunities for hundreds of Americans to make money doing what they do best - teach. American economy +1.
I learned a ton, met some amazing people, got some good experience, and am confident that I could do it again. Immigrant +1.
Problem is that US policy makes it difficult to do it again without an American co-founder.
And this is what I don't understand: doesn't America want start risk-takers who leave their country to come and start businesses, grow the total pie, and earn a small slice of it? Isn't that how the country became so great?
Just graduated from a US college on a regular foreign-student visa...
Now with this out of the way, I have to say that if these companies you are talking about are 'raising money', then they have not created any value for the US economy. You are hoping that they will create value for the US economy. When the companies turn profitable, then they will be creating value. Until that point, they are being used to recycle currency, not to create wealth.
Just a little nit pick on your post. The propensity to confuse 'raising money' with 'creating value' or 'creating wealth' is a pet peeve of mine.
Why does this matter? Even in the short term startups spend a lot of money here on services, and long-term they'll provide jobs for a lot of native workers.
Really? What about the additional man power needed to process the "millions" of pending applications?
To REALLY free the economy we need a million of doctors from France, India, UK and Cuba competing here, locally, against our home grown millionaire surgeons. The #1 reason companies are outsourcing and people are leaving is this enormous burden of medical racketeering.
Come on, the world is so much larger than the information technology sector and most problems that can't be solved by coding.
ADDED: Note that neither "programmer" nor "software" appear in the original article: the author is talking about all H1-Bs, which includes medical specialists. (Though, licensing issues might prove a more significant employment barrier for foreign doctors than immigration rules, and those also need to be addressed.)
<sigh>
I agree though, we should stop bringing in programmers and start bringing in doctors.
I know that Canada has been trying to lure medical doctors from abroad (Eastern Europe and elsewhere) in recent years, but they're after the young graduates, not the old veterans who were disowned by the fall of Communism.
Unfortunately, the doctors' lobby in the U.S. is too powerful. In order to keep their salaries inflated, they will never allow the U.S. to import doctors from abroad, even if that would mean that the average American would have access to more affordable healthcare.
Definitely a shame we can't get them to the US. It is insane that we have roughly the same number of doctors as we did 30 years ago, despite increases in population and average age.
Not all of healthcare consists of curing cancer and performing open heart surgery. A lot of medical practice is terribly dull and vanilla. It would be hard to go against the doctors' lobby, but perhaps a compromise could be reached. Doctors want to keep their salaries high. People want affordable healthcare. There are a lot of people who simply can't afford healthcare anyway, so they are not even in the market. Re-training foreign doctors could be a step towards a more-affordable healthcare system.
Worst-case scenario, ask Bill Gates for a couple of billion USD. Hire foreign doctors, retrain them and place in Vancouver. Then allow American citizens to cross the border to have access to healthcare. The colluding doctors of the U.S. could not fight it.
The U.S. is run by interest groups, unfortunately. Other countries are run by interest groups, too, but at least they have the decency not to claim their system is a capitalist one.
A lot of doctors in Israel are immigrants from former Soviet Republics.
But a few years hence, the result is that a lot of Israeli doctors are former Soviet citizens.
I remember when I was 11 I broke my front teeth on a bycicle. We went to the dentist. He sat me in the chair and said "Well, cosmonaut, let's see what we can do", and he rebuilt my teeth in 2 days. All he got in return from my mom and I were flowers and a thank you. There was no insurance, no co-pays, none of that bullshit. And I still have the same teeth he rebuilt now 20 years later. I heard that doctor moved to live in Canada...
The medicine was neither on the forefront of high technology nor equally distributed nor ideal, but the preventive tactics and the highly rigourous, fundamentals-oriented education of the doctors more than made up for it.
It's the same idea as Eastern Bloc polytechnic institutes; why do you think 15 of the 16 bank / capital crime hackers wanted by the FBI are ex-Soviet? It's certainly not because they had access to the latest and greatest Western commercial gear at any point in their education or experience. It turns out that it doesn't matter; the focus was on strong mathematics, computational theory and machine processing. They understand what a buffer overflow is and how to effect one easier, better and faster than their more empirically trained counterparts.
We have a family doctor in his 80s now who still practices medicine in what's left of the state system in Russia. After my parents get frustrated with yet another round with pointless paper-shuffling bureaucrats practising defensive medicine, with their army of office assistants, nurses, medical billing consultants and transcriptionists, they unfailingly call him for good advice - and it works.
There is so much low hanging fruit that has mysteriously remained almost completely absent in the current USA health care debate.
Today, approximately 1.6 million farmers are eligible to receive heart surgeries (and 955 other surgery types)
He has recently started getting traction in New Delhi for a similar scheme.
http://www.hindustantimes.com/News/india/Delhi-does-not-want...
In a nutshell, and H1B visa is attached to a company, so if you have one, you cannot go work for another company or even start up your own.
What the author is advocating is that the president/government lift these restrictions, so that the skilled foreigners who already live in the USA can go ahead and help the economy grow.
Of course lifting the restrictions would probably mean that employers will be less willing to sponsor people for H1B visas, knowing that they can walk away anytime they please.
Another common type of visa in the valley is the L1. Big companies like Google, Yahoo and Microsoft, who have foreign subsidiaries, hire people in those countries. After they have worked in the foreign office for a year they can apply for the L1, which is an "internal transfer". This allows them to work in the US, but only for that company. You cannot ever work another company than the original sponsor of your L1. This really is indentured servitude (though of course it's usually quite well paid).
Lookit, a lot of the H1-B slots are being taken up by consulting firms. We don't have a shortage of H1-Bs; we just allocate them poorly. That's what we need to fix.
As to the (what I consider a minor) founding issue, that's pretty simple: find an American co-founder. Form a company, apply for a second H1-B, and you can work for the NewCo from the minute you file (if you already have an existing one). Work on the side, make something people want, then transfer over the main H1-B once the NewCo has revenue/investment. Hell, I'm happy to sign on as a co-founder for as many companies as I can until INS stops me.
To me it seems the article is advocating changing the legislation to make it more convenient for immigrant workers. That is of course followed by a stern warning to us 'xenophobes' that if we don't our economy will be ruined.
They should instead advocate for punishing large corporations for gaming the system, underpaying H1-B employees and depressing everyone else wages. For every 'smart' and 'bright' H1-B visa candidate there are a thousand of unqualified ones, with flaky academic or employment history record. The reason they are here, because they are willing to work for %30 less than Americans are.
The article provides a much more simple solution: if someone qualifies to work in the USA, end the rules which tie them to a specific job. It's those rules that cause the gaming, limit competition by employers, and cause lower pay.
Once an H1-B holder has filed for a GC, they can't be switch employers or be promoted. Since most companies have pay caps based on job title, this means the H1-B holder can't get raises past a certain point. The end result of all this is you have H1-B "junior engineers" who've worked at the same company for 5+ years really doing the job of a intermediate/senior engineer.
The joke is that the company is not "gaming the system" at all. By not promoting someone with an outstanding GC application, they're doing exactly what the law requires of them.
INS has strict rules about the companies to which it will issue visas. Companies must have established physical offices, have existed for a certain length of time, have a minimum number of other employees, and be able to produce statements showing real customers and actual revenue to prove they are a "real" company.
None of these apply to a startup. Even for medium-sized companies, the lawyers, time and expense required to sponsor an H1-B is a big barrier to hiring immigrants on this visa. For a startup it's completely impossible: not just inconvenient or expensive; impossible. INS will not let H1-Bs join a startup, even a genuine one.
It is a win-win for America and hundreds of entrepreneurs in other countries where the startup ecosystem doesn't exist and ofcourse many would want to build businesses for developed economies than attempt to run something in their home economy which probably can't pay enough. They might go back and build something few yrs down the line or invest in their home countries nevertheless America would have benefited in the mean time.
And this is not even converting all H1-Bs at least the capable ones to start their own firms.
The fact that H1B's have no mobility also depresses wages and reduces the incentive for corporations to be a great place to work because the switching cost for these workers is much higher. So hiring a lot of H1B's actually do offer corporations an incentive that is more insidious than you might think.
That's the bad form of H1B. Corporations bringing worker drones for cheap. But that's why this specific reform can affect the system for the better.
It also doesn't benefit the case to call those opposed to more immigration Xenophobes. They aren't xenophobes, they are rationally aware of the situation.
Also, what he says is not true according to the research: http://news.ycombinator.com/item?id=794685 and http://news.ycombinator.com/item?id=794677
Furthermore, H1-B's are not "highly skilled." The majority of H1B workers take entry level jobs. There is an O-1 visa for highly skilled workers and there is no cap on this visa. If this debate was really about bringing in more highly skilled workers, then why argue for uncapping the lower skilled visa? Wouldn't corporations just bring in more O-1 visas, for which there is an unlimited supply available?
The reality is that O-1 visas cost more than H1B visas to employ. This debate is really about concentrating more power in the corporations and erradicating the middle class in America.
I think that money will benefit America more if it stays in America. This will happen if we employ more Americans who spend all of their money in America, rather than sending some of it to family members in other countries.
If trade is central to the wealth of society, then more trading with other economies of the world will lead to increased wealth in the US.
In fact, we have the largest free trade zone right here in the US. Goods and services in the US, for the most part, move freely.
Research shows, as the middle class increases in wealth, then so does the whole economy and through increasing H1B's, we are eliminating the middle class american worker to jobs overseas.
Read the article on comparative advantage. http://en.wikipedia.org/wiki/Comparative_advantage
This is the reason why we specialize and trade, because everybody will be better off.
> largest free trade zone right here in the US.
That is true, but I thought we are talking about internation trade.
The following is from Wikipedia:
Generally, to qualify for O-1 classification, aliens of extraordinary ability in the sciences, education, business, or athletics must demonstrate sustained national or international acclaim and recognition for achievements in the field of expertise by providing evidence of:
Receipt of a major, internationally recognized award, such as the Nobel Prize; or at least three of the following forms of documentation:
1. Documentation of the alien's receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor;
2. Documentation of the alien's membership in associations in the field for which classification is sought, which require outstanding achievements of their members, as judged by recognized national or international experts in their disciplines or fields;
3. Published material in professional or major trade publications or major media about the alien, relating to the alien's work in the field for which classification is sought, which shall include the title, date, and author of such published material, and any necessary translation;
4. Evidence of the alien's participation on a panel, or individually, as a judge of the work of others in the same or in an allied field of specialization to that for which classification is sought;
5. Evidence of the alien's original scientific, scholarly, or business-related contributions of major significance in the field;
6. Evidence of the alien's authorship of scholarly articles in the field, in professional journals, or other major media;
7. Evidence that the alien has been employed in a critical or essential capacity for organizations and establishments that have a distinguished reputation;
8. Evidence that the alien has either commanded a high salary or will command a high salary or other remuneration for services, evidenced by contracts or other reliable evidence.these were posted on TC:
1950’s
Population Growth = 11,516,000
Employment Growth = 7,215,000 (62.65%)
1960’s
Population Growth = 19,449,000
Employment Growth = 13,862,000 (71.27%)
1970’s
Population Growth = 30,811,000 (Depression in Mexico)
Employment Growth = 21,224,000 (68.88%)
1980’s
Population Growth = 20,865,000
Employment Growth = 17,685,000 (84.76%)
1990’s
Population Growth = 21,667,000
Employment Growth = 16,998,000 (78.45%)
2000’s (Mar. 2009)
Population Growth = 26,254,000
Employment Growth = 5,137,000 (19.57%)Second is H1B abuse by large corporations. This is a legit problem -- some IT firms bring in people they shouldn't (sometimes thousands at a time), and this takes up H1B's from talented people who should get them. Again, the fix requires the government to figure out who is abusing it, and changing the policies to prevent them from doing so.
They aren't leaving for the sake of leaving, they are leaving to exploit the opportunities in their home countries
And if the "majority" are "not that much better than the average American worker" -- but still just a little better -- why can't they stay? Everyone above average brings up the average -- why not have them producing great stuff here rather than elsewhere?
The geniuses are welcome, it's the lesser skilled people, who are imported solely to drive down wages and take jobs away from Americans that people have problems with.
Who said they are more skilled? You ever read code written by someone on an H1B?
Because they aren't producing great stuff, most programming jobs aren't at Google, they are at places where you maintain some crappy code written 10 years ago. This mundane crap can be worked on by the thousands of American programmers that are unemployed, because they aren't willing to work for $40K/yr like their H1B counterparts
I suppose those like myself (CA-born holder of a [20 year old] lowly BSEE from a Cal State uni, veteran of Silicon Valley for the same duration) that remain are the second echelon (of dimwits) who are somehow managing to hold things together as the true geniuses are booted out? Somehow I didn't notice, but clearly collapse is nigh (the sky is falling!) and I'm too blind^H^H^H^H^Hxenophobic to see it coming.
And OBTW if this is true, isn't it merely "fair"? After all, aren't the home countries that these [exploited] individuals are returning to going be benefiting enormously from the returnees brightness? I mean, it's really the [evil U.S.] corporations, at whose request the H1B system was created by the [corrupt] U.S. government in the first place, who are harmed, and that harm is merely "chickens coming home to roost", right?
And once the geniuses return to their home countries, they'll start spawning off startups left and right, further uplifting the surging economies of India, Taiwan, China, Russia, Belarus, etc. A net benefit to the world will result! It seems selfish to view this thru a U.S. centric lens.
Summary: oh happy day!
> the fix requires the government to figure out who > is abusing it
Cool. "There ought to be a law." Congress oughta "do something"! Full employment for [immigration] lawyers! Hurrah! I'm sure the [evil] corporations will step aside and let the right laws be written this time around. Uh huh.
Instead, why not abolish the H1B system entirely? Stop the U.S. (evil corporations) plunder of the rest of the world's "best and brightest"! A level playing field across the globe! Justice at last! (Another round of "oh happy day!")
Whew. Clearly I'm an out of touch [ranting] xenophobe.
In the article: "My research team documented that one quarter (http://ssrn.com/abstract=990152) of all technology and engineering startups nationwide from 1995 to 2005 were started by immigrants."
The linked source says it more precisely: "We found there was at least one immigrant key founder in 25.3% of all engineering and technology companies established in the U.S. between 1995 and 2005 inclusive."
The key words in the second quote are "at least one immigrant key founder"; there are typically 2-4 founders in a startup (YC's avg is 2.5). If we just calculate what fraction of founders are immigrants across all startups (=total_immigrant_founders/total_founders), the number should only be ~ 11% [1], which sounds less dramatic but is more accurate in terms of how much credit immigrant founders deserve for the startups.
Similarly "more than 25% of U.S. global patents had authors who were born abroad" should really mention what fraction of inventors listed on patents are foreign-born, since patents typically have many coinventors.
[1] - There's probably actual data on this somewhere, but if we assume the probability p of a founder being immigrant is independent of other founders, and the number of founders per startup = 2.5:
=> 1 - (1-p)^founders_per_startup = probability_that_startup_has_at_least_1_immigrant_founder
=> 1 - (1-p)^2.5 = .25
=> p = .1087