In Turnabout, Disney Cancels Tech Worker Layoffs | Hacker News Reader

In Turnabout, Disney Cancels Tech Worker Layoffs

nytimes.com

67 pointsjonburs53 comments

H-1Bs are supposed to be used to fill jobs for which qualified Americans can't be found, but to get around this, Disney lays off workers and brings in a consultancy to take over. The consultancy employs the H-1B workers, not Disney.

There are so many loopholes that it seems like the only solutions are to either create a well funded agency/department to oversee this, or to increase the price far enough that H-1Bs are only viable as a last resort.

The solution is for H1-B workers to auto-convert to a green card after 12 months. Period. The company has 12 months to complete a security check and has to fund it itself.

Now, if the company really needs a worker brought in on an H1-B, they will be very happy and the H1-B queue will continuously clear itself. However, if all they want is an indentured servant, that will get quashed when the green card arrives.

Everybody wins--except for companies who abuse the H1-B program. Which is almost all of them. Which is why you never hear this solution.

Exactly. The primary issue with H-1B is that it's attached to the company. As a nation, it's in our interest to pull in people with (supposedly) unique skills, and to incentivize them staying in the country.

If the visa is not attached to the company, then the wage deflation effect will be much more minor. After all, the visa holder could just go to the company next door and get a higher wage if the initial company tries to pay too low a salary.

This would be a huge improvement, though it doesn't address a more fundamental issue: why should tech companies should have the power to bestow temporary residency on workers? This is an unusual aspect to a labor market, especially at this kind of scale.

The justification is that that there is a critical shortage of software developers (at any price? at market rate?) that threatens the US economy, so we should allow corporations to bestow "front of line" privileges on tech workers that other classes of immigrants don't get.

I don't buy it. Why wait a year, why not just award the green card the moment the immigrant shows up. And why require that the immigrant have a job offer from a tech company? In short, why not just let people immigrate, and allow them to enter the job market in response to market signals?

A dental hygenist earns about as much at the median in SF as a software developer. A registered nurse earns quite a bit more. Why not allow immigrants to choose those fields just like US citizens get to? Why force them to study tech fields and work even a year for disney in a tech role to get to come here?

Not everyone ones: American citizens who compete with immigrants for jobs. Or H1B immigrant's compete for overall quota spots with other immigrants, so those lose.

I compete with H1-Bs every day. I don't have a problem competing with the ones who have green cards since their salary isn't artificially deflated. I do have a problem competing with an H1-B who is 40% of my salary and is stuck that way for 5+ years (even if an H1-B is hired at mostly market rate--the lack of raise in a hot sector drops their relative salary very quickly).

This would be an interesting solution, in special if at the end of the year the worker's transition into green card regime were conditioned to passing a test not unlike the one people applying for citizenship do and, if the worker does not pass, that spot cannot be used by the hiring company for a certain period. Requiring companies that "rent" H1B workers to American clients to actually invest and depend on their staff would probably make the business model of abusing work visas less profitable.

I see a lot of H1B workers that would not fit my notion of "skilled" except for vanishingly narrow fields (those you can master after a week of training).

Won't companies just fire the H1-Bs before the year is up and keep the treadmill rolling?

That might be, but continuous personnel replacement would be hard for both the abusing company and its customers. Disney wouldn't be so keen to outsource if they knew all the people they train now will be gone in a few months. It would also dry up the pool of applicants faster at the other end, especially if linked with provisions forbidding reapplying for X years.

Sure, but those companies will get spotted and the H1-B applicants won't work for them. It's easy to hide that you're an H1-B sweatshop and blame the government when you don't have to answer anything for 5+ years. It's not so easy to hide when 12 months is your limit.

People want to be part of the H1-B program so that they can get out of it--either by green card or by going back to their native country with training that makes them more profitable back there.

I would add to that that H1-Bs should be auctioned. That way, they are more likely to be used for high-value people coming to high-value R&D positions, not lo-wage seat-warmers for outsourcing shops.

nope, just means they have 12 months to get the next indentured servant lined up. lose/lose, still.

The H-1B visa should be eliminated. It's been nothing but a scam from the start. If there's a demand for a certain type of skill high wages will attract people to the field.

High wages are not enough. It takes time to train people. It can take years. Demand for experienced workers can't be satisfied with newly trained workers. Demand for skilled workers can very easily exceed their supply.

A good example of this problem currently is nurses in the Bay Area. They are very well paid however there is still a shortage because there isn't enough teaching available. The teachers are of course experienced nurses, so there's no way to increase the supply of teachers without further reducing the supply of nurses.

So while supply and demand will solve them problem eventually, you might have to wait 20 years and in the world of business someone else is going to eat your lunch during that time.

Twenty years? No way. Maybe five or ten years for something like nursing.

Programmers can learn a language in a few months and become professionally proficient in two years or so. It's a lot closer to factory work than rocket science.

Beyond that there are a bunch of 50+ year old guys with perfectly good skills who can't get jobs because they don't fit the common (erroneous) mental picture of a software developer. There's no shortage of IT people in the US and never has been.

I'm not sure I would agree with you that programming is closer to factory work than rocket science. If programming were closer to factory work, Disney would have outsourced it 10-15 years ago to China. :)

Companies large and small have been outsourcing development work for decades.

You mean, like IBM has done with India.

Very well paid is relative, especially when you factor in the cost of living somewhere like the Bay Area. I personally know several experienced nurses who would happily move if it meant increasing their overall standard of living.

It's always about salary. The shortage of nurses could be easily filled if they were raised. Instead hospitals prefer to cut it close, running borderline unsafe units on busy days

This is a fair point, one of the strongest arguments to be made for very specific work visas.

The problem, then, is how to allocate those visas without suppressing the market signals that would, long term, bring pay into balance.

All kinds of differences of opinion on this one from reasonably people. I tend to take a very suspicious view point on government intervention to control prices. I look at high level tech jobs, and to me, it looks like they generally require majoring in the hardest undergraduate subjects, and often (sometimes preferred, sometimes required) require gaining admission to top programs with high standardized test scores and GPAs, and finishing grad programs with much higher attrition rates than elite med, law, or business schools (UCSF's medical school attrition rate is below 0.5%, whereas top PhD programs often have attrition rates of 50%. MS programs are harder to find data on - all I could get was aggregate (rather than elite) and it was behind a pay wall, but I believe it was 25-30%).

Although an MS is shorter than a med degree, and a PhD is about the same amount of time (considering residency), keep in mind, we're also talking about a "shortage", so I think it's reasonable to take a generous view of what compensation should be. I'd say people with grad degrees in math heavy STEM fields - even MS degrees, should probably be on a par in terms of salary and career stability with medical specialties before we should be talking too seriously about a "shortage" that wouldn't simply be explained by uncompetitive wages and working conditions. So overall, if it's relatively straightforward to earn over $300k a year with a grad degree from a top 20 engineering school, then I'd be more open to the notion of a "shortage". Otherwise, I'd say that people are just making economically rational decisions to stay out of STEM jobs, considering the skill and academic ability required to get grad degrees in this field.

I know that would cause sticker shock, but I'd say that if the average mid-career industry salary is much below 300k for these degree holders (to say nothing of job stability), I have trouble believing it isn't a crutch to avoid competing for workers who can participate freely in labor markets.

The other trick is to run job ads with impossible requirements (10+ years of Node.js, etc.) and hey, what do you know, we just don't have the skills required in this country!

I recall back in 2010 I saw job postings looking for a minimum 5 years experience writing iOS Apps. Never mind that the iOS SDK was only two years old at that point. #sigh

A lot of those is "job openings" that translate seniority to years of experience

So the recruiter inputs "wants senior node.js dev" and the software outputs "10+ years Node.js"

It doesn't actually seem that complicated - just stipulate that H1B workers must work on site, for the company they are employed for, not as a contractor.

Obviously that would need enforcement, but they already do checkups on some of these things, and if they're paired with high enough fines these outsourcing firms won't risk it.

Follow the money, the US corporations are at least in their mind are saving a lot of operational cost with Outsourcing, so they do lobby for H1B workers of outsourced company to work in their campuses.

Its not a coincidence that decades of Visa abuse is ignored, there are bigger forces than these outsourcing companies namely, the chamber of commerce et al.

In my wildest dreams, I wish the tax system would allow the deduction of salaries and benefits payed to citizens but not to foreign workers. That would change the incentive for companies. Or, add a tax on foreign workers to help pay unemployment for citizens.

they already do collect medicare and social security from foreign workers.

I want the company that receives the H1B to pay an addition tax on the salary that goes to unemployment. It needs to be something above an beyond what is payed for a citizen. After all, the H1B is supposed to have skills that the local workers don't and thus should be worth the extra money.

Unless you are tarring ships, you mean paid, not payed.

As an H1-B holder you have to jump through many hoops, including constant attention to your command of the language. How does it feel to be judged? :)

More importantly, why would you expect more from a foreign applicant that from a local? The point is there shouldn't be discrimination, in either way. H1-Bs are for specialty occupations that are in high demand to begin with. Not sure what encourages you to be more catholic than the Pope.

> Unless you are tarring ships, you mean paid, not payed.

> As an H1-B holder you have to jump through many hoops, including constant attention to your command of the language. How does it feel to be judged? :)

I never brought up language issues, that is your hang-up and a distraction from my point. Further, if you think everyone isn't judged, then you are just loopy.

> More importantly, why would you expect more from a foreign applicant that from a local?

Because that is the stated legal purpose of the H1B program. It says that H1B workers have skills that the local programmers do not.

> The point is there shouldn't be discrimination, in either way.

In personal dealings, here we are talking about a government's responsibility to its citizens.

> H1-Bs are for specialty occupations that are in high demand to begin with.

If Disney decides to fire all its IT workers and replace them with contracted H1Bs then I would say the law failed. The purpose of the law is to fill knowledge gaps not add labor to the market.

> Not sure what encourages you to be more catholic than the Pope.

The law states the purpose.

Your whole premise is, and I quote, "H1B is supposed to have skills that the local workers don't and thus should be worth the extra money."

That's false. I think you are mistaken about what an H1-B visa is: it's a temporary, non-immigrant visa that allows people with specialty occupations (and thus in high demand) to work for 6 years in the States.

The skill condition (as determined by a LCA application) to get one is not that you should have extraordinary skills the locals don't (That would be an O-1 visa, or an EB-1), but rather that you have the skills and the degree, and that your employer is willing to compensate you as well as they would compensate a local.

If you don't believe me, here's a link to USCIS: http://www.uscis.gov/eir/visa-guide/h-1b-specialty-occupatio...

I won't deny that there's abuse by big corporations using H1-Bs to hire people that look like seniors but are really junior in skill, but it's cause they skirt the law and have gotten away with it so far. I see no sanctions to Infosys or Tata for selling people with say, Junior Engineer skill as Seniors, but what I see lots of hate towards the H1-B workers. If Disney fired the senior IT guys and replaced them with recent graduates, told them to train them, it would be the exact same situation, only we wouldn't be hearing "they took our jobs".

So as with everything in this country, the suits fuck the little guy over and the little guy blames the neighbor.

"That's false. I think you are mistaken about what an H1-B visa is:"

No, you do not understand the H-1B http://www.dol.gov/whd/immigration/h1b.htm

"The intent of the H-1B provisions is to help employers who cannot otherwise obtain needed business skills and abilities from the U.S. workforce by authorizing the temporary employment of qualified individuals who are not otherwise authorized to work in the United States."

You looked at only the foreign worker part and not the American company part.

> the H1B is supposed to have skills that the local workers don't

Given that, wouldn't it make more sense for the extra money to go into education? How is contributing to unemployment going to get Americans more jobs?

What about companies that need the skills but can't afford the more expensive workers? If I'm a small startup with a $200k budget for an <insert niche field> expert but there are no citizens with the skills available (at all), paying $220k may not be an option, leaving me with either a loan or without the skills I need.

> Given that, wouldn't it make more sense for the extra money to go into education? How is contributing to unemployment going to get Americans more jobs?

Unemployment is the result and those budgets are stretched these days. In some place unemployment pays for classes.

> What about companies that need the skills but can't afford the more expensive workers? If I'm a small startup with a $200k budget for an <insert niche field> expert but there are no citizens with the skills available (at all), paying $220k may not be an option, leaving me with either a loan or without the skills I need.

Why do you think its ok to not pay people the market rate just so you can benefit? Perhaps you need to compensate by equity or profit sharing? Why are workers less valuable then your startup?

> Unemployment is the result

Unemployment isn't the result of H1B, it's the result of Americans lacking the necessary skills. H1B is also the result of that lack of skill. Yes the H1B is abused but that's a separate issue to what I'm saying.

> and those budgets are stretched these days

Well you can either increase the budget or reduce the unemployment. One results in unproductive money drain, the other results in more people performing productive tasks.

> Why do you think its ok to not pay people the market rate just so you can benefit?

I'm not saying not to pay the market rate, I'm saying there's no market. There are 10 people with the skills I need in the country. All of them are at megacorps and being paid $200k, which is the same I'd offer. I'm just a small company, I can't compete with a megacorp.

> Unemployment isn't the result of H1B, it's the result of Americans lacking the necessary skills.

No, the workers had the skills and were doing the job. Its the result of a company wanting those same skills cheaper. Unemployment is the result.

> I'm not saying not to pay the market rate, I'm saying there's no market. There are 10 people with the skills I need in the country. All of them are at megacorps and being paid $200k, which is the same I'd offer. I'm just a small company, I can't compete with a megacorp.

If there are truly only 10 people who can do what you need then that is what the H1B program was for. If the skill is valuable maybe you need to figure out other incentives than salary.

> No, the workers had the skills and were doing the job. Its the result of a company wanting those same skills cheaper. Unemployment is the result.

That's abuse of the H1B, something that I acknowledge but is a separate issue. I acknowledge that abuse of the H1B results in unemployment. I'm arguing for the H1B as it was intended.

> If there are truly only 10 people who can do what you need then that is what the H1B program was for.

Exactly.

> If the skill is valuable maybe you need to figure out other incentives than salary.

I can't hope to compete with a megacorp and that's my point. No matter what I offer they can outdo it. My only hope is to find employees outside the megacorp which means employees outside the US.

I would rather burden the employer with additional tax, scrutiny and labor rules. This mechanism is to reset to original intent of acquiring talent rather than cost-saving labor (as currently practiced).

I meant the employer of the H1B needs to pay an additional tax.

> This mechanism is to reset to original intent of acquiring talent rather than cost-saving labor (as currently practiced).

completely agree - also looking at folks who come here to be educated getting work visas.

You can get it back when you turn 65.

No you cannot, unless you have been paying into the system for 10 years. If you have, then you probably have a green card by then. If not, you should get one anyway since you've spent a decade of your life in the country that your pretty much american by that point. Legally and paying a lot of taxes.

You would never get medicare treatment as only an H1-B worker, since if your unemployed, you cannot stay in the country long enough to be able to use medicare benefits much.

So you effectively pay at %12 tax on your income that you will never see the benefits of unless you immigrate.

> No you cannot, unless you have been paying into the system for 10 years.

Ah yeah;

But IIRC, there are some reciprocating treaties that let me get my money out?

This mentions that for australians it is reduced to 18 months: https://www.dss.gov.au/about-the-department/international/in...

A simple enough solution is to require H-1B to be given only if the salary is X% above the industry average for the position. Then companies will only use them for people whose skills are actually difficult to find in the USA.

Edit: wording

That would just lead to employers redefining which "industry" a particular position is in.

It's the whole company that operates in a given industry, not the particular position. If you're a software consulting company, you can't say you want a visa for a farming position...

But you could create a "farming division" which then loans that employee to the software consulting division :)

Very few companies operate only within one industry

Let me get this straight - just as soon as the Department of Justice opens an investigation into the two major consultancies, Tata and Infosys, Disney decides to walk-back its plan of layoffs and replacement?

At the end of the day, I'm sure this will get swept under the rug and nobody in an Executive position - at any company (Tata, Infosys, Southern Cal Edison, Fossil, Disney, etc) - will actually face prosecution as an individual for manipulating / corrupting the system. However, there may be a job or two lost in shuffling around in order to sign a declaration that "We admit no wrongdoing and promise not to do it again" which ties up the investigation and puts a bow on it. Case closed.

Yet another metaphorical example of how the top tier of "business leaders" and decision makers pander to the top tier of the richest individuals ("investors") and have absolutely no disincentive to continually gutting the middle class and young generation of US Citizen workers who are ridiculously underemployed at this time.

This doesn't seem like great reporting - largely unrelated to the Orlando event that triggered the NYT article.

This worker's blog seemed pretty insightful: https://plus.google.com/+KeithBarrett/posts/PWA6BXs7dbS

Taking his comment about revenue focused technology being developed in that office, it doesn't seem like it was a smart business move to lose the experience of the staff they had in place already.

Thinking about it, perhaps some fine Congress Person could add a line to the H1B regulations that specifically states that an H1B cannot be billed out to other parties.

"The Labor Department said last week that it had opened an investigation into two outsourcing companies, Tata Consultancy Services and Infosys..." Disney was using both. And suddenly, Disney management decides that maybe violating labor law isn't such a good idea.

The US has reasonably good labor laws, but weak enforcement and too-small penalties.

Now if only the Australian government would follow suit and follow through with investigations of similar practices here. Abuse of "skilled immigration" 457 visas is rampant.

I am more than a bit shocked. Of course I assumed there would be some abuse of H1B visas, but I never imagined a company would give the workers being displaced proof of such abuse.

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