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> So if the median salary for skill X in locale Y is 150 and foreign labor is willing to accept 120, apply a 30 tax to neutralize any difference. I wish that e

> So if the median salary for skill X in locale Y is 150 and foreign labor is willing to accept 120, apply a 30 tax to neutralize any difference. I wish that every single individual who on this site rants against H1B, understood one thing about H1B (or any law in general): The intent of a policy isn't always the real usage of a policy. Or in more general, the art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. I can clearly see how you approach this problem. You see these economics and incentive problems as some sort of equation, where you notice that foreign labor undercuts local labor in terms of wages. So your solution is: "Lets make it expensive for companies to hire foreign labor", but that's incredibly naive. The elements of the equation you're missing is: * H1B is a path to immigration, not just some mechanism (as stated by the policy) to acquire labor. The stated reason is how it might have been sold to the American people, but at the end of the day, it's how high skilled immigrants come to America. * The foreign labor is much larger, and (economically) diverse than you think. If you put a 30 tax on a foreign labor who is willing to accept 120, then some other foreign labor who is willing to take 110 would find himself in demand. * H1B regulations make it difficult for the foreign labor to easily change jobs, this results in them being more 'loyal' (that is, they work for a company for longer than their local counterparts), which means it's worth investing the training time on foreign labor (which means they would hire a 100K foreign labor for a job which needs a 150K local talent, pay 30K and train him). * The reason why local talent can't be paid what they are asking for, is because not every product has the same 'gross profit margin'. People are willing to pay $600 for a smartphone which can be produced for $300(gross profit margin 100%), but they are not willing to pay $300 for a smart watch which is being produced for $150. However smartwatches could be sold if they were available for $250(that is if they carried a gross profit margin of 60%). Lower profit margin means that the local talent who demands $150K may not be available for hire.

riskable 10y ago
> H1B regulations make it difficult for the foreign labor to easily change jobs, this results in them being more 'loyal' (that is, they work for a company for longer than their local counterparts), which means it's worth investing the training time on foreign labor (which means they would hire a 100K foreign labor for a job which needs a 150K local talent, pay 30K and train him). I think this claim is BS. I've worked in enterprises large and small for about 18 years and I've never seen any company invest in training H1Bs, specifically. If a company offers training (which most don't these days) it is offered to all employees. Not just H1Bs. Also, why invest in training H1Bs when by definition they're "temporary"? Most H1Bs are employed by the likes of consultancies (e.g. Tata, Wipro) and are brought into companies for terms of six months to two years (sometimes three) and I'm sure the majority of the contracts are at the shorter end of the scale (six months to a year). It doesn't make sense to spend three to six months training someone only to kick them out the door six months later. Training is an investment. Why would you spend money on that if you didn't expect that investment to stick around for very long? It explains a lot of what's going on in IT these days where employees are treated as expendable and interchangeable.
- splintercell 10y ago
  > I think this claim is BS. I've worked in enterprises large and small for about 18 years and I've never seen any company invest in training H1Bs, specifically. If a company offers training (which most don't these days) it is offered to all employees. Not just H1Bs. < There have been many incidences where American employees had to train their H1B replacements. [1] There are many other ways this 'training' is implemented, When I say training, I mean the task of converting a less skilled employee into a higher skilled employee. One way of doing it is, a third party sponsors H1B, does the whole headache of hiring a foreign worker, and then they send those people to client location. The third party often exaggerates the experience of their employee, and most of the time there is a quick and fast training program in place (this training program is a proper training program). Many times these H1Bs are blatently lying about what they know or for how long they know, and most clients have a rough idea of how this works, they also know that these noobies are really under pressure to learn according to what they're claiming and that they are cheap. Consider it to be this way, imagine if you have a bunch of friends who currently work as a waiter, bus boy, chef, and dishwashers. You get them to join your company, you make them go through code academy style bootcamp, train them into knowing every crazy thing about Jenkins CI tool, and then send them to clients by claiming that you have a guy who is a Jenkins expert. Great business plan right? Maybe not, but this is exactly what Indian IT companies do, except the people they pick all have engineering degrees and decent Mathematical training in high school (otherwise they'd have never gone to Engineering school). > Most H1Bs are employed by the likes of consultancies (e.g. Tata, Wipro) and are brought into companies for terms of six months to two years (sometimes three) < The main job of Tata and Wipro is to train these people to be good enough so that they can work at a client location. If an employee fails, then they just send him to more training. 1. https://www.conservativereview.com/commentary/2016/02/disney-worker-breaks-down-when-describing-how-he-trained-his-foreign-guest-worker-replacement https://www.conservativereview.com/commentary/2016/02/disney...
mc32 10y ago
The company would always pay 150, regardless of what the foreign worker accepts. The company is taxed on the difference. So for someone accepting 90, the company pays 60, for someone accepting 140, the company pays 10, for someone demanding 160, the company pays 10, etc.

riskable 10y ago

> H1B regulations make it difficult for the foreign labor to easily change jobs, this results in them being more 'loyal' (that is, they work for a company for longer than their local counterparts), which means it's worth investing the training time on foreign labor (which means they would hire a 100K foreign labor for a job which needs a 150K local talent, pay 30K and train him). I think this claim is BS. I've worked in enterprises large and small for about 18 years and I've never seen any company invest in training H1Bs, specifically. If a company offers training (which most don't these days) it is offered to all employees. Not just H1Bs. Also, why invest in training H1Bs when by definition they're "temporary"? Most H1Bs are employed by the likes of consultancies (e.g. Tata, Wipro) and are brought into companies for terms of six months to two years (sometimes three) and I'm sure the majority of the contracts are at the shorter end of the scale (six months to a year). It doesn't make sense to spend three to six months training someone only to kick them out the door six months later. Training is an investment. Why would you spend money on that if you didn't expect that investment to stick around for very long? It explains a lot of what's going on in IT these days where employees are treated as expendable and interchangeable.

splintercell 10y ago
> I think this claim is BS. I've worked in enterprises large and small for about 18 years and I've never seen any company invest in training H1Bs, specifically. If a company offers training (which most don't these days) it is offered to all employees. Not just H1Bs. < There have been many incidences where American employees had to train their H1B replacements. [1] There are many other ways this 'training' is implemented, When I say training, I mean the task of converting a less skilled employee into a higher skilled employee. One way of doing it is, a third party sponsors H1B, does the whole headache of hiring a foreign worker, and then they send those people to client location. The third party often exaggerates the experience of their employee, and most of the time there is a quick and fast training program in place (this training program is a proper training program). Many times these H1Bs are blatently lying about what they know or for how long they know, and most clients have a rough idea of how this works, they also know that these noobies are really under pressure to learn according to what they're claiming and that they are cheap. Consider it to be this way, imagine if you have a bunch of friends who currently work as a waiter, bus boy, chef, and dishwashers. You get them to join your company, you make them go through code academy style bootcamp, train them into knowing every crazy thing about Jenkins CI tool, and then send them to clients by claiming that you have a guy who is a Jenkins expert. Great business plan right? Maybe not, but this is exactly what Indian IT companies do, except the people they pick all have engineering degrees and decent Mathematical training in high school (otherwise they'd have never gone to Engineering school). > Most H1Bs are employed by the likes of consultancies (e.g. Tata, Wipro) and are brought into companies for terms of six months to two years (sometimes three) < The main job of Tata and Wipro is to train these people to be good enough so that they can work at a client location. If an employee fails, then they just send him to more training. 1. https://www.conservativereview.com/commentary/2016/02/disney-worker-breaks-down-when-describing-how-he-trained-his-foreign-guest-worker-replacement https://www.conservativereview.com/commentary/2016/02/disney...

mc32 10y ago

The company would always pay 150, regardless of what the foreign worker accepts. The company is taxed on the difference. So for someone accepting 90, the company pays 60, for someone accepting 140, the company pays 10, for someone demanding 160, the company pays 10, etc.