3 ms·

I think you're missing two key points here - 1) what are corporations doing with their increased profits as a result of tactics like abuse of the H1B system?, a

I think you're missing two key points here - 1) what are corporations doing with their increased profits as a result of tactics like abuse of the H1B system?, and 2) what portion of H1B salaries ends up back in the US economy vs. abroad? The net effect for the overall economy is only going to be better under the current H1B system if companies reinvest their profits into productive uses, which they haven't been [1]. And if H1B workers spend their earnings in the US instead of sending that money back home. I don't have solid data on this last point, but having worked with many H1Bs over the years I can at least anecdotally confirm it. You can also look at our trade deficit with India as another data point here [2]. We are not, in fact, selling more stuff into India than they sell us. There's a pretty strong argument to be made that the current system is more harmful than helpful to the economy as a whole. [1] https://www.nytimes.com/2016/01/24/magazine/why-are-corporations-hoarding-trillions.html?_r=0 https://www.nytimes.com/2016/01/24/magazine/why-are-corporat... [2] https://ustr.gov/countries-regions/south-central-asia/india https://ustr.gov/countries-regions/south-central-asia/india

dxhdr 10y ago
> 1) what are corporations doing with their increased profits as a result of tactics like abuse of the H1B system? I'll answer that for anyone confused: stock buybacks, of course!
valuearb 10y ago
It's not about selling stuff to India, its about selling stuff to the world and Indian developers help us do that. And it's not H1B abuse it's what it's intended for. Since we slammed the door on immigration 50 years ago, this program was created to release a tiny amount of the massive pressure of super smart people world wide who want to come to the US and help make it better. It's funny that engineers don't get the massive benefits of free trade that built this country, and the huge risks (Smoot Hawley) of trade barriers to our economy. Every dollar we send to India has to be spent in the US to be worth anything. They can save it, store it, send it to other countries, but it's nothing but imaginary paper if no one ever buys something from the US or reinvests it here. And if you are tired of foreigners buying our T-Bills instead of our goods/services, then stop running such massive budget deficits and fix the corporate income tax system that is taxing reinvested capital so highly that US firms are forced to park their foreign profits overseas to avoid losing nearly half of them to federal and state taxes. It's like a farmer eating their seed corn.
- yuhong 10y ago
  Even after then restoring manufacturing may be non-trivial. I have been thinking that currently NAND fabs would be good, not to restore jobs but to restore the balance of trade. It is probably not a simple matter though.
- ModusPwnens 10y ago
  If it's for the super smart people, it won't make a difference if we pay them a lot of money instead of the current standard, right? The super smart should get paid a wage that reflects how smart they are.
- mdorazio 10y ago
  I'm sorry, but I'm somewhat confused by your comment. Are you for or against the current H1B system? I'm not sure what economic outcome you're saying is its natural result. To your point on corporate taxes, please see [1] and [2]. The effective tax rate on US corporations is on par with that for corporations in other large Western countries. I'm all for reforming the corporate tax code, but talking about it as though the effective rates are sky-high is not really going to get us very far. [1] http://www.forbes.com/sites/taxanalysts/2015/03/25/the-truth-about-corporate-tax-rates/#7cf95b0a20a5 http://www.forbes.com/sites/taxanalysts/2015/03/25/the-truth... [2] https://fas.org/sgp/crs/misc/R42726.pdf https://fas.org/sgp/crs/misc/R42726.pdf
msie 10y ago
And if H1B workers spend their earnings in the US instead of sending that money back home. What? They're spending no money on rent, food or taxes? How's that possible? And what about the Americans who save their money?
- mdorazio 10y ago
  It's a matter of amounts, not of yes/no. Of course they pay rent and buy food, but in what comparative amounts? If you send half of your money outside the country, where very little of it makes its way back to supporting the US economy, that's worse than if your salary was given to someone who was going to use it all inside the US. If you disagree with that, please provide some numbers for us to use as examples. Also, please point me to these Americans who save their money. The average domestic savings rate is 5.7% and almost all of that is money stored in US bank accounts and stocks, which in turn is used to help the US economy.

dxhdr 10y ago

> 1) what are corporations doing with their increased profits as a result of tactics like abuse of the H1B system? I'll answer that for anyone confused: stock buybacks, of course!

valuearb 10y ago

It's not about selling stuff to India, its about selling stuff to the world and Indian developers help us do that. And it's not H1B abuse it's what it's intended for. Since we slammed the door on immigration 50 years ago, this program was created to release a tiny amount of the massive pressure of super smart people world wide who want to come to the US and help make it better. It's funny that engineers don't get the massive benefits of free trade that built this country, and the huge risks (Smoot Hawley) of trade barriers to our economy. Every dollar we send to India has to be spent in the US to be worth anything. They can save it, store it, send it to other countries, but it's nothing but imaginary paper if no one ever buys something from the US or reinvests it here. And if you are tired of foreigners buying our T-Bills instead of our goods/services, then stop running such massive budget deficits and fix the corporate income tax system that is taxing reinvested capital so highly that US firms are forced to park their foreign profits overseas to avoid losing nearly half of them to federal and state taxes. It's like a farmer eating their seed corn.

yuhong 10y ago
Even after then restoring manufacturing may be non-trivial. I have been thinking that currently NAND fabs would be good, not to restore jobs but to restore the balance of trade. It is probably not a simple matter though.
ModusPwnens 10y ago
If it's for the super smart people, it won't make a difference if we pay them a lot of money instead of the current standard, right? The super smart should get paid a wage that reflects how smart they are.
mdorazio 10y ago
I'm sorry, but I'm somewhat confused by your comment. Are you for or against the current H1B system? I'm not sure what economic outcome you're saying is its natural result. To your point on corporate taxes, please see [1] and [2]. The effective tax rate on US corporations is on par with that for corporations in other large Western countries. I'm all for reforming the corporate tax code, but talking about it as though the effective rates are sky-high is not really going to get us very far. [1] http://www.forbes.com/sites/taxanalysts/2015/03/25/the-truth-about-corporate-tax-rates/#7cf95b0a20a5 http://www.forbes.com/sites/taxanalysts/2015/03/25/the-truth... [2] https://fas.org/sgp/crs/misc/R42726.pdf https://fas.org/sgp/crs/misc/R42726.pdf

msie 10y ago

And if H1B workers spend their earnings in the US instead of sending that money back home. What? They're spending no money on rent, food or taxes? How's that possible? And what about the Americans who save their money?

mdorazio 10y ago
It's a matter of amounts, not of yes/no. Of course they pay rent and buy food, but in what comparative amounts? If you send half of your money outside the country, where very little of it makes its way back to supporting the US economy, that's worse than if your salary was given to someone who was going to use it all inside the US. If you disagree with that, please provide some numbers for us to use as examples. Also, please point me to these Americans who save their money. The average domestic savings rate is 5.7% and almost all of that is money stored in US bank accounts and stocks, which in turn is used to help the US economy.