8 ms·

WSJ: H-1B Visas Keep Down U.S. Tech Wages, Study Shows

67 points by woobar 10y ago

DarkKomunalec 10y ago
I wonder if unskilled immigration has the same effect on unskilled wages...
- ousta 10y ago
  i know you know that it has.
sly010 10y ago
Did it occur to anyone that it's US companies that "keep down" US tech wages?
- goldmouth 10y ago
  This is also a well known contributor. Remember when Google and Apple were caught (and maybe fined?) for suppressing wages a few years ago?
  - pravula 10y ago
    Class action lawsuit with settlement, not just a fine.
cashmonkey85 10y ago
Crazy that an increase of supply depresses the price in a market. I have not been this outraged since I discovered water was wet. Competition makes our world prosperous. We should welcome it
- rajeshp1986 10y ago
  Not in this case and this is not very hard to understand. The H1bs who come to US are exploited by companies and are paid less than market salary. The reason most companies give is because they have to bring the person from overseas they have made significant investment in time & money and therefore pay them less.
- richardlong 10y ago
  > Competition makes our world prosperous. Competition only increases efficiency if the price of a good is currently inflated. Labor is likely under-priced as a good relative to other expenditures, like property and the means to production, so an increase in competition for jobs does not necessarily equate to a more highly functioning society.
  - acchow 10y ago
    You're ignoring the creation of new goods via reinvestment of profits. In any case, for a given good if there is any profit at all being made (which...well, there should be otherwise the producers wouldn't exist) then the price of the good is (I will borrow your language) "inflated" and has room for competition to be brought down. There's a lot of stuff wrong with your claims, I don't know where to begin...
    - richardlong 10y ago
      Profits aren't automatically inflated margins. There are healthy margins, and there are inflated margins. There are even margins that are so thin that it's unhealthy, as in the airline industry. Now, to loop back around to your point about investment; either party having additional capital will allow that party to further invest. That is true in the case of formalized businesses, like the ones your thinking about, who can further invest in capital goods. However, it's also true of more informal businesses that you're ignoring, specifically, the employed individuals themselves. Employees are in the business of services -- they perform some labor, be it mental or physical, and are paid for that labor. Formalized businesses are their customer. Profits that those employees obtain are also capital which can be invested -- whether that investment is in their health, their happiness, their residences, their educations, buying tools, the stock market, creating new businesses, affording time to raise and educate their children, and so on. Theories of economics which ignore that the employed are also themselves informal businesses are disjointed, and fail to explain the totality of economic growth and investment.
- Zigurd 10y ago
  There's the baby, which is highly talented people educated at elite universities overseas. Then there is the dirty bathwater, which is seat warmers hired at the lowest possible wages by "body shops" that bill them out to government and corporate customers. The first does create prosperity. The second, not so much. There are several possible fixes: Auction visas with a high minimum. Disallow contracting-out workers on visas. Etc. It's a system that would be easy to fix at zero cost, and maybe even could be made into a source of revenue.
  - davidf18 10y ago
    Or would could enforce the law. The H1-B Visa program was intended to fill jobs for which there were no Americans with those skills desired. There should be some sort of approval process from an institution or firm that does not have a conflict of interest with the firms applying for H1-B Visas.
    - Zigurd 10y ago
      The problem is that the law as written, while it sounds like it should not allow body shops to hire phalanxes of seat warmers, has been lawyered-around (and by that I mean there are lawyers specializing in fitting your favored candidate to an H1-B visa): Post a job description that's impossible to fill, and then arbitrarily accept that the H1-B applicant meets the job criteria. Short of litigating every case, how do you stop that?
deleted 10y ago
[deleted]
jstewartmobile 10y ago
Let the economisms commence!
scott00 10y ago
Public service announcement: There is no such thing as a labor shortage. Having trouble hiring developers? Offer a salary of $1 million per year. Your new problem will be job applicant crowd-control. Whenever an employer reports a labor shortage they mean they can't find enough people to take jobs AT THE WAGE THEY ARE WILLING TO PAY. Lest you brand me a red shirt-wearing Das Kapital-waving pinko commie, let me lay another one on you: there is no such thing as a job shortage. Whenever anyone reports a shortage of jobs they mean they can't find anyone willing to employ their skill set AT THE WAGE THEY ARE WILLING TO ACCEPT. Any discussion of the labor market that focuses on quantity supplied, or quantity demanded, without addressing the necessarily-related price issues is ignorant at best, and very likely intentionally deceptive.
- Eridrus 10y ago
  This seems like an argument that can be used to argue that shortages cannot exist for anything you can buy. The same rough argument could be used to argue that food shortages cannot exist. I'm pretty sure the word shortage already implies that there is a shortage at the market price, not at an arbitrary price.
  - dragonwriter 10y ago
    > I'm pretty sure the word shortage already implies that there is a shortage at the market price "Shortage at the market price" seems to be a somewhat incoherent concept. The market price is the price point at which the supply and demand curves intersect. Other than a discontinuity in either supply or demand such that the curves pass without intersecting (which makes the market price ill-defined), demand equals supply at the market price.
    - Eridrus 10y ago
      I agree that it's poorly defined, but I would argue that a shortage at the market price implies that buyers would buy more at the market price if more of it was available. We're pretty comfortable talking about shortages in consumer markets when we would buy things at the stated price, but can't because it is sold out (eg Pixel phone shortages), so I'm not sure why we can't say a similar thing about labour.
davidf18 10y ago
Another article explaining how colleges graduate twice as many STEM workers as there are jobs. http://www.pbs.org/newshour/making-sense/the-bogus-high-tech-worker-sho/ http://www.pbs.org/newshour/making-sense/the-bogus-high-tech... EDIT: (from the article) "Currently, U.S. colleges graduate far more scientists and engineers than find employment in those fields every year — about 200,000 more — while the IT industry fills about two-thirds of its entry-level positions with guest workers." One of the reasons that SV tech firms hated Trump was because he wanted to stop the abuse of H1-B Visas. Even Republican and head of HP Meg Whitman said she was voting against Trump. His promise to fix the H1-B Visa abuse would mean that HP would have to pay market wages for programmers and engineers.
- thatWasntFun 10y ago
  Thank you for pointing this out. Not two weeks ago I was "hired" by a firm to do some consulting for them, during which time they extracted data on "how" to solve a problem (NLP related) and then flew in some dude form India to code the solution. I made a decent wage. For two days. He undoubtedly was a faste progrmmer than me, but fuck if we both didn't get used. I live in a state that thinks the word union means that General Sherman is fixing to burn down the capital, so there's little to no recourse. And I am hesitant about even writing this given how shadily I was treated. Needless to say, there are many reasons why DT was elected, but one of the primary ones is because he promised a thousand times if he promised once that he would slow the tide of incoming labor to shore up the lessening of wage depreciation. I also love how ten years ago the Department of Labor "projected" that STEM career growth would continue unabated for many years, and yet now I can't find a job writing code for literally anyone beyond the example I mentioned earlier. If this is the future, we are completely and totally fucked. Save your pennies folks, you're going to need the copper. Oh, and don't forget to make sure to keep taxes off the rich and the jobs outsourced so the poor Americasn can take it in the ass until the next "public servant" gets elected and doesn't do what they said they would. Meanwhile, I'll be teaching 7 year olds to code hello world (if I am ever lucky enough to actually get a GD job that isn't flipping burgers or pouring sweet fucking tea) while pining for the research position I spent more than three decades in school to be smart enough to do. God Bless America, and all of the nations "she" serves.
sumitgt 10y ago
I feel that there are some core issues that can fix the problem: 1) Solve the Green-Card backlog issue that forces people in the backlog to stick with their current jobs. This is a major thing, that is not talked about more often. 2) Simple merit/salary based priority queue to grant VISAs. I have never quite understood why there is this urge to entirely get rid of it instead of fixing it to do what it was originally supposed to do. Edit: On an H1B right now, and I do think there needs to be major fixes.
- richardlong 10y ago
  Giving H-1Bs expedited green cards only accelerates the decline of the price of skilled labor.
  - aanm1988 10y ago
    You still have caps. The difference is you don't have H-1B workers who are trapped in jobs and have little power to move around and increase their wages. You can see this today. Look at the number of GC sponsorships by companies that treat H-1B employees well (Google, Microsoft, etc...) vs the consulting companies like Infosys and Tata. They have no interest in getting their employees green cards because then they have no power over them.
  - bobdole1234 10y ago
    The knowledge economy isn't a zero sum game. Adding skilled labour can allow more opportunities to add more skilled labour jobs. Without the extra slack, there's no opportunity. Part of what makes Silicon Valley work is that there's a lot of talent that is somewhat slack to allow for new companies to get started.
  - sumitgt 10y ago
    @richardlong: I'm not even talking about expedited GCs. Even the normal GC process is horribly broken for people who are born in India. Look up "Green Card backlog India" related searches. Currently it would anywhere from 15 to 35 years for a H1-B from India to get a Green Card after their Perm is filed.
vanattab 10y ago
I don't understand why we don't just make the minimum H-1B visa salary 130k-150k. If it true that there are no other candidates that have the skills you need in the entire country then surely that skill set is worth a solid six figures.
guitarbill 10y ago
What I don't get is why they don't just raise the minimum pay for H1-B visas. It might not fix all issues for this type of visa in the long run. But the fact that the minimum pay was set in 1989 seems like an obvious issue to me. This would seem to be corroborated by the numbers. The lottery system is arguably the worst part of it, it punishes companies who carefully and rigorously select candidates and rewards companies who "spam" applications. Again, while not perfect, compensation is probably an okay proxy for how selective the interview process is. Apart from the people abusing the system, who is against a market rate/inflation adjustment? I have no stake in this, but I really don't understand.
- xiaoma 10y ago
  >"What I don't get is why they don't just raise the minimum pay for H1-B visas." That was a key part of Trump's proposed bill. IRRC, the proposal is to increase the minimum from $60k to $130k. Interestingly $60k in 1989 was worth what $117k is in 2017. In other words, given current inflation rates, it's very likely that the new minimum will be the 2020 or 2021 equivalent of the original minimum. That would suck for low-end outsourcing body shops, be good for the giant SV tech companies and probably remain about equally sucky for young start-ups as it is now.
  - duskwuff 10y ago
    Startups have never really benefited from the H-1B system anyways -- they rarely have the resources to discover and interview candidates from outside the country, nor are they willing to wait 6+ months for a visa application to be reviewed, especially when there's a good chance that it may be randomly rejected.
    - camelspade 10y ago
      I think you might be ignoring the international students who graduate from US universities? They also need to go through the H1-B process.
  - bobdole1234 10y ago
CodeWriter23 10y ago
How preposterous that a question like this requires a study to answer it. It doesn't take a PhD in high math to know that corporations hire foreign workers because they cost less. IOW, Duh!
exabrial 10y ago
I don't mind H1B visas. What I do mind is tech companies paying them significantly less than their US counterparts [exploiting foreign workers]. Hence I'm ok with limiting the program until measures and audits are in place to good that situation.

67 points by woobar 10y ago

DarkKomunalec 10y ago

I wonder if unskilled immigration has the same effect on unskilled wages...

ousta 10y ago
i know you know that it has.

sly010 10y ago

Did it occur to anyone that it's US companies that "keep down" US tech wages?

goldmouth 10y ago
This is also a well known contributor. Remember when Google and Apple were caught (and maybe fined?) for suppressing wages a few years ago?
- pravula 10y ago
  Class action lawsuit with settlement, not just a fine.

cashmonkey85 10y ago

Crazy that an increase of supply depresses the price in a market. I have not been this outraged since I discovered water was wet. Competition makes our world prosperous. We should welcome it

rajeshp1986 10y ago
Not in this case and this is not very hard to understand. The H1bs who come to US are exploited by companies and are paid less than market salary. The reason most companies give is because they have to bring the person from overseas they have made significant investment in time & money and therefore pay them less.
richardlong 10y ago
> Competition makes our world prosperous. Competition only increases efficiency if the price of a good is currently inflated. Labor is likely under-priced as a good relative to other expenditures, like property and the means to production, so an increase in competition for jobs does not necessarily equate to a more highly functioning society.
- acchow 10y ago
  You're ignoring the creation of new goods via reinvestment of profits. In any case, for a given good if there is any profit at all being made (which...well, there should be otherwise the producers wouldn't exist) then the price of the good is (I will borrow your language) "inflated" and has room for competition to be brought down. There's a lot of stuff wrong with your claims, I don't know where to begin...
  - richardlong 10y ago
    Profits aren't automatically inflated margins. There are healthy margins, and there are inflated margins. There are even margins that are so thin that it's unhealthy, as in the airline industry. Now, to loop back around to your point about investment; either party having additional capital will allow that party to further invest. That is true in the case of formalized businesses, like the ones your thinking about, who can further invest in capital goods. However, it's also true of more informal businesses that you're ignoring, specifically, the employed individuals themselves. Employees are in the business of services -- they perform some labor, be it mental or physical, and are paid for that labor. Formalized businesses are their customer. Profits that those employees obtain are also capital which can be invested -- whether that investment is in their health, their happiness, their residences, their educations, buying tools, the stock market, creating new businesses, affording time to raise and educate their children, and so on. Theories of economics which ignore that the employed are also themselves informal businesses are disjointed, and fail to explain the totality of economic growth and investment.
Zigurd 10y ago
There's the baby, which is highly talented people educated at elite universities overseas. Then there is the dirty bathwater, which is seat warmers hired at the lowest possible wages by "body shops" that bill them out to government and corporate customers. The first does create prosperity. The second, not so much. There are several possible fixes: Auction visas with a high minimum. Disallow contracting-out workers on visas. Etc. It's a system that would be easy to fix at zero cost, and maybe even could be made into a source of revenue.
- davidf18 10y ago
  Or would could enforce the law. The H1-B Visa program was intended to fill jobs for which there were no Americans with those skills desired. There should be some sort of approval process from an institution or firm that does not have a conflict of interest with the firms applying for H1-B Visas.
  - Zigurd 10y ago
    The problem is that the law as written, while it sounds like it should not allow body shops to hire phalanxes of seat warmers, has been lawyered-around (and by that I mean there are lawyers specializing in fitting your favored candidate to an H1-B visa): Post a job description that's impossible to fill, and then arbitrarily accept that the H1-B applicant meets the job criteria. Short of litigating every case, how do you stop that?

deleted 10y ago

[deleted]

jstewartmobile 10y ago

Let the economisms commence!

scott00 10y ago

Public service announcement: There is no such thing as a labor shortage. Having trouble hiring developers? Offer a salary of $1 million per year. Your new problem will be job applicant crowd-control. Whenever an employer reports a labor shortage they mean they can't find enough people to take jobs AT THE WAGE THEY ARE WILLING TO PAY. Lest you brand me a red shirt-wearing Das Kapital-waving pinko commie, let me lay another one on you: there is no such thing as a job shortage. Whenever anyone reports a shortage of jobs they mean they can't find anyone willing to employ their skill set AT THE WAGE THEY ARE WILLING TO ACCEPT. Any discussion of the labor market that focuses on quantity supplied, or quantity demanded, without addressing the necessarily-related price issues is ignorant at best, and very likely intentionally deceptive.

Eridrus 10y ago
This seems like an argument that can be used to argue that shortages cannot exist for anything you can buy. The same rough argument could be used to argue that food shortages cannot exist. I'm pretty sure the word shortage already implies that there is a shortage at the market price, not at an arbitrary price.
- dragonwriter 10y ago
  > I'm pretty sure the word shortage already implies that there is a shortage at the market price "Shortage at the market price" seems to be a somewhat incoherent concept. The market price is the price point at which the supply and demand curves intersect. Other than a discontinuity in either supply or demand such that the curves pass without intersecting (which makes the market price ill-defined), demand equals supply at the market price.
  - Eridrus 10y ago
    I agree that it's poorly defined, but I would argue that a shortage at the market price implies that buyers would buy more at the market price if more of it was available. We're pretty comfortable talking about shortages in consumer markets when we would buy things at the stated price, but can't because it is sold out (eg Pixel phone shortages), so I'm not sure why we can't say a similar thing about labour.

davidf18 10y ago

Another article explaining how colleges graduate twice as many STEM workers as there are jobs. http://www.pbs.org/newshour/making-sense/the-bogus-high-tech-worker-sho/ http://www.pbs.org/newshour/making-sense/the-bogus-high-tech... EDIT: (from the article) "Currently, U.S. colleges graduate far more scientists and engineers than find employment in those fields every year — about 200,000 more — while the IT industry fills about two-thirds of its entry-level positions with guest workers." One of the reasons that SV tech firms hated Trump was because he wanted to stop the abuse of H1-B Visas. Even Republican and head of HP Meg Whitman said she was voting against Trump. His promise to fix the H1-B Visa abuse would mean that HP would have to pay market wages for programmers and engineers.

thatWasntFun 10y ago
Thank you for pointing this out. Not two weeks ago I was "hired" by a firm to do some consulting for them, during which time they extracted data on "how" to solve a problem (NLP related) and then flew in some dude form India to code the solution. I made a decent wage. For two days. He undoubtedly was a faste progrmmer than me, but fuck if we both didn't get used. I live in a state that thinks the word union means that General Sherman is fixing to burn down the capital, so there's little to no recourse. And I am hesitant about even writing this given how shadily I was treated. Needless to say, there are many reasons why DT was elected, but one of the primary ones is because he promised a thousand times if he promised once that he would slow the tide of incoming labor to shore up the lessening of wage depreciation. I also love how ten years ago the Department of Labor "projected" that STEM career growth would continue unabated for many years, and yet now I can't find a job writing code for literally anyone beyond the example I mentioned earlier. If this is the future, we are completely and totally fucked. Save your pennies folks, you're going to need the copper. Oh, and don't forget to make sure to keep taxes off the rich and the jobs outsourced so the poor Americasn can take it in the ass until the next "public servant" gets elected and doesn't do what they said they would. Meanwhile, I'll be teaching 7 year olds to code hello world (if I am ever lucky enough to actually get a GD job that isn't flipping burgers or pouring sweet fucking tea) while pining for the research position I spent more than three decades in school to be smart enough to do. God Bless America, and all of the nations "she" serves.

sumitgt 10y ago

I feel that there are some core issues that can fix the problem: 1) Solve the Green-Card backlog issue that forces people in the backlog to stick with their current jobs. This is a major thing, that is not talked about more often. 2) Simple merit/salary based priority queue to grant VISAs. I have never quite understood why there is this urge to entirely get rid of it instead of fixing it to do what it was originally supposed to do. Edit: On an H1B right now, and I do think there needs to be major fixes.

richardlong 10y ago
Giving H-1Bs expedited green cards only accelerates the decline of the price of skilled labor.
- aanm1988 10y ago
  You still have caps. The difference is you don't have H-1B workers who are trapped in jobs and have little power to move around and increase their wages. You can see this today. Look at the number of GC sponsorships by companies that treat H-1B employees well (Google, Microsoft, etc...) vs the consulting companies like Infosys and Tata. They have no interest in getting their employees green cards because then they have no power over them.
- bobdole1234 10y ago
  The knowledge economy isn't a zero sum game. Adding skilled labour can allow more opportunities to add more skilled labour jobs. Without the extra slack, there's no opportunity. Part of what makes Silicon Valley work is that there's a lot of talent that is somewhat slack to allow for new companies to get started.
- sumitgt 10y ago
  @richardlong: I'm not even talking about expedited GCs. Even the normal GC process is horribly broken for people who are born in India. Look up "Green Card backlog India" related searches. Currently it would anywhere from 15 to 35 years for a H1-B from India to get a Green Card after their Perm is filed.

vanattab 10y ago

I don't understand why we don't just make the minimum H-1B visa salary 130k-150k. If it true that there are no other candidates that have the skills you need in the entire country then surely that skill set is worth a solid six figures.

guitarbill 10y ago

What I don't get is why they don't just raise the minimum pay for H1-B visas. It might not fix all issues for this type of visa in the long run. But the fact that the minimum pay was set in 1989 seems like an obvious issue to me. This would seem to be corroborated by the numbers. The lottery system is arguably the worst part of it, it punishes companies who carefully and rigorously select candidates and rewards companies who "spam" applications. Again, while not perfect, compensation is probably an okay proxy for how selective the interview process is. Apart from the people abusing the system, who is against a market rate/inflation adjustment? I have no stake in this, but I really don't understand.

xiaoma 10y ago
>"What I don't get is why they don't just raise the minimum pay for H1-B visas." That was a key part of Trump's proposed bill. IRRC, the proposal is to increase the minimum from $60k to $130k. Interestingly $60k in 1989 was worth what $117k is in 2017. In other words, given current inflation rates, it's very likely that the new minimum will be the 2020 or 2021 equivalent of the original minimum. That would suck for low-end outsourcing body shops, be good for the giant SV tech companies and probably remain about equally sucky for young start-ups as it is now.
- duskwuff 10y ago
  Startups have never really benefited from the H-1B system anyways -- they rarely have the resources to discover and interview candidates from outside the country, nor are they willing to wait 6+ months for a visa application to be reviewed, especially when there's a good chance that it may be randomly rejected.
  - camelspade 10y ago
    I think you might be ignoring the international students who graduate from US universities? They also need to go through the H1-B process.
- bobdole1234 10y ago

CodeWriter23 10y ago

How preposterous that a question like this requires a study to answer it. It doesn't take a PhD in high math to know that corporations hire foreign workers because they cost less. IOW, Duh!

exabrial 10y ago

I don't mind H1B visas. What I do mind is tech companies paying them significantly less than their US counterparts [exploiting foreign workers]. Hence I'm ok with limiting the program until measures and audits are in place to good that situation.