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"Why would you think that they are exceptions to the rule that added supply reduces market clearing cost?" Wage deprecation (allegations) from H1-B isn't from
by mankash666 8y ago
"Why would you think that they are exceptions to the rule that added supply reduces market clearing cost?"
Wage deprecation (allegations) from H1-B isn't from an increased supply. It's from the lack of portability once employed. Optimally, every 3-5 years, a jump would result in higher wage growth than working for the same employer. The H4-EAD allows for free movement, alleviating this one sub category of wage deprecation.
- dragonwriter 8y ago> Wage deprecation (allegations) from H1-B isn't from an increased supply. So, you think H-1B as well as H-4 EAD are exceptions to the basic dynamics of supply and demand? Even if you assume the immigrants involved have the same distribution of salary demands as the general American workforce, adding them to the domestic labor supply decreases market clearing costs for labor of the type they are available to do, all else being equal. (Of course, if they have lower salary demands, this is even more pronounced without a prevailing wage rule, which H-1B has but H-4 EAD does not.)
- mankash666 8y agoSo you think the H1-B is a scheme to suppress wages with oversupply? The H1-B's aim is to fill a shortage of skilled labor. Annual caps exist explicitly to control supply and prevent wage depreciation. The thing that wasn't accounted for was captivity of H1-B holders from certain countries who'd applied for their greencard. Given the long wait times, they are effectively enslaved to their employer. With reduced portability comes reduced wage increase