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Most of the work these companies are hired to produce is done in India. People on H1B are few and hired to delegate across time zones. It's hard without someone

Most of the work these companies are hired to produce is done in India. People on H1B are few and hired to delegate across time zones. It's hard without someone in the US connecting the bridge. This pandemic made it clear. It's a possibility that this new policy has very little implication on the overall budget of projects.. unless the companies are financially strong enough to hire local employees at a high salary. When compared to an employee salary in a developing economy, local salaries look very high! Smaller and mid-sized non-tech companies are hurt during this pandemic. These IT consulting companies work mostly with non-tech companies. Fiscal policy this year has failed to "really" provide loans or stimulus to small struggling companies. They all want tech and that means more work will go to these IT companies that can do at a lower cost. International trade is done on the mutual-benefits equation. Historically the unwritten understanding is that India allows US companies to operate in its local market in return partly for labor market access to its people through a work visa. That these workers are not creating value is a myth looking at the financials of these IT consulting firms. Getting a grocery purchase order database implemented correctly has far more immediate influence than the work of a futuristic researcher. Overall this new policy looks like an election stunt to appease a certain electoral audience given its timing and lackluster fiscal policy. That's called election hacking. Every economy specializes, influences international trade to that end. It's cheaper to manufacture in China, buy corn from the US, write computer programs in India. I feel just so sick to read comments here calling these companies bodyshops, sweatshops, cheap labor.. whatever word degrading in the context. The right question is perhaps: how to help create locally employed IT consulting companies that can compete with Indian IT consulting companies... and the answer is more than bad-mouthing or volatile short-term regulations. Is it even in the country's interest to spend resources to become a leader in IT consulting?

nwienert 6y ago
Whenever lower wage markets are open to higher wage markets, what happens is the higher wage markets lose - especially their up-and-coming developers who normally would get hired and trained, but instead get replaced. This normally happens near the bottom, historically. Low wage workers come and work on farms and at other minimum wage jobs, they do actually have an effect on the labor market that is negative for American workers, but since there are usually many jobs on the bottom it doesn't have a large effect. But at the top - where jobs are far more limited and scarce - it has a large effect. Further, the companies using H1B are almost entirely large companies. Small businesses are not being hurt at all by a shortage of H1B's. International trade is highly susceptible to imbalances. Lower wage workers will replace higher wage workers if not protected against, and it isn't always a win in terms of lower cost goods - it often can displace an entire industry that normally would have done well. Especially industries that are important for America to stay strong in, like manufacturing. It also is highly susceptible to distortionary trade policy - see subsidies in foreign nations designed to take over entire industries long term. Finally, a note on hover governments should work. They should look out for their citizens. That is their modus operandi. There shouldn't be charity, unless the charity in some way truly helps our citizens. And especially, they should care about the average gal. H1B visas are literally taking out a big pool of well-paid jobs that otherwise we could easily be feeding with community college graduates and younger citizens. This isn't even close to hacking anything, by any definition of the word. It's literally what he campaigned on years ago, if anything it's super long overdue.
- holdenk 6y ago
  I've worked at small companies while on an H1B, if you look at the who's hiring posts on HN I think you will see many places willing to sponsor H1s, so it's not just big companies.
- tomcat27 6y ago
  When the US subsidizes corn production so much it destabilized local corn markets everywhere else in the world. Suddenly, it's cheaper to import corn from the US than buy at a local farm house in other places. This alone doesn't mean bad news to those other countries. The likely response may not be to increase import tax on corn. You need to see where the net positive results are accumulating as a consequence. I don't have a solution to these complicated problems. My observation is today's policy won't solve the problem even slightly. The US specializes in innovation, incentivizes economy to create innovation. IT consulting is not innovation. When you start hiring local employees at a higher salaries, influences inflation.. and what does this inflation from IT mean to other sectors? The right question is: What would be the cost of home grown IT consulting that can compete with Indian IT consulting? How fast can those policies be deployed? is it even in the US interest to pursue this direction? What I don't see is a framework that doesn't look like a patch work. It's definitely targeted to win elections. The real promise is not delivered.
  - nwienert 6y ago
    So your claim is hiring locally somehow “influences” inflation... and does what? What is the cost of home grown IT? There’s no “cost”, it’s just a shift in market, the wage may go up a bit but business would also adapt, either by being more efficient or shifting budget, etc. I’m not really putting together where your questions are leading. They don’t feel like they have a coherent point, and they don’t seem to be pointing in any way. This is an incremental improvement, one that absolutely will reduce H1B which is a good thing for Americans. There’s no shortage of Americans able to take these jobs, and if there is ever at times, the increased demand will solve itself - companies will raise wages, Americans will respond to higher wages by filling the jobs, America will grow stronger with more white collar jobs going to our own citizens. And it will help win elections because it’s what citizens want, are you claiming any other way it helps win? It’s a popular policy and this is an effective change to it, if it wasn’t effective I doubt you’d be arguing about all these downstream effects you’re worried it will cause - you can’t say it won’t be effective but also it will be effective in a negative way. Tell me how raising wage requirements + requiring higher education does anything but lowering H1B usage and force companies to only get more qualified people on the visa. Win win.
president 6y ago
Have you considered that the US workers are also hurting in this pandemic? At some point people need to start thinking about helping out the productive class in this country instead of just the business owners and CEOs who are pocketing the savings from labor arbitrage.
- tomcat27 6y ago
  That's a damn good question and but I don't see how this policy is the right answer.
thu2111 6y ago
That's called election hacking No it's not. This term has already been widely abused and I doubt many people take such claims seriously anymore, but widening it still further to mean "making pledges designed to appeal to voters" will just render the term utterly hopeless. Then we won't be able to talk about actual electronic compromise of vote counting systems.

nwienert 6y ago

Whenever lower wage markets are open to higher wage markets, what happens is the higher wage markets lose - especially their up-and-coming developers who normally would get hired and trained, but instead get replaced. This normally happens near the bottom, historically. Low wage workers come and work on farms and at other minimum wage jobs, they do actually have an effect on the labor market that is negative for American workers, but since there are usually many jobs on the bottom it doesn't have a large effect. But at the top - where jobs are far more limited and scarce - it has a large effect. Further, the companies using H1B are almost entirely large companies. Small businesses are not being hurt at all by a shortage of H1B's. International trade is highly susceptible to imbalances. Lower wage workers will replace higher wage workers if not protected against, and it isn't always a win in terms of lower cost goods - it often can displace an entire industry that normally would have done well. Especially industries that are important for America to stay strong in, like manufacturing. It also is highly susceptible to distortionary trade policy - see subsidies in foreign nations designed to take over entire industries long term. Finally, a note on hover governments should work. They should look out for their citizens. That is their modus operandi. There shouldn't be charity, unless the charity in some way truly helps our citizens. And especially, they should care about the average gal. H1B visas are literally taking out a big pool of well-paid jobs that otherwise we could easily be feeding with community college graduates and younger citizens. This isn't even close to hacking anything, by any definition of the word. It's literally what he campaigned on years ago, if anything it's super long overdue.

holdenk 6y ago
I've worked at small companies while on an H1B, if you look at the who's hiring posts on HN I think you will see many places willing to sponsor H1s, so it's not just big companies.
tomcat27 6y ago
When the US subsidizes corn production so much it destabilized local corn markets everywhere else in the world. Suddenly, it's cheaper to import corn from the US than buy at a local farm house in other places. This alone doesn't mean bad news to those other countries. The likely response may not be to increase import tax on corn. You need to see where the net positive results are accumulating as a consequence. I don't have a solution to these complicated problems. My observation is today's policy won't solve the problem even slightly. The US specializes in innovation, incentivizes economy to create innovation. IT consulting is not innovation. When you start hiring local employees at a higher salaries, influences inflation.. and what does this inflation from IT mean to other sectors? The right question is: What would be the cost of home grown IT consulting that can compete with Indian IT consulting? How fast can those policies be deployed? is it even in the US interest to pursue this direction? What I don't see is a framework that doesn't look like a patch work. It's definitely targeted to win elections. The real promise is not delivered.
- nwienert 6y ago
  So your claim is hiring locally somehow “influences” inflation... and does what? What is the cost of home grown IT? There’s no “cost”, it’s just a shift in market, the wage may go up a bit but business would also adapt, either by being more efficient or shifting budget, etc. I’m not really putting together where your questions are leading. They don’t feel like they have a coherent point, and they don’t seem to be pointing in any way. This is an incremental improvement, one that absolutely will reduce H1B which is a good thing for Americans. There’s no shortage of Americans able to take these jobs, and if there is ever at times, the increased demand will solve itself - companies will raise wages, Americans will respond to higher wages by filling the jobs, America will grow stronger with more white collar jobs going to our own citizens. And it will help win elections because it’s what citizens want, are you claiming any other way it helps win? It’s a popular policy and this is an effective change to it, if it wasn’t effective I doubt you’d be arguing about all these downstream effects you’re worried it will cause - you can’t say it won’t be effective but also it will be effective in a negative way. Tell me how raising wage requirements + requiring higher education does anything but lowering H1B usage and force companies to only get more qualified people on the visa. Win win.

president 6y ago

Have you considered that the US workers are also hurting in this pandemic? At some point people need to start thinking about helping out the productive class in this country instead of just the business owners and CEOs who are pocketing the savings from labor arbitrage.

tomcat27 6y ago
That's a damn good question and but I don't see how this policy is the right answer.

thu2111 6y ago

That's called election hacking No it's not. This term has already been widely abused and I doubt many people take such claims seriously anymore, but widening it still further to mean "making pledges designed to appeal to voters" will just render the term utterly hopeless. Then we won't be able to talk about actual electronic compromise of vote counting systems.