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Tech Startups Say New Pay Rules for H-1B Visas Are Unaffordable
- uberman 6y agoThe top H1-B employers are outsourcing onshoring consulting companies who bring foreign employees to the US and typically underpay them. These companies then farm these people out at their actual value. This policy is put in place specifically to ensure that when a foreign worker is brought to the US that they are paid what they are worth and that they are not used to undercut American labor.
- rammy1234 6y agoBut a rule needs to have a second-order thinking. here there is lot of unintended side effects. one such https://www.insidehighered.com/news/2020/10/21/colleges-sue-over-new-rules-eligibility-wages-h-1b-visa-holders https://www.insidehighered.com/news/2020/10/21/colleges-sue-...
- RhysU 6y agoI doubt those effects are unintended.
- uberman 6y agoA summary of the changes follows: "H1B applicants will need to be earning a salary equivalent to the 45th percentile of their profession's salary if they're an entry-level worker, rising to 95th percentile for higher-skilled workers. In the past, the boundaries were set at the 17th and 67th percentiles respectively." I work in the Higher Ed space and it is a common practice to use cheap student labor (particularly captive international student labor) J1/F1 holders who are then transferred into OPT for a year and then onto H1 status for an additional six years of servitude/captivity. I want to be clear that I am not opposed to immigration or foreign labor. Rather, I oppose treating these employees as a cheap source of labor. It is unfair to them and deflates pay for all employees. I actually like programs like OPT that provide a path for international students to begin to repay what is often huge debt, particularly when compared to wages in their home countries. They should however be paid fairly. I would like to conclude with this. I have a friend who recently applied for a senior position at a private university (one with a name you would recognize). The positional called for a data scientist with ML and AI experience. I know because they asked me for a reference. They were offered the position but told that the absolute maximum the university would pay was $65k per year as that was what the former employee (a graduate who they transitioned to an H1 visa) was paid. I suspect the Yale case is basically this as well. A university that wants to avoid paying the prevailing wage and has been able to avoid that by exploiting former international graduates. If they feel that either their employee is not a level 4 or that the prevailing wage estimates are wrong they can appeal.
- aejnsn 6y agoThis is exactly the intended effect. Cuts the middleman out of what is an incredibly common sweatshop tactic. Everyone thinking the US is overly strict needs to look at how EU countries regard this with their priority principles in residence/work permitting.
- maxharris 6y ago"How and Why Government, Universities, and Industry Create Domestic Labor Shortages of Scientists and High-Tech Workers", By Eric R Weinstein PhD [Hosted at NBER from 1998-2017 where the author was at one time Co-Director / Co-Founder of the Sloan Foundation funded Program on the Economics of Advanced Training / Science and Engineering Workforce Project (PEAT/SEWP) https://www.ineteconomics.org/uploads/papers/Weinstein-GUI_NSF_SG_Complete_INET.pdf https://www.ineteconomics.org/uploads/papers/Weinstein-GUI_N... https://twitter.com/EricRWeinstein/status/1070327318185267202 https://twitter.com/EricRWeinstein/status/107032731818526720...
- rmrfstar 6y agoDo you think the "why" has anything to do with the blow-back DuPont experienced as a consequence of manufacturing napalm during the Vietnam War? DOD has extremely talented strategists, and an infinite simulation budget. Without considering the willingness of the workforce to do as directed without question, I can't see a reason this would be in the long-term US strategic interest (as conceptualized within DOD). Or, have the strategic questions been subordinated to political ones in the absence of a peer adversary?
- maxharris 6y agoThat's interesting, but I think a more basic motive is simply that we reached a limit to postwar growth in the early 70s, and this move was a way to keep up the metrics (embedded growth obligations), giving the appearance of growth, but actually taking it out of the wages of scientists and engineers. This is a terrible thing, because it's a particularly insidious form of eating your seed corn, in that you really don't see the full effects for decades. Think of all of the scientific advances we ought to see by now that aren't just your phone and laptop...
- Devils-Avocado 6y agoAnd those phone and laptop advancements are courtesy of the Taiwanese.
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- nottorp 6y agoHmm they increased the minimum pay, but are H1-Bs still tied to an employer? Allowing them to job hop easier would have brought salaries up to market value anyway. Guess it would have given them too much freedom?
- 8note 6y agoI think you would model that as a type of green card, rather than a temporary work visa
- uberman 6y agoThe big difference is that so called green cards convey permanent residency in addition to job mobility. I would certainly support the idea that H-1B holders should be allowed job mobility. My guess is that Employers not the government stand in the way of that kind of change though.
- dicomdan 6y agoUnfortunately that would require an act of Congress.
- refurb 6y agoThe goal of the visa is to bring workers temporarily as there are no Americans to fill the role. That’s why it’s tied to a company. I don’t disagree that if we’re attracting the best and brightest, they should go through H1-B. We should be giving them green cards.
- mensetmanusman 6y agoThe rules are put in place to help these people start companies in their own countries?
- mynameishere 6y agoWaste of digital ink. Any roadblocks to importing foreign labor will be gone very soon.
- atlgator 6y agoLe gasp! Maybe the whole point was to import cheap labor and force them to work for you for decades before gaining citizenship.
- HenryKissinger 6y agoI'm all for globalization, but a country should take care of its own people first. > New restrictions intended to protect U.S. workers curb access to pool of highly skilled foreign labor There are thousands of software engineers out of work or fresh out of school looking for their first job. Why not hire them? Lower your requirements if necessary, and train your new employees on the job. Groom them, mentor them, teach them the technologies they need to know.
- atlgator 6y agoYou’ve addressed cost but not mobility. Citizens have agency to take their new skills and move to other companies if their wages or career opportunities stagnate. H1Bs do not have this luxury. If they switch they risk losing their place in line.
- toomuchtodo 6y agoThis is an additional policy modification that is required on top of pay rule changes.
- t-writescode 6y agoSo that means the companies need to be places that people want to work? Working on important stuff, getting good benefits? Or listening to their employees when the employees warn the company that the product is bad or unethical??? Still a bonus.
- eof 6y agoBecause they just aren’t that good? Just because someone calls themselves a software engineer, or had a degree in computer science, it doesn’t mean they can take the place of a strong, seasoned engineer. The market is so competitive it’s pretty absurd to think anyone is being passed over because it’s cheaper to hire people on visas, at least when it comes to software engineers.
- Izikiel43 6y agoI thought the new wage rule would basically ruin the indian consultancy business model, and benefit H1B applicants as they would be payed a competitive wage and actually getting a visa. Wouldn't the typical bay area salary exceed the minimum requirements? I can't read the article due to the paywall.
- bonniemuffin 6y agoThe number I've been hearing is that even early-career positions will have to pay at least $208k base salary (not including any equity) in the bay area, which seems totally out of reach for most companies.
- coderintherye 6y agoDepends on what you define as "early-career". The rule is based on junior vs. senior positions. This article explains it well: https://news.efinancialcareers.com/us-en/3004591/h1b-visas-finance-tech-minimum-pay https://news.efinancialcareers.com/us-en/3004591/h1b-visas-f... In short, no $208k is not the minimum for junior positions, it just needs to be at or above the median wage for those positions.
- jlj 6y agoIf a company needs early-career talent H1-B might not be the right avenue. It was intended for highly skilled talent not available in-country. Experienced talent in software engineering should clear 200k no problem. H1-B portability would be great to see. It would encourage companies to treat people as humans, not endentured servants.
- uberman 6y agoWhile the $200k number gets tossed around a lot, the proposed rule is actually: "H1B applicants will need to be earning a salary equivalent to the 45th percentile of their profession's salary if they're an entry-level worker, rising to 95th percentile for higher-skilled workers. In the past, the boundaries were set at the 17th and 67th percentiles respectively."
- Melting_Harps 6y ago
- Devils-Avocado 6y agoI'm sure that ramping up illegal and H1B immigration will be the first order of business for the Kamala administration.
- ycombonator 6y agohttps://www.boundless.com/blog/biden-harris-immigration/ https://www.boundless.com/blog/biden-harris-immigration/
- whoisjuan 6y agoI doubt it. Reforming the H1-B is also a matter of interest for the Democrats. They just never had political capital to pursue that within the Obama’s administration. I doubt those measures will be reversed.
- refurb 6y agoTrump did it by EO. There is no reason why Obama couldn’t have.
- whoisjuan 6y agoHmm. I say this with respect but I believe you don’t understand politics well, if you believe it’s that simple. Everything that Trump did is unconventional in traditional politics. Trump didn’t care about whether or not he was burning his political capital for unpopular measures. But for his base that’s not the case anyway. For Obama doing an EO that looks like a reformation to the H1-B program would have looked completely off-color when compared to the rest of his immigration agenda.
- refurb 6y agoThat’s a long winded way of saying he just didn’t want to do it.
- uberman 6y agoWhy would Biden be in favor of exploiting foreign labor by allowing them to be payed less than they are worth? Biden might expand the number of H-1B visas awarded sure and that is a separate issue that we could talk about, but it seems clear that Democrats are not supportive of worker exploitation. Just a heads up the H-1B and other visas are not "illegal" immigration.
- one2know 6y agoEveryone at tech startups are working remote right now, so I don't see the problem. The only reason they need to bring early employees into the United States is so they will have indentured employees who are left-loyal at the top of these companies so the investments can continue to be party controlled. H1-B as well are less likely to balk at being asked to do shady shit like businesses that rely on tracking people and selling user data. Privacy is generally a western idea traditionally not practiced outside the United States.
- t-writescode 6y agoThis might be better to look at from a capitalistic / wage-slave perspective rather than a left- or right- issue. For your argument of ‘left-loyal’ to have any real value necessitates that the employees vote. After all, we’ve long not cared at all about the social stances of prisoners and felons and have equally stripped away their rights to vote. Same thing. You need to be able to defend that the politics of a non-voting immigrant matter.
- one2know 6y agoWTF are you talking about? This isn't about voting or getting employees votes for the democrat party. H-1B cannot vote for the left but that is better to party hardliners than someone who votes right and hires right wing. This is 100% about making sure executives of tech companies remain leftists and members of the leftist pro-socialist party. H-1B is only one way they work to achieve this. Since 2015 they have created chief people/diversity officer roles which are nothing more than party officials who are given power to filter hires based on perceived party loyalty but in the name of combating "racism" which is pretty much envelops all leftist reasoning these days. They are hardcore leftists and trade blacklists between companies. In the corporate world it is imperative to leftist managers and boards that they maintain political control of tech companies like google, twitter, amazon that both track every move and word of the populace as well as filter the content that people are allowed to see.
- t-writescode 6y ago
- lizardking 6y agoIt seems unlikely that the new rules last with a Biden administration.
- loudtieblahblah 6y agoGood
- googthrowaway42 6y agoThese rules would undoubtedly be reversed under a Biden-Harris administration.
- deleted 6y ago[deleted]
- exabrial 6y agoOh that's terrible. You have to pay prospective immigrants the same wage as a citizen? I feel zero sympathy for you.
- geofft 6y agohttps://nfap.com/wp-content/uploads/2020/10/Analysis-of-DOL-H-1B-Wage-Rule.NFAP-Policy-Brief.October-2020.pdf https://nfap.com/wp-content/uploads/2020/10/Analysis-of-DOL-... (via https://www.forbes.com/sites/stuartanderson/2020/11/02/flaw-in-dol-rule-sets-h-1b-visa-salaries-at-208000-a-year/?sh=647762a8187c https://www.forbes.com/sites/stuartanderson/2020/11/02/flaw-...) has a longer description of what "the same wage" means here: > The new DOL wage system requires employers to pay exactly $100 an hour, or $208,000 a year, for over 18,000 combinations of occupations and geographic labor markets, regardless of skill level and position, NFAP research found, because DOL cannot provide prevailing wage data for the occupations under the new system. This takes place for some of the most common high-skilled occupations in America’s leading hightech area. While there certainly are citizens getting paid $208,000 a year for certain high-skilled roles, I think it is entirely plausible that for many roles, the competitive wage is far below that and there are not enough American citizens who can fill those roles even for $208,000. (Or, put another way, for certain roles, if they can't find citizens available and qualified to do the work, employers will simply choose not to engage in whatever business they were considering engaging in. There's no way that's good for the American economy.)
- whatshisface 6y ago>there are not enough American citizens who can fill those roles even for $208,000. Given that it's possible to train people, that condition cannot occur. Maybe "no cost-effective American citizens," or "no quickly available American citizens," but the state of there being absolutely no possible way to fill a role with an American citizen, cannot happen.
- geofft 6y agoCorrect, I mean no cost-effective American citizens. (Or, really, I do literally mean people who can fill those roles - if they need to be trained, and a company wants to train them, awesome, but they're not actually filling the role until they've been trained.) Businesses will not do cost-ineffective things. If they cannot pursue a venture profitably, they won't pursue it. The question is whether we're better off with companies hiring qualified foreign workers for sub-$208,000 wages to do work in America or not hiring anyone and not doing the work.
- ryanSrich 6y agoSo they’re admitting this now? That there really never was a tech shortage? That the entire push for more H1-Bs was to take advantage of cheap labor? End the entire program.
- rammy1234 6y agoEnding something is never an answer. We need to understand why such program was created in first place. Fine tune the program to get maximum benefit, than abolishing it. We need more optimization not removal. We need a well thought through solution and not half baked ruling intended to create confusion than a solution.
- maxpert 6y agoI have personally been in position of living with $70K a year in SanFrancisco startup. This is back in 2013. While I accepted the offer thinking it will suffice I was living hand to mouth. I was spending my energy fighting with budgeting and spending my energy trying to save up while other with settled backgrounds were fine. In the end I lost my motivation and ended up leaving for a higher paying offer in 9 months. I have no sympathy for any of these low paying companies. They should pay what an engineer deserves. It’s pure exploitation and I walked right into it.
- bradlys 6y agoI got $65k in 2015. I know your pain well. I was trying to break into the area as a graduate from the PNW. No one but small startups would reply and they took advantage of my dwindling savings. My story is similar as yours as I had nowhere else to go since no other places in the country were responding but all these startups in the bay area. They were exploitative assholes and knew it completely. I never stopped interviewing and found a place eventually that paid the normal $110k/yr for entry-level positions but it took about a year after I started that first post-graduation job. Pretty terrible experience up until that moment. Guess I should mention - I wasn't even on H1B. I'm a US citizen. I feel bad for people on H1B who have to live like that and can't escape that level of exploitation. I think it hurts everyone involved.
- shalmanese 6y agoThe San Francisco median household income in 2012 was $74,922 (https://www.census.gov/newsroom/press-releases/2013/cb13-r85.html https://www.census.gov/newsroom/press-releases/2013/cb13-r85...). If you were living "hand to mouth", you should give some serious consideration to just exactly how many others in San Francisco were living, often supporting many more family members than you were.
- meowfly 6y agoI moved from a much smaller city to Seattle for a job that paid more (even after a CoL adjustment) but ended up moving back because I felt poorer in Seattle than I did in my old city. A big part of it is that most of my acquaintances were paid significantly more than me. When they go out to eat dropping $40 on lunch and drinks was no big deal. I would imagine OPs issue could be similar. An engineer at a startup making ~75k in SF is likely hanging out with engineers who make double that.
- rammy1234 6y agoThis is another from colleges which are affected by this rule. https://www.insidehighered.com/news/2020/10/21/colleges-sue-over-new-rules-eligibility-wages-h-1b-visa-holders https://www.insidehighered.com/news/2020/10/21/colleges-sue-... , this is something not thought through
- exabrial 6y agoFacebook/Google since you guys are so about equality, feel free to post the average/stddev of what you pay white people vs h1b visa holders. I mean, its the same... right? There's no way the most woke of companies are taking advantage of foreigners..... Right? We've all seen the notices posted in the employee break areas. It's wrong. The only people opposing this are the abusers.
- uberman 6y agoWhile FANGS do employ a lot of H-1B workers, they pay them relatively well compared to what they are paid by consulting companies who exploit them. The Average FANG H-1B salary is $143,373. While the average at Tata or Cognizant for an H1-B employee, is $86,453.
- mavelikara 6y agoThe top comment here says: > The top H1-B employers are outsourcing onshoring consulting companies who bring foreign employees to the US and typically underpay them. These companies then farm these people out at their actual value. Many other comments echo it too. This is wrong. The outsourcing companies use H-1Bs mostly as local liaisons for their remote teams. They all have businesses that annually generate _billions_ of dollars in revenue. That revenue is generated by the labor arbitrage between countries, not shaving off few dollars per hour in the wages of their H-1B employees. The real wage abuse comes from the tail of the distribution - staffing companies, owned and operated by American citizens. Many of these citizens were immigrants originally. If you look at the cases DOJ has brought against H-1B abuses, you will notice that many of these people operate _multiple_ companies. Each of these companies get only few H-1Bs per year, but as an aggregate they get a significant portion of the H-1B quota annually. If wage abuse is the concern, blaming outsourcers is barking up the wrong tree, IMO.
- uberman 6y agoHere are the top H1b-Sponsors and the number of visas they sponsor per year. Take out the handful of "Big Tech" FANG types and JPMorgan and what is left? Is this not then exactly a list of consulting firms importing cheap international labor and then farming them out at their true worth? 1 Cognizant Technology Solutions 28,526 2 Infosys 21,473 3 Tata Consultancy Services 11,868 4 Google 10,577 5 Ernst & Young 8,893 6 Capgemini 8,411 7 Deloitte & Touche 8,258 8 Amazon.Com Services 7,705 9 IBM 7,237 10 Microsoft 6,041 11 Accenture 5,654 12 Hcl America 4,688 13 Wipro 4,291 $77,533 14 Tech Mahindra (Americas) 15 Larsen & Toubro Infotech 3,625 16 Facebook 3,212 17 Wal-Mart Associates 2,277 18 L&T Technology Services 2,117 19 Syntel 1,893 20 Jpmorgan Chase 1,796 21 Salesforce.Com 1,722 22 Amazon Web Services 1,711 23 Apple 1,708 24 Intel 1,683 25 Compunnel Software Group 1,667 Tata explicitly advertises their services are "Onshore-Offshore". When a FANG like google hires an H1-B employee, their average salary is $143,373. When Tata or Cognizant hires an H1-B employee, their average salary is $86,453. If we take the number of H-1B visas sponsored per year at Tata and Cognizant and compare their average salaries to their FANG counterparts it suggests a short changing of $2 billion per year.