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The role of high-skilled foreign labor in startup performance
- Bostonian 5y agopaper available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3459001 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3459001
- dang 5y agoIn that case maybe we should just put that URL at the top? I've changed to that from https://www.sciencedirect.com/science/article/abs/pii/S0304405X2100235X https://www.sciencedirect.com/science/article/abs/pii/S03044..., which doesn't give access to the paper.
- RcouF1uZ4gsC 5y agoPractice that reduces wages for labor makes business more profitable. That is an entirely different question than if that is better on the whole for society.
- linksnapzz 5y agoAn entirely different question that HN would prefer not be asked...
- commandlinefan 5y agoI've spent the entirety of my 30-year programming career working with mostly (> 90%) foreign labor. The "skills" in question (that I have as well)... don't seem that hard to acquire. Yet I believe the employers when they say they literally can't find Americans who have them. Either I'm seriously underestimating how hard it is to acquire said skills (and by extension undervaluing myself, by a lot), or there's something else going on.
- vsskanth 5y agoMy guess - Americans with relevant skills already have jobs they like and are in high demand, and the ones who can up skill into programming positions are probably working all the time just to survive. Foreign workers usually already have a relevant degree or experience (knowing atleast the basics) and don't have as much student debt.
- deleted 5y ago[deleted]
- kesselvon 5y agoH1B labor isn't mobile, so you can underpay and treat them how you like. It's like when manufacturing complains about labor and skill shortages but the wages are terrible. When you need labor and can't find it, lots of times its just that employers aren't meeting the market rate for said labor. Hence their desire to get it on the cheap via importation or outsourcing.
- darth_avocado 5y agoThat is actually not true. SOME H1B labor isn't mobile (mostly people outsourcing firms), but people on H1B change jobs whenever they like. At least that's the norm in tech industry.
- sg47 5y agoThat's not at all true. People on H1B cannot change jobs easily. They have to go through the visa transfer process and hope nothing goes wrong with the process. They have to make sure their current employer does not get wind of the job change and doesn't fire them during the transfer process. They have to ensure that the new employer can process their green card application. Lots of nuances involved. It's a serious source of stress for a lot of highly skilled H1B engineers
- random42_ 5y agoThere is no such thing as visa transfer process. When you’re switching jobs on an H1B you follow the same process as if it were a new application, with the exception it can be done any time in the year and the visa cap doesn’t apply.
- dang 5y agoPlease don't post unsubstantive comments here. HN has discussed this question frequently and at length for many years. (Often not very well, but this is the internet, and that's a different issue.)
- darth_avocado 5y agoI know there is a substantial pool of companies that uses the "consulting" formula and brings in cheap H1B labor, but H1B is a very broad Umbrella that also includes very highly skilled workers (with PhDs), doctors, etc. I'm a hiring manager in one of the big tech companies and let me tell you, H1B labor is NOT cheap. We not only have to pay them market rates, but a lot of foreign nationals with specialized skills are getting paid more than market average (it's part of the process that DOL enforces to make sure we don't abuse H1B). I think the study references "startups", so there is a chance that it is biased, but within that bias, accurate.
- sg47 5y agoBut you get to retain them for longer since the switching cost is high.
- treyfitty 5y agoLook at credit card or marginalized finance departments. They get around the "we must pay market rates for H1B" by depressing the wages for the rest of their employees, thereby justifying the "market rate." - AmEx - Mastercard - JPMorgan - Citi H1B Labor might not be cheap if you're truly innovating, but let me tell you- there's a reason why credit card companies pay so little across the board, and it's no coincidence that they rely heavily on H1B labor.
- walshemj 5y agoBut most are not theirs a difference between a transplant surgeon with a PHD and some one whos ground out a CS degree and memorized a lot of leet code.
- SouthAmericanTA 5y agoCreating a throwaway because I don't want this to follow my profile (which identifies me). I'm one of these high-skilled foreigners (phd, 5 years experience in applied ML). I make market rate salary in local currency (~35k USD/year) plus substantial bonuses (75~90k USD/year). I work for a major corp, and I think at least a couple dozen folks make similar money with similar experience. I'm not posting to brag; just to contextualize (and agree with parent) that, yeah, maybe that money would hire a recent grad in California and gets my phd+exp here, but I wouldn't say we're "cheap" I know you're discussing H1Bs and I'm talking remote work - just feel like it's worth poiting out that the same set of people fill both roles; so if remote salaries are X I can't see how you could pay less than X to a H1B. Why would I move to a much higher COL for same/less money? I mean, maybe some folks for the express purpose of leaving their country, but still - remote work should push H1B salaries up for skilled foreigners, right?
- danbmil99 5y agoI suspect more than compensation, another strong Factor would be the difficulty or possibly the cultural tendency not to change jobs as often with an H-1B.
- nickff 5y agoThere are probably many differences between H1B and US Citizen employees; I doubt that anyone would be able to disentangle all of them.
- orange_joe 5y agoThis paper seems to suffer from selection bias, as the examine the a large universe of VC backed companies. Not all VC companies can afford H1-B employees and this implies that only better funded companies are more likely to succeed. There’s a vast difference in amount of funding a VC backed startup can raise, so it doesn’t really make sense to compare a company that raised 100K through YC and a pre-IPO unicorn. The paper didn’t seem to control for this when I looked through the first few pages.
- rightbyte 5y agoYe the authors are taking correlation for causality big time. It is just a bad paper, judging from the abstract.
- bjornsing 5y agoWhat? This is one of few papers I’ve ever seen (on this kind) that can make a causal claim. The visa lottery essentially makes it a Randomized Controlled Trial (RCT), the gold standard of science.
- wins32767 5y agoIt's randomly controlled within startups that apply to sponsor visas. That implies some level of initial success since visa sponsorship is a huge pain in the ass.
- johncolanduoni 5y agoBut it doesn’t include startups that didn’t apply to sponsor visas in the study, so isn’t that sufficient for randomization purposes?
- koolba 5y agoIt doesn’t show that it’s a net plus vs not applying. It shows that winning the lottery that you choose to enter is better than not winning.
- vsskanth 5y agoWish I could read the paper without having to make an account
- vsskanth 5y agoPoints to a bigger problem. Imagine how many startups simply don't come into existence because the founders are stuck on life long H1B visas. Or many times the founders simply can't even make it into the US even though they have much needed skills. Skilled immigration into the US is much harder and way more uncertain than other nations. Massive amounts of paperwork (so much that you need a lawyer), lotteries, long wait times and in the end highly dependent on whichever immigration officer sees your application.
- secondaryacct 5y agoYeah it's so weird - Im French, I emigrated to Hong Kong with literally no effort and will be permanent soon, I know I could go to Singapore, Taiwan, maybe Japan with ease and a good sponsor, or China with difficulty with a very good sponsor. I think Canada is an english test away, Australia should be not too hard. The US: just the whole thing stresses me. I d rather stay in Hong Kong forever than move to the US with all their weird paperwork, conditions etc. They dont want me, I wont insist :D
- triceratops 5y ago> I think Canada is an english test away Or French test.
- belval 5y agoIt's actually better if you have both because of the point system. If the author has both + is considered skilled labor it should be pretty easy to get in.
- wing-_-nuts 5y ago...and doesn't have a disability. Canada is awfully ableist, even when it comes to those who have skills and high paying jobs.
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- vsskanth 5y agoHow did they account for H1B transfers which don't go through the annual numerical limit ?
- black_13 5y agoThink about how badly cotton plantations needed chattel slavery.
- distribot 5y agoNot only is this in poor taste, they seem to be fundamentally different. People who apply for H1-B visa and immigrate do so voluntarily.
- bobbytit 5y agoSlavery and mass immigration are simply mechanisms the rich use to lower the cost of labour.
- ktta 5y agoMass immigration is also a mechanism that lets the poor* climb the class ladder * = Compared to the average American, the average H1-B holder has substantially less purchasing power, before immigrating. Moreso in the case of unskilled immigration, whose quality of life improves substantially.
- bobbytit 5y agoMass immigration is used to keep the native poor in their place. It forces them to live in tents even if they work full time
- amrcnimgrnt 5y ago"* = Compared to the average American, the average H1-B holder has substantially less purchasing power, before immigrating." So? Is America's immigration system supposed to serve the interest of foreigners, or Americans?
- throw123123123 5y agoI dont understand why an american would prefer a foreigner to work remotely and pay no taxes and no consumption in america.
- baybal2 5y agoIt points to the very obvious fact that H1B, and other legal immigration options are a very potent filter, at least filtering people who are too lazy to go through all the paperwork.
- killjoywashere 5y agoI don't see the "bigger problem" here. Imagine if big US companies started telling red state legislatures "No, really, we need you to fix your education system". What's wrong with investing in the local economy?