4 ms·

Will "startup investors" discover a lucrative black market in selling H1-Bs? Rich foreigners could pay them $200k under the table to invest $100k in their new s

Will "startup investors" discover a lucrative black market in selling H1-Bs? Rich foreigners could pay them $200k under the table to invest $100k in their new startups, thus buying citizenship. Just following up on this particular point, what would be the problem with letting rich foreigners buy American citizenship? Personally I think Paul's startup visa is a great idea, but orthogonally to that, I just don't see a problem with letting wealthy people buy their way into the US.

Celcius 18y ago
This might be a bit cynical of me but I'm quite convinced that if a rich foreigner wanted to become an American citizen that wouldn't be much of a problem. Steve Jobs for example got Feist, American citizenship: http://www.tuaw.com/tag/leslie-feist/ http://www.tuaw.com/tag/leslie-feist/ it's not the same thing but there obviously has to be different channels to go through for the wealthy.
yummyfajitas 18y ago
I've often thought this might be the best way to select immigrants. Pick the number of immigrants we want, and distribute green cards via dutch auction. We can give bonuses to areas of national interest, e.g. nurses. Doing this, we import people who are most likely to be productive. To allow high human capital pople to compete, we could allow the immigration fee to be paid out over 10 years with a nation-dependent down payment required up front (e.g., $75k for brits, $10k for indians). Of course, politically this is a no go. Politicians push immigration as a way of importing people to vote for them (e.g. dems want poor Mexicans and reps want skilled former Soviets); the good of the country comes second.
- lutorm 18y ago
  So you're saying importing more people like those that worked in Bear Sterns would have been in the national interest? This sounds completely backwards to me. Besides, with your particular method, how do you prevent people from over-bidding and then being unable to pay the fee? No, whatever algorithm is used to select immigrants, wealth surely is not the thing to use.
  - yummyfajitas 18y ago
    Based on our knowledge back when Bear Sterns was still alive, yes. It would have been our best guess as to what is in the national interest. It turns out that the best guess would have been wrong, but that's unavoidable. Perfect information isn't available, and people make mistakes. Our central planners didn't know any better than the markets (Bush, Clinton and various other politicians tried to inflate the housing bubble). As for those who don't pay up, immediate deportation without the possibility of re-entry. Combine this with a policy of enforcing immigration law, and we might get a workable system.
    - lutorm 18y ago
      Given how many startups fail, you don't think "life without parole" is a bit harsh? It certainly will prevent them from trying again... I also think that if you average over a long enough time span, it seems that those that hit the moon, money-wise, at one particular time barely break even over the long run. (Except they've already taken home their own salaraies, of course.) That's what I meant by it being a bad idea; at any given time the highest earners will, by selection effect, be those with the riskiest, most highly leveraged strategies. I can do without those, I think we need people that create wealth, not concentrate it into their own hands.
  - neilc 18y ago
    So you're saying importing more people like those that worked in Bear Sterns would have been in the national interest? Absolutely. The recent turmoil notwithstanding, people "like those that worked in Bear Sterns" are enormously valuable to the economy.
lutorm 18y ago
Wealthy people can already buy their way into the US with the investor visa (EB-5). I don't think they exhaust their annual quota.
- bitdiddle 18y ago
  exactly, I believe this is still done. I'm just jumping into the middle of these threads and perhaps this has already been said but I believe that the H1-B program is all about importing cheap labor, period. In other words, reducing costs. In many areas programmers are in high demand, so much so that it is worth it for many programmers to constantly learn new skills to stay in the game. The H1-B is all about getting a steady supply of 3-5 year programmers at 50-75K rather than paying citizens 75-100K. I'm not sure how the hefty requirements of the investor visa fits the Y Combinator model. It could create exploitation issues if not handled properly. One could imagine the investors putting the money up but that changes the dynamic of ownership. I believe the investor visa can be satisfied with job creation or money but then there's the issue of minimum wage laws, founders typically work at a loss since they own the company. I've always felt our immigration law is absurd with respect to graduate students. I think a green card ought to be attached to an advanced degree so that these folks will stay here, enter the work force unencumbered in order to compete fully and start paying taxes immediately, raising families, etc.. Instead we try to keep them out whilst encouraging small businesses to hire illegal immigrants with poor skills thereby creating resentment over access to public services. Sorry to rant, it's a touchy subject.
  - abstractbill 18y ago
    The H1-B is all about getting a steady supply of 3-5 year programmers at 50-75K rather than paying citizens 75-100K. When my last startup got acquired, it was small enough that the acquiring company just convinced us all to move from London to Silicon Valley. Some of us decided to stay permanently, and the company got us H1-Bs and put us on the Green Card process. I'm pretty sure all of us were making more than $100K. Having been on the H1-B process, I just don't believe what you said makes sense. The visa process costs the sponsoring enough time and money that it really doesn't seem worth using it to hire cheaper people.

Celcius 18y ago

This might be a bit cynical of me but I'm quite convinced that if a rich foreigner wanted to become an American citizen that wouldn't be much of a problem. Steve Jobs for example got Feist, American citizenship: http://www.tuaw.com/tag/leslie-feist/ http://www.tuaw.com/tag/leslie-feist/ it's not the same thing but there obviously has to be different channels to go through for the wealthy.

yummyfajitas 18y ago

I've often thought this might be the best way to select immigrants. Pick the number of immigrants we want, and distribute green cards via dutch auction. We can give bonuses to areas of national interest, e.g. nurses. Doing this, we import people who are most likely to be productive. To allow high human capital pople to compete, we could allow the immigration fee to be paid out over 10 years with a nation-dependent down payment required up front (e.g., $75k for brits, $10k for indians). Of course, politically this is a no go. Politicians push immigration as a way of importing people to vote for them (e.g. dems want poor Mexicans and reps want skilled former Soviets); the good of the country comes second.

lutorm 18y ago
So you're saying importing more people like those that worked in Bear Sterns would have been in the national interest? This sounds completely backwards to me. Besides, with your particular method, how do you prevent people from over-bidding and then being unable to pay the fee? No, whatever algorithm is used to select immigrants, wealth surely is not the thing to use.
- yummyfajitas 18y ago
  Based on our knowledge back when Bear Sterns was still alive, yes. It would have been our best guess as to what is in the national interest. It turns out that the best guess would have been wrong, but that's unavoidable. Perfect information isn't available, and people make mistakes. Our central planners didn't know any better than the markets (Bush, Clinton and various other politicians tried to inflate the housing bubble). As for those who don't pay up, immediate deportation without the possibility of re-entry. Combine this with a policy of enforcing immigration law, and we might get a workable system.
  - lutorm 18y ago
    Given how many startups fail, you don't think "life without parole" is a bit harsh? It certainly will prevent them from trying again... I also think that if you average over a long enough time span, it seems that those that hit the moon, money-wise, at one particular time barely break even over the long run. (Except they've already taken home their own salaraies, of course.) That's what I meant by it being a bad idea; at any given time the highest earners will, by selection effect, be those with the riskiest, most highly leveraged strategies. I can do without those, I think we need people that create wealth, not concentrate it into their own hands.
- neilc 18y ago
  So you're saying importing more people like those that worked in Bear Sterns would have been in the national interest? Absolutely. The recent turmoil notwithstanding, people "like those that worked in Bear Sterns" are enormously valuable to the economy.

lutorm 18y ago

Wealthy people can already buy their way into the US with the investor visa (EB-5). I don't think they exhaust their annual quota.

bitdiddle 18y ago
exactly, I believe this is still done. I'm just jumping into the middle of these threads and perhaps this has already been said but I believe that the H1-B program is all about importing cheap labor, period. In other words, reducing costs. In many areas programmers are in high demand, so much so that it is worth it for many programmers to constantly learn new skills to stay in the game. The H1-B is all about getting a steady supply of 3-5 year programmers at 50-75K rather than paying citizens 75-100K. I'm not sure how the hefty requirements of the investor visa fits the Y Combinator model. It could create exploitation issues if not handled properly. One could imagine the investors putting the money up but that changes the dynamic of ownership. I believe the investor visa can be satisfied with job creation or money but then there's the issue of minimum wage laws, founders typically work at a loss since they own the company. I've always felt our immigration law is absurd with respect to graduate students. I think a green card ought to be attached to an advanced degree so that these folks will stay here, enter the work force unencumbered in order to compete fully and start paying taxes immediately, raising families, etc.. Instead we try to keep them out whilst encouraging small businesses to hire illegal immigrants with poor skills thereby creating resentment over access to public services. Sorry to rant, it's a touchy subject.
- abstractbill 18y ago
  The H1-B is all about getting a steady supply of 3-5 year programmers at 50-75K rather than paying citizens 75-100K. When my last startup got acquired, it was small enough that the acquiring company just convinced us all to move from London to Silicon Valley. Some of us decided to stay permanently, and the company got us H1-Bs and put us on the Green Card process. I'm pretty sure all of us were making more than $100K. Having been on the H1-B process, I just don't believe what you said makes sense. The visa process costs the sponsoring enough time and money that it really doesn't seem worth using it to hire cheaper people.