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H-1B visa use cuts U.S. programmer, software engineer wages by up to 6%
- aditya 18y agoWould be nice to see the actual paper, and understand how they went from correlating resume's from "a leading online job search site" to employers and the wages they pay their H1-B employees.
- mblakele 18y agohttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1380343 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1380343 Author home pages: http://opim.wharton.upenn.edu/~lhitt/ http://opim.wharton.upenn.edu/~lhitt/ http://pages.stern.nyu.edu/~ptambe/Site/Prasanna_Tambe.html http://pages.stern.nyu.edu/~ptambe/Site/Prasanna_Tambe.html
- aditya 18y agoRight. No download link anywhere. Just abstracts and citations. Seems suspicious now...
- iigs 18y agoI don't want to speak for anyone else, but I'll take the 6% pay cut over more entire projects being outsourced overseas. I have no desire to see San Francisco become the next Detroit.
- tptacek 18y agoYeah? How about a 30% cut, all your benefits, and a clause in your employment contract where you lose your apartment (wherever it may be) when you quit? That 6% number --- which is misleading on its face --- also ignores the fact that many H1Bs are FTEs for body shop firms that lease them to big companies.
- andylei 18y agoIn other news, the invention of the automobile cuts horse and buggy driver's wages by 100%. Ban automobiles!
- tptacek 18y agoWhat a fatuous comment. Automobiles didn't themselves lock foreign workers into abusive contracts. H1-B worker visas aren't an evolution of the market; visa and foreign labor terms and conditions are as old as foreign relations.
- andylei 18y agothat's a reason why abusive contracts are bad, not a reason why allowing foreign workers into the united states is bad. we should allow more foreign workers into the united states for the same reason we should let automobiles overtake horse and buggy - it's more efficient.
- tptacek 18y agoYou're arguing with a straw man. Nobody is arguing that foreign workers shouldn't be allowed into the country. It's a market inefficiency for companies to be allowed to "capture" employees and artificially suppress their wages by keeping them off the open employment market under threat of deportation.
- iigs 18y agoI don't understand your assertion -- the deportation thing is BS, but working conditions seem to be favorable enough that people are willing to leave their families behind and work in the USA. I don't really want to argue about immigration on here. Suffice it to say I welcome any skilled people who want to contribute to the GDP and body of technical expertise in my country. The point I was hoping to make is that even if a glut of talent depresses salaries it's worth it in order to stay globally competetive.
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- josefresco 18y agoIf you're worried about San Fran being the next Detroit, start looking at that fact that you and other hackers depend on a specific region to sustain their salaries and arguably inflated sense of self worth. Beyond physical networking, where you are doesn't matter like it used to. I know that's not what you meant, but it's the same syndrome that contributed to the downfall of Detroit auto workers. They all said "But this is Detriot, the home of the Big 3! United States Auto Town, we can't fail" Meanwhile the rest of the world was busy building cars cheaper and better everywhere else while the folks in Detroit tried to protect their salaries without improving the product. Find a place where your rent is cheap, your staff is cheap and you can build something fantastic (and then pay everyone more) without worrying about what the next 'hot' place to live or have an office is.
- staunch 18y agoDetroit: A few massive companies that failed due to an almost total lack of innovation. Silicon Valley: A few big companies and thousands of small companies who's existence is founded and maintained almost entirely on innovation.
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- old-gregg 18y agoI suggest you read up something about the raise and fall of US automotive industry: Detroit used to be no less "startupish" than SV is today: thousands of engineering startups have flourished and vanished over relatively short period of time. The history of Detroit is one of several reasons why I don't take Paul's views on special role of SV seriously: Valley isn't something we haven't seen before. If anything, it is declining: Valley startups no longer represent the cutting edge of computing innovation at large [as they did in the 80s], they have mostly escaped competition by hiding in relatively narrow niche of "English-speaking consumer Internet" very much like Detroit has been hiding behind big SUVs. And "release early, release often" web sites are no different from body-on-frame SUVs: their tech is so well understood and simple that Chinese can produce cheaper and faster copycats of facebooks and twitters in a matter of months within an original launch. When they'll learn to market them properly, they will build their own data centers in San Antonio, TX and the similarity with Detroit will be complete.
- btwelch 18y agoWow, I had the exact same thought (ie. comparing hackers to Detroit auto workers) when I read the article. Though, I thought I was being profoundly pessimistic. So, to add more pessimism (for fun)... we don't have the bargaining power that the UAW had, and I don't think we have any members of congress that will consider software professionals to be a serious constituency. So, without legislation, we would definitely spiral down faster as an industry.
- geebee 18y agoIf that were the equation, I'd be on board with that point of view. The problem is that the H1B is increasingly used to outsource jobs rather than bring talented engineers to the US. Seven of the top 10 users of the H1B visa are India-based outsourcing companies, and even many of the US-based users are really there to facilitate outsourcing. These companies use the visa to cycle someone through the job in the US for a few years, do "knowledge transfer" where an American is allowed another 6 months of employment and a severance under the condition that they train their replacement, and then move the job and worker overseas. SO in this case, you'll get your 6% pay cut and the outsourcing of an industry - all under the guise of making sure that talented foreign engineers are allowed to come to the US and create wealth (which is an indisputably wonderful thing for the US and would be possible without all this abuse if the system were reformed).
- hamidp 18y agoIt's simple supply and demand. H-1B increases the supply of programmers, which means that the price (wages) paid to them will decrease. As for the whole "dispels the myth that globalization generates no losers," thing -- that's not really how globalization works. Labor and capital mobility, along with low impediments to trade allows for specialization, which may hurt specific industries like manufacturing in the developed world but helps others like services. The extra programmers that were hired because they were 6% cheaper brought a lot into the US economy, and they brought a lot more to their home countries in forms of remittances. For some of these developing countries remittances are 25%+ of GDP, meaning that they are completely dependent upon them. And of course, there is no discussion of methodology nor data.
- potatolicious 18y agoNot that simple. The fact of the matter is that the H-1B is linked to only a single company and cannot be transferred, meaning that any foreigner wanting a legitimate shot at citizenship cannot afford to leave their job for up to a decade or more (until green card). IMHO that is why the wages are lower - would you give your employee a raise if you knew that he had absolutely no way to quit your lousy job for something better?
- Retric 18y agoI know an H1B that switched jobs 3 times in the US. The rule is you need employment within X days of the loss of your job but you are NOT tied to a specific company.
- code_devil 18y agoYes, you are correct. I believe its 2 months, else you will have to leave the country. However changing jobs does slow down your Green Card process as some of the paper work has to be redone when you join a new company.
- kirubakaran 18y ago"The fact of the matter is that the H-1B is linked to only a single company and cannot be transferred" Incorrect. You can transfer your H1-B quite easily. However you can't transfer an L1-B (intra-company transfer from a foreign country). But even in that case, you can apply for an H1-B while you are in US and then change jobs once you have received your H1-B. Also, all the H1-B holders I know get very good salary - often higher than 'the market'. When you leave your home, get a visa and come to work half-a-world away, you are not going to dick around. You are going to do everything you can to maximize what you came here for.
- wallflower 18y agoIf you really want to know salaries, take a look at the H1-b job databases (they are required to report salaries for specific job titles). I don't look because I don't want to know (plausible deniability). I'm warning you - you don't want to know what some people earn (when I looked X years ago, my eyes almost burned out)
- kirubakaran 18y agoIn case you do want to know... http://www.flcdatacenter.com/CaseH1B.aspx http://www.flcdatacenter.com/CaseH1B.aspx
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- chiffonade 18y agoAnd? Software development is labor, plain and simple. If you think you're so smart, create your own opportunities to get paid. This is called "business", and many truly great hackers are good at it.
- obvioustroll 18y agoIs that such a bad thing? The larger the pay differential, the more likely the jobs will be sent overseas.
- briansmith 18y agoEven if the H1-B visa program did have some negative result on the average programmers' income, it doesn't affect any of us. The average programmers' income is only relevant to the mediocre among us. Just be the best so you don't have to worry about averages. I don't care where my competitors were born; I want to get job offers and win contracts based on my merits, not based on my mother's geography. If there's a guy in Thailand or India that is better for a position than I am, then he deserves the job and I want him to have it. Literally everybody I know that has a H1-B visa is making this country better. If I had to make a prioritized list of people to throw out of the country, most of the people on the list would be American citizens. If I got to choose 10 things to change about this country to increase my net income, the H1-B visa program wouldn't even be a consideration--it doesn't make sense to complain about an speculation of a 6% cut due to the H1-B program when the government is taking 6% (sales tax) + 6% (state income tax) + 40% (federal income tax) + 2% (property tax) and when we are paying a huge percentage of our income to insurers who turn around and rip us off when we make claims.
- ericb 18y ago>> The average programmers' income is only relevant to the mediocre among us. Just be the best so you don't have to worry about averages. I hear Lake Wobegon is nice this time of year.
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- jacoblyles 18y agoIf you really want to increase software engineer wages, put a legal cap on the number of CS degrees that can be handed out every year, like med school! I can't say what this will do for the health of the US software industry, but I'm sure it will drive wages up.
- zzzmarcus 18y agoThere are a few major problems with this article. First, the authors say: "In this paper, we simply sought to dispel the myth that globalization generates no losers." In my experience, If you start out seeking to confirm your biases, you generally will. Second, all their evidence is correlation not causation. I'm sure the correlations are strong, but there is no way to prove that H-1B workers actually caused wages to go down. There are too many external factors. Finally, unless there is some relation shown between the companies' profitability and the wages they're paying, you can't rule out the possibility that the less expensive H-1B workers and lower wages for American workers didn't actually save the American worker's jobs by keeping costs down and their employers in business. Lower wages and more H-1B workers could just mean that the company is doing what it has to do to stay afloat. Less pay is better than no job at all. That's just one of many possible scenarios. The paper isn't out yet, but as of now, their argument seems pretty weak.
- kqr2 18y agoProfessor Norm Matloff of UC Davis has always been a staunch critic of the H-1B visa: http://heather.cs.ucdavis.edu/h1bwritings.html http://heather.cs.ucdavis.edu/h1bwritings.html
- CWuestefeld 18y agoI'm assuming that someone wants us to draw the conclusion that this is a bad thing. But I don't see why our salaries should be kept at a high level, at the expense of both employers (and thus businesses and consumers) and other humans. Also, it seems to ignore the demographic problems that society is starting to see. Without a broader base of employed people, we can't keep paying retired people their Social Security and Medicare. An influx of employment-age people is necessary to keep these systems afloat. So in the long run, having these Visa workers will help ensure that I get out of those systems at least some of what I'm putting in.
- btwelch 18y agoInteresting point. But, I would guess the resulting wage deflation of opening up our markets completely (increasing labor supply) would outpace the deflation of medical expenses, and I doubt the latter would ever catch up completely. Therefore, those expensive government programs would have to be funded with much less tax revenue due to lower wages. I don't think that would fix the problem at all.
- noss 18y agoIsn't this the site where entrepreneurs go, those people that compete on being better. Not the site where salary-slaves go to whine about having to defend their salaries?