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The H-1B Swindle
An anonymous reader writes "A new study shows that companies hire foreign workers for cheap labor, not skill." From the article:"When you look at computer job titles by state, California has one of the biggest differentials between OES salaries and H-1B salaries. The average salary for a programmer in California is $73,960, according to the OES. The average salary paid to an H-1B visa worker for the same job is $53,387; a difference of $20,573 ... H-1B visa workers were also concentrated at the bottom end of the wage scale, with the majority of H-1B visa workers in the 10-24 percentile range. 'That means the largest concentration of H-1B workers make less than [the] highest 75 percent of the U.S. wage earners,' the report notes. "
Anyone who has been in the computer industry for more than a few months knows this. Its prevalent everywhere. Don't let them say "there aren't enough engineers to go around", thats pure horse hockey. HIB workers arre cheaper, plain and simple.
A new study shows that companies hire foreign workers for cheap labor, not skill.
I'm curious, did anyone at all believe otherwise?
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
LOL... nice theory...
Working since 2000 to bring you news of how badly programmers are treated!
Still, in reality, is this any different than Norm Matloff's reports saying exactly the same thing over the past 5 years? And does anybody REALLY have any doubt that guest worker programs are just ways to lower wages in a given industry?
The exact same method was used to break up the California Agriculture Worker's Union back in the 1970s- and will continue to be used.
SJW: a person who perceives an injustice, and while correcting it, commits a greater injustice.
That's what I've always wondered. There are plenty (ok, maybe not as much as in Socal) of skilled programmers in the Midwest who earn much less. I can appreciate why they want their offices in big, expensive cities, but why not outsource within?
I'm not sure how the assertion that these workers are less skilled is borne out here. This is just more globalization fallout. Apparently, programming skills are not as precious as we would all like to think; there are many workers in China and India that will work for less than half of what we make here; this is the same thing that has happened in other industries historically. The only way to save our skins is to continue to provide more value or agree to work for less. Programming that can be shifted overseas effectively is going to go there and no amount of complaining will do it. I say it's better to attract and hire these people here in America and let them build industries here than to push them out and artificially fix wages high here. Protectionism will not work.
Currently hooked on AMP
Having RTFA I wonder how much of the "Duh this has to be true" concept effected their research. They seem to focus mostly on jobs title vs. looking at years of experience or education vs. pay. I think there would be more value in comparing people with the same relative experience who got their final degree be it BS, MS, or PHD from the same school to each other before saying.
"Abuse is by far more common than legitimate use,"
PS: This might be true but I think this has more to do with H1B's being less mobile as far as switching jobs than outright abuse vs. US citizens.
Is this really caused by the industry, or by the H1b workers themselves? I think many H1b workers are less aggressive in increasing their salaries than native Americans (not a reference to First Nations). Some of the impediments that kept H1b workers in their places afraid to lose their jobs were removed years ago. The main one of these being the ability to switch jobs immediately and then apply for a new H1b with the new employer. I've been an H1b and was earning more than the average in the TFA back in 2000 in Colorado. Part of the reason I had a good salary was due to a work colleagues going and demanding (without my knowledge) that I have a higher salary. My cultural background hadn't prepared me to fight for my salary in this way, which is required in the US. On top of that, I was much more forthcoming and stubborn about my salary than many of my other H1b work colleagues from other cultures.
Some might argue that the industry is taking advantage of H1b worker's cultures to keep their salaries low. I think it's more the other way around. This subject seems to garner quite a lot of hysteria and sensationalism and is a very good tool for politicians and certain media companies who claim to report news to further their own agendas.
BTW, I'm no longer an H1b. I moved to Canada, a country that is more accepting of immigrants.
Other issue is that it does not compare apples to apples: most H1b are non-managerial positions with relatively low experience, while national average includes middle managers. One need to compare H1B to the people in the same position.
And it looks like reducing numbers of H1Bs does wonders to the IT jobs retention in U.S. indeed. Not.
<^>_<(ô ô)>_<^>
You know, in the past this was called indentured servitude. You can come to America, but you have to work here for a while for the man getting paid little or nothing. Oh, and don't complain, or we'll ship you back.
No kidding it's a swindle. That's the whole thing that pisses me off about it! I have no problem in general with some American losing their tech job in favor of some non-American gaining a tech job. What I have a problem with is that what really happens is an American loses their well paying tech job, some non-American gains a usually well paying job by their standards but still vastly less than what it replaced, and then the executives give themselves phat bonuses for saving money.
:)
They have no incentive to pay them well. As always, they will pay only the absolute minimum necessary to get someone to do the job, and yes considerations like "quality" are fortunate if they are considered at all like all non-bean-countable aspects of business. The result is more money concentrated in the hands of the few, fewer well-paying jobs for skilled people in this country, and oh yeah a little bit different distribution of what wealth remains. Gutting the American middle class for fun and profit!
And if the ones getting those not-so-bad paying jobs in India think they aren't going to be next when the greedy whores realize that someone in China will work for a third of what the Indian does, well, they'd be exactly like we were not so long ago.
I wish there was some reasonable way to cap the salary of executives to, say, 20x what their average employee makes, including outsourced/contracted work (which is part of what makes this seem impractical to me). Cap their bonuses and other compensation similarly. Then you'd stop seeing employers struggling to pay their employees less and less, they'd have an incentive to pay them more. Since they'd be paying more for employees, you might see them caring more about quality that they're getting for their money no matter where they are hiring from.
The enemies of Democracy are
The article and referenced study is useless. It doesn't account for permit fees and the cost of regulation compliance, it doesn't control for the employee's age/experience/skills. It tries to generalize across huge categories of workers (programmer/analyst?) that in reality vary wildly.
/. in order to get traffic and notice. Make sure your conclusion is in line with /. reader's financial interests.
The theory that "funny-named people who speak with an accent tend to have a harder time getting hired for as much money" is as equally sound of a conclusion as this guy's conclusion. At least my theory could actually be proved if you used better information in the study. It's a lot harder to prove a mind-reading result with financial data, as opposed to say, a controlled survey of the people who have hired H1-B workers.
The article can be summed up as:
1. Add up some random salary facts
2. Ignore any major controls for those facts
3. Draw completely irrelevent conclusion (He makes a socialogical conclusion reading employers minds based on financial data.)
4. Post a commentary to
4. ????
5. Profit!
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
The report does not accounts for the fact that the money that a company pays for a H1B worker to a staffing firm is exactly the same that it will pay to an employee.
Most of the H1B workers in USA are recruited though a staffing firm. The staffing firm does the visa for the worker and brings them over to USA. The staffing firm then sends the worker as a contractor/consultant to the companies where he actually works. The company pays the market rate to the staffing firm. However the staffing firm (bodyshopping firms) take a major cut from that money and that is why your H1B worker gets paid less.
If you really care about the state of the foreign workers on H1B, then come to terms with the fact that they are required for worker/skill shortage in your economy which does exceedingly well by trading globally. The worker shortage might not be reflected by the employment figures as there are many jobs (code coolie types like maintainence, porting etc) that American workers do not want to do. Who does them ? Your underpaid H1B worker. Why is he paid less ? He has been targetted and potrayed as low cost job foreign job snatcher, because of which companies are reluctant to recruit him directly. So if you want to talk about ethics, then stop this diatribe against the foreign H1B worker.
Tell that to WalMart. Always exploited workers, always.
The article summary would lead us to believe that companies are hiring foreign workers who are less skilled, for less money. If that's true, then it actually makes sense, and doesn't imply any kind of terrible unethical business practice.
However, I'm guessing that they're hiring foreign workers that ARE skilled, but paying them less money. That certainly does sound bad. But what if the jobs aren't disposable? If a person makes himself invaluable within an organization, I wonder if he couldn't demand proper compensation regardless of his nationality.
In my mind this is another issue of the American worker getting screwed. I'm sure that many people take it the same way. If something is done to even the score here, then it should be to benefit the American workforce, and not the foreigner who comes here by choice and is willing to work for lower pay. The outcome would likely be the same though no matter which side you approach it from.
Another thing to consider is that by hiring lower paid foreigners, companies may have more money to throw at US workers. Although that argument would probably work a little better if programmers were calling the shots and employers were scrambling to hire good people, like it was 6-10 years ago.
I'm not against foreign workers and I'm not a strict nationalist, but I do believe that a strong middle class is necessary to sustain our economy long term.
Always remember, it's only illegal if you don't have the money to buy a politician.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Why is it unethical? Because you don't like it? Do you think these foreign workers sould be entitled to some sort of guaranteed wage minimum, comparable to those holding similar skills that are native to the country? Should we have a central committee determining what everyone's value is? Screw that free market concept?
It's already been screwed in many industries by union-forced excessive wages - look at those industries on their ass today because they can't lower their expenses enough to compete with the availability of cheaper, yet sufficiently skilled labor.
Everybody wants cheaper prices - until it's their rice bowl being looked at. Anything that can be done cheaper should be done cheaper - to do otherwise eventually leads to unsupportable economies - look at the (approaching negative) "growth" rate of many of the EU members.
.... speak English, very often better than USians or even British people (gramatically speaking, the accent is a completely different matter, I know of people from different regions in the US that struggle to understand people from other US places, and don't ask a Londoner with strong Cockney leanings to try to understand a person from Glaswog).
I work with Polish, Chinese, Pakistanis, Indians, Spanish, Japanese, Italians and of course USians and British people, and frankly the language is a non issue in most circumstances.
IANAL but write like a drunk one.
H1-B's are predominately hired into entry-level positions, and as such their salaries should be expected to be lower than the average. Most of them are college freshouts who just completed a degree in the US, and have exhausted their student visas. They are paid the same as other new hires that are college freshouts. Trying to say that H1B's make less money than the average engineer is like saying a newly hired freshout makes less money than the average engineer. Duh. If you've ever been involved in hiring an H1B visa person, you know that you must fill out government paperwork documenting the salaries of staff in equivalent positions. The starting salary of that H1B cannot be less than those workers. In the real world you get a stack of 300 resumes. You pick out the top 30. You bring them in for interviews. By law, you're not allowed to ask what kind of visa they might be on, only if they can legally work in the US. You send out job offers to the best candidates. You then find out your top 3 choices need H1B's. You either pursue them or settle for the lesser qualified candidates. If you have the budget (it costs me more to hire an H1B) and your company hasn't exhausted its H1B quota, you go for the more qualified H1B candidate. Otherwise you settle for a lesser candidate.
This is the God damned truth.
Foreign workers get your jobs because you are inept at something. You could be a fantastic engineer, but if you lack a job it's likely you're horribly inept at social interaction. It's easy to get a job and to hold a job unless you're some mouth-breathing idiot.
Is there really anything wrong with that? Most large companies already outsource many jobs overseas. Since these people are not citizens, they may plan on making some money here, and spending it at home to improve their life there. There's nothing wrong with that morally of course, but that would be bad for the US economy. I don't know many foreign people that have worked in the US, but the few I have have eventually gone back to their native country. I might go to Japan someday and work. I wouldn't expect to get full pay as a foreigner though since it might not go back into their economy. Now if I was registered as a citizen and wasn't getting equal pay, then it might be something to bitch about.... But in typical working situations, people that get payed are expected to just put the money back into the economy, and that doesn't always happen w/ non-citizens.
In undeveloped countries, the consumer controls the market. In capitalist America, the market controls you.
Anything? Well then, let's bring back slavery.
Then workers don't need to be paid at all.
If you're opposed to H1Bs ask yourself a question... Are you using anything that wasn't made in America? Think of all the American jobs lost because you weren't checking for "Made in the USA". So why is it that cheap foreign labor is just fine when it makes your shoes and electronics cheap but "immoral" if it happens to affect the industry that employs you? The American car industry tried that in the early 80s and it backfired. Import tarrifs were needed to keep prices equal with the Japanese which raised prices for CONSUMERS un-naturally. Nobody wanted to pay the inflated prices so sales tanked costing 50,000 jobs. Sure, Americans working at the Honda dealership lost their jobs but at least the Japanese couldn't embarass us with their amazing productivity right?
I do not want to pay more for my stuff because you can't compete with foreigners. The alternative is that we just offshore the work in which case they don't spend money in America which is even "worse" for the economy. Please read Bastiat's famous plea to ban sunlight for the benefit of candlemakers if you disagree. They were making fun of this type of logic in the 1800s.
What if Digg added local news and a Slashdot inspired comment karma system? ---
http://houndwire.com
China is a slave labor state. The introduction of capitalism liberates the Chinese about as much as the slaves of Rome.
Until you can vote for the men who write your laws, Chinese labor will NEVER be able to effectively organize and raise their living standards.
All we are doing by trading with China is empowering the worlds new industrial plantation system. Cut'em off. Treat em like we did the Soviet Union (or benign Cuba).
-------- -------- Support Wesley Clark for president!!!
People start dragging out their same tired old positions on the topic of H1B visas and don't seem to be talking about the actual article. It's unsurprising. We have all decided our positions on the issue long ago. (Aren't we all just so Pavlovian?)
...anyway...
This article is about bringing to light some general evidence of illegal practices that are defrauding the U.S. Government. It's a serious crime that doesn't get punished often enough and it's pretty sad. I actually still believe in the whole free market drive. If programmers are available from somewhere else cheaper, then let it be. Maybe programmers are overpaid anyway. I don't know enough about it to really know if that's the truth or not. But when we're talking about defrauding the government in order to lower your businesses operating expenses, then I'd say someone needs to be held accountable and should be barred from holding office in a publically trade corporation.
Businesses that operate (and compete against others) using illegal activity should be shut down plain and simple. If the evidence offered by the article is skewed or incorrect then of course that should be discussed and wouldn't it be nice if we had evidence offered that would counter the article's assertion?
Do you really think Americans should receive no preference in getting American jobs? If your vision is realized, then countries are just meta-corporations with no alleigence to their own citizens. In that case, do you think anybody will be dumb enough to join the military in their defense?
There are two things that you actually have the power to do to help yourself:
Complain if you like, but above all, act.
Mike (trying to practice what he preaches)
"Not an actor, but he plays one on TV."
If the companies are using the H1B workers to pay them $20,000/yr less, do you think they'll give them large raises. What if they don't? The H1B code monkeys aren't going anywhere, they'll work for $30,000/yr, it is still better than what they get in their home country. Most of them will underestimate the living expenses and will think they are getting a killer deal. It is like me, when I tell my family in Russia what I make here in America, they are all "ooh"-ing and "aah"-ing like I am some kind of a millionare, they don't know that my car insurance is $200/month and utilites another $150/month and car payments, mortgage, school loans etc etc
(Disclaimer: I'm a dirty foreigner caught in red tape)
I've had to go through a number of processes and trust me, H1B's are hardly "easy ways to get cheap labor" for employers.
Maybe you're forgetting that the usual visa cost for one of these is $20,000? Or that the visa only lasts for, at most, 5-6 years?
What about the fact that most cases where "dirty foreigners" are needed are in skilled creative fields like games, which also (suprise suprise) end up having lower salaries?
Or maybe that you have to apply about a year in advance, and that makes ultra-skilled people gravitate towards visas like the L-1 and the O-1(that can be renewed indefinitely), thereby skewing salary surveys?
If employers want cheap labor, they'll outsource to India, not go through years of government red tape and tens of thousands of dollars per employee.
This is already subverting the free market by opening a loophole which allows employers to look outside their home market in order to undercut workers in their own market.
It's unethical for two reasons. First, the H1B regulations require that employers pay prevailing market rates for the talent they're importing, which they clearly aren't. Second, it provides a lever to help lower everyone else's salaries, while the executives pocket huge bonuses for dubious reasons.
It's good to use your head, but not as a battering ram.
So if slavery was legal, then it would be OK?
If memory serves, it was legal at one point.
Just because something is legal, does not make it right or best.
Which was my point of my original post:
The 'anything that can be done, should be done' argument should be tempered with some ethics.
But that's nonsense! Yes, globalization will have emerging countries getting paid more, and wages for 1st world nations getting paid less. That's rational. But that kind of balancing-out is only happening in the job market! Tuition prices are still rising, and I don't see the cost of living going down in my city. I'll stop demanding more money from my employer when my landlord, school, and government stop demanding more money from me.
Rather than say, "Hey, you're trying to pay less for programmers!" we should be saying "Hey, are we getting paid too much? Are we pricing ourselves out of positions?"
No. Any cheap work that could be done overseas is already being done overseas. The work that's left in the US would stay in the US regardless of what pay programmers demand. So, companies can only reduce the amount they pay in wages by artifically increasing the workforce and reducing the demand for high-skilled workers.
This has nothing to do with "free" trade in labor and everything to do with market manipulation. These companies do not want to deal with the free market as it's currently structured. So, instead of dealing in the free market, they'd rather redefine the labor market in their terms.
These companies would rather have completely open borders in the US where everyone from everywhere could freely enter. We've already heard Bush say exactly that. Labor costs in the US would plummet. So would the standard of living, but companies and the current administration don't actually care. The only reason they don't push that through now is that they've been pounding security for the last four years. Also, the majority US citizens, both Democrats and Republicans, don't want any more foreigners entering the country to take away jobs. If anything, people want the foreigners to leave so we could actually get some work and decent pay raises around here.
Don't get me wrong. I've been a programmer for quite some time and it sucks, but supply and demand concepts aren't limited to one country. The world is getting smaller and more connected. National economies are merging into a world economy. No amount of artificial propping-up by local governments is going to keep it from happening. Get used to it.
I will not get used to it. There's a difference between competing in a free market and having your own government bring in non-US citizens to compete directly against you. Or giving tax breaks to coporations shipping jobs over to China.
Should we expect any less of a Republican big business administration?
vs. looking at years of experience or education vs. pay
Why should an employer look at those two things when job performance should be the primary salary measurement? We just let a unix admin go who had 20+ years of "experience" and a college degree. That means 20+ years of screwing up servers in DC's accross the continental US. Nice guy, but I wouldn't let him touch a PC with a 10 foot pole.
In contrast, I've been in the industry since 94. I have no diplomas (not even high school), but have "the mother-f'ing force" when it comes to working with huge app clusters and complicated enterprise applications.
BBH
To my educational credit, I was a professional cook before getting into computers....
"Do you think these foreign workers sould be entitled to some sort of guaranteed wage minimum, comparable to those holding similar skills that are native to the country?"
Actually yes.
Follow my logic here...
If the intent of H1B is to get talent that simply isn't available locally, then the best way to treat these workers is to give them a green card the moment they're hired. That way, there is no pressure to stay with an employer if they are underpaid. If takes away any incentive to underpay these folks because they'll simply move elsewhere. That protects the H1B and the American worker.
If the intent of the H1B is to get cheaper labor, then these folks are little better than indentured servent filling out time being underpaid for the promise of a green card after 5 years. If that's the intent of the law, then lets be honest about it and stop lying about the lack of local talent.
[BTW: You can tell an ad to prove no local talent exists... its always like this:
WANTED: Senior Oracle DBA (10+ yr) with extensive Java programming skills, and Masters Degree in Mathematics. Salary up to $48K depending on relevant experience.]
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Spelling and Americans, you must be kidding me!!! I work with couple of american co-workers and I pitty their written English.. God help them!!
"Let's just open our borders completely and see how much cops, nurses, and mailmen make after we open up their position to everybody on earth."
Nurses are an exception, but generally few people come to the US intent on becoming a cop or a postal worker. Police forces specifically have a long history of employing poor imigrants that can't get jobs elsewhere (consider the stereotype of the Irish cop). In general, however, these are jobs that you don't need to leave the country of your birth to do.
Programming is one of those jobs that you need to go to the developed world to do. If it ain't North America, it's Western Europe, Eastern Asia or Australia.
"In that case, do you think anybody will be dumb enough to join the military in their defense?"
On the other hand, we have a situation where foreign nationals sign up to go to Iraq with the intent to become citizens. And while Washington will continue to swear up and down that it isn't official policy to "fast-track" soldiers, it sure doesn't help, and Congress has a habit of granting posthumous citizenship.
H1-B's are not supposed to be imported for the lower-tech jobs unless there is a scarcity of native talent for those lower-tech jobs. H1-B's are expected to be as trained, or more so, than their American counterparts. That's what the Benedict Arnold CEO's keep telling us - the supply of US tech talent is lacking. They have to import highly qualified people to continue innovating.
If what you say is true - H1-B's are less skilled - then the author's argument is strengthened.
Most people in the tech market today tend to feel that H1-B's are really being used to decrease salary pressure. If you're qualified but demand $80,000/yr, well they can just hire an H1-B at $60,000/yr. That's not what H1-B's are for.
Education is a better safeguard of liberty than a standing army.
Edward Everett (1794 - 1865)
I agree with you for the most part, but everybody makes mistakes.
On the spelling front, for example, you misspelled the word "pity".
On the grammar front you forgot an "a"; "I work with a couple of American". (Yes, that's with a capital "a", too.)
Lastly, your first sentence would be more proper if it would read "Spelling and Americans ? You must be kidding me!!!" or "Spelling and Americans - you must be kidding me". The form in which you've written it now seems to indicate that you are saying "you must be kidding me" to both Americans and a person who goes by the name of "Spelling".
--
That said - who cares ? I've seen similar errors in letters written directly by CEOs (not passing through their secretaries/etc.) and even in press releases. It *would* be nice to hold everybody to a high standard to help keep it up, but I think it's far too late.
Bull. It went back from 200000 per year to 65000 (plus 20K for those with U.S. degrees).
as many are only in the US for the short haul and could care less about Social Security, schools, infrastructure, etc.
Bull. They pay Social Security, Medicare and all other taxes, while they are not eligible for the benefits.
Illegal aliens and outsourcing are our enemy. Quality educated folks coming here to work their asses off are our friends.
<^>_<(ô ô)>_<^>
How is voting Democrat going to convince anybody pay $60k to $70k IT for an "IT administrator/help desk specialist"? I can completely understand staying with a profession for 8 years when you've got a wife and kid, but you don't see a huge pay gap between entry-level and 8-year sweatshop workers or secretaries, so why should there be one for your job?
/. uid of 925786? Pathetic! :)
I've seen a survey that points that average MCSA salary at $47k in 2003. If you don't like the market forces that play into that salary, feel free to move to your favorite communist or socialist nation.
I'd probably question your experience, anyway... a
contributes towards generating revenue?
And so is electricity, and so is lots of other things.
And do you suppose the seed of the farmer
are 'just a liability'? The seed, the manure, and pencils,
are all directly contributing towards generating his income.
The toilet paper in the bathrooms (to you, 'liability')
is actually more important than the last sale. Is it not?
Truely, you've just argued my point. You were swindled, my freind -- taken adavntage of. If you had specialized knowlege that was highly valuable to to the complany, you should've been compensated appropriately. Just because you couldn't code at the time, is not an excuse. They needed the information/skills you were in posession of, yet you were not appropriately rewarded.
I'd even argue that PHds, like yourself, should not be coding, unless you're building models. You should be sitting in a nice office, being allowed to think. Your brillant ideas should be documented, and handed down in understandable language for someone else to code or make applicaible use of.
I say again, you were duped. Either you knew of this all along, or are in denial.
Please don't take this as a flame. It isn't.