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. "

Comments

This is news?

[Bob McCown]

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.

Re:This is news?

[vsprintf]

Moreover, INS (now USCIS) has a prevalent wage requirement for H-1B workers. I believe that wage is about $75K for software engineers currently. Thus, any employer offering a salary below this rate to a software engineers should/would be denied the H-1B visa.

There is a big difference between should and would. First, there is no active enforcement of H-1B program regulations. That has never been funded by Clinton or Bush, so the DOL simply doesn't do it - they don't have the people. The only way to get enforcement of the regulations is via lawsuit against a company. Second, any company hiring H-1Bs is allowed to use its own method to determine prevailing wage if they want, and the last time I checked, nearly 70% did so. They are also allowed to set the worker's title of course, so it's easy to hire an experienced programmer as an associate. The government's own study (as well as independent ones) have shown H-1Bs are paid 15% to 30% less than resident workers for the same job. (And I gave links to all this stuff the last time this subject came up, so it's pointless to do it again - it doesn't do any good.) Just because your company doesn't abuse the program doesn't mean that other companies are as ethical.

Re:Well, Duh!

[Retric]

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.

Slightly incorrect research.

[Axe]

Data on the public disclosure site lists salaries for H1B workers at the moment they were hired. On average that would be unvervalued by about 4 to 5 years of raises - when most of H1B were hired.

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.

Re:Cost to hire?

[_Sharp'r_]

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.

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 /. in order to get traffic and notice. Make sure your conclusion is in line with /. reader's financial interests.
4. ????
5. Profit!

Re:This is common

[MightyMartian]

Always remember, it's only illegal if you don't have the money to buy a politician.

Re:This is common

[timeOday]

Why should IT bear the brunt? 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.

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?

Raises

[drgonzo59]

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

Re:Raises

[wealthychef]

And I bet you wonder why the number of american kids enrolled in technology and science degree programs keeps dropping. I've got news for you - the kids aren't stupid - they see that there is no real future there.

They ARE stupid if they think that science and engineering has no future. Where do these brilliant students go to make money? These geniuses are either going to leech off their parents or they are not going to be well off if they reject science as an option. Do you think a law degree or a medical degree is so lucrative compared to a good engineering degree? I'm not so sure about that.

The truth is that kids aren't becoming scientists not because of money, but because they are looking for a way to have a good life, meaning make a good contribution to the world. We put scientists down as geeks and emphasize money over all else. There is zero appreciation for science in the popular culture, compared to Indian and Chinese cultures, where becoming an engineer makes you a respected professional, even a hero to your family.

The fact is that unless we continue to improve our skills here, we will lose ground. The fact is that complaining about how hard our competition in the labor market works is not going to cut it -- we will have to work as hard as they do. They want it more, so they are getting it. They are offering their labor for a lower price and it is just as good usually. Why shouldn't they get the prize?

"Free" Markets

[Vicissidude]

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.

Re:This is common

[tkrotchko]

"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.]