How European Startups Are Battling Labor Laws For Developers and Programmers

Nerval's Lobster writes "The United States with its H-1B controversy isn't the only country going through that sort of immigration upheaval. As the cult of entrepreneurship spirals upward in Europe, the intricate vagaries of immigration policy on the continent are being newly scrutinized by our company-building classes. Freshly venture-backed European Internet companies want talent, and they are going to remarkable lengths to get it — but not always legally. Milo Yiannopoulos talked to whole bunch of entrepreneurs and investors in Europe about the fudges, shortcuts, workarounds and, in some cases, 'strategic decision-making' are — just about — getting their companies the talent they need. For example, one well-known Parisian venture capitalist told Milo that he knows of 'at least nine' startups in France employing developers illegally, keeping them off the books not only to avoid France's notoriously onerous labor laws but also because it would have been impossible, or simply too expensive, to import them officially."

Comments

so why not set up shop elsewhere?

[Chirs]

If the laws of the land are too onerous, the correct solutions are either to change the laws or else go somewhere else.

Re:so why not set up shop elsewhere?

[cayenne8]

If the laws of the land are too onerous, the correct solutions are either to change the laws or else go somewhere else.

That's what most companies do.

Why doesn't the US set corporate tax to near "0"....for all companies set up physically IN the US with over X number of employees in the states? I'd think we'd be attracting all sorts of businees to our shores. The lack of corp tax would offset to a great deal the higher salaries to be paid here.

Also, make those non-tax incentives to have to hire US citizens....

Re:so why not set up shop elsewhere?

[gnoshi]

1. Because it is a race to the bottom: if you're getting companies in there because of your 'near zero' corporate tax, don't be surprised if they move to another country with 'nearer zero' corporate tax, and lower payroll tax as well, and maybe poorer working conditions.
2. Because if a company isn't paying corporate tax, then it is much harder for it to be worth having them in the country (the cost of servicing their existence may exceed their return to society/government)

Re:so why not set up shop elsewhere?

[gl4ss]

If the laws of the land are too onerous, the correct solutions are either to change the laws or else go somewhere else.

Maybe they can't move to the other place to work legally either, Setting up a legal entity in China can be an adventure of it's own.
But it's not really that hard to employ people legally in europe, even if they're from India or China. Hell, it's easier to get the travel permits if you employ them legally.

HOWEVER.. if you don't employ them officially you can screw them. Also you save a ton of money in taxes. That's what "uuu it's too expeeensive!!!" and bitching about the labor laws is about.

actually, they can _screw_ the owners. technically it's the employers fault and they could ask for all the benefits, unpaid holidays etc if the company folds and the owners/employer would be on the hook for them(it's not the illegal immigrant who arranged the situation so technically I think it's just, it's also practical. that's why people employing illegal immigrants generally don't want them to mingle with general population because they would tell all kinds of things about rights and how their illegally acting employer is potentially in deep shit because dodging taxes is serious business)... really, what the fuck is a thousand bucks on paperwork to get some guy that's going to cost you 6-10 thousand euros (legally paid ok pay) per month anyhow, are you going to make your talent live in illegal 10 persons per apartment shithole in some Parisian suburbs? are yo looking for coders or pizza delivery boys?? If your business needs them to work for pennies and you can't afford the taxes, make them partners or something - don't be a dick, it's going to cost you a ton if you are.

In other words, it's not really a problem in Europe to get the permits, it's relatively cheap as well.

Re:so why not set up shop elsewhere?

[gnoshi]

Because it is a race to the bottom:

Yes. It's called "competition". It's what keeps markets efficient and prices low. It's what makes people better off over time.

Sure, I'll acknowledge competition can encourage market efficiency and prices low. It's a bit of a stretch to claim that a race to the bottom makes people better off over time. It makes some people better off over time, but I think you're overreaching an awful lot to claim it 'makes people better off over time' more generally than that.

e.g. it is 'efficient', temporarily, for companies to use as close to slave labor as they can obtain with the minimum safety standards that prevent loss due to injured or killed workers that exceeded the cost of having safety equipment and protocols. It reduces production cost to a minimum, which makes things cheaper.

Re:so why not set up shop elsewhere?

[gnoshi]

The problem with a VAT system is that it is a flat tax, which means all individuals are taxes equally on what they buy irrespective of income. Some have argued that this is fine, since higher-income individuals consume more and thus pay higher taxes. In practice, though, this is not what happens - the proportion of income which is saved or stashed increases with income. Someone on $20k a year will be spending essentially all their income; someone on $200k a year is much less likely to be. It is the same reason that (some have argued) having a means test on a stimulus package is a good idea because those on lower incomes are more likely to spend it. I should note others have argued that the opposite is true and low income earners will save the 'free cash'.

Re:so why not set up shop elsewhere?

[ShanghaiBill]

In some countries they then wind up the targets of investigation and receive tax bills and fines.

... and other corporations notice that, and locate their new facilities someplace more welcoming.

I don't think your comment supports dropping the corporate tax rate to zero, but rather better policing and tax law management.

Every dollar the government spends on better policing and better tax law management is one dollar less for something else. Likewise with every dollar that corporations spend on tax avoidance. US corporations already spend about $200 billion per year on tax avoidance. If the corporate income tax was cut to zero, all of that money could go into something productive, and the end result would be higher overall tax revenues from payroll taxes, sales taxes, excise taxes etc.

I've seen the claim that corporate income taxes inhibit job creation, but I've not seen convincing evidence that it does.

When a company moves its headquarters overseas, the executive and administrative jobs go with it. When American businesses spend hundreds of billions on accountants and tax attorneys, that is just dead end spending that results in no useful goods or services, and no job growth.

Re:so why not set up shop elsewhere?

[nbauman]

That's what economic theory teaches. Reality is more complicated.

Here's reality: Suppose I'm a contractor with a bunch of construction workers digging trenches. Now trench collapses are a major cause of workplace deaths. You prevent trench collapses by shoring up the sides of the trenches if they get too deep or the soil is too damp. It takes longer to shore up the sides, so it takes longer and costs more to do the job safely. If the trench collapses, and kills a few workers, it doesn't cost the contractor anything, because it's a worker's compensation case, which means the state pays (and doesn't pay much), and these businesses are run as corporations, so the contractor simply goes bankrupt and starts a new corporation.

Most contractors don't shore up the sides of the trenches. They can bid low for these jobs. If a contractor were to shore up the sides of the trenches, it would cost him more, he'd have to bid more, and he wouldn't get the job.

So the result of competition in the free market is for contractors to run their businesses in a way that kills their employees. Because unemployment is so high, they can always get more employees, who are desperate for work and willing to face the risk of death.

And that's the race to the bottom.

(OSHA can't stop it because they they don't have enough inspectors. They'd need a thousand times as many inspectors to visit all these small sites.)

Re:so why not set up shop elsewhere?

[stenvar]

No, you need to stop conflating the conditions at the dawn of the industrial revolution with today's conditions, and you need to stop giving false credit. What stopped 12 year olds working 72 hours a week was not just that the labor movement demanded it, but that the industrial revolution made it possible; the same 12 year olds used to work 72 hours a week (and more) before the industrial revolution, but people didn't stop that because economic conditions made it impossible.

Today, programming is not dangerous industrial work. The idea that programmers need to be protected from predatory employers by applying workplace standards developed for dangerous manual labor is ludicrous. Most people these days should be free to contract for work in whatever way they like. And they want to, as you can see from the declining union memberships.

Re:so why not set up shop elsewhere?

[SerpentMage]

This is the classical mistake where people like you assume that labor is a resource like steel, or oil. Humans are not a resource, for they are unpredictable, and stochastic. Meaning if I drop steel I have certain physical properties. Where as if I drop a person I will have a multitude of reactions.

"For example, in the classic case of the original Luddites, when it became cheaper to make clothing due to technological advance, people had more money to spend elsewhere, and that elsewhere is where the new jobs go, and you invariably see more jobs created than had existed before that "job costing" technology was invented. It happens every single time, without fail"

Silicon Valley; In fact jobs have left and have not been created. Sure there are success stories, but the influence of Silicon Valley as a job creator has waned. Take for example Apple, or Oracle, who have jobs there, but have created a huge number of jobs outside of that region. Facebook is a bit of the old culture of creating jobs in silicon valley. New jobs have not replaced the old jobs. I can bring in many other examples of where more jobs are not created.

"As for minimum wage...If your wage was below what you're willing to work for, then you'd simply not take the job. This is a fact. Most people do in fact work at above minimum wage. Minimum wage has the following effect: For the low end workers who really aren't worth a shit (there are many out there - this nobody can deny) they simply have no job at all. Whereas they could have at least had SOMETHING, they now have nothing. This has two effects: Increased unemployment, and higher prices. Because prices now go up to match that minimum wage increase, your purchasing power hasn't really gone anywhere. Most people tend to equate money with wealth, and that relationship isn't one to one."

Wrong, another example, Germany. Germany has no minimum wage and in fact there is this concept of hunger wages. This means a person is working full time, and does not even come close to making enough money to support their family. I am talking wages of about 1 euro per hour. The government kicks in social help to make ends meet. Germany has shown that to survive you will take work below your pay because you need to do something.

"A classic example I look at is this: Back in 2001, I paid $3800 for a 50" tv. The thing was pretty massive not just in diagonal length, but it was pretty fat too - it was rear projection. A really big and obnoxious TV by today's standard. Last year I "upgraded" my whole living room: Bought a new leather couch, ($1,200) built a 5.1 surround system from the ground up (none of the HTIB crap, a truly good sound system, $1,000ish with 8 channel lossless audio) and a new samsung 50" tv that has a MUCH better picture quality than the one from 11 years ago, consumes a lot less power and is light enough for one person to carry. Total spent was $3,200. Basically by spending less I have more "wealth" than I did 10 years ago - and that's even ignoring inflation."

Oh yes just because I can pay for cheaper consumer crap things are ok. I am going to ask how old are you? For life also includes health care, education, etc. These costs have become prohibitive for the poor. Sure they are given loans and then get jobs where they can barely pay back these things. But hey as long as I can get get cheap consumer crap all is ok, right?

"When somebody tells you that the poor are poorer and the wealthy are wealthier because - adjusted for inflation - the poor are making fewer dollars today than they were in the 90's, they have no idea what they are talking about. "

Again you don't know what you are talking about. Cheaper consumer crap yes. Cheaper food? NO, but I guess you don't buy food do you? Again the question of age. The poor are poorer than the average poor of say 40 years ago. When economists measure poverty and such they don't measure it in absolute values like how much currency you have. The measure it in terms of what you can afford for the monies you make. Again, g

Re:so why not set up shop elsewhere?

[xelah]

The problem with a VAT system is that it is a flat tax, which means all individuals are taxes equally on what they buy irrespective of income.

The structure of corporate taxes isn't better in this regard, and is often worse. The poor pensioner with a few stocks gets her dividends with corporate taxes taken off (assuming they're actually paid in the first place...), and so does the wealthy investor. In the UK at least, owners of businesses are likely to pay less tax than typical employees overall because they can manipulate the structure much more than an employee can. In the UK that might mean receiving their income as dividends, which have a lower income tax rate and don't attract NI (a 'payroll tax'), or for the adventurous it might mean tax avoidance structures involving tax havens. I imagine it's similar elsewhere: extra flexibility enables avoidance.

My opinion is that corporate taxes are just too hard to define well to be worth doing anyway. eg, I work for a (very) small company with shareholders in the UK, US and Brazil, people working for it in the UK, US, Argentina, India and the Ukraine and custom/potential custom in various places in South America. Which government should collect the corporate taxes? Whose rules do you apply? Defining profit as a whole is hard enough, physically locating it can be an exercise in futility. Instead, I think it'd be better to tax profit when it becomes an individual's income (and to tax all kinds of income the same - salary, royalties, dividends, interest, capital gains, whatever). Far fewer individuals have an ambiguous location, it's ultimately individuals who benefit from government services, it's easier to define an individual's income and it's possible to make the tax rates progressive. And, of course, if you eliminate a whole layer of taxation you can eliminate a whole layer of avoidance, distorted behaviour and bureaucracy.

Buy American?

[girlintraining]

Hey. I'm an American. Our H1-B visa program has tanked our industry. Substandard code, slipping release schedules, low wages. There is plenty of domestic talent here already, and I'm not even here on a visitor's pass.

What would it take for me to get out of my mismanaged and failed country of fools and into your country, which appears to be slightly less mismanaged and the changes are being pushed by startups who want to pay me well instead of MegaCorp(tm) who wants to pay me minimum wage to do something that takes 10 years of training to get into?

I'm deadly serious here. I could line up about 50,000 americans inside a week for you guys -- we're unemployed but we have the skillset. Our H1-B Visa program has killed our tech sector. Don't fall for the same trap we did.

Re:Buy American?

[DaHat]

Substandard code, slipping release schedules

That sounds more like a management issue than it does an H1-B problem.

If someone is churning out substandard code and causing schedules to slip... be they an American or H1-B holder... replace them... it's that simple.

Re:Buy American?

[Intrepid imaginaut]

I think a lot of the better educated in the US are starting to look with interest at Europe's social protections. My sister and her family moved to the land of opportunity a month ago, and are already working out exit options since there's no way in hell they can afford university or health fees for the kids. Yes it's not perfect but you'd be surprised how financially advantageous paying your taxes into social systems can be.

Re:Buy American?

[DoofusOfDeath]

Yeah, I'm in the same boat. From what I've been able to determine, the governments in central and northern Europe / Scandinavia just seem to generally work better than do the U.S., U.K., and southern European governments. I'm not going to pretend I know why, but it's looking very, very attractive to me. (I may be particularly sensitized to the issue at the moment, as federal budget sequestration is causing me major problems.)

Re:Buy American?

[JaredOfEuropa]

Those social protections are part of the problem, or rather, the way some countries implement them. In some EU countries, government has pushed the cost and risk of social measus to employers. An employee falls ill or is injured? Company is obliged to pay for their wages, sometimes for over a year. Need to fire someone? You can't, or you spend a goodly sum getting rid of him/her. Or you have someone off on maternity leave, with the obligation to keep paying her wages, just a few weeks after she joined the company. Yes, it happens, and by law you cannot refuse someone on that ground or even ask about it in a job interview.

That's all fine and dandy for the worker, and for corporations who can easily absorb the average costs incurred in a large group of employees. But in small startups, having to pay a worker who is unproductive one way or another for a long period of time can kill the company. You can insure against that, but the premiums are unbelievable.

Re:Buy American?

[tnk1]

Speaking as someone who hires and fires people, firing people and hiring new ones is far easier said than done, even if you propose to pay them well.

Even with a labor market full of candidates with the skills you need, you're still looking at a few weeks to get them in the door. In the meantime, your project is disrupted. Sure, you can try and train up someone on your team and make them work harder for a month or so, but they don't just learn stuff overnight, and your good team member is going to be overworked because those people still have to get their own code/project out the door on time as well.

I don't know where you have worked, but it's about ten times more likely to see people laid off than it is for them to be fired for performance, and there is a reason for that. I'm not afraid to fire someone who is not performing, but that's usually after at least working with them for some period of time to try and rectify the issues. The last thing I want to have to do is fire anyone unless they are richly deserving and that usually is demonstrated by a history of failure over time. So, if I have a "problem", he's going to be my problem for awhile. Thankfully, if you do find the right candidates, the failures are few and far between.

I work in a "right to work" state in the US. So, I don't even have to worry about half the stuff a European employer will have to when it comes to letting people go. There is nothing simple about it.

And there's the fact that you're going to fire someone. Unless the guy is an asshole, even doing what you must for good reason is not a pleasant task. In no way do I want to work for people who think I am going to fire people at the drop of a hat.

Re:Buy American?

[girlintraining]

If someone is churning out substandard code and causing schedules to slip... be they an American or H1-B holder... replace them... it's that simple.

You haven't worked with people who ask you to... do the needful... have you? The substandard code is a byproduct of a combination of culture, language barrier, and a lack of experience. Note that I said experience, not education. American labor often stresses that people take their own initiative in solving a problem. You're expected to come up with a solution on your own, with little oversight or guidance, and you're given some leeway in making that happen. Yes, some companies are worse about this than others -- I am speaking in generalities here. YMMV. The culture of many of our immigrants is to not take that initiative -- but to only do things under the express guidance of their leaders. They see a problem and unless it's in the three ring binder that says "Things Management Says You Should Do When You Spot Problem X", it doesn't exist. They don't even see it. If you ask them about it, they'll say they don't know.

I'd snark you back and say "it's that simple," but nothing about conflicting cultural ideas and attitudes is. Nothing. You can't just replace people who have good attitudes but limited experience or have been trained to not take the initiative... you're just passing the buck on to the next person then. And it won't save your project. Software development isn't like factory work -- you can't mongolian hoarde the problem and solve it faster. In truth, a lot of times adding new people or more people makes the project take longer. This is a "people" problem, but it's commonly seen in all engineering disciplines. It's just the nature of the work.

The H1-B problem is not about putting down immigrants. We want them. Hell, we need them for some industries. The problem is that you can't destabilize an industry by radically changing either supply, or demand, and not have it hurt everyone. The H1-B program radically increased supply, and as a result, the cost of technical labor dropped -- a lot. It dropped so much that a lot of people who had invested in an education in it were left high and dry, and many people who had solid experience suddenly found themselves knocked several notches down on their career path and had to scramble to find a way to support their current lifestyle at a much lower income, with often tragic results. So a lot of experienced people left the industry to move into fields that were more stable, and the overall quality of the labor dropped.

This, in turn, fueled more cries for H1-Bs because high level positions were now going unfulfilled -- there was a glut of low-level workers, and very few experienced people because they didn't want to move 'down' in their career and simply moved out. That gap simply couldn't be filled no matter how many workers you threw at the problem. So the entire problem became cyclical... more H1-Bs mean more experienced workers leave, which mean lower overall quality of work, and now businesses are scrambling to find anyone who's qualified amongst a veritable sea of resumes... none which have the amount of experience needed.

And that, right there, is how our industry collapsed. It was because of short-term thinking -- they wanted to tap into the global labor market, so they poked a hole in the dam of regulations holding them back, thinking they could suckle off the new supply of cheap labor. But they were trying to drink out of a firehose, and then the dam exploded and washed out the entire industry.

There is no new tech now in this country. It's all gone to shit. It died because of short-term thinking, and now our high tech industry is just an empty shell, unable to produce any better than the third world, because that's the only labor source we have left.

Re:Buy American?

[JanneM]

Most of those rules either exempt small companies or they get reimbursed in turn by the state for the costs. In Sweden, for example, the employer pays for the first 14 days of sick leave (which is lower than your regular pay), the state covers anything beyond it. Same kind of thing with the other costs.

Re:Buy American?

[girlintraining]

The last thing I want to have to do is fire anyone unless they are richly deserving and that usually is demonstrated by a history of failure over time. So, if I have a "problem", he's going to be my problem for awhile. Thankfully, if you do find the right candidates, the failures are few and far between.

I can't say I speak for everyone, but I know I speak for the most professional amongst us when I say: Thank you. I'll never work for you, but we need more managers like you in the field. People who are willing to roll their sleeves up and get involved. So again, thanks.

We now return to our regularly scheduled flame-fest, already in progress...

Re:Buy American?

[Luckyo]

Not "worker" but "society". These safety nets are created to ensure the future continuity of society through making everyone's future safer. A good example you list is maternity leave. Most of the developed countries already have bare minimum birth rates to hold their populations steady, and many would be in decline if not for immigration. This is a massive time bomb because our retirement systems are designed so that we have enough people providing for those who no longer provide for themselves. As this pool is depleted, societal order built on wealth will collapse. Japan has this problems in a very severe form due to their extreme xenophobia preventing immigration from plugging the short term loss accrued and as a result they're already struggling even though enough time hasn't lapsed for the problem to become even remotely bad. This is the issue of next twenty to thirty years and it's going to keep getting worse during this period.

So we have a choice: deprive the owner class of some income and give all mothers in the country a significant incentive to get children desperately needed to maintain the society, or award owner class with a bit more money, and make sure that it will be next to impossible to get children unless you're very safe financially and have society hang on the verge of a cliff in twenty years or so due to collapsing birth rate.

It's called "short term gain versus long term gain". You are advocating the short term gains and fully willing to throw the future under the bus for them. This is a very common way of thinking among those of the current owner class, as they believe that they and their capital will be allowed to leave the society when it starts to collapse and go to another healthy society to parasite off until its eventual collapse. And the circle will continue.

They are likely wrong, and forgetting the lessons of French Revolution and what happens to owner class alongside everyone else when society really does collapse in a large Western contry. While many of the owner class in the developing countries successfully dodged this bullet and just left for European countries and US after parasiting their own countries to the point of societal collapse, it's highly unlikely that US and European countries will allow for the same thing to happen to them. A far more likely outcome is the way of the guillotine and mob justice on those who remain alongside massive confiscation of property and a complete collapse of society to the point where there are no "healthy economies" to run to due to global impact of a collapse of a large Western country.

Re:Buy American?

[TheSync]

There is no new tech now in this country.

Instagram? GoPro? iPhone? iPad? Square? Google self-driving cars? Tesla? SpaceX? Drones from General Atomics Aeronautical Systems & Northrop Grumman?

Re:Buy American?

[ctype_007]

I'm suspecting that you will start complaining about outsourcing just after banning H1-B

Re:Buy American?

[Xest]

Look, I get it, you're unemployed, you're bitter, and you're looking for blame, but you've been going on like this for weeks now and it's tiresome.

I'll admit I'm not American, and I don't know the vagaries of the H1-B system, maybe that means I don't know what I'm on about, but maybe alternatively it allows me to be objective.

You see here's the thing, I hear a lot whining about how H1-B has decimated the US technical industry, and the people I hear it from all seem to have one thing in common - they're unemployed or they seem to believe they're underpaid, and it's all the fault of immigrants. So I decided I'd look at the fact.

I figured I'd see exactly what these low paid immigrant workers are getting paid and so forth, and I found this site which seems to have a pretty good database:

http://www.h1bwage.com/

For 2012 a search of programmer came up with 10k records, developer another 10k, whether any of these crossover I'm not sure, but hey let's call it 20k anyway. Estimates are shaky but currently the amount of developers in the US seems to be anything from about 1 million to 4 million depending on who you ask, but again let's given the benefit of the doubt and pretend there are only 1 million, so H1-B visas account for 2% of developer jobs each year based on these figures, that's a small amount but it's certainly not negligible so it's a fair criticism that H1-B immigrants are taking at least a non-negligible amount of jobs each year. Note that the number of developers has grown each year, and so has the visa cap, roughly linearly so the figure will be reasonable for past years also.

But I also found figures for average salaries for developers, they seem to have remained fairly stagnant for a few years (if the economy isn't growing much, neither will wages grow much) at roughly $73k per year as the average and the top 10% earning an average of $110k. So the next issue is that immigrants are being employed because they accept less money and are bringing salaries down, again though looking at http://www.h1bwage.com/ I can't really see how that's true - the majority are getting paid more than the average so if anything H1-B immigrants must be raising the average.

In fact, many of the companies that I see chided here for wanting to increase the H1-B quota "to bring down developer wages" are doing quite the opposite. Facebook in 2012 was paying an average of $115k per developer, Google $125k, Microsoft $104k, Apple $119k. Given this, all these major companies are paying well above the average developer salary to immigrants, and all except Microsoft are paying above the average paid to the top 10% of developer salaries in the US.

So here's what frankly I think the facts say the reality of the situation is, that in practice, across the globe it's not ever going to be the case that every American programmer is better than every other programmer in the world, in fact, there will be a sizeable segment where the opposite is true, that is for example, that perhaps the bottom 50% of American programmers are statistically going to be nowhere near as talented as the top 10% of developers in almost every other country in the world. That's bound to be a lot of developers, and awful lot. What this means is that technology companies who want to populate their company with the best talent available no matter where in the world that comes from are going to have to use the H1-B visa program.

I'm not saying there aren't companies taking the piss, one company at least stood out on my peruse through and that was Wipro, they clearly seem to pay a little below average on average, and lot in some cases whilst also taking up more than their fair share of the quota, but by and large the H1-B visa program seems to be being used for what it's intended to be used for, on average does not appear to decrease average developer salaries but in fact increases them and that companies such as Facebook, Microsoft etc. want to

Re:Buy American?

[chrismcb]

Hey. I'm an American. Our H1-B visa program has tanked our industry. Substandard code, slipping release schedules, low wages.

Code was substandard, schedules slipped before the "tanking" of the industry. Some of the best programmers I know were hired on H1B visas... and some of the worst programmers I've worked with were H1Bs... But some of the best programmers I know are Americans, and some of the worst are Americans.

Re:Buy American?

[Xest]

I think you've probably misunderstood what I said so I'll explain in more detail. The 2% is the proportion of H1-B visas relative to the amount of the jobs in the market each year.

For example, for 2012, if there are 1 million developer jobs in the US as the most realistic lower bounds figures suggest* and there are 20,000 new H1-B applicants each year then that means that in 2012, 2% of developer jobs were taken up by H1-B applicants. This means that in the 10 years since the H1-B program started, assuming there wasn't an equivalent number of H1-B workers leaving that the total figure will be higher, as the number of jobs and number of workers has scaled in fact you'd have just under 1%, but let's round it up to 1% of today's figures in 2002, 1.1% in 2003, 1.2% in 2004 and so on. That means assuming none left, none retired, none changed role (for example, promoted into management) 16.5% of today's developer market consisting of H1-B workers.

So your 20% figure isn't too far off that, but that estimate is very generous in weighting all assumptions towards the viewpoint that H1-B visas have a real impact on the job market. If there are in fact as high as 4 million developers it drops to only 4.125%, and of course if you guess that a non-negligible proportion have moved into management, left the US and gone back home, or changed careers then the number shrinks further. The truth is probably somewhere in the middle, but it's likely that in practice maybe 7 - 8% of developer jobs in the US are taken up by H1-B workers.

If you're seeing figures of 20% - 40% then you're working in places that are grossly weighted towards using the H1-B program and to offset that there would need to be many more companies that use few or no H1-B workers at all. In other words, your experience would not be typical in the slightest so is not reasonable to form an objective or neutral viewpoint off of.

*Some figures are even lower, but they search on a specific term like "programmer" and ignore developer so 1million is the lowest realistic estimate I could find but as I say, some estimates put it as high as 4 million.

Re:Buy American?

[tnk1]

I agree that I could probably source a contractor faster than an employee, but I don't understand why being a contractor means he or she learns faster than anyone else would. There is also the fact that contractors tend to be of an uneven quality themselves, sometimes. If there was some sort of firm that maintained people on staff that had my exact needs available, that might be different, but that sort of specialization is expensive, even when it actually exists.

I used to be a contractor myself, and I'd like to think I did a good job of it, but I worked with many who were not. And good or not, I had the same spin-up period as anyone else. There would always be some tool they used which I had not, or they used tools I use all the time, but differently. For instance, believe it or not, I have never seen a business use JIRA in quite the same way or to the same extent, even working in three jobs in a row that have used it. That was mostly all process involved.

Business knowledge is king when it comes to a lot of things. Unless a new person already knows our deployment tools, our business model, and has some experience with the packages we use, they will effectively work at the level of someone who is not as good for a period of time, even after they start being productive. So in that case, I might as well keep the poor performer for the interim unless they suck that much, because at least I don't need to detail an existing employee to train them on the business stuff.

Which goes sort of back to my point on layoffs. Although they are horrible, that is usually when management takes the chance to fire people who are not all that good. Part of that reason is that the planning of the layoff usually gives you some ramp to figure out how to deal without that person. Unfortunately, being a layoff, you don't usually get someone to replace that person.

That is not to say that you suck if you got laid off. Very few people in this business rate being fired, many of the people who get laid off get the shaft based on some "fair" metric like critical domain knowledge, performance reviews, or seniority. Of course, since the layoff tends to include target numbers, there is the "unfair" situation where you simply cost too much. I used to wonder why companies didn't just reduce salaries, but the sad truth is that the preference is to fire rather than reduce salaries because reduction in salary creates an employee who has a good reason to look for another job while they continue with you. That means you have unplanned vacancies at the wrong time and produce potentially shoddier work.

Re:Buy American?

[TheSync]

Gimme a break, man. Look at the Large Hadron Collider -- that could have been us, but we slashed the funding. A Nobel Prize?

Well David Jeffrey Wineland (USA, NIST) won the Nobel Prize in Physics in 2011 for laser cooling and manipulation of quantum states.

Brian Kobilka (USA, Stanford) and Robert Lefkowitz (USA, Duke) won the Nobel Prize in Chemistry in 2012 for work on G protein-coupled receptors.

Some other recent USA winners of scientific Nobel prizes:

Saul Perlmutter, Physics, 2011
Brian P. Schmidt, Physics, 2011
Adam G. Riess, Physics, 2011
Ralph M. Steinman, Physiology or Medicine, 2011
Bruce Beutler, Physiology or Medicine, 2011
Richard F. Heck, Chemistry, 2010
Ei-ichi Negishi, Chemistry, 2010
Thomas A. Steitz, Chemistry, 2009

Re:Buy American?

[mantle9695]

I am one of the co-founders of a tech start-up that is currently going through expansion, and I completely agree with Xest's point. We recently gave an offer out to someone with an O-1 visa, with a competitive salary. For a small, lean company, we are extremely mindful about our burn rate. But he is certainly one of the best in his field and we didn't even think twice about having to sponsor the O-1. At the end of the day, the labor market is a free market like everything else in this capitalistic society. If people have rare and special skills, they will command a higher market price. It doesn't matter if someone needs a visa sponsorship, has 11 fingers, or is a midget and needs a different furniture setup. If I don't acquire the necessary talent for the company to excel, then I am doing my team, my customers, my shareholders, and myself, a disservice. If I need to do or give extra to make the hire, then I absolutely will be glad to do so.

Didn't want to pay prevailing wages

[Animats]

Typical employer whining about not being willing to pay prevailing wages. From the article:

• "Getting a regular visa wasn't an option because of the salary thresholds"
• "Canadian cousin flew in to London via Germany. ... She was due to stay with us to help us out with our newborn baby, and also to do some unpaid work experience at my wife's business."

As usual, it's employers whining that they can't find wage slaves.

Re:Didn't want to pay prevailing wages

[Intrepid imaginaut]

Hey, my business plan would work great if only I didn't have to pay people!

Re:Didn't want to pay prevailing wages

[rmstar]

Quite the contrary. Employers are able to find good workers for a reasonable price and the government is saying no.

They want to work for free but the gov says no. It's sensible, because stopping people from working for too little avoids races to the bottom and makes sure everyone gets paid enough (which in turn ensures that the economy keeps moving).

Free trade, by definition, is mutually beneficial to both parties.

Only in a simple and sterile world where everything is linear. In truth, it is easy to find examples of free trades that do not benefit anyone. Like the addict and the heroin dealer, both sinking deeper into tragedy as a result of their (free) trade.

Re:Didn't want to pay prevailing wages

[ebno-10db]

You must have a better business plan than me. Mine only works if the employees pay me.

Re:Didn't want to pay prevailing wages

[ebno-10db]

We're not talking about megacorps here, we're talking about small businesses.

So? Small companies that can't survive without special privileges deserve to die. It's a harsh reality called "capitalism" and "competition", though many people seem to like those things only when they're applied to other people. As for "anything that allows them to grow a business is only going to help your country", it's utter crap. If a company isn't competitive in an environment where other companies do fine, it means that company is a failure. Giving it special privileges to stay afloat is called welfare. The resources would be better invested in a competitive company.

Hate labor laws?

[i kan reed]

You might be a greedy scumbag, regardless of the amount of money you have already accrued. Check for the following symptoms: not wanting to pay taxes on money your employees earned for you, feeling it is totally acceptable to dumb toxic waste from your country off the coast of Somalia, or stealing from babies.

But seriously, this isn't "battling labor laws," this is breaking the law for a higher profit margin.

Re:Hate labor laws?

[geek]

You might be a greedy scumbag, regardless of the amount of money you have already accrued. Check for the following symptoms: not wanting to pay taxes on money your employees earned for you, feeling it is totally acceptable to dumb toxic waste from your country off the coast of Somalia, or stealing from babies.

But seriously, this isn't "battling labor laws," this is breaking the law for a higher profit margin.

The laws being talked about are the ones where it is literally impossible to fire the employees unless they commit a crime. My company has an entire office full of people in Italy that do nothing because we have no more use for the facility but the local laws do not allow us to fire them. Instead we make them show up every day, for their 7-8 hours and sit in chairs and do nothing. They get paid for this. Some day they will quit and move on to other jobs and they just wont be replaced. However it's been about 3 years so far and they are still hanging around. France is even worse.

Not to mention the insane amount of paid time off many Europeans get. Honestly, I have a lot of friends in these countries. Many are out of work needlessly. If the government would unpucker its asshole and allow the crap people to be fired, the companies wouldnt be so afraid to hire new ones.

Re:Hate labor laws?

[rmstar]

Not to mention the insane amount of paid time off many Europeans get.

What is insane is how little paid time off people get in the US. I am sure most americans would love to have a decent break every now and then without having to fear that the job is gone when they are back.

In fact, without having to fear.

Re:Hate labor laws?

[Intrepid imaginaut]

The more business-astute in these countries just open a seperate business and close it when they need to let people go.

Re:Hate labor laws?

[girlintraining]

You might be a greedy scumbag, regardless of the amount of money you have already accrued. Check for the following symptoms: not wanting to pay taxes on money your employees earned for you, feeling it is totally acceptable to dumb toxic waste from your country off the coast of Somalia, or stealing from babies.

You must have missed the part where they said they want to do it legally. There. It's in bold now to be harder to ignore in your frenzied rush to get in a few licks without bothering to check and see that this is Europe, not the United States. You know, with the paying of taxes and the giving of benefits. They want to give those things away. Oh, and vacation days? They have those in Europe. It's some radical liberal idea that just hasn't caught on here. And as for toxic waste and stealing babies... well that escalated quickly... this is software development, not a nuclear weapons program with a side of trading in humans...

Re:Hate labor laws?

[girlintraining]

My company has an entire office full of people in Italy that do nothing because we have no more use for the facility but the local laws do not allow us to fire them.

We call those types of people Senators over here in the USA.

Not to mention the insane amount of paid time off many Europeans get.

Paid time off... that sounds nice. I'm putting in 60 hours this week.

Many are out of work needlessly. If the government would unpucker its asshole and allow the crap people to be fired, the companies wouldnt be so afraid to hire new ones.

Sounds like the government may have been reacting to high levels of unemployment by making it more difficult to fire people for crap reasons just to rotate in someone at a lower wage. As I understand it, Europeans take quality of life a bit more seriously than over here -- national health care, a solvent social security system, generous unemployment and welfare packages, vacation days that aren't just stand-ins for sick days, and your CEOs over there don't make 4,500x more than your rank and file. It's almost like they... care about the working class.

Look, I can appreciate bad laws interfering with commerce and employment. I sympathize. But only to a point. The system we have over here which throws the working class under the bus is not an improvement. I do not often hear of cities in Europe being reclaimed by nature because it was infested with poor people and we didn't care enough to rebuild it. I don't hear about expensive cell phone plans with limited options and everything is locked in by vendor. I don't hear about nightmare housing situations where 20% of a country's homes sit vacant while nearly the same number of people are homeless.

You may have traded a lack of profit and industry production for a better quality of life and resent that fact, but take it from someone whose country chose the former over the latter: It's bad. It's real bad over here. For every person who "made it" and became a success story, there's dozens who are living hand to mouth and afraid they won't be able to afford food next week.

Europe has its problems... but choose wisely which ones you want to trade them for.

Re:Hate labor laws?

[ebno-10db]

The laws being talked about are the ones where it is literally impossible to fire the employees unless they commit a crime.

No, these are startups whining they can't hire anybody they want from anywhere they want, wages, visas, etc. be damned.

Re:Hate labor laws?

[tnk1]

You are right, but they are attempting to close that little loophole. The courts are starting to look very unfavorably towards companies that try to liquidate, and then start a new business with all the same customers and the employees they want, but without any of the debt or the other obligations.

Re:Hate labor laws?

[geraud]

No, it's not impossible to fire people in Italy nor in France. Companies just have to pay adequate compensation for breaking employment contracts. The keyword here is contract, binding both parties (employee not getting unemployment benefits if they are the ones breaking it). Of course most are too cheap to pay.

"Importing" labor?

[Noryungi]

Yeah, right.

It's more like: "We don't want to pay proper wages for good techies, so we are breaking/bending every rules to exploit cheap illegal labor and keeping more of the venture capitalist money for ourselves".

Seriously, I have seen this in many a start-up, in France and elsewhere: pay people low - even though their knowledge is what makes your bloody start-up possible - and fire them as soon as they start demanding correct wages and reasonable working hours. Meanwhile, the CEO is looking for the nearest Porsche dealership. It's simply disgusting, and it has nothing to do with France laws and regulations (which can be a pain in the neck, I admit).

Re:"Importing" labor?

[Noryungi]

You're confusing Europe for the United States. We just made labor exploitation legal. Not exactly a new concept -- the H1-B visa program might have screwed up, but we built our entire railways at the turn of the last century on the backs of chinese immigrants. The European Union has much stricter laws regarding labor exploitation, and also immigration. It's flat out near-impossible to immigrate into many of those countries.

Nope. First of all, re-read the original article: we are talking about people working illegally in European countries. It is entirely possible to move to Europe illegally - just like in the USA, get there with a student (or tourism) visa and just stay in the country instead of going back home. Sure, it sucks because you can be caught (asked to provide valid ID, etc.) and sent back to your country, opening a bank account, renting a place, etc. all of these things are somewhat harder to do when you are illegal, but they can be done in every European country that I know of.

Second, European laws are sinking very fast to the level of the USA. More and more EU countries, under pressure by the same kind of people that are described in the article, are dismantling the only thing that makes life bearable: the protection they gave to their workers. In France, where I reside currently, a law is being considered that would make hiring/firing even easier than in the USA, while reducing social benefits, including firing compensations and unemployment benefits. And it's the same thing pretty much all over Europe.

Remember that unemployment is rising to never-before-seen levels. Youth unemployment stands around 25%-30% in Southern Europe, and sometimes much higher. In the meantime, start-ups are looking at illegal immigrants for techie jobs... Why is that? Because, yes, these people want to stuff as much money in their pockets as possible.

Again, this has nothing to do with finding labor - it has everything to do with screwing Joe Techie. Same as the US H1-B visas.

Re:"Importing" labor?

[girlintraining]

Remember that unemployment is rising to never-before-seen levels. Youth unemployment stands around 25%-30% in Southern Europe, and sometimes much higher. In the meantime, start-ups are looking at illegal immigrants for techie jobs... Why is that? Because, yes, these people want to stuff as much money in their pockets as possible.

We're at 25-30% right now and have none of those protections. We just lie through our teeth about how we calculate our unemployment. I'm not sure giving up those protections will net the result you're looking for. You'll still have unemployment, except now life for 100% of your population will suck, instead of 25%.

great reasoning!

[Njovich]

Along the same line of reasoning, you should just steal that Porsche that you are selling, as it would have been impossible, or simply too expensive, to buy it officially.

Yes, of course it's a pain in the ass that you can't just hire people in 1st world countries for 3rd world prices. However, if we want to maintain our social system, that's not viable. So they should either hire them in the low wage country themselves, or pay a good price for this skill they say is not available on the local market (depending on country, that means a salary between 2500 and 5000 euro per month to be eligable for a highly skilled migrant visa). If it's really such a uniquely skilled person, that should be no problem of course?

Re:I've run into this

[0123456]

The problem is that the EU allows most people from any EU nation to move to other EU nations. As the locals get fed up with millions of people arriving in their country with whom they have nothing in common, who often can't speak the same language, and who take many of the low-paid jobs that locals used to do, they demand that their politicians do something about immigration. The politicians can't do anything about EU immigration because it's controlled by the EU, so they impose tougher and tougher rules on non-EU immigration, which are counterproductive and fail to solve the problem, but win votes.

I hear Bangladesh has cheap labor, cheap buildings

[mspohr]

Capitalists want the cheapest labor possible. They don't want to pay for frivolous things like health insurance, unemployment insurance, vacations, sick leave, etc. Europe has better protections for workers than the US but both are pretty onerous when you just want people to work hard for no money. That's why China and Bangladesh are so attractive. You can exploit people there much better than in more developed countries.
Yeah! Capitalism!

 

Typo in article

[mwvdlee]

the fudges, shortcuts, workarounds and, in some cases, 'strategic decision-making' are — just about — getting their companies the talent they need.

the fudges, shortcuts, workarounds and, in some cases, 'strategic decision-making' are — just about — getting their companies the price they need.

FTFY.

Tried Running A Bar This Way

[Bob9113]

not only to avoid France's notoriously onerous labor laws but also because it would have been impossible, or simply too expensive, to import them officially.

I took the same approach when I opened a bar that offered drinks for half the price of the competition. I couldn't afford to buy my booze officially, so instead I was knocking over liquor stores. It's the only way I could make my business model work, which completely justifies it.

France isn't representative of Europe

[dutchwhizzman]

Europe isn't like the USA. The countries have different languages and laws. Not like state laws in the USA, but real country laws. Sure, EU legislation is deminishing these, but there still is a lot more difference in EU countries than there is in the USA. French labor laws are considered borderline communistic by some other EU countries. On top of that, a lot of French IT companies insist that candidates speak fluently French, while in a lot of EU countries English is sufficient, even if that's not the native language where the company is. In the UK, Netherlands, Germany and several nordic countries, this whole article is not relevant at all. There are probably several other countries to which this applies as well, but I have no direct contacts there so I can't speak for those.

Re:France isn't representative of Europe

[YoopDaDum]

And one guy opinion may not be representative of the whole of France. I happen to work in a start-up in France, many of my colleagues are foreigners for all around the world (not counting EU people as they're free to work here so not a problem for them). Yes there is some paperwork to do, but if you have a competent HR or go through external competent HR consulting it can be done. It could be more fluid and smoother for sure, nothing is perfect. But it's not as dire as often painted on the web. It adds delay and cost, but if the company pays decent salaries it's not a big factor. You have to justify hiring a foreigner (as in the US), but again if the job is technical it is usually not a big issue. There is high unemployment on average but as in many places there is also shortage of qualified people in some areas, and the administration is aware of this. Of course if you want to get foreigners on the cheap at cut rate salaries it's a different story, but then I'd say the issue is not the country law it's the employer.

It's also possible to fire people, and it has been made easier recently. The company has to provide typically 3 months of advance notice. But it's perfectly possible to just pay this and ask the employee to leave immediately (what we typically do where I work: if there's a problem with someone there's no point lengthening the issue). It's typical to pay a bit more, like 6 months severance. Bigger companies often go higher for old employees, 1 year is not unheard of. But for a start-up I would assume it's on the low end. The issue on firing is not that it cannot be done, but that there is significant legal uncertainty around it: the employee can turn against the employer and challenge the decision or severance amount. Some changes have been done to bring clarity there, I haven't followed the details. It's a true concern, but in high tech which is a small world with usually reasonable people, this is quite rare. I've had contacts with ex-employees working and I expect that to be typical. Everyone benefit by making this as unpleasant as possible (and it's never pleasant). The situation is very different when a manufacturing plant is closed, it can becomes messy with factories being occupied and that's what people tend to hear about. But when talking start-up the context is different.

There are many things to improve in France and many legitimate criticisms on the legal and administrative situation. Still I feel that some paint a blacker picture to justify their own unrelated problems, or having left the country (which is ok in itself: go and explore. No need to pretend you just left hell thought).

startup whiners

[joe545]

That whole article sums up what is wrong with these venture capitalist funded start-ups; they want to compete on a different playing field than established companies. They want to be able to import cheap labour from other countries as they aren't willing to pay the going rate for local engineers. They don't want to register their employees properly as they will be liable for more taxes and to give their employees the rights they are entitled to.

As a European, I'm glad these guys are finding it difficult to ride roughshod over the laws has to protect workers. If you can't afford to do things the proper way then your business is not viable. Complaining that you can't find exploitative loopholes that depress wages for the rest of us is laughable.

Re:startup whiners

[ebno-10db]

That whole article sums up what is wrong with these venture capitalist funded start-ups; they want to compete on a different playing field than established companies.

That's only in Europe. In the US we have a level playing field: both new and established companies, large and small, demand the right to import the cheapest labor they can.

Happening in Canada as well.

[Anonymous Coward]

Tim Horton's, a freaking donut shop, has been using the 'skilled worker' loophole in labour laws here to import "temporary foreign workers" (H1-B analogue). They were claiming there were no Canadian workers able to fill the positions. At what they are willing to pay, perhaps, but that's the real problem isn't it?

Royal Bank of Canada was playing similar games, under the guise of "internal position transfers" which were supposed to be limited to people with unique expertise, and for short terms like 6 weeks -- but keeping them for 2 years or more.

Re:I hear Bangladesh has cheap labor, cheap buildi

[ebno-10db]

So, riddle me this: how do you pay your workers a lot of money, but offer a cheap product?

Henry Ford figured it out. Anyone who can't doesn't deserve to stay in business.

Re:I hear Bangladesh has cheap labor, cheap buildi

[mspohr]

Apple seems to be able to charge a lot for their computers and phones. They use cheap Chinese labor so they make a lot of profit. They could pay workers better if they weren't so greedy.
If Walmart took its entire $22 billion of annual pre-tax income and used all of it to give each one of its 2.1 million employees a raise, this would amount to about $10,000 a year apiece.
In 2004, a year in which Wal-Mart reported $9.1 billion in profits, the retailer's California employees collected $86 million in public assistance, according to researchers at the University of California-Berkeley. Other studies have revealed widespread use of publicly funded health care by Wal-Mart employees in numerous states. In 2004, Democratic staffers of the House education and workforce committee calculated that each 200-employee Wal-Mart store costs taxpayers an average of more than $400,000 a year, based on entitlements ranging from energy-assistance grants to Medicaid to food stamps to WIC—the federal program that provides food to low-income women with children.

Capitalism puts the greediest bastards in charge of the economy and the society adopts those values.
More enlightened countries have laws to protect workers, pay them more, etc.

What are your values?

avoid France's notoriously onerous labor laws

[manu0601]

The company wants to "avoid France's notoriously onerous labor laws", but it still operates in France, rather than India or China. There must be some reason for that choice. Perhaps some reason paid by taxes, or even guaranteed by labor laws...