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Evidence That H-1B Holders Don't Replace US Workers
Okian Warrior writes: In response to Donald Trump's allegations that H1B visas drive Americans out of jobs, The Huffington Post points to this study which refutes that claim. From the study: "But the data show that over the last decade, as businesses have requested more H-1Bs, they also expanded jobs for Americans." This seems to fly in the face of reason, consensus opinion, and numerous anecdotal reports. Is this report accurate? Have we been concerned over nothing these past few years? Remember, this is about aggregates, rather than whether some specific job has been replaced.
What the H1B provides is a means for an employee to *NOT* participate in relocation. By offering H1B positions, companies do not actively recruit people from other areas, assist in relocation, the alternative is to open more branch offices in other locations near the groups of people. Instead, they offer the H1B because (1) the cost of that worker is less, and (2) they do not need to provide relocation. Lastly, most H1B workers want a green card. The problem is once the worker starts the green card process they are sort of an indentured servant to the sponsoring company. They cannot quit, they cannot threaten to leave otherwise they loose the green card. This process lasts from 3 to 6 years. If the H1B worker had job mobility as a normal american does, the H1B worker would recognize the low pay, demand higher pay, or move on to another job in the USA leaving the low paying company with a hole. This job mobility (or non-mobility) by the H1B worker solves or causes the problem. I know this, I have been involved with these types of decisions, or watched these types of decisions occur right before me over the last 30+ years writing software.
Also, remember that part of the fight is about _expanding_ the pool of H1-Bs. From the pov of the employers, if current levels of H1Bs mean they aren't getting cheaper labor, then clearly they don't have enough H1-Bs. The study doesn't project what would happen if the number were increased substantially.
This is BS. The author of TFA is using the third type of lie, statistics, to suggest that H-1Bs aren't having a negative affect, by setting up a strawman argument. Sure, H-1Bs may not increase unemployment, IN AGGREGATE. But that's as easy as saying, "Well, Initech replaced 50 American coders with H-1Bs, but there's a new McDonalds open down the road that hired 60 people at minimum wage, so unemployment is down!"
There was no mention of salaries, benefits, much less anything specific to particular fields, not even "IT." At most he made an argument that "STEM grads are less likely to be unemployed" but that means nothing, because that can still be true even if they're not being given the opportunities they should.
This is just a rewording of the old saw that illegal immigrants are doing the jobs that Americans won't do -- at salaries that are too low. If the flow of H1-Bs dried up, then wages would rise as the American tech workers would become more valuable. As wages rose, then becoming a tech worker would be viewed more favorably.
With the same evidence, Huff Po could have argued that H1-Bs are depressing wages for American tech workers.
Economics 101.
Supply and Demand: If Demand stays constant and supply goes up, cost for services go down.
So during the late 1990's we had a High Demand for Tech, and at the current supply, tech workers were getting exceptional pay and benefits. Then during the Clinton Administration they opened the H1B1 for tech workers, because they saw this as a permanent increase in demand, and wouldn't meet supply in the near future.
However after Y2k settled down and a new infrastructure was setup demand settled (The tech bubble pop), however there is now a glut of tech workers, and H1B1 and the new infrastructures allowed for outsourced IT services. Thus so many tech workers, caused the salaries of tech workers to plummet.
Now technology demand is going up as the Y2k infrastructure is approaching 20 years old. So IT worker salaries are on the rise.... H1B1 increases will cause a drop in salaries, so many tech workers will leave work, as the lower salaries will not be acceptable.
However if a company is trying to stay competitive, and they find if they layoff their local workforce, and hire H1B1 for half the price, then they can make up for the cost of high turnover.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Any other day and HuffPo would be telling us about the horrors of H1B abuse by large corporations. However, if it means furthering the narrative that Trump is bad, then suddenly H1Bs are good.
It means there's more demand for CHEAPER skilled workers than the native talent pool has.
There is ALWAYS demand for less expensive labor. Sometimes it isn't available. Sometimes companies engage in measures to reduce labor costs. Importing cheaper labor is fundamentally no different than offshoring the work. The basic goal is the same - to reduce labor costs. I run a manufacturing company and we do all our work domestically and pay as much as we can but our competition does a lot of their work in Central America or China so we really cannot compete on jobs with a high labor content unless there are special requirements like engineering help or just in time delivery. We simply cannot pay much more than we do and remain competitive.
Some companies are obviously engaged in some shady tactics to keep labor costs down. The tactics may be reprehensible but the fact that they are trying to contain labor costs should surprise no one. In a competitive market companies HAVE to try to do that. It's particularly galling though when the company has huge profit margins like Microsoft or Facebook does. A low margin manufacturing company might go out of business if they don't keep a tight lid on labor costs. A hugely profitable tech company has no such excuse.
I've heard stories from a technical director at a major American firm where they'd reject PHDs simply because they were worried they'd leave for higher paying jobs elsewhere.
It's not just PHDs. I have a pair of masters degrees and I've been told point-blank during interviews that they were afraid I would get bored and leave or seek higher paying work. It's incredibly short sighted but it happens pretty routinely.
It is a very simple thing -- even though H-1Bs were meant to be hired on as true experts, the program is being used the same way businesses in the early 1900s hired scabs when unions were striking, or hired Chinese labor in large quantities to build railroads... only thing that stopped that was Americans threatening to burn down factories.
We saw the same shit back in the 1990s. Japan was good, US workers were lazy.
Now, it is the same thing with so many games used for companies to say they "need" a H-1B:
1: They have a position for a Linux person with RedHat certs, then demand a CCIE. Usually nobody has both, so they get their $18,000/year junior admin who is an indentured servent.
2: They demand shit like 5+ years of Swift mandatory or 2 years of Windows Server 2016. Of course, nobody is going to have that, so the business gets their bottom of the barrel H-1B dev which gets replaced every 90 days.
3: There is the scream of PHBs, "Lets call Tata/Infosys... they fix everything". What results is not pretty.
I've seen this in IT since the 2000s, when the PHBs tried to offshore entire IT management to Bangalore, then realized that they needed big-ass network pipes for that, so decided to import the cheap labor.
As for quality, I've know managers who are used to flipping people every 90 days, and are used to nothing getting done, and just assuming the low code quality is the norm.
Well, of course. Every foreign worker hired is a job that doesn't go to an American worker.
Claiming that hiring foreign workers doesn't take jobs away from American workers is bizzaro logic at its best. Its the same bizzaro logic that said shutting down factories and sending millions of jobs to Mexico and China creates job for American workers.
More importantly, the claim that these are "highly skilled workers" is a lie that insults our intelligence.
Why is it that all of these "highly skilled workers" come from the same place - a country where a huge percentage of the population is illiterate and lives in poverty far beyond anything that exists in the U.S. A country where 350 million people, more than the entire population of the U.S., shit in public because they don't have access to a toilet. How is it possible that such a country is producing such huge numbers of "highly skilled workers"?
That's right, it isn't possible. The only "skill" they possess is a willingness to work for low wages. And since the H1-B program is nothing more than legalized indentured servitude, companies can do anything they want without feat of being reported by the workers.
Any other day and HuffPo would be telling us about the horrors of H1B abuse by large corporations. However, if it means furthering the narrative that Trump is bad, then suddenly H1Bs are good.
Someone finally states the correct spin of the article. I doesn't matter who funded the study or why, it's needed to attack Trump.
If you think I voted for Trump because of this post, you're wrong. I voted for Dr. Jill Stein of the Green Party. Again.
You realize you just told the world you don't know what "far left" means, right?
I suppose when you yourself are far left but tell yourself you are moderate, then everything seems far right by comparison.
From my understanding once the employee leaves infosys for another company then infosys does not have control anymore.
That's the thing - the H1-B would have to quit first (*if* another company is willing to take him on), which would be an escape. However, as noted, it is an added expense. Also, if the client company complains, the H1-B usually gets recalled to India for 'reassignment'. I cannot claim to know what happens after that, but unless that H1-B has a rare skill, I bet it isn't pretty. Note that this is technically illegal, but yet it's still there, as evidenced by the relationship between, say, Infosys and their client companies.
You claim it is a small part of the person's salary, but it still requires work from the new company's HR department, so unless they already have someone there set up to handle H1-B visas, they'll have to spend the time to do it (which in turn costs money) - and no, unlike your assertion, it is not a simple matter.
Quo usque tandem abutere, Nimbus, patientia nostra?
> I've heard stories from a technical director at a major American firm where they'd reject PHDs
> simply because they were worried they'd leave for higher paying jobs elsewhere.
Employers who think this way will ultimately hire the employees they deserve.
Pay is not the only thing that attracts a person to a job (or keeps them there). A person leaves
for a *better* job, which may or may not mean it offers higher pay.
But no, the majority of H1-B workers are not "slaves".
Of course not, nowadays we call them "salaried employees" instead. Have you seen the 10th Edition of the Newspeak Dictionary?
Kindly tell me how many companies are willingly going to take on someone under those conditions?
Here in Silicon Valley, "stealing" H1Bs from other companies is a common occurrence. Hiring them away from a competitor is way easier than doing all the paperwork to bring them direct from India. My company has done some stealing, and we have also been stolen from.
Besides the rural population you already mentioned, there are another 350M middle class there, and yet another 350M there that are quite well off, have access to excellent schools thus becoming as "highly skilled" as a westerner.
Why people want to claim such easy to disprove bullshit is quite befuddling. No country has a good balance between rich, poor, and middle class. The 1/3rd of the population you claim exists and is "quite well off" simply does not! India is very similar to the US where the top .01% own most of the country and the top 10% own 90% of the wealth just like the US. There are more people in extreme poverty in India which makes them worse than the US.
Getting a degree does not make a good and productive worker in a foreign country. If it did, every company would have more Chinese workers than Indian workers because that is who the numbers have favored for decades. There is quite a bit to that discussion, more than I care to get into in this thread. Anyone that has dealt with development and support out of a foreign country knows exactly what I'm talking about.
Your personal anecdote with hiring does not change the fact that H1B workers are easily pressured into working far more than anyone should. Recent criminal actions against several companies for human rights violations in the SF Bay area should make that abundantly clear, and we only know about the few that were abused to a point where they turned in their sponsors. Of course a H1B worker is "hard working"! That is the point of people calling it a legal indentured servitude. For every one company that uses the system correctly there are at least as many that don't.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
While true, it doesn't mean foreign workers don't affect US employment at all. Just not on a 1-to-1 basis like simplistic politicians claim.
Of course, there may be more long-term benefits that far outweigh the short-term drops in domestic employment. As others mentioned, these are hard-working, semi-skilled to very skilled individuals who want to come to this country to work, pay taxes, buy property, etc. Hardly the type of people you wanna be turning away considering your own population is dominated by people of retirement age....
I see two obvious errors in logic in this analysis.
1. Rising total employment of Americans does not mean that other Americans were not replaced by H1B holders. If there were no H1Bs, employment of Americans would have been even higher. What sloppy logic!
2. From the article: "If H-1Bs were primarily cheaper substitutes for American labor, the pace of H-1B requests...should rise when unemployment rises, as employers look to cut labor costs by laying off workers." In what universe does this logic make sense? If unemployment is higher, cheaper labor can be obtained by hiring more Americans since they are having a harder time finding a job. The actual results are completely consistent with H1Bs being a cheaper replacement for American workers.
"He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
[MODERATORS] I am used to being down-modded unfairly because I frequently go against Slashdot group-think. Instead of down-modding me why not actually give readers a chance to come up with an intelligent response instead? Is it because the opposing position is basically indefensible? Or are the supporters of the right so stupid that they cannot string together a few sentences that (a) make sense and (b) support their position?
Perhaps you should rethink your methods of argument, as your post comes across as quite flamebait, and I would have downmodded you.
This "study" is from a Libertarian "think tank" (can you say oxymoron?)
So, because Libertarians have a different political opinion than you, they must all be stupid, is that really the way you want to portray yourself? It is very likely that you aren't a Libertarian because you don't understand the platform, not because the platform is stupid.
I am sure there are other examples, but I feel like I am losing intelligence arguing with you, so it is not worth it to me.
APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
But neither Scenario A or B is the common one.
Scenario C - company doesn't hire the American worker that suits the role, and chooses to import a worker at 60% the salary cost. Company C rejects all American workers they can based on any criteria they can find, while accepting falsified resumes by H1B importer companies. Company C, who would of had to spend $1 million on American workers saves $400,000 on H1B workers. Rather than increase salary, the $400,000 is divided in two, $200,000 goes to investors, and $200,000 goes to executive bonuses.
American worker finally concedes, lowers salary from $100K to $75K. Gets hired. Company C then hires H1B workers at $50K instead of $60K. Result, our own government IT jobs are filled with 30 man teams in which 3 are Americans and the rest H1B.
That's far more the accurate scenario.
Top 10 is 71+K. Get rid of them, all of a sudden there's a whole lot fewer H1Bs in country. I'm sure if you go down the list, you'll find more in "consulting" roles. MS is #11, how many of their consultants are H1Bs vs the rest of the employees? By the time you get to companies with less than 50 H1Bs, I'm pretty sure you'll have wiped out the large majority of H1Bs. Having done consulting, no one does consulting for an average 70K a year in the manner these do. It's not worth it. I doubt most will have more than 2 years tenure if they were paid 100K.
Now to part 2 - H1Bs should be paid 20% above the going rate for the average US worker, plus a 10% tax straight to the gov (might as well fix our deficit with these highly skilled but not US workers while making US workers more attractive) or maybe have the entire 30% go straight to the debt or some other combination.
The cesspool just got a check and balance.