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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.
I have a bunch of H-1B workers (All Indian) at my place of employment, so yeah, they DO replace American workers.
Always consider the source. This "study" is totally biased and funded by the libertarian--regulation hating Koch Brothers and their CATO institute. This is false and not true.
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.
This just means there's more demand for skilled workers than h1b's and native talent pool combined.
It means there's more demand for CHEAPER skilled workers than the native talent pool has.
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. Their opinion was "why employ someone who wants more in terms of benefits, vacation, pay, etc when we can bring in someone who is completely under our control, easily replaceable/dismissable as needed, and cheaper". Control is the real crux of it - these workers are completely at the whim of the company because once the company is done with them they can't seek another job they must return home. That lets them abuse the crap out of them and if they complain they get sent home and someone else is brought in to take their place.
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.
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.
these workers are completely at the whim of the company because once the company is done with them they can't seek another job they must return home. That lets them abuse the crap out of them and if they complain they get sent home and someone else is brought in to take their place.
That is incorrect. If the management thinks that they probably have not researched it properly. Once here on their H1-b can moe to any company willing to take over the H1-B.
When you cant win, ad hominem.
You mean...Disney didn't replace their US tech employees with H-1B Visa holders? So their US employees did not train their H-1B Visa replacements?
You mean...Microsoft didn't lay off 18,000 people and then lobby Congress to increase the number of H-1B Visas?
You mean...there isn't economic research that refutes that article's premise: "As longtime researchers of the STEM workforce and immigration who have separately done in-depth analyses on these issues, and having no self-interest in the outcomes of the legislative debate, we feel compelled to report that none of us has been able to find any credible evidence to support the IT industry’s assertions of labor shortages." http://www.epi.org/publication...
Sounds like a page out of the Philip Morris playbook: "cigarettes don't cause cancer" - "H-1B Visa holders don't displace American workers"
you realize there is only about 167m Americans of working age right? You mean that the unemployment rate is at 60%? Out of 318m people, 47.4% are not of the working age. http://quickfacts.census.gov/q...
When you cant win, ad hominem.
That is incorrect. If the management thinks that they probably have not researched it properly. Once here on their H1-b can moe to any company willing to take over the H1-B.
Actually, you are not fully correct either. Well, ostensibly you are correct, but here's what really happens:
* The vast majority of H1-B workers are tied to Infosys, Tata, Wipro or some other India-HQ'd company as their sponsor, which means if the worker complains, said worker is recalled to India and quickly replaced. Huge corps like Nike *love* this kind of arrangement (this is a real-world example - Nike is a huge customer of Infosys). This in turn gives the client corporation (e.g. Nike) full control over their charges while their charges are in the US - one complaint from the corporation, and Infosys/Tata/Wipro does all the dirty work for them and provides a replacement within literal days.
* the second part of your sentence, "...any company willing to take over the H1-B" is the condition that undoes the rule. Kindly tell me how many companies are willingly going to take on someone under those conditions? Doing so w/o a company like Infosys/Tata/etc means expense and paperwork...
QED, 'mano :)
Quo usque tandem abutere, Nimbus, patientia nostra?
No, it means the unemployment rate, as it was calculated during the Great Depression, is higher than it was for all but one year of Great Depression. http://www.shadowstats.com/alt...
GP meant Depression in both places it is used. GP did also leave out a clause that would clarify the meaning and tie it to the Great Recession though. Here's what (s)he is trying to say: "..the unemployment rate *now*, if calculated the same way it was calculated during the Great Depression (as opposed to how they've changed the calculation to make the numbers look better) is higher than it was for all but one year of the Great Depression." In other words, GP is claiming that the current REAL unemployment rate is a lot higher than what you hear in the news.
Three days from now?? Thats tomorrow!! ~Peter Griffin
Yes, this. ( sorry I was going to mod here, but I have to post, even though I signed into hypothesis annotations https://hypothes.is/stream and marked this article up all over ).
There is an *association* between H 1B and hiring because H 1B is granted in areas of relatively high demand for labor, and so total hiring is bound to increase in those areas. This doesn't mean H 1B is causing the hiring, it's merely that those who are hiring are hiring H 1B.
Also, companies put their budgets where it will solve their problems. They hire contractors to get more labor quick. This article says that H 1Bs are paid more than Americans so they can't be replacing them. THEY ARE. By keeping incentives low to be contractors, they are replacing would-be American contractors.
Also they prevent companies from being creative to fill positions by doing things like partnering with local educational institutions, running training programs, and helping financially with prospective employee's education.
...
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?
How many days do they have once fired from a company to get someone to take it over?
30. In theory. In practice, nobody is really monitoring that closely. We have 10 million illegal Mexicans, so a handful of Indians bending the rules isn't a big concern.
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.
So since the interview process takes 22 days on average now that means the person has 8 days to get an interview to remain legal.
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
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.