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How Outsourcing Companies Are Gaming the H-1B Visa System (nytimes.com)
New submitter shakah writes: The NY Times has a straightforward summary of how the H-1B Visa system is being gamed by companies inside and outside of the United States. Particularly interesting for me was their clarification on the argument that "VISA holders have to make prevailing wages, so they won't depress wages." Quoting: "Under federal rules, employers like TCS, Infosys and Wipro that have large numbers of H-1B workers in the United States are required to declare that they will not displace American workers. But the companies are exempt from that requirement if the H-1B workers are paid at least $60,000 a year. H-1B workers at outsourcing firms often receive wages at or slightly above $60,000, below what skilled American technology professionals tend to earn, so those firms can offer services to American companies at a lower cost, undercutting American workers."
How about H1-B Visa holders get paid 110% of the prevailing wage so that only the companies who seriously need a specialist and legitimately can't find any local talent will hire them. Also, give H1-B holders a ten year window to work in the U.S. that isn't dependent on staying with a single employer. If someone else hires away your H1-B employee, that's your company's problem.
Yep, in reality with this and even the farming jobs. The truth is "wages that Americans won't accept".
At competitive wages, you can always find people willing to do the job.
Now, show of hands ... who the hell is surprised to find out that this whole thing is being misused? Anyone?
The whole bloody point is to drive down wages and replace American workers.
Anybody who tells you otherwise is lying to you.
How anybody could possibly be shocked at this 'revelation' is mind boggling.
Lost at C:>. Found at C.
IMO, solution is to create a separate class of visas for outsourcing companies. H1B visas serves different purpose.
In the farming, I have heard from people who live in those areas, the farm owners won't even hire an American, as they can demand minimum wage, but an illegal will work for dollars a day and can't complain.
APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
If U.S. companies don't want to hire U.S. workers, then these companies need to stop pretending, and just get the fuck out of the U.S altogether.
IMO, they should stop all H1B's and fast track tech workers for full green cards.
That way they can demand what they are worth and if the company abuses them, they can do what most IT people do. Go find another job and give the company the finger.
What about the French dream... what's wrong with pursuing your dreams in France or any other country for that matter?
We changed that to the "Freedom dream." Along with freedom fries, freedom kissing, the freedom braid, freedom toast, renamed the Gene Hackman movie "The Freedom Connection," and freedom onion soup.
Help fight poverty: Punch a poor person.
OK, go pass a law that says companies have to higher higher priced Americans instead of lower priced foreign programmers.
Now your company is competing for that huge $1 billion contract in Dubai. I'm the guy in Dubai awarding the contract. Why the hell do I pick your overpriced American company instead of the cheaper alternatives? Is it because you'll do a better job? Don't make me laugh.
Sorry, but in the end you WILL lose to lower priced labor. The funny thing is, Slashdot groupthink sees this clearly when it isn't your job on the line. When it's someone else's job? Well, if their business model isn't working out, they should just get a new one.
The world owes you nothing. You either compete, or lose out to those who do. You can't stop those market forces with national laws, any more than the Soviet Union is now competitive in the world automobile market due to THEIR protectionism. Protectionism doesn't work, and never has.
Companies don't want that, which is why the H1Bs work the way they do ... because that's what industry wanted.
If they're using an H1B to fill jobs they can't find people for, wages should be going up. Instead they're bringing in cheaper labor to drive down American salaries and displace Americans.
If those people had any ability to fight back or demand more, they just might. This way they're exactly what they're supposed to be .. cheap labor with fewer rights.
Seriously, this didn't happen by accident. It was bought and paid for by industry.
Lost at C:>. Found at C.
How about a flat $50K/year tax payable straight to the gov't? Think of that as a tariff or duty. This would have several advantages:
- Simple & stupid, can't game a flat fee
- That kind of revenue wold keep the gov't interested in enforcing the program
- Makes the process of hiring offshore much more expensive. Remember, the idea is that hiring offshore is supposed to be a *last* resort, so $50K wouldn't deter someone who truly needed a particular skill.
- Makes it impractical to hire offshore lower-level employees, the kind that we already have plenty of and who are blatantly being replaced with foreigners just to save money.
I work for a large bank that rhymes with face. I have watched the area I work in go from 90% american workers to 90% H1-B workers. And that wouldn't be so bad, except on top of that, they are offshoring like crazy as well, and those guys on the other side of the planet do not do anything.
Tickets come in during the night, and they sit on them. Then, when (we) the day shift comes in, they forward us all the tickets, meaning we start every day with a flood of work. What is the point of paying the offshore dweebs if they aren't doing squat?
Sooner or later this policy will bite my company in the ass, and there will be no one left who knows these systems to fix it, because all the people who could have done the work were laid off to save a few bucks.
And while I'm no fan of Trump, he's right -- all the H1-B women are preggers. They are having anchor babies like it's going out of style.
If telephones are outlawed, then only outlaws will have telephones.
Remember, the idea is that hiring offshore is supposed to be a *last* resort
Let's not waste our time with this. It's clearly not true or enforced.
New tax, especially on business = dead in the House.
The H1B program is broken in it's current form. It needs to be scrapped. Like other countries, e.g., Germany, the guest work visa program needs to be tightly monitored. No company should be allowed to flood the application process. No outsourcing or contractor companies should be allowed to apply, period. The reality is there is not shortage of STEM applicants. Plenty of qualified people. If you want to hire people from 3rd world countries, thereby undercutting labor rates, then locate your business there. You'll do more to help that country raise their standard of living by doing that. Not that you were truly interested in doing that.
As there is currently more visa applications than available visas, the solution can be very simple. Instead of lottery as it is done now, I would simply give visas to companies that plan to pay the highest salary. That would make companies to raise salaries if they really need applicants. That would also solve problems with definition of "prevailing wage" etc.
No sig today.
Is it only me who always reads H-1B Virus?
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
How about just raising the minimum wage? I live in Europe, where things work a bit differently, but when I saw the $60k figure, I thought it must surely be a typo. I've never met somebody in IT, especially programmers, pulling less than €3,500 gross, plus benefits (car, laptop, phone, "13th month" annual bonus, supplementary health insurance...). Once you factor in those benefits, that would easily clear $70k or $80k, and this is for juniors.
If somebody's services are only worth $60k, surely that is an indication that the market is providing those workers already? I really doubt that you are getting into workforce shortages until you hit six figures.
Flat fee issue:
Do you really want to incentivize the government to have offshore workers by making them profit centers for the government itself? How is that an incentive to avoid destroying domestic jobs?
I'd think more like saying "H1B hires cost 3x the prevail wage for a job as determined by industry". Anyone not willing to pay up triple the cost can hire back the same folks they are firing now to save a buck. Anyone claiming this is not about companies saving a buck is being disingenuous. If there is truly not a single domestic worker able to fill the role, then paying extra for it should not be a problem. Looking at employment rates, and layoff/offshoring announcements I think these problems would fix itself pretty quickly given the right financial incentive.
Warning: Teh poster of this messaeg is lysdexic
If there really were a shortage of tech workers, which I don't believe for a moment, the H1-B program is still about indentured servants. They should speed up/open up proper permanent residencies for these people so they come in with all the same rights and expectations of the Americans they are currently displacing. Holding them hostage to one company, training them to work well with Americans and then sending them home to lead off-shored teams is so bad for American workers that it's ridiculous.
I don't live in a farmland area. I don't have personal experience to bring to the table. Do you have personal experience that contradicts what my friends have told me? Do you have personal experience that agrees with it? If you don't have any personal experience to draw from, why would you expect more from me?
APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
Americans are not willing to give green cards to Indians anymore... apply today and you might get one 30 years from now assuming you dont get laid off or retire in that time period
Start by going after Disney, they're replacing all their tech workers with H1B visa workers.
Start by never going to Disney.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
> "Mark Merkelbach and his small engineering firm in Seattle. For water projects in China, he needed engineers and landscapers who speak Mandarin"
You can not make knowledge of a foreign language a requirement for an immigrant visa.
Every American worker who used to have a middle-class life with a STEM job used to (1) be saving money for his/her retirement, getting a pension established, etc AND (2) be paying into Social Security at a high rate to both pay for his/her future benefits and also help fund the benefits of many American workers with lesser jobs.
Every American STEM worker replaced by an H1-B is going to be made doubly-dependent upon Social Security and Medicare, while paying less into both and also not helping pay in enough to support others with lower-wage jobs. In a sane world without corrupt, bribed politicians an employer bringing in an H1-B would have to prove that there is no American who is PHYSICALLY able to be trained to do the job - and then a fee of 3 or 4 times the average prevailing wage top management of the firm should be assessed.
Ideally, H1-B visas should not exist and any employers attempting to replace their workforces with cheap foreigners should be prosecuted for treason, in a mass-trial, and put before a firing squad; they want all the benefits of the stable American system and markets and all the rights that the Constitutional Republic of "we the people" provided, but then want to sell-out the nation to line their pockets. There's little difference between these jokers and the business men who sold technology and equipment and raw materials to Germany and Japan between WWI and WWII.
To prevent the abuse of H1B visas replacing Americans, tax the company at $100K per layoff, and give that money to the laid off worker.
There is no talent shortage, only excuses to lay off US workers to replace them with cheap labor.
Unfortunately, to lock in the employee the outsourcers provide "loans" to the visa holders to cover relocation costs, and the loans are "forgiven" upon completion of their contract, when they return to India.
This. The problem isn't so much with a big company (like Google or Apple) hiring specific talent using an H-1B visa. It's with body-shop type contracting firms that employ almost 100% H-1B holders (except for maybe certain management roles), and then contract out to cover jobs/duties/tasks that otherwise would be done by U.S. workers. Get rid of those (Infosys, etc) and you'll go a long way to fixing the worst of the abuses.
It depends where you live. 60k is great money if you're in someplace where the cost of living is low, but if you're in someplace like Silicon Valley? Yeah, good luck with that.
To prevent the abuse of H1B visas replacing Americans, tax the company at $100K per layoff, and give that money to the laid off worker.
So then before they lay everyone off they transfer all of them to a subsidiary with no H1-Bs then shut down said subsidiary. Tax avoided.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
Because you can lie about the prevailing wage.
You can't fudge your way around a flat fee.
Should 20 companies be able to get 32,000 visas? Shouldn't there be a max of how many visas a single company can apply, like say, 500 max? That's the loophole that allows large outsourcing companies to DOS other H-1B applications.
There's a quota of 85,000 visas/year while there are 233,000 visa applications filed in just 7 days at the start of the process. Even if the rules were made fair, there's only a slim chance the french guy could've gotten an H-1B visa.
At my work place the majority of the H1B Visa consultant are .Net programmers. Believe me that being a .Net programmer is not difficult and that there are tens of thousands of .Net programmers. So we shouldn't be importing any. And if we need more then send a CS grad to a boot camp for a month.
BTW, the secret reason why India has so much talent is that they made it up. You ten thousand .net program then the type the word on their resume. Instant .Net programmer.
FWIW, OP is on the whole correct in what he has "heard" but is a bit unclear on the specifics. Migrant farm workers typically work on a "piece rate" where they get paid a fee per unit of production (bushel, or what have you) rather than a fixed hourly amount. They end up doing fairly well for themselves (often significantly more than minimum wage) but work their asses off to achieve it. Most people raised with a modern urban lifestyle who are hunting for a minimum wage job aren't looking to work that hard, which is why farmers don't want to hire them.
This work is also seasonal in nature--they can work for most of the year, but they're also travelling from region to region to stay employed (i.e. first they're picking cherries in michigan, then apples in pennsylvania, then oranges in florida, or whatever). This is NOT a stable life, and most people have no desire to live this way regardless of what the pay is.
A few weeks ago, NPR's Morning Edition did a pretty good story on some of the challenges farm workers (and their kids) face. It's pretty good reading/listening for the "they took our jobs" crowd (to be honest, I'm normally on their side of the debate, but on farm work in particular, they have it wrong).
What part of "shall not be infringed" is so hard to understand?
Do you really want to incentivize the government to have offshore workers by making them profit centers for the government itself? How is that an incentive to avoid destroying domestic jobs?
You earmark the flat fee to go towards funding the enforcement of the H1B program rules. Any surplus goes to fund worker re-training programs.
This way enforcing the rules of the program is self-funding, and congress can't defund enforcement "because business" and the larger and more popular it is, the more enforcement can be funded.
Plus, you're basically forcing employers who "need" to hire cheap offshore help to also (provided there is a surplus, and at $50k per, there should be) fund worker retraining so the people needed to do the job can be found at home.
At Hardley-Davidsin (my favorite condom name/trade-mark infringement), Keith Wandell made $23 million the same year he fired 200 IT workers. Made the jobs all external and wonder of all wonders, who got the contract? Infosys. As an engineer at Harley said to me, as I slaved for 6 months to train the 15 Indians who eventually replaced me, "Nothing says Amierican Iron like outsourcing to India". 3 of those Indians moved to Milwaukee. The rest are in India, probably making $10 an hour. Wandell has since retired, somehow he was able to afford it, but he will always be the biggest scum bag in all of business to me. I hope his ink leaks through his pocket protector and at least one of his mistresses has the crabs.
Just what is the end game to gutting the middle class, anyway?
Is the whole goal here just to have like 3 people who control 99.99999% of the wealth?
Surely once the the middle class is denuded, they'll start going for the "HENRYs" (high earners, not rich yet) and find a way to strip them of their earning potential and wealth, too.
At least in ancient Rome the emperors would stage feasts, festivals and games.
The job that they want an H1B for must be presented to the government and a $10k fee paid to the government to cover expenses. The government will interview qualified candidates and if the company does not take one of them, they do not get an H1B either. If no qualified candidates are found, the salary is raised until a qualified candidate is found, up to a maximum of 3 standard deviations from the average salary for the position. If there are still no qualified candidates, then you can have an H1b.
If you are not allowed to question your government then the government has answered your question.
Yep, in reality with this and even the farming jobs. The truth is "wages that Americans won't accept".
Not just that. They're at wages that can't even be offered. For instance: Some (not all) of the social programs where H1-B workers aren't eligible don't require the employer contribution. So hiring a US worker - even at the same pay - is substantially more expensive.
One of the problems is that, in a very competitive environment where labor costs are large compared to differences in process costs, if ONE competitor takes advantage of a cheat and another does not, the non-cheater loses the competitive bids. Thus, if the regulations aren't enforced, all must cheat or go out of business.
One place you see this is in the construction industry, with the "undocumented" workers. US workers need not apply (and the jobs aren't offered.) Contractors can't stay in business employing them at mandated minimum wages, benefit levels, and safety standards (which they CAN get the government to enforce) when their competitors can hire workers for less and cheat on all of the above - which those not here legally can't try to get enforced without risking deportation, but can afford to live on (especially if their family is on public assistance).
So if the government is going to put these regulations in place, it must enforce them. The "Invisible Hand" will deliver a knockout punch to anybody who follows expensive, but unenforced, rules.
At competitive wages, you can always find people willing to do the job.
Yep. The trick is to keep the playing field level.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
And everyone will still go watch Star Wars The Force Awakens, making them more money, and nothing happens.
Beware of the Redittor who loans you a Sharpie.
Just saying. Raising the min-wage won't fix the problem of being locked into a specific company.
Adding an 100k fee to *anything* will cause businesses to stop it for anything other than hiring CEOs (who I think get their own visa type).
Which any business will point out to their congresscritters if they even thought of trying it. You're effectively outlawing H1-Bs, which they won't tolerate.
I still like the idea of only handing out the H1-Bs to those who intend to pay their workers the *most* of all of the applicants over some minimum. Then you can't be accused of trying to torpedo the program, and the businesses have their own rhetoric backfire on them when they say that these people have "talent" they can't get in the USA. If they have "talent", they *should* be willing to pay the H1-Bs like they are "the talent".
Of course this about companies saving money. They have bought the rules, as set by government, in such a way that there's some sort of fig leaf protection for American jobs, but really the system is designed to drive the cost of labour down.
I've heard it too, from the farmers.
Because they're trying to maintain an artificially high standard of living against the rest of the world which is relatively impoverished.
They're riding the tiger. They know that they can't maintain this standard of living forever, something will equalize it, but due to the need to get votes, they don't dare feed the population a dose of bitter medicine. So, they just shrug and try and hold on as long as they can and hope they are dead when reality comes to roost.
The problem is that you believe it is a conspiracy. It is nothing of the sort. It is a mechanism that is off the rails, and everyone is going along for the ride. Some people get insanely rich off of it, the rest get run over.
However, don't think for a minute that this is a plan. There is no plan, only short term gain and stupid investors.
There are vast inequalities of opportunity in the world, and those can be used to the advantage of those who are willing to break down those barriers. The hope is that eventually, a fully globalized market will stabilize salaries and the ability to hire cheap Indians or Vietnamese will no longer exist, but it's going to hurt all the way down.
People believe that the free market is a choice. It's not. Market forces are a system that operates outside of any policy decision, and it will ensure that it gets what it wants, which is an equilibrium. As communication and the ability to trade all over the world increases, the barriers that were used to maintain protectionism become more and more artificial and rickety. This is the result. It may be that the only way that we protect ourselves is to ensure that those across the sea are successful and our partners, driving up their standard of living to a point where they have more in common with us.
Eliminate the H1B program, increase the quota for skilled Greencard holders (EB1, EB3). Wage problem solved because workers can leave if they are paid poorly.
HA
I guess that is why my old Co-Workers at Catholic Health had to train their H1B replacements to do their own jobs before they were laid off. Clearly they couldn't find anyone to do the job other than the people already doing it.
If you think it's expensive to hire a professional to do the job, wait until you hire an amateur. --Red Adair
Just what is the end game to gutting the middle class, anyway?
Frighting that you do not already know this, sincerely.
The -entire point- is to crate a have / have-not society; which BTW is the norm throughout human history. The concept of a "middle class" is but an aberration. Be it communism or fascism, by any other name it's feudal. In a democracy, people vote not for whom they like, but rather out of fear their "benefits" will be taken away. Think of it as indentured servitude.
Life is not for the lazy.
If you want to put a quick brake on this, just impose quotas by nationality
of the candidate. This is done for other things, so why not H1-B? You can
bias the quotas by size of the nation (population, GDP or whatever), but since
such a large percentage are from South Asia, that will quickly rebalance it.
And it would hardly be unfair or racist, since it is just introducing diversity
into the process, where there is none now (since the Indian companies
almost exclusively hire Indians where possible).
At least in ancient Rome the emperors would stage feasts, festivals and games.
McDonald's, New Year's Eve, NFL.
The end game of capitalism? The French Revolution. You can only push people so far. There's a point where the laws of society and morality lose their meaning, usually soon after the masses start starving and suffering. At that point it doesn't matter how many guns or gates you have. You're not going to stop an angry mob who thinks they have nothing left to lose and view death as a reprieve from a tormented life.
~X~
These H1Bs are an infusion of folks who are paid $60K, which is higher than average US income, into US population. They are now travelling, eating out in restaurants, sending their kids to daycare and buying computer hardware and software. When otherwise, they would spend their disposable income in India or whatever country they come from.
The only practical downside is restriction on transferring between jobs, which depress wages for both H1B holders and US citizens. Give folks a year to either find another US job or put their affairs in order and leave. Every other objection is plain irrational prejudice*.
* Obviously, entire 7 billion of Earth population can not move to North America. Luckily not everyone wants so, and imposing a sensible requirement of supporting oneself and earning a lower middle class salary narrows to influx to manageable numbers.
The naiveté is strong with this one! Earmarking Federal income means nothing. Never has, never will.
There is no grand plan, conspiracy or end game. There are just a bunch of people who would rather be the king of a mound of shit than a prince on a mountain of gold, enabled by a second bunch of people who would see the world go to hell in a bucket so long as they get to touch the handle.
From the other business owners that I know, I'm involved in a few now, they cite similar things. One owns a small computer repair shop with a few employees. Another, has maybe 500 employees in a bunch of fast food franchises, and the another owns a web hosting company - leases a few good sized cages in a couple of data centers in the US. All of them cite the same things. We talk about this extensively. I chose those few to mention specifically because their disparate. I know law firm owners, a guy who has a medical practice, etc... It could, easily, be the industries that I'm most familiar with or you're being lied to by your bosses. Take a look at some corporate filings for publicly traded businesses.
I'm a bit lazy so you can either search or believe me or wait until I am less lazy but I think the labor costs, as an itemized expense under overhead, is something like 17% averaged across the entire work force? Something like that, at any rate. Some higher, some lower, of course. The last time I found and cited the stats they were from BLS as I recall. It was not that long ago. So, while I did shunt the expense (included them as a cost) so doesn't every other business. You're not just buying parts when you buy a car, you're paying the labor also. It's a circular thing, I guess. The people I employed, for instance, paid higher taxes and paid a proportion greater than most to the municipalities that got improvements through their labor.
All-in-all, it wasn't that huge of an expense in the debit column and under the overhead header. I believe it's another 2-3% for benefits. We probably spent more on perks and office supplies than we spent on a secretary and even those were paid well. Bonuses don't come under labor costs, they're itemized separately. Those were a bit much but it is important to remember that without them you'd have no business at all. Paying bonuses for quality work is a very good motivator and allows people to share in the success of the company.
"So long and thanks for all the fish."
*** SMACK*** is the sound of dave420 going down eating his words getting bitchslapped by apk http://slashdot.org/comments.p... hahahaha
APK, you admitted doing this yourself. How can you condemn someone for doing something you do yourself? Oh yeah - "APK" - that's how.
Speak for yourself. The massive amount of extra work for countless developers the world over says otherwise. The lack of apparent effects of Y2K were because there was a tonne of work done to make it that way. I guess if you weren't in the industry when this was happening you might not realise.
Actually, H1B serves exactly this purpose, which is why so many tech firms are clamoring to expand it.
Can someone tell me WHY we need such a system at all? I doubt that we are importing only once-in-100-years mega-geniuses, so is it worth all the cost and problems and cheating and vigilance and unemployment? I don't see how...
It's funny, after I wrote that I did a Google search for inequality in ancient Rome.
http://persquaremile.com/2011/...
According to this article that summarizes the work of some academics, Rome actually had a more equal Gini coefficient than contemporary America.
It's obviously an estiimate, although these guys did some deep work analyzing some of the ancient records left over to try to dial in numbers that were probably pretty close.
OK, call it a "fee." For, ya know, enhanced security screening and whatnot.
The other beauty of making the fee payable directly to the gov't is that the employer can't extort the money back from the employee.
You also probably want the employee to have the ability to job hop.
Why free agents? I thought the idea was to fill specific job posts that Americans can't do -- not to expand the general labor pool.
last resort... clearly not true or enforced
Impose a $50K price tag and it will very quickly become last resort. And enforced.
The funny thing is, I don't post AC, I only ever post under this name.
I've told him this repeatedly, but he is just so ingrained in his methods, he just assumes any AC calling him out must be the same person, it couldn't possibly be a totally different person that sees his errors.
Oh, and thanks for the laugh.
APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
Expel Brahmin From Your Country; http://wh.gov/iyhMK
Casteism