

A scheme to lower engineers’ wages - anacleto
http://www.sandiegoreader.com/news/2015/mar/11/citylights1-scheme-lower-engineers-wages/?google_editors_picks=true

======
jws0111
This article and some of the comments here make it seem like having a H1B is a
terrible situation to be in.

I have a H1B. I work for major tech company in the Bay Area. I have a salary
in the six figures which is about twice what I would earn back home. I was
excited to come to America and work for a company I admire in their Silicon
Valley headquarters and the H1B lottery was the only way for me to do so.

Without H1B I wouldn't have had this opportunity. I don't feel like its
indentured servitude, I have a salary which I believe is higher than the
average market wage and is more than my American peers because the company is
paying all of my visa expenses and the fees related to me pursuing a green
card. I've been promoted once already in the 18 months since I arrived and
received a related salary bump. If I wanted to leave and goto a different
company, most in the bay area would allow me to transfer my visa so I could
work for them.

H1B is not a problem for America or "engineer's wages". Abuse of the system
is. Lets focus on curtailing that abuse and not on victimising H1B employees
who may be very happy and grateful for the opportunity to pursue their own
version of the American dream.

Spare a thought for those who had the job offer of their dreams, from that
"brand name company" in an exciting field, and the opportunity to move to
America, only for everything to fall through when they didn't get selected in
the lottery. That is surely not right. Can't we come up with a system where
American companies can hire who they want, where talented people can work for
fair wages, and where individuals can get the opportunity to move to America,
as despite all its failings, it is still an highly attractive place to live.

~~~
humanrebar
> H1B is not a problem for America or "engineer's wages". Abuse of the system
> is.

I'm sympathetic. I really am. I have a lot of friends working on visas, both
now and in the past. But I just don't see the economics of this. How can
adding hundreds of thousands of people in _any_ field not depress wages, at
least in the short-to-medium term.

Why do I care? I want young Americans to go into IT and engineering in
general. They are becoming more interested because wages and job security have
been improving (at least relative to other careers, I'm not sure about in
absolute terms). If we open the valve and flood the market, wages will be
affected. Maybe they won't shrink, but maybe they'll be stagnant. And maybe
the job security isn't quite as good.

When I was in school, many people didn't go into IT because investment bubbles
and trends in offshoring made IT work seem like a bad bet. There was
skepticism that IT would provide a good long-term career. I don't see how
importing hundreds of thousands of technology workers won't do the same thing.

So, again, I really want people all over the world to have opportunities, but
I feel my concerns should be for the future of the young people around me.
They don't have another America to move to when their prospects get stale or
bleak. They're already here.

~~~
davidw
> But I just don't see the economics of this

It goes beyond basic economics, so it's worth reading and learning about.

> adding hundreds of thousands of people

"Unfortunately", those people already exist and have skills, just in other
places, where they happened to have been born. If you create bad enough
policies, companies can and will go where the workers are.

Also, this is _not_ a zero sum game. There are more people and workers than
100 years ago, and yet... wages haven't cratered.

> I feel my concerns should be for the future of the young people around me

What is the radius of 'around you'? Your city? State? Country? Why are those
people more important than those that happen to be born elsewhere?

When did your ancestors come to the US? Why should people now not have the
same rights they did?

I'll post my link again: [http://journal.dedasys.com/2014/12/29/people-places-
and-jobs...](http://journal.dedasys.com/2014/12/29/people-places-and-jobs/)

~~~
nikroux
> Why are those people more important than those that happen to be born
> elsewhere?

I can answer that one for you. Why should he as an American care about and for
the future of youth in other countries? It is natural for us as humans to
first take care of our own family/neighbours/country men. As mean as it sounds
you cannot build a better future for your children if instead of taking care
of things that will help them you take care of things that will help others'
children.

Its not a hard concept to grasp really. And for Americans the future of
American youth is ABSOLUTELY unquestionably more important the future of the
youth elsewhere in the world. You know I had this exact conversation with an
Easter European friend of mine who wants to have an easier time to move to the
US, but at the same time he got upset when I proposed that his country should
take in African immigrants in droves.

> Why should people now not have the same rights they did? Different times.
> Its very childish to expect the world be the way you want it to be and to
> throw a tantrum about it.

Americans pay taxes in America and they build the country. Their ancestors did
the same. Their alligence was and is to the US - it is their home. Do tell me
what the artificially driving down of wages has in store for them? How does
benefit the US?

~~~
davidw
> And for Americans the future of American youth is ABSOLUTELY unquestionably
> more important the future of the youth elsewhere in the world

Unquestionably? That's pretty strong. I live in Italy, and frankly, I'm more
inclined to care about my friends' kids here than about some kid in, say,
Alabama, although of course I wish all of them the best.

50 years ago, there were people who unquestionably thought the future of kids
they shared a "race" with trumped that of other children.

> Different times.

So your relatives got what they wanted, and fuck everyone after them? Can you
point to a year and month when 'things changed' and after which immigrants
should keep out?

> Americans pay taxes in America

Uh, the other people in the US pay taxes too, and don't even get to vote.

------
PaulHoule
I am a member of the IEEE Computer society (and not the ACM) precisely because
IEEE opposes H-1B expansion. This is not necessarily a "litmus" test for me,
but it is a sign that the IEEE is sticking up for engineers and not the
financiers of tech industry.

~~~
moron4hire
IEEE has also supported legislation (that they've gotten to pass in my home
state) to require licensing of software developers, that the sorts of
companies that use H-1Bs would not be held to.

~~~
PaulHoule
That sort of thing could help with the "market for lemons" in software
developers, and also could raise our social status which would mean we have
more support standing up to wrong decisions on the part of management and
thus, fewer project failures.

~~~
moron4hire
Given that the testing requirements don't really cover anything about software
development, I would say it's really more about preventing upstarts from
getting a foothold and eventually growing to compete with the large
consultoware corporations. You can't eventually build a competitor to Raytheon
if you can't even get off the ground.

------
joelwilliamson
It seems auctioning H1-Bs to companies would let the companies that can't find
enough talent to hire at market price, and force companies that just want
cheap talent to pay for Americans. Solicit bids from every company stating how
many visas they want and how much they will pay for each one. If Google wants
5000 visas and is willing to give the government $200K for each visa, while
Infosys is only willing to pay $40K per visa then Google should get 5000 visas
and Infosys can try for whatever is left.

If there is an actual shortage of necessary talent, companies should be
willing to pay whatever it takes to get visas for qualifying workers. If they
just want to save money, this will show up in the low prices they are willing
to pay for a visa.

~~~
davidw
Auctions are a good way of allocating scarce resources.

However, visas are arbitrarily scarce: you still have to pick a random number
out of the air for "how many visas should there be".

What _is_ the optimal number of immigrants?
[http://johnhcochrane.blogspot.it/2014/06/the-optimal-
number-...](http://johnhcochrane.blogspot.it/2014/06/the-optimal-number-of-
immigrants.html)

------
fsk
The worst part of importing workers via H1-b is the indentured servant aspect.
That makes the H1-b employee more attractive than a comparably-qualified
American earning the same salary.

~~~
mc32
So would you support an effort to make it easier for foreign engineers, sw
developers and physicians to come in to get a legal job in the us? Foreign
knowledge workers seem to not enjoy the same sympathy low wage immigrants
enjoy, perhaps due to the more immediate threat of job stability foreign
knowledge workers pose to domestic knowledge workers, even when this fear
hasn't been substantiated.

~~~
hapless
Yes, unreservedly. Immigrant workers whose residencies are not tightly coupled
to their jobs would drive wages down much less than H-1Bs.

This is why you don't see employers lobbying for easier immigration policy.
Instead, they lobby for expansions of the H-1B program.

------
NTDF9
As professionals, software engineers should be more supportive of each other
regardless of their backgrounds. America has profited from some of the best
international talent. That talent deserves to receive their fair share of
rewards. That is the American spirit. Not unfettered self-centered greed. On
the other hand, increasing the number of H1bs from the current number is pure
corporate greed.

My opinion is that they should just speed up the green card process instead of
increasing H1b numbers. A lot of hard working and honest immigrants keep
waiting in their current jobs for their green card to get approved. In some
cases, it takes 6-10 years to get a green card.

If these folks get some job mobility without jeopardizing their green card
status, there will suddenly be enough mobile engineers and wages will rise
very fast.

------
beat
Once when debating the poor quality of programmers with a friend, I said "You
know how dumb the average programmer is? By definition, half are even dumber!"

He responded, "Only half? Do you mean the mean, the median, or the mode?"

And there's the rub. There may not be a shortage of engineers, but there's a
serious shortage of _good_ engineers. And I'm not sure more H1B will solve
that problem.

~~~
Klockan
H1B's earn at least standard wages, so companies wouldn't bring them here if
they weren't noticeably better than average.

~~~
beat
As someone who has worked with and hired many H1Bs, that hasn't been my
experience at all. If anything, the median quality is significantly worse than
American programmers. Green card workers tend to be much better than H1Bs,
although "better than average" still doesn't apply.

The problem is definitely the median, not the extremes. Top-quality foreign
programmers are absolutely as good as top American programmers. It's in the
middle that things go sour. There are many reasons for this, both cultural and
business. The big business problem is that H1Bs are hired from body shops to
supply large numbers of staff quickly at a price target, so they rarely get to
work on interesting, challenging projects. Whatever projects they're on are
dragged down by the poor quality of their teammates, so they don't get to
challenge themselves and excel. It's also aggravated by their body shop
employers rewriting their resumes in an absolutely generic fashion for maximum
buzzword compliance, denying the workers a chance to shine and specialize to
potential employers.

So the interview process consists of starting with a generic technology set,
and then spending five minutes or so on technical questions to see if they
actually know their ass from a hole in the ground or not (they usually don't).
If they do, the process can proceed normally. But without a resume that shows
any individuality, it's a huge waste of time for the interviewers to weed
through all the crap. This adds to the perception of poor quality.

Yeah, it's a real problem.

------
therealwill
Sponsoring an H1-B employee, in theory, is always more expensive than an
hiring a local because not only do you have to pay an H1-B visa employee the
same wage as a local you also have to pay the lawyer and visa fees. Often
times employers will also have to provide an employment contract guaranteeing
x number of years of employment in order to increase chances of visa approval.

In practice, this is not the case. H1-b visa workers have poor mobility and
little recourse when employers cheat the system by providing lower than market
pay and requiring the employee to pay their own H1B visa fees. Furthermore,
there is little (if any) enforcement that the employer seriously considered
domestic applicants at market rates over the H1B applicate. 99% of the time
the H1-B is already hired and the employer is posting a job 100% tailored to
that H1-B applicant.

~~~
hapless
Even if they hire in at a market wage (and they often don't), you don't have
to give H-1B workers raises or promotions.

~~~
vowelless
> Even if they hire in at a market wage (and they often don't), you don't have
> to give H-1B workers raises or promotions.

And do you "have" to give "normal" workers raises or promotions? Is any
employee entitled to such a trajectory?

~~~
therealwill
Yes but a "normal" worker can easily change jobs. With H1-B it is very
difficult and expensive to change jobs so they have to either leave the
country or suck it up.

------
drcube
You mean "a scheme to deflate artificially high engineers' wages"?

If you can't compete with foreigners working in your field, you can't compete.

I'm concerned with the indentured servitude we're putting H1Bs under, but not
with the fact that they're working here instead of China or India. There isn't
a "shortage" of STEM workers in the US, but that's no reason to support
protectionist policies.

~~~
geebee
I think the argument is that we should simply treat engineers and programmers
the same way we treat all other workers in the US. Nobody is lobbying for
special protections for engineers, just a level playing field.

The US currently accepts 1.2 million immigrants legally into the country every
year, and the engineers among them are most welcome to work here with minimal
licensing and red tape (this isn't the case for foreign lawyers or doctors).
The question is whether the US government should go out of its way to increase
the percentage of immigrants who are STEM workers (actually, even that would
be an improvement over the terms of the H1B, which empowers corporations to
decide who should and shouldn't be allowed to live and work here).

As it stands, I'd say the deck is stacked against engineers _relative to other
professions_ in the US. This is probably why people who have the right to
choose their profession in the US are reluctant to go into STEM - it's a
rational response to market distortion caused by uneven regulation.

~~~
beat
I doubt the average high school student considering a career in engineering is
worrying about market distortion from uneven regulation.

The percentage of women going into computer science in college has dropped
precipitously since the 1980s. Why is that?

------
davidw
I wrote this to have a standard thing for these threads:

[http://journal.dedasys.com/2014/12/29/people-places-and-
jobs...](http://journal.dedasys.com/2014/12/29/people-places-and-jobs/)

Short version: opening things up to people willing to work, and lifting the
restrictions on H1B workers are the best options, morally and economically.

Excluding people who happen to have been born in the wrong place, or the wrong
color, or female or whatever, is a bad idea.

~~~
PaulHoule
I am happy to give them green cards, not happy with the H-1B program.

------
mwsherman
There’s no doubt the promoters of the bill are self-interested, and one should
read the fine print, but: the notion of excluding workers that are on a
different side of a border, in order to “protect” wages, is deeply immoral.

Do the wages of the people outside of the border count? Theirs would be going
up, due to a more liberal immigration policy. The idea that such a bill would
“lower engineers’ wages” seems to be selective in which engineers we are
talking about.

~~~
pcthrowaway
I agree completely. I will also add however that it took me nearly two years
from graduating with a Computer Science degree to land my first job in the
field, so I do take offense to the fact that employers want employees who can
do a certain thing now, rather than investing in employees who will be able to
grow into their role. I would have gladly worked for minimum wage for a year
to get that experience (which is what I ended up doing with an internship).

So I agree that we should let whoever wants move to the U.S. I'm in favor of
open borders. But I also acknowledge that more people living here will mean
more competition for jobs, and therefore more of a culture of employers
treating employees as disposable.

------
robotkilla
We need a tech union to help prevent this sort of thing. It would be nice if
it could also help prevent bad practices in the industry (like building
backdoors into code for the nsa).

~~~
AnthonyMouse
Traditional unions only work when they're negotiating with monopolistic
industries, because the company then has to hire the majority of the available
labor pool itself and has no substitute workers to replace them if the union
makes significant demands.

Any kind of operation that only needs a dozen developers is never going to
need union workers. As soon as the union makes some nontrivial demand the
employer can just let them walk out and hire other people. This is why modern
unions are disappearing.

Moreover, the issue in question is about politics. The idea that unions have
any real political power is a joke; the only exception is public sector unions
and that isn't because they're a union, it's because government employees are
a large bloc of single-issue voters and public sector unions are their de
facto lobby group. Which, because the public sector unions are providing votes
in favor of spending other peoples' money, has led to corruption and pandering
much more than it has to the union keeping the government honest.

Exercising political power in the same way can be achieved with a lobby group
that isn't a union but which lobbies Congress with the support of members
willing to vote the way of the group consensus. Tech workers could certainly
use _that_.

~~~
therealwill
Good thing the largest tech companies don't collude to lower wages... /s
[http://www.wsj.com/articles/judge-rejects-settlement-in-
sili...](http://www.wsj.com/articles/judge-rejects-settlement-in-silicon-
valley-wage-case-1407528633)

------
hga
" _How about the presidential race of 2016? Hillary...._ "

On the Republican side, Ted Cruz wants to increase the H-1B cap to
300,000/year. All of the other Republicans who look like they might throw
their hat in the ring are immigration boosters, although I'm not aware of any
of them having positions on H-1B visas.

~~~
cpursley
[http://www.economicpolicyjournal.com/2014/07/rand-paul-
mets-...](http://www.economicpolicyjournal.com/2014/07/rand-paul-mets-
privately-with-mark.html)

> Rand has previously said all of the country's illegal immigrants should
> receive work permits and mentioned that he did not vote for the Senate's
> comprehensive amnesty bill because it did not award enough high-tech visas.

------
pnathan
Leaving aside the nationalist politics, this would do approximately as
described by the paper: a heap more indentured engineers coming in, able to be
underpaid and exploited, driving down market rates for salaries. That's going
to be real fun for people in competition with the body shops. :-/ Outsourcing
has its next iteration, I guess.

This is, by the way, why hackers should pay attention to politics. The
political forces know how to game systems of humans extremely well - an apex
politician has the backing of a machine tuned to game politics for him & them
at the level of a Gosling or a Steele with an army of supporters. Staying out
of politics and wanting change is equivalent to not contributing/communicating
to a project at all and moaning to your friends: ain't nothing gonna happen.

------
tdaltonc
ITT there are apparently two sides: 1) the heartless capitalists who want to
abuse labor and 2) the nativist nationalists who want special treatment
because of where they were born.

~~~
Vraxx
That's a false dichotomy at its finest. I've read a wide range of agreeing and
dissenting opinions with a range of reasons to back them up. Though I will say
that there is a decent amount of nationalism present in this comment section,
you are right about that.

------
wooyi
I bet if someone did an economic impact study of H1B visas and looked beyond
pure salary numbers, you would find a very positive economic impact.

America was built by immigrants. Lest you forget.

Borders are a remnant of the old world. Companies need to stay competitive and
tapping the international workforce is part of that competitiveness.

~~~
Vraxx
I find it interesting that typically we commend ourselves for being a nation
of immigrants (all in the past of course) and consistently resist current
immigration. I feel like we might be more tolerant as a species if we did away
with all of these nationalistic tendencies.

------
warfangle
How about we just make the immigration process sane? #vastoversimplification

~~~
protomyth
Like taxes, too many people and companies rely upon the current system to
allow politicians to change what we are doing.

A good start would be to remove the H1B program in its entirety and allow
specialized labor to get a work permit (with the intention to be citizens) and
not be tied to a company. Graduates of our public universities should be the
first to get these slots.

------
rguzman
> A 2013 study by the Economic Policy Institute showed that American
> universities graduate 50 percent more students in computer, information
> science, and engineering each year than are hired in those fields

This is a reasoning flaw: companies don't need people who graduate from
certain fields. They need people with certain skills that are difficult to
attain. A degree in those fields is correlated with the skills in question,
but it is very far from a predictor.

~~~
TheOtherHobbes
And companies can only find those skill abroad? And not by - say - offering
local graduates lower starter pay but extra training?

When everyone is talking about how hard it is to predict hiring outcomes, it's
a bit of a stretch to suggest that this problem magically disappears for
prospects who happen to be from other countries.

~~~
Klockan
You have a finite amount of smart people in the USA, the only way to increase
supply is by importing them. You can teach skills but you can't teach talent.

------
Yhippa
In an ideal world it would be nice if you could go work from country to
country without having to deal with things like this.

------
erikb
So, the problem here is that "more foreigners come here and steal our jobs"?
Why is such an article even on this website?

------
freefrancisco
If the US doesn't want all the tech talent, they will have to go somewhere
else. If another city outside the US becomes a magnet that concentrates all
that talent, be prepared to relinquish leadership.

~~~
PaulHoule
I have some familiarity with the "job shops" that hire a lot of H-1Bs, they do
advertise for jobs in the US but I will say that the basic business model is
something like "charge the customer $120 an hour and pay somebody $35 an hour
to do the work" (Now there is some overhead, so this is not as bad as it
sounds, but it is pretty bad.)

One thing that is fairly shocking is the low pay rates for people with skills
that are unusual and high demand, I can only imagine they are throwing huge
numbers of freshers at the problems.

~~~
bsbechtel
My questions is why can't someone else offer these same programmers >$35/hr
and steal them away? What's the friction in the market preventing this?

~~~
warfangle
H1Bs can't be stolen away. They're locked into their employment contract
unless they want to go home.

~~~
catkin
Not true. Once a H1-b recipient has a receipt number, they can effectively
transfer the H1-b to any company willing to sponsor.

Source: I hold a H1-b.

------
solutionyogi
I am torn on this issue.

To give my personal background, I came to the US in 2004 on H1B visa through
Infosys.

Working in NY/NJ area, I have seen it first hand how H1B can indeed lower
wages. Here's how. The H1B visa belongs to an Employer and not the Employee.
This means that losing a job on H1B could have dire consequences if you can't
line up a job right away. This leads to a situation where a person on H1B visa
avoids jobs where there is a risk of getting laid off. This leads to tons of
'body shops' setup by Indian/Asian folks who will sponsor your visa and then
you go do 'hourly consulting' for a multinational firm. (See this page:
[http://techjobs.sulekha.com/h1b-jobs-
usa](http://techjobs.sulekha.com/h1b-jobs-usa)) The body shops will charge at
least 20% for this benefit, 30% in average case and even 50% if the employee
is not smart enough. The goal of these body shops is to bring in more folks
from India where someone will happily take up job for 60k to come and work in
NY/NJ. The guy in India is thinking: 60k USD = ~3,785,000 INR. This is a huge
amount which they will not be able to get in India. (In Bangalore, you can
expect to get paid around 700,000 on average). However, most of the time, they
don't factor in the cost of living and it means that their actual savings are
much closer to what they make it in India. By the time they figure all this
out and want to make a move, they understand the visa restrictions and realize
that they are stuck till they get green card.

To share my personal story, when I first came in 2004, I was making 60k in NJ.
Kept making around the same amount for the next 3 years. Then I became friends
with a person who worked as recruiter for COMSYS (now acquired by
ManpowerGroup) (For those who don't know, it's one of the bigger staffing
firms in NY). She gave me the inside detail on how much companies are paying,
how much these staffing companies are keeping and how to keep more share of
the money. She also told me that if I want to make real money, I should
consult for Investment banks. Based on this, I started improving my technical
knowledge, finance knowledge and interviewing skills. I started making more
and more money. I got green card last year and I am now making over 200k. I
have used this knowledge to help my friends but I have seen it first hand how
folks are not able to get a better paying full time job due to visa
restrictions. This ultimately leads to wage suppression.

Summary: If you think that H1B abuse is not rampant, you are living under the
rock.

So, on one hand, I want H1B visa program so that folks like me can come to
this great country and make good money. On the other hand, I am fully aware
that businesses are strictly using as a way to lower wages. There are very few
H1B jobs where the worker is doing a 'highly specialized job' that a local
American can not do.

I really don't know what the answer is. One idea I do like is to do the
auction of the H1B visas. That way employer who have the money and who really
need highly specialized work done can hire the person from any part of the
world. I think it's fair that in a capitalistic system, you let the money
decide who should get the opportunity to immigrate. (The current lottery
system means that a company may not be able to hire a candidate if they get
unlucky.) The only dilemma is that if it worked this way from beginning, I
would have never made it to the US.

------
geebee
The current political reality is that about 1.2 million immigrants are
accepted legally into the US every year, a number that falls far short of
demand. The current system is generally based on family reunification rather
than work force needs (such as skilled immigration). Silicon valley employers,
ostensibly unable to hire the workers they need (under the terms they feel are
acceptable) from the citizens who were born here or immigrated through non-
work related programs, have lobbied for the power to bestow "front of line"
privileges on people (usually STEM workers) they wish to hire. This is an
unusual request (and substantial expansion of corporate power into the
immigration system) that they justify by claiming that there is a shortage of
these very highly skilled workers, a shortage severe enough to cause harm to
the US economy in general.

This is where it starts to get complicated, because if you change the rules
only for a small segment of the workforce (such as proposals to staple a green
cart to STEM degrees but not dentistry, law, MBA…), you may end up creating
market distortions that reduce the attractiveness of engineering or software
relative to the other fields highly educated people can pursue (provided those
people already have the right to live and work in the US). When you consider
the skill it takes to be a good software developer and what they could earn in
some other field, I don't think that the evidence supports claims of a
particular shortage.

Take a look at the US News Best Jobs salary data some time, and focus on
salaries in high cost regions like SF. You'll find that while programmers are
reasonably well paid, in SF they earn only a bit more than dental hygienists,
and quite a bit less than registered nurses. I also think that career
stability and long term prospects may actually be much better in other fields.
In short,I think that the aversion to software development among people who
already possess the right to live and work in the US may be rational and
market based, and that getting the government involved will simply forestall
the market signals that would get more people interested in this field. Pay
and work conditions (you make about as much as you would have with an
associate's degree in a health related field, work in a giant open office with
back visibility, in a company that may discard you when you get older, perhaps
demanding that you train your replacement) need to improve to get more people
into programming. Why should we tinker with the immigration system to allow
business as usual, when clearly something needs to change?

Just to be clear, I do think that openness to international engineering talent
is a critical factor in any countries workforce, and I do favor some kind of
skilled immigration program. My big difference is that I also see a potential
risk to the domestic pipeline through these market distortions.

