
Free the H-1Bs, Free the Economy - jrbedard
http://www.techcrunch.com/2009/08/30/free-the-h-1bs-free-the-economy/
======
ankeshk
To protect their populations against internal and external threats and
revolts, Sparta - the ancient Greek city-state made a few decisions.

1\. Every Spartan citizen has to join the army and train since childhood to
become the best fighter possible. Weaklings are killed at birth.

2\. The currency of Spartans was changed to heavy iron bars. Prevented folks
from other neighbouring city-states from doing business with Spartans.

This made Sparta very independent. And their citizens became the best fighters
the world had ever seen. People looked up to them in awe. Poems are written
about them.

But these same _protectionist_ rules that made Sparta glorious for little
time, led to Sparta decline in the long run.

Populations declines. Wealth declines. Progress declines.

Moral of the story has always been: protectionism brings short term benefits
but long term doom.

But yet we'll always see the majority of the people rooting for protectionism
for short term progress.

(I'm pretty sure I'll be slammed for this post because there is no direct
relation or parallels between Spartan policies and American policies. Time was
different. Threats were different. Rules were different. But I had to write it
to make a point against general protectionism. And not against any specific
American policy including the one being talked about here - restricting
H1-Bs.)

~~~
gaius
_But these same protectionist rules that made Sparta glorious for little time,
led to Sparta decline in the long run._

What did for the Spartans was all dying glorious deaths before having enough
kids. The Spartan economy, operated by the Perioikoi and Helots, was strong
enough, but it relied on there being a critical mass of adult male Spartans to
maintain it. Protectionism was little to do with the fall - the Perioikoi
could trade with whomever they pleased.

~~~
ankeshk
1\. Yes but Spartan rules of being killer fighters made immigration
impossible.

2\. The Perioikoi could trade with whomever they pleased - but - but no one
wanted to trade with them because of the iron slabs being used as currency of
exchange.

Dig a little deeper into the motives as to why such rules were made by the
Spartans and you will see that it was pure protectionism.

~~~
netsp
where would you suggest digging to uncover the motive of illiterate
bureaucrats from 2500 years ago?

I imagine it should be easy compared to uncovering the motives of living
politicians in information societies.

~~~
gaius
On a slightly unrelated note, the way to win in Afghanistan is to plumb every
Afghan home with hot running water.

~~~
netsp
Are you being ironic? It's fairly amusing hearing (usually Americans) revive
some colonialist axiom or piece of logic as if it is new & brilliant.

The relationship between wealth & compliance is complex.

------
rdtsc
> Hundreds of thousands of mostly very smart and highly educated workers who
> could be starting companies are not.

Alright, but millions of Americans could be starting companies as well, but
are not.

In fact, America is _not_ as an entrepreneurial country with lots of little
small business owners as we'd like to think. That is the propaganda bullshit
we get fed on every election cycle "we got help America's small business. We
gotta help Joe The Plumber...blah...blah."

In fact America businesses are mostly large behemoths employing tens of
thousands of minions.

There was just a recent report from the Center for Economic and Policy
Research ( [http://www.cepr.net/index.php/publications/reports/int-
comp-...](http://www.cepr.net/index.php/publications/reports/int-comp-small-
business/) ) that compared employment in small businesses among the developed
nations. US is consistently at the bottom when it comes to self-employment or
employment in business with less then 20 people. The biggest reason -- the
high cost of health insurance.

So I don't buy the bullshit about "if immigrants could only start their
companies, then our economy would boom..." Unless, of course, the author is
implying that immigrants are going to run sweatshops where employees don't get
health insurance...

~~~
rantfoil
Even within YC, our own Summer 08 batch, there are several startups by non-
Americans that have been very successful at building useful products, raising
money, and altogether creating value for the US economy.

But those same startups have to jump through a million hoops just for the
right to exist in our borders. So this effect is real. I don't claim to know
to what extent our economy could be affected positively or negatively, but it
is real.

~~~
rdtsc
> But those same startups have to jump through a million hoops just for the
> right to exist in our borders.

> I don't claim to know to what extent our economy could be affected
> positively or negatively, but it is real.

The question then is, who are we trying to help here? Do we want to help the
immigrants or the American economy?

Unless, we can show how the hassle of immigrants trying to setup startup is
seriously damaging our economy, then this starts to look more and more like we
just want to provide some convenience for the immigrant workers. Of course, we
should provide convenience, and should certainly not make it difficult on
purpose, but that is not a top priority. We shouldn't be called xenophobes if
we don't push this task to the priority of our things to do at the moment.

~~~
kareemm
> Do we want to help the immigrants or the American economy?

These aren't mutually exclusive. I was an immigrant from Canadian (first on
TN, then H1), started a company with an American co-founder, provided
opportunities for hundreds of Americans to make money doing what they do best
- teach. American economy +1.

I learned a ton, met some amazing people, got some good experience, and am
confident that I could do it again. Immigrant +1.

Problem is that US policy makes it difficult to do it again without an
American co-founder.

And this is what I don't understand: doesn't America want start risk-takers
who leave their country to come and start businesses, grow the total pie, and
earn a small slice of it? Isn't that how the country became so great?

~~~
studentx
So--is there an acutal way to do start a company without a US citizen as your
co-founder?

Just graduated from a US college on a regular foreign-student visa...

------
old-gregg
More programmers to free the economy? Come on...

To REALLY free the economy we need a million of doctors from France, India, UK
and Cuba competing here, locally, against our home grown millionaire surgeons.
The #1 reason companies are outsourcing and people are leaving is this
enormous burden of medical racketeering.

Come on, the world is so much larger than the information technology sector
and most problems that can't be solved by coding.

~~~
TriinT
After the collapse of the USSR, lots of medical doctors and other specialized
workers found themselves without a job. Today in Western Europe you can find
construction workers who were doctors in the Ukraine SSR or Moldova in the
1980s, These people are a huge source of qualified work, but to the best of my
knowledge only one country (Portugal) has shown any interest in re-training
them as doctors to meet the severe lack of qualified medical personnel. It's
interesting to note that in the former Soviet republics, being a doctor did
not have the same status (let alone financial compensation) as in the West.

I know that Canada has been trying to lure medical doctors from abroad
(Eastern Europe and elsewhere) in recent years, but they're after the young
graduates, not the old veterans who were disowned by the fall of Communism.

Unfortunately, the doctors' lobby in the U.S. is too powerful. In order to
keep their salaries inflated, they will never allow the U.S. to import doctors
from abroad, even if that would mean that the average American would have
access to more affordable healthcare.

~~~
rdtsc
That is very sad. I remember growing up in USSR, they had very good doctors.
They didn't have carpeted hospitals, TVs in every hospital room, or fancy
technology but doctors were good.

I remember when I was 11 I broke my front teeth on a bycicle. We went to the
dentist. He sat me in the chair and said "Well, cosmonaut, let's see what we
can do", and he rebuilt my teeth in 2 days. All he got in return from my mom
and I were flowers and a thank you. There was no insurance, no co-pays, none
of that bullshit. And I still have the same teeth he rebuilt now 20 years
later. I heard that doctor moved to live in Canada...

~~~
abalashov
Yeah, I can second that, having been born and spent part of my childhood in
the USSR.

The medicine was neither on the forefront of high technology nor equally
distributed nor ideal, but the preventive tactics and the highly rigourous,
fundamentals-oriented education of the doctors more than made up for it.

It's the same idea as Eastern Bloc polytechnic institutes; why do you think 15
of the 16 bank / capital crime hackers wanted by the FBI are ex-Soviet? It's
certainly not because they had access to the latest and greatest Western
commercial gear at any point in their education or experience. It turns out
that it doesn't matter; the focus was on strong mathematics, computational
theory and machine processing. They understand what a buffer overflow is and
how to effect one easier, better and faster than their more empirically
trained counterparts.

We have a family doctor in his 80s now who still practices medicine in what's
left of the state system in Russia. After my parents get frustrated with yet
another round with pointless paper-shuffling bureaucrats practising defensive
medicine, with their army of office assistants, nurses, medical billing
consultants and transcriptionists, they unfailingly call him for good advice -
and it works.

------
nanijoe
Wow.. it is evident that most of the commenters here do not really understand
1. The H1B process and/or 2. What the author of the techcrunch article is
saying.

In a nutshell, and H1B visa is attached to a company, so if you have one, you
cannot go work for another company or even start up your own.

What the author is advocating is that the president/government lift these
restrictions, so that the skilled foreigners who already live in the USA can
go ahead and help the economy grow.

Of course lifting the restrictions would probably mean that employers will be
less willing to sponsor people for H1B visas, knowing that they can walk away
anytime they please.

~~~
tnovelli
Right on - H1B is akin to indentured servitude. It's hard for the rest of us
to compete with a captive work force.

~~~
cema
I am aware of this argument, but it has always seemed strange to me. Surely
slave labor is not efficient.

------
sachinag
This is bullshit. Here's actual data:
<http://www.businessweek.com/table/08/0305_h1b.htm> More (I don't know the
source, but seems correct): <http://www.myvisajobs.com/Top_Visa_Sponsors.aspx>

Lookit, a lot of the H1-B slots are being taken up by consulting firms. We
don't have a shortage of H1-Bs; we just allocate them poorly. _That's_ what we
need to fix.

As to the (what I consider a minor) founding issue, that's pretty simple: find
an American co-founder. Form a company, apply for a second H1-B, and you can
work for the NewCo from the minute you file (if you already have an existing
one). Work on the side, make something people want, then transfer over the
main H1-B once the NewCo has revenue/investment. Hell, I'm happy to sign on as
a co-founder for as many companies as I can until INS stops me.

~~~
rdtsc
I agree. This is like trying to fix the high rate of injuries by getting more
band-aids.

To me it seems the article is advocating changing the legislation to make it
more convenient for immigrant workers. That is of course followed by a stern
warning to us 'xenophobes' that if we don't our economy will be ruined.

They should instead advocate for punishing large corporations for gaming the
system, underpaying H1-B employees and depressing everyone else wages. For
every 'smart' and 'bright' H1-B visa candidate there are a thousand of
unqualified ones, with flaky academic or employment history record. The reason
they are here, because they are willing to work for %30 less than Americans
are.

~~~
agmiklas
Consider this, though. Even the most qualified H1-B candidate can end up
getting paid less than they should simply because of the way the green card
application process works.

Once an H1-B holder has filed for a GC, they can't be switch employers or be
promoted. Since most companies have pay caps based on job title, this means
the H1-B holder can't get raises past a certain point. The end result of all
this is you have H1-B "junior engineers" who've worked at the same company for
5+ years really doing the job of a intermediate/senior engineer.

The joke is that the company is not "gaming the system" at all. By not
promoting someone with an outstanding GC application, they're doing exactly
what the law requires of them.

------
kansando
This article and all others on the topic seem to confuse two different trends:
1> That there is a real incentive for the very best to return to India and
China because they are self-confident and know that they can thrive anywhere,
and 2> That the current H1-B regime (read indentured labor) is abused by
corporations, especially IT outsourcers to bring in bodies. In my case, after
a PhD at a top 5 engineering school and a 7 year wait at a Fortune 500
company, I finally got a Green card. I started a company within a month of
that, we have over 100 employees (all in the US) and we are hiring today. The
generation of PhD's before me used to get their Green Cards in three months. I
see a lot of my friends now contemplating a return to India and China. I think
this is bad for the US and bad for Silicon Valley. It basically comes down to
this, in intellectual fields, the most productive workers are 10X better than
the median. Multiple that with a 10X tolerance for risk (which a lot of
immigrants with much lower fixed costs and lower expectations from life tend
to have) and you are talking about losing someone who is 100X more valuable
(in economic terms) than the average worker. If we don't figure out who these
people are and insist on having them wait in the H1B line along with everyone
else, we are doing ourselves a great disservice. BTW my cofounder is American,
also falls in the 100X category - so this is not a statement about "all
Chinese/Indians are superior to all Americans". His daughters are learning
Chinese as a backup plan. By mixing legal with illegal immigration (due to the
relative strength of some of the lobbies) and uber-skilled with somewhat
skilled immigration, we are creating a mess.

------
jyothi
Reminds me of PGs "Founders Visa" article -
<http://www.paulgraham.com/foundervisa.html>

It is a win-win for America and hundreds of entrepreneurs in other countries
where the startup ecosystem doesn't exist and ofcourse many would want to
build businesses for developed economies than attempt to run something in
their home economy which probably can't pay enough. They might go back and
build something few yrs down the line or invest in their home countries
nevertheless America would have benefited in the mean time.

And this is not even converting all H1-Bs at least the capable ones to start
their own firms.

~~~
rantfoil
I've seen H1B essentially lock up some of the brightest people I've worked
with... for years. Even a decade or so. You have to get sponsored, and you
can't leave your corporate home. It's a strange, watered down form of
identured servitude.

The fact that H1B's have no mobility also depresses wages and reduces the
incentive for corporations to be a great place to work because the switching
cost for these workers is much higher. So hiring a lot of H1B's actually do
offer corporations an incentive that is more insidious than you might think.

That's the _bad_ form of H1B. Corporations bringing worker drones for cheap.
But that's why this specific reform can affect the system for the better.

~~~
barrkel
And of course the depressed wage / indentured servitude plays into the
xenophobic / "dey tuk ur jerbs" crowd as an argument _against_ immigration
reform.

------
ojbyrne
Totally off-topic, but this is the first thing I saw after getting my new
shiny US visa. Couldn't help but share.

~~~
andreyf
Congrats :) didn't realize you were from abroad - where from?

~~~
auston
Canada, I believe?

~~~
ojbyrne
Yes, I'm Canadian, nominally. I have dual citizenship (+Irish) and have lived
in a bunch of different countries.

------
fnid
This is a very biased article. The author neglects to mention that a very
large portion of income generated by foreign born workers is sent home by
those workers. The money doesn't stay in America to benefit the American
economy.

It also doesn't benefit the case to call those opposed to more immigration
_Xenophobes_. They aren't xenophobes, they are rationally aware of the
situation.

Also, what he says is not true according to the research:
<http://news.ycombinator.com/item?id=794685> and
<http://news.ycombinator.com/item?id=794677>

Furthermore, H1-B's are not "highly skilled." The majority of H1B workers take
entry level jobs. There is an O-1 visa for highly skilled workers and there is
_no cap_ on this visa. If this debate was really about bringing in more highly
skilled workers, then why argue for uncapping the lower skilled visa? Wouldn't
corporations just bring in more O-1 visas, for which there is an unlimited
supply available?

The reality is that O-1 visas cost more than H1B visas to employ. This debate
is really about concentrating more power in the corporations and erradicating
the middle class in America.

~~~
kiba
All economies depend on trade and division of labors to be prosperous. So
money going back to India and other countries may help increase global trade.

~~~
rdtsc
It's nice to help India's economy, or China or Russia. Unfortunately, US is
not in the charitable business of helping developing economies.

~~~
kiba
You did not clearly understood the implication of "trade" part.

If trade is central to the wealth of society, then more trading with other
economies of the world will lead to increased wealth in the US.

In fact, we have the largest free trade zone right here in the US. Goods and
services in the US, for the most part, move freely.

~~~
fnid
Increase in wealth for whom? The upper class or the middle class or the lower
class? I think _qui bono_ is the central question in this issue. The _wealthy_
in America benefit, but the middle and lower class does not.

Research shows, as the middle class increases in wealth, then so does the
whole economy and through increasing H1B's, we are eliminating the middle
class american worker to jobs overseas.

~~~
kiba
Common sense should already suggest that trade is _mutually_ benefical because
well, I get stuff that I wanted, and you get stuff that you want. Why should
trade only specifically benefit some certain classes of society?

Read the article on comparative advantage.
<http://en.wikipedia.org/wiki/Comparative_advantage>

This is the reason why we specialize and trade, because everybody will be
better off.

------
vaksel
yeah that's what we need, more H1Bs...after all its not like we have a lot of
unemployed. The job growth rate has dropped significantly, why should we
increase our population when we don't have the jobs to support them?

these were posted on TC:

    
    
       1950’s
       Population Growth = 11,516,000
       Employment Growth = 7,215,000 (62.65%)
       
       1960’s
       Population Growth = 19,449,000
       Employment Growth = 13,862,000 (71.27%)
       
       1970’s
       Population Growth = 30,811,000 (Depression in Mexico)
       Employment Growth = 21,224,000 (68.88%)
       
       1980’s
       Population Growth = 20,865,000
       Employment Growth = 17,685,000 (84.76%)
       
       1990’s
       Population Growth = 21,667,000
       Employment Growth = 16,998,000 (78.45%)
       
       2000’s (Mar. 2009)
       Population Growth = 26,254,000
       Employment Growth = 5,137,000 (19.57%)

~~~
rantfoil
There's two issues here -- one is that there's a brain drain in the United
States. The best and the brightest are leaving. They can't stay, because we
won't let them. The fix is letting them, by reforming H1B policies.

Second is H1B abuse by large corporations. This is a legit problem -- some IT
firms bring in people they shouldn't (sometimes thousands at a time), and this
takes up H1B's from talented people who should get them. Again, the fix
requires the government to figure out who is abusing it, and changing the
policies to prevent them from doing so.

~~~
vaksel
i don't buy the brain drain issue, sure there are probably some geniuses in
the millions of H1B people, but majority are not that much better than the
average American worker. So out of those few geniuses, what tiny percentage
leaves?

They aren't leaving for the sake of leaving, they are leaving to exploit the
opportunities in their home countries

~~~
gojomo
The emigration of even a "tiny percentage" of geniuses is a great loss --
they're geniuses!

And if the "majority" are "not that much better than the average American
worker" -- but still just a little better -- why can't they stay? Everyone
above average brings up the average -- why not have them producing great stuff
here rather than elsewhere?

~~~
vaksel
because if they are at the same level, then the same level job goes to the
Indian, because he can get paid half as much. When there is economic
prosperity, noone really cares about immigrants because there are jobs aplenty
for everyone, but when there is a down turn, people start wondering...why
should we import 100,000 people who are not better than the thousands of our
own unemployed people.

The geniuses are welcome, it's the lesser skilled people, who are imported
solely to drive down wages and take jobs away from Americans that people have
problems with.

Who said they are more skilled? You ever read code written by someone on an
H1B?

Because they aren't producing great stuff, most programming jobs aren't at
Google, they are at places where you maintain some crappy code written 10
years ago. This mundane crap can be worked on by the thousands of American
programmers that are unemployed, because they aren't willing to work for
$40K/yr like their H1B counterparts

------
zhyder
I agree with the author's thesis but I'm bothered by the way the numbers are
presented. Other articles in favor of making immigration for skilled workers
easier usually are guilty of the same number fudging.

In the article: "My research team documented that one quarter
(<http://ssrn.com/abstract=990152>) of all technology and engineering startups
nationwide from 1995 to 2005 were started by immigrants."

The linked source says it more precisely: "We found there was at least one
immigrant key founder in 25.3% of all engineering and technology companies
established in the U.S. between 1995 and 2005 inclusive."

The key words in the second quote are "at least one immigrant key founder";
there are typically 2-4 founders in a startup (YC's avg is 2.5). If we just
calculate what fraction of founders are immigrants across all startups
(=total_immigrant_founders/total_founders), the number should only be ~ 11%
[1], which sounds less dramatic but is more accurate in terms of how much
credit immigrant founders deserve for the startups.

Similarly "more than 25% of U.S. global patents had authors who were born
abroad" should really mention what fraction of inventors listed on patents are
foreign-born, since patents typically have many coinventors.

[1] - There's probably actual data on this somewhere, but if we assume the
probability p of a founder being immigrant is independent of other founders,
and the number of founders per startup = 2.5:

=> 1 - (1-p)^founders_per_startup =
probability_that_startup_has_at_least_1_immigrant_founder

=> 1 - (1-p)^2.5 = .25

=> p = .1087

------
rams
The author Vivek Wadhwa, iirc, used to be a very prominent H1B critic. Wonder
what's made him change his mind ?

