
A loophole in immigration law is costing thousands of American jobs - hackerboos
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20150222-column.html#page=1
======
curiousDog
As an Indian, I really really hope they ban Tata and Infosys (or any other
Indian outsourcing company) from getting H1-B visas. The people they bring
over are the bottom of the barrel in India and have no interest in Computer
Science whatsoever. They suck at their jobs. They can't write a single
paragraph in English without grammatical errors. Furthermore, incidents like
these will perpetuate xenophobia against the general Indian populace (I
already regularly encounter abuse where I live).

~~~
enlightenedfool
Nonsense. There are several Americans who are less skilled at the place I
work. Xenophobia can't be stopped by Indians being better workers than locals.
The article is about a loophole in law which any corporation would exploit,
not just Tata and Infosys. My company (which is American) does it too, in way
that isn't obvious. It makes zero sense to ban "any Indian outsourcing
company"

~~~
MichaelGG
> Xenophobia can't be stopped by Indians being better workers than locals

But it would. Every case I've encountered where there is a skepticism of
Indian workers is due to horrific experiences with such hires. I haven't seen
the same applied to, say, Russian engineers.

There may be a another reason, like just the sheer population and widespread
English usage, but the result is that Indians suffer an unfair bias that other
groups don't have. Things like MS shipping a major product made in IDC, with
broken English in the dialogs. Or so many outsourced support and development
failures. Perhaps it's because bad experiences are noticed because there was
an interaction. But good experiences, say excellent code written by anonymous
Google engineers, doesn't have any particular nationality associated with it
(except American)? So if all tech support and dev was outsourced to Russia,
then Russia would have a disproportionate bad rep?

It's not fair (or perhaps not even fixable in a fair way), but if more
interactions were positive, then there'd be less resistance.

I feel bad for having an internal reaction when I start dealing with an
Indian, but I try to balance that out by making an extra effort to be sure I'm
concentrating on the work. And I know there's tons of far-more-talented-than-
me Indians. It terrifies me that this bias might be mathematically incorrect,
in addition to being individually unfair.

------
putlake
This article is bad journalism. I worked in that industry for about 10 years
and the way this operates is the company lays off 100 workers and replaces
them with 120 contractors, 90 of which are offshore and only 30 are in the
U.S. These 30 get, on average, about 60% of the wages (including benefits)
that laid off FTEs used to get. However, the client company (e.g. Edison) pays
the contracting company (e.g. Tata) roughly the same hourly rate for the on-
shore guys. The major source of savings for Edison is moving the work
offshore. The 90 folks in India cost about 20% of US FTE. This Google
spreadsheet has the math:
[https://docs.google.com/spreadsheets/d/1g3upQ7KOlgo8sgKLf4Qd...](https://docs.google.com/spreadsheets/d/1g3upQ7KOlgo8sgKLf4Qdai1yP5fY5x0acTcaK9LgCcc/edit?usp=sharing)

------
evanpw
Let's say for the sake of argument that every Indian immigrant displaces one
American from their job. Under what moral calculus is that a bad trade? The
per-capita income in India is almost exactly 10 times less than in the US. By
American standards, keeping someone from leaving India seems pretty equivalent
to condemning them to life-long poverty.

Can you imagine someone making (with a straight face) the argument that people
from Detroit shouldn't be allowed to move to San Francisco to take a better
job, because they'll steal jobs from and drive down the wages of SF natives?
What's the difference?

~~~
A_COMPUTER
Because I am legally and morally compelled to pay taxes to my country, and in
exchange my country is legally and morally compelled to look out for my
interests and well-being--not to find the fastest and most economical means to
replace me. It's called the social contract, that is my moral calculus.

~~~
murbard2
Valentino Mancini has been coming to your grocery store and he's offered to
protect you against fire hazards. He made such a compelling offer you couldn't
refuse it, and you've been paying him off for years.

Valentino protects you, he's been looking out for you. Like when they tried to
build a K-Mart in the neighborhood, and the developer had an unfortunate
accident.

But here's the thing, Valentino's consigliere has convinced him to let in a
new grocer in the neighborhood, and business hasn't been that good since.

Is it ethical for you to go see Valentino and complain that, since you've been
paying him off for years, he should kick that new grocer out of the
neighborhood?

~~~
freehunter
Oh right, because the government is like the Mafia. Yeah that whole anarchy
thing totally works.

~~~
murbard2
The government is different from the Mafia in many ways, and similar in other
ways. Analogies are helpful as a source of moral intuition.

What matters in this example is that two wrongs don't make a right.

If it's morally wrong to prevent immigrants from finding jobs in the US, then
the fact that the parent has paid taxes is irrelevant. Using it to justify
preventing immigrants from getting jobs in the country is begging the
question.

------
kjksf
Something doesn't add up in this article.

According to the article, 50-60 year olds IT specialist who "install, maintain
and manage Edison's computer hardware and software" are making $80-$160k /
year ($120k on average).

Those salaries seem to be 2-3x market rate for such work. Even the salaries
paid to the new, outsorced people ($65-$70 average (sic)) are on the high side
for someone who installs software.

The article claims this is a "loophole" because H1B is supposed to replace
"highly skilled, hard to replace workers" ergo those $120k/year are not highly
skilled, hard to replace, which begs the question: how come are they all
making $100-$190k/year
([https://s3.amazonaws.com/s3.documentcloud.org/documents/1671...](https://s3.amazonaws.com/s3.documentcloud.org/documents/1671461/sce-
it.pdf))?

~~~
sologoub
The software they work is probably a lot more complex and customized to
Edison. The article notes that some systems are involved in emergency
response, which would make the system a lot harder to maintain due to the more
stringent requirements.

To put it differently, think of a system that routes phone calls. Twilio and
Plivo are great examples of such systems and are very reasonably priced. BUT
you cannot route 911 calls through them[1] because they do not offer E911
support out of the box. Doing so would expose them to liability should their
systems fail. Your home landline is required to have this and you pay quite a
bit more. (Though if you ask me, WAY too much for what it really is.)

Bottom line, critical/emergency systems cost more to run and maintain, with
people bearing the responsibility costing more.

[1][https://www.twilio.com/help/faq/voice/what-kind-of-phone-
cal...](https://www.twilio.com/help/faq/voice/what-kind-of-phone-calls-cant-
be-made-using-twili)

------
rhino369
The problem with H1-B is that it is temporary in nature and the person gets
booted from the country if fired. That depresses wages and is also
fundamentally unfair to the immigrant.

H1-Bs should be converted into greencards after 3 years.

Also, anyone graduating from an America college should get a greencard.

~~~
HarryHirsch
_Also, anyone graduating from an America college should get a greencard._

No, please, no. We know where that will lead. The so-called "Masters Cap"
exists, that's another 20K H1B visa on top of the 65K quota for those
graduating with a Masters degree from an American institution. Who could have
guessed that that would lead to a cancer of taught masters degrees?

These degrees are cheap to put on (just define a few advanced undergrad
classes as required for the Masters degree) and come at no extra cost for the
university (the class needs to be taught anyway). Boof, it's free money and a
guaranteed stream of desperate foreigners. These "let-me-stay-in-the-US
courses" need to be killed dead, they aren't even education.

Meanwhile any foreigner with an actual degree still gets to jump through
extraordinary hoops for the green card.

------
jqm
I believe having a large technically competent domestic work force is of
strategic importance to any modern country. If jobs are outsourced to
temporary residents, (especially as wage deflation and reverse discrimination
starts occurring), less natives choose to enter the fields or otherwise obtain
these skills.

They still give the sugar cane industry in Florida large subsidies (even
though most sugar is from beets now) because sugar is apparently of such
strategic importance to the US. Is one specific kind of sugar of more or less
importance than a mass of domestic technical ability?

I'm waiting for the day in which societies realize that the importation of low
cost labor produces short term benefits... and then much larger problems which
last for a very long time.

(Edit) The problem (mostly) goes away if immigrants come to be permanent
residents and have a stake in the system. I'm very much in favor of
immigration/citizenship to the US of talented individuals. Nor are my points
on strategic importance a long winded way of saying "they took er jurbs!".

~~~
dogma1138
I some how doubt that people who go to MIT do it to get a six figure job after
they graduate. There are plenty of much "easier" ways of getting paid six
figures, heck there are plenty of "blue collar" jobs in certain fields which
some are even related to engineering (and 40 years ago would had engineers
filling those positions) which American's seem to not want to even touch.

My GF's dad teach meteorology and welding in Iceland (In Europe and Asia
you'll still find that in a Uni), half of his students end up working these
days in the states for companies like Caterpillar and the bigger ship yards,
their starting salaries are between 80 and 120K and they are crying each year
and trying to lobby for grants to get US students into these fields. Oil,
Mining, and large scale construction and manufacturing which once were fields
dominated by US companies are dying to staff various technical and engineering
positions however with the current theme in US higher education they can only
get workers these days from E. Europe, Russia and China for the most part.

Pushing some graduates out of software engineering and similar studies might
actually be good for the US economy in the long run.

However doing it trough migrant visa's which take in people who are paid near
to nothing and can't negotiate better terms since dismissal is equivalent to
deportation is really not the way to go.

------
sologoub
While the article isn't the best written piece I have ready, it as enough
facts for me to be outraged as the customer. The rates Edison charges aren't
exactly super high to begin with, so me as a consumer saving a few cents here
and there isn't going to move the needle.

I would much rather see a company that enjoys monopolistic protection from the
government be barred from pulling such stunts. Edison can be viewed as a quasi
government entity and absolutely benefits from their monopolistic position. In
return, their duty should be to watch out for the greater good of the
community that funds it, including employment for individuals from those
communities.

If they were subjected to true open market competition, my opinion of this
would be vastly different... but they are not.

------
swatow
I agree that it's a loophole, although if it was closed, exactly the same
number of jobs would be "lost", because there is a cap. The only difference is
that different people would get the H-1B's, which would be good for other
reasons.

There is an even bigger loophole in immigration law, which is that the
government turns a blind eye to illegal immigration from Mexico. However
saying so is considered "racist" since anti-racism is constructed to forbid
comments about certain groups, and allow them about others.

~~~
falsestprophet
It surprises me that liberals generally come down on the side unlimited
illegal immigration when the people harmed most are marginalized poor workers
who are overwhelmingly disadvantaged minorities themselves (lawful black and
Hispanic residents).

Ironically, driving down the cost of labor is great for rich people who are
generally conservative and oppose illegal immigration.

~~~
swatow
It's useful to decouple social liberalism, i.e. that belief that there is no
such thing as White culture, and there is no (cultural) harm from large
numbers of immigrants from Mexico, from economic liberalism, i.e. the belief
that classical economics doesn't adequately describe the economy.

When you separate these things, it is consistent for an orthodox economist to
promote more immigration from Mexico (not sure how a person could ever
advocate for illegal immigration) while being a social liberal. In classical
economics, immigrations is (1) good for the immigrant (2) bad for the local
workers they are competing with and (3) good for the employers. According to
classical economics, the net benefit is positive, and so (with appropriate
taxation policy) the overall result is good for the nation.

Personally I am orthodox when it comes to economics. The only thing I don't
understand is that the liberals apply orthodox economic arguments when it
comes to Mexican immigrants, but refuse to apply these same arguments when it
comes to H-1B visas.

To me it is clear that their real agenda is to promote non-White immigration,
but to keep sentiment against Indian and Chinese immigrants as a safe way to
express "racist" thoughts.

------
xxxyy
And here we go again with H1Bs. Let me spare the discussion and give a
numbered list of options to stick with - I propose everyone just writes his
number in his comment.

1) H1Bs are both good and evil. We need reform.

2) US Government sucks. I'm skilled and cannot enter this country. Increase
the quota.

3) Immigrants hurt local labor so much I can't stand it. Just throw them out.

------
jes
I stumble a bit over the concept of American jobs. The jobs belong to the
people who are offering them, don't they?

~~~
freehunter
American jobs = jobs in America. Jobs that can be offered to anyone approved
by the American government to live and work in the country.

Theoretically you could hire anyone. You just couldn't expect them to show up
to the office unless the government lets them into the country. If the company
doesn't like this, they can let the person work in their own country instead
of coming to America, but then that's not an American job anymore.

Does that clear things up?

~~~
jes
That adds clarity, thank you.

------
beeps
Immigration laws and national borders aside, this is how an economy works.
'Price' performs an economic function of major significance by distributing
resources according to demand.

------
abort
It is unfortunate whenever I see that anger being directed at the indian
worker who is just trying to make a living by working his ass off at a
fraction of the pay on contract. The Congress isn't closing loop holes, the
companies exploiting this are companies where most of the top management are
americans and finally the indian outsourcing companies giving kickbacks to get
the big contracts and paying only a tiny fraction of that.

------
chrismcb
What is the actual loophole, the article doesn't spell it out (or I missed it)
it seems that if a company is laying off an employee and then replacing the
employee with an h1b employee, then the company has broken the law. I don't
see the loophole that is being exploited.

------
mc32
A couple of thoughts on this. What's the difference between allowing h1bs and
allowing people over the fence along the border? Illegal entry into the
country, even if we all for amnesty, puts a dent on the income potential of
citizens and immigrants at the lower income levels, who legally enter
society... But for the most part, society recognizes the plight of low class
immigrants and work to have them legitimized, however, when immigration
threatens people in the middle class, they resist.

What I'm pointing out is that middle class American citizens are quite in
favor of allowing immigration, doing as it does not affect them negatively,
economically speaking, once it does, the middle class retrenches. I think this
explains why poor American citizens tend to oppose amnesty programs while the
middle class typically support it. Typical, I support causes, so long as it
does not affect me negatively.

~~~
mjmahone17
The issue is the nature of the h1b: if you lose your job, you're immediately
kicked out. This gives employers much more leverage over their employees,
allowing them to suppress wages. It's the nature of the h1b, which doesn't
encourage people to invest in and make roots in the country they emigrate to,
the problem. On the other hand, there's very little evidence that there's a
"fixed" number of jobs in the country: allowing more people in likely causes
more opportunities, especially if they have children, buy a house, etc.

There are a few possible solutions to this, such as:

\- Make it so once you have an h1b, you have the right to stay in the US for
at least 1 year, whether your job is terminated, and make it easy for another
employer to take over your h1b. This gives immigrants leverage over a bad
employer, in the form of being able to go somewhere that will pay them more.

\- Make h1bs go to the highest bidders: each company says what salary they're
going to give the h1b holder, and those companies paying the most get the
visas.

~~~
mc32
Illegal immigrants can also be deported and have this hanging around their
neck throughout their stay. So I don't think it's that.

I think the middle class and upper classes say they believe in principles,
except when believing those principles will affect their way of life.

For example, in SF, kids from areas with historically low scholastic
performance are bused into schools with better performance, the hope is that
aptitude will 'rub off'. Upper class SFers, are for this, it's socially
responsible, but they put their own kids in private schools --the middle class
immigrants I speak to, wish they could send their children to schools in their
neighborhood, rather than ending up in a random school where performance is
suspect.

------
beeps
Immigration laws and national borders aside, this is how an economy works.
'Price' performs an economic function of major significance by distributing
resources according to demand (as long as they're not artifically controlled).

------
dennisgorelik
The article implies that american workers deserve better pay than foreigners
and even deserve legal protection that would put discriminate foreigners in
order to give american workers their jobs back.

There is something deeply wrong with that attitude.

~~~
chrismcb
I don't think there was any implication that the American worker deserves
more, or that the foreigner deserves less. Just that is what the rates are.
And yes, you can't invite a foreign worker into America to displace an
American. Most countries have that rule, what is wrong with attitude of a
country trying to protect its citizens?

~~~
dennisgorelik
1) The title itself claims "costing thousands of American jobs" assuming that
Americans somehow deserve these jobs over foreigners.

2) Even if most countries discriminate foreign workers, that does not make it
right.

3) Discrimination (if it is not based on skills) is making economy less
efficient.

