

H-1B visa use cuts U.S. programmer, software engineer wages by up to 6% - Harkins
http://www.computerworld.com/action/article.do?command=printArticleBasic&taxonomyName=Careers&articleId=9131729&taxonomyId=10

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zzzmarcus
There are a few major problems with this article.

First, the authors say: "In this paper, we simply sought to dispel the myth
that globalization generates no losers." In my experience, If you start out
seeking to confirm your biases, you generally will.

Second, all their evidence is correlation not causation. I'm sure the
correlations are strong, but there is no way to prove that H-1B workers
actually caused wages to go down. There are too many external factors.

Finally, unless there is some relation shown between the companies'
profitability and the wages they're paying, you can't rule out the possibility
that the less expensive H-1B workers and lower wages for American workers
didn't actually save the American worker's jobs by keeping costs down and
their employers in business. Lower wages and more H-1B workers could just mean
that the company is doing what it has to do to stay afloat. Less pay is better
than no job at all. That's just one of many possible scenarios.

The paper isn't out yet, but as of now, their argument seems pretty weak.

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iigs
I don't want to speak for anyone else, but I'll take the 6% pay cut over more
entire projects being outsourced overseas.

I have no desire to see San Francisco become the next Detroit.

~~~
tptacek
Yeah? How about a 30% cut, all your benefits, and a clause in your employment
contract where you lose your apartment (wherever it may be) when you quit?

That 6% number --- which is misleading on its face --- also ignores the fact
that many H1Bs are FTEs for body shop firms that lease them to big companies.

~~~
andylei
In other news, the invention of the automobile cuts horse and buggy driver's
wages by 100%. Ban automobiles!

~~~
tptacek
What a fatuous comment. Automobiles didn't themselves lock foreign workers
into abusive contracts. H1-B worker visas aren't an evolution of the market;
visa and foreign labor terms and conditions are as old as foreign relations.

~~~
andylei
that's a reason why abusive contracts are bad, not a reason why allowing
foreign workers into the united states is bad.

we should allow more foreign workers into the united states for the same
reason we should let automobiles overtake horse and buggy - it's more
efficient.

~~~
tptacek
You're arguing with a straw man. Nobody is arguing that foreign workers
shouldn't be allowed into the country.

It's a market inefficiency for companies to be allowed to "capture" employees
and artificially suppress their wages by keeping them off the open employment
market under threat of deportation.

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briansmith
Even if the H1-B visa program did have some negative result on the average
programmers' income, it doesn't affect any of us. The average programmers'
income is only relevant to the mediocre among us. Just be the best so you
don't have to worry about averages.

I don't care where my competitors were born; I want to get job offers and win
contracts based on my merits, not based on my mother's geography. If there's a
guy in Thailand or India that is better for a position than I am, then he
deserves the job and I want him to have it.

Literally everybody I know that has a H1-B visa is making this country better.
If I had to make a prioritized list of people to throw out of the country,
most of the people on the list would be American citizens. If I got to choose
10 things to change about this country to increase my net income, the H1-B
visa program wouldn't even be a consideration--it doesn't make sense to
complain about an speculation of a 6% cut due to the H1-B program when the
government is taking 6% (sales tax) + 6% (state income tax) + 40% (federal
income tax) + 2% (property tax) and when we are paying a huge percentage of
our income to insurers who turn around and rip us off when we make claims.

~~~
ericb
>> The average programmers' income is only relevant to the mediocre among us.
Just be the best so you don't have to worry about averages.

I hear Lake Wobegon is nice this time of year.

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wallflower
If you really want to know salaries, take a look at the H1-b job databases
(they are required to report salaries for specific job titles). I don't look
because I don't want to know (plausible deniability). I'm warning you - you
don't want to know what some people earn (when I looked X years ago, my eyes
almost burned out)

~~~
kirubakaran
In case you do want to know...

<http://www.flcdatacenter.com/CaseH1B.aspx>

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jacoblyles
If you really want to increase software engineer wages, put a legal cap on the
number of CS degrees that can be handed out every year, like med school! I
can't say what this will do for the health of the US software industry, but
I'm sure it will drive wages up.

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aditya
Would be nice to see the actual paper, and understand how they went from
correlating resume's from "a leading online job search site" to employers and
the wages they pay their H1-B employees.

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mblakele
<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1380343>

Author home pages: <http://opim.wharton.upenn.edu/~lhitt/>
<http://pages.stern.nyu.edu/~ptambe/Site/Prasanna_Tambe.html>

~~~
aditya
Right. No download link anywhere. Just abstracts and citations. Seems
suspicious now...

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kqr2
Professor Norm Matloff of UC Davis has always been a staunch critic of the
H-1B visa:

<http://heather.cs.ucdavis.edu/h1bwritings.html>

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CWuestefeld
I'm assuming that someone wants us to draw the conclusion that this is a bad
thing.

But I don't see why our salaries should be kept at a high level, at the
expense of both employers (and thus businesses and consumers) and other
humans.

Also, it seems to ignore the demographic problems that society is starting to
see. Without a broader base of employed people, we can't keep paying retired
people their Social Security and Medicare. An influx of employment-age people
is necessary to keep these systems afloat. So in the long run, having these
Visa workers will help ensure that I get out of those systems at least some of
what I'm putting in.

~~~
btwelch
Interesting point. But, I would guess the resulting wage deflation of opening
up our markets completely (increasing labor supply) would outpace the
deflation of medical expenses, and I doubt the latter would ever catch up
completely. Therefore, those expensive government programs would have to be
funded with much less tax revenue due to lower wages. I don't think that would
fix the problem at all.

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obvioustroll
Is that such a bad thing? The larger the pay differential, the more likely the
jobs will be sent overseas.

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noss
Isn't this the site where entrepreneurs go, those people that compete on being
better. Not the site where salary-slaves go to whine about having to defend
their salaries?

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hamidp
It's simple supply and demand. H-1B increases the supply of programmers, which
means that the price (wages) paid to them will decrease.

As for the whole "dispels the myth that globalization generates no losers,"
thing -- that's not really how globalization works. Labor and capital
mobility, along with low impediments to trade allows for specialization, which
may hurt specific industries like manufacturing in the developed world but
helps others like services.

The extra programmers that were hired because they were 6% cheaper brought a
lot into the US economy, and they brought a lot more to their home countries
in forms of remittances. For some of these developing countries remittances
are 25%+ of GDP, meaning that they are completely dependent upon them.

And of course, there is no discussion of methodology nor data.

~~~
potatolicious
Not that simple. The fact of the matter is that the H-1B is linked to only a
single company and cannot be transferred, meaning that any foreigner wanting a
legitimate shot at citizenship _cannot_ afford to leave their job for up to a
decade or more (until green card).

IMHO _that_ is why the wages are lower - would you give your employee a raise
if you knew that he had absolutely no way to quit your lousy job for something
better?

~~~
kirubakaran
_"The fact of the matter is that the H-1B is linked to only a single company
and cannot be transferred"_

Incorrect. You can transfer your H1-B quite easily. However you can't transfer
an L1-B (intra-company transfer from a foreign country). But even in that
case, you can apply for an H1-B while you are in US and then change jobs once
you have received your H1-B.

Also, all the H1-B holders I know get very good salary - often higher than
'the market'. When you leave your home, get a visa and come to work half-a-
world away, you are not going to dick around. You are going to do everything
you can to maximize what you came here for.

~~~
geebee
H1Bs live in two parallel universes. People in one never meet the people in
the other.

The H1Bs who work at Google probably get paid a pretty decent wage (though
even then, the restrictions on how and where they can work, as well as the
difficult in changing professions, probably does still drag down wages
_relative_ to what they would earn if they were totally free agents).

The H1Bs at the body shops are often paid miserable wages, and these visas are
used without question to fire Americans and replace them with foreign
nationals. Keep in mind that 7 of the top 10 users of the H1B visa are
actually Indian Outsourcing companies.

Here's a link to the story about the usage of H1B (the link is msnbc, but the
original story was on businessweek) <http://www.msnbc.msn.com/id/17048048/>

Here's a link to an NPR segment

[http://www.npr.org/templates/story/story.php?storyId=1424156...](http://www.npr.org/templates/story/story.php?storyId=14241565)

According to Ron Hira (from the NPR) link:

"infosys was certified by the department of labor meeting the prevailing wage
requirement to bring 100 computer programmers in at $9.15 an hour. HCL America
got 75 programmers at $24,000 a year."

The real debate is how prevalent the two camps are - Microsoft and Google
insist that the H1Bs are exceptional engineers who couldn't be found "at any
price" in the US, and who create huge amounts of wealth. They would tend to
claim that the abuses are minor, the kind of thing that happens in any complex
system.

Opponents, on the other hand, tend to say that the abuses are widespread, and
that very talented engineers are a small minority of the H1B workers.

For the record - I believe that talented engineers from overseas are
exceptionally valuable to the US and should be allowed in without all the
indentured crap. However, I believe that recent evidence demonstrates that the
abuses are extremely widespread, and that the H1B has greatly reduced the
appeal of engineering careers at a time when the US desperately needs to
ensure a steady supply from within its own population.

~~~
CWuestefeld
My first real job (I'm a native-born US citizen) was in such a body shop.
_Everybody_ there got paid chicken feed.

In fact, the INS would check that the green card applicants were getting paid
market wages. When an employee reached that point in the process, his salary
was actually increased as appropriate. But for those of us that had no such
immigration issues, we never got such an upward adjustment.

(Things may have changed since then. That was the early '90s, the time of a
big downturn in the industry)

I got paid a little extra to do technical interviews for this purpose. A green
card applicant had to prove that there were no available US citizens that
could do the job, so we'd run an ad in the Times, soliciting applicants for
that job. I would then give them technical interviews so difficult that they
couldn't pass, thus proving that our employee was the only one qualified.

