This is actually a fantastic experiment to evaluate whether people are employed on H1-Bs because of a shortage which can't be met locally, or because indentured workers are cheaper. Ideally there would be another cohort, allocated randomly, where the employee is not tied to any one employer, like a temporary green card.
It is fallacious to say that with decreased supply, demand will dictate wages will go up. It is quite possible that demand is elastic at a particular price point, but at higher prices demand falls to zero (aka set up an office in Canada). There is no reason to assume linearity in any of this.
What's missing is that, even with the potential for high wages after graduation, it is still a big risk for an individual to borrow for a college education. These employers should be taxed, perhaps 10% of their H1-B expenditure, with that tax subsidising education in that field.
> The reality is that some H-1B workers such as an IT analyst would need a starting salary of $208,000 to be eligible – a massive jump over the previous requirement.
> An entry-level programmer would need to make $111,946 instead of the previous $78,125.
I was planning on going down to the states (I'm living in BC Canada), the salaries down there are more than 2x what you can get here. It doesn't look like I'll be able to do that now. With this said, this move by your current administration makes a lot of sense to me, there is an opportunity to grow the American middle class around knowledge work. The United States has the best training institutions and capital structures in the world. They have a healthy demographic profile (they are maintaining their population), there is no reason for them to spoil their own job market with injections of foreign labour. I see no reason for them not to train and hire their own citizens.
One is that foreign labor allows lower wages which can make american companies more competitive over foreign ones.
Second, allowing foreign workers encourages jobs to stay here in the US where at least the wages will be taxed and a large portion of those salaries will be spent here in the U.S., thus further stimulating the economy. Alternatively,if those same jobs move overseas, we see none of the tax revenue and none of it being spent here.
We did the first experiment. I want to do this one too. We can’t just do one experiment and warn of other experiments.
If we get a bigger home grown tech sector, then experiment two
wins.
Let’s get those Java oracle enterprise bootcamps going, I think we have enough need right here in America to fill those jobs. Plenty of Classic Lit majors ready to switch up.
Oh, and for who pays the most taxes and contributes the most to the American economy, I just googled it, it turns out it’s Americans. So ya, let’s get them into these jobs.
We can import the finest Java people to teach the bootcamps if necessary.
Are you somehow going to outlaw outsourcing? Because I think it is likely that everyone is going to just outsource the coding (at least in many cases) rather than wait for all those classic lit majors to get trained up.
Basically the administration turned the tables on Big Tech. They primarily import H1Bs to dilute the employment pool to let the market take care of wage depression. There is plenty of tech talent pipeline inside the country. Just look at the eager undergrads looking for employment and other US citizens looking to step into tech field via boot camps. Increasing the threshold for the wages to paid for “specialty occupation for which several attempts have been made to hire US Citizens” aka H1B makes the test true to the spirit of the law.
> Basically the administration turned the tables on Big Tech. They primarily import H1Bs to dilute the employment pool to let the market take care of wage depression.
> Not really, Big Tech pays H1Bs competitive salaries
That doesn't challenge the argument. Wages are set by supply and demand, expand the supply and wages fall. It doesn't matter if H1B wages are similar to a U.S. residents; wages as a whole are depressed.
As a personal example, the entry level of my field is almost completely composed of freshly graduated H1B Visa holders. The market rate is dictated by whatever their wages are, which actually isn't too far below the $200K headline number.
If anything, this change will reduce big tech wages because they don't have to compete against the bodyshops in the H1B lottery. The people the bodyshops were bringing in weren't going to get hired by the big tech companies anyway.
On the other hand, the H1Bs working at big tech with higher salaries are more likely to later start another company, which will increase demand for top tier engineers, but this effect will take longer to materialize.
Does it though? Prior discussions on this made me aware that H1B is mostly not profitable for the consulting firms. It’s the offshore work where they can severely underpay. So long as a US company can get offshore workers via the consulting firms (their preferred business model), all is well.
But ya, we don’t need to import someone doing JavaScript over to America anymore (which, believe it or not, is what I’ve witnessed). There’s no rhyme or reason to it, we have a solid home grown talent pool for that.
A lot of full stack web dev work can be saturated by Americans because there’s enough people crossing industries to take it on.
I’ll let the other types of developers chime in on what kind of shortage they are seeing, because I see zero in web development. It’s nothing personal to my immigrant friends, but believe it or not our industry is pretty crowded at the moment to justify opening up to foreign workers. We can easily drive prices down amongst ourselves at the rate we’re going at.
I support this policy through and through, and I’m a Democrat.
> But ya, we don’t need to import someone doing JavaScript over to America anymore (which, believe it or not, is what I’ve witnessed). There’s no rhyme or reason to it, we have a solid home grown talent pool for that.
Being able to program language X isn't really the marketable skillset at the high level. You don't hire good javascript programmers. You hire good programmers
You know other countries also have multi million dollar companies too. At scale, I don’t ever see them importing American talent because ‘no one else can do it in our country’. It’s just pure bullshit, there’s 300+ million people across a lot of these countries. At scale, the talent is there, in every country.
Unfortunately I think there are a lot of people who know the technology to some limited degree to do some tasks, but indeed cannot really program. They do testing or something, running scripts and needing a lot of supervision.
Adding additional context from the article. It primarily impacts Indian outsourcing companies registered as US companies such as Infosys, Cognizant, TCS, HCL, Tech Mahindra, Wipro etc. These companies have been gaming the system and making billions by underpaying their imported staff.
> An analysis [PDF] of the new rules by non-partisan National Foundation for American Policy noted that the H-1B wage minimums will require foreigners to be paid much more than American citizens on market rates. That's not a problem for the likes of Facebook and Apple, though it will be disastrous for organizations like Infosys, that import immigrant workers, as well as small and medium-sized businesses.
Is there data or research to suggest H1B actively dilutes the talent pool? There’s no doubt the system is abused — not too long ago, I was at an oil and gas company who contracted out to a company that brought in H1Bs. Many of the guys spoke zero English and couldn’t write code at all. Yes - that kind of indefensible abusive. But how rampant is this stuff?
Since h1b is a lottery system, these companies flooding the system with their applicants at lower salaries was directly impacting the chances of employees at other companies. I anecdotally knew a coworker at a FAANG who failed to get his h1b consecutively for two years in a row, with his OPT expiring the next. Looking at the data from the latest year though, it seemed as if they had already started addressing the problem.
You are mixing that up with the Greencard, which is a lottery system. H1B must not be a lottery system, and it must not be a way to offload expensive domestic labor to cheap imported labor. Which the well-known Indian H1B cheating companies did. The minimal wage is mandatory to exclude those abusers of the H1B system, so they it is not overloaded anymore. But 200k is definitely too high for the rest of the US, which needs highly qualified workers also. It should be dependent on the region.
There is lottery for the Diversity Visa program, but that is not the only path to permanent residency and there is no cap on the number of applications for permanent residency.
The H1-B has always used a lottery when there are more applications than visas. There is a cap on both visas granted and applications. There are three caps: Regular, C/S (treaty obligations with Chile and Singapore), and US Master's (US master's degrees or higher). The USCIS will publish a memo when enough applications are received, closing the application season (normally six months) until next year.
Applicants with a US master's degree (or higher) have two chances to receive an H1-B visa. A lottery is held to award the visas available to master's degree holders, and those not selected are entered in the regular lottery.
I don’t doubt that H1Bs drive wages down, but I disagree anything different is surprising or that it’s easily explained by “basic economics”. If H1Bs are being awarded to a handful of exploitative firms, then it makes sense that wages face a downward pressure. On the other hand, if H1Bs are being awarded to truly exceptional workers, then that’s a brain drain for their home country and a benefit for the host country. In the latter case, if the H1B applicant is the right employee for a job since a local candidate doesn’t meet or exceed the bar, then there isn’t much of an increase in the labor pool to drive down wages.
It is not so simple. We do not act in a world with perfect information to predict the supply and demand curve. There are only 65,000 H1B in a year of which 20,000 are prioritized for people with a masters degree in US. Given the economy of size of US and the kind of roles being filled by H1B, it is doubtful that they have any meaningful impact on wages. There are bad actors who take advantage of H1B to get people to work for lower pay, but that lower pay is not at minimum wages.
It has just become a talking point to take a few instances and beat a dead horse. The big stink from the Disney instance that employees were asked to train their replacement. It is a insensitive move by Disney and the contractors and they deserve to be called out. But if a job requires minimal skill and there are substitutes available, isn't it just what capitalism is all about?
I do not see the same talk about H2 (agricultural workers) coming in to work in US and people arguing that they are making the farm wages depressed. How about TN1? At the end of the day, it is the kind of job that defines the value and pay for the job, not the visa.
Just to note, outsourcing does play a big role in bringing a substitute product and hence making jobs redundant, but that is a different argument.
> do not see the same talk about H2 (agricultural workers) coming in to work in US and people arguing that they are making the farm wages depressed.
That’s just because people affected by that policy are not able (or educated enough) to make their argument in any forum you might be reading, and have long resigned to the idea that they are shit jobs anyway so might as well leave them to the poorest of the Earth — particularly when it means everyone benefits from low food prices.
The same happens in the UK (and other wealthy European countries). Society as a whole has accepted that seasonal rural work should be left to a transient workforce from poorer areas in order to keep food prices down. Locals wouldn’t be bothered with those jobs without a significant wage increase, which would push prices up quite dramatically. Even in the context of an isolationist and xenophobic wave, it was always assumed the UK agri sector would be exempted by migration restrictions - and effectively it has been. In many ways, it’s a more honest and frank argument than in other sectors, in its brutality.
I’m a migrant myself but I’ve long come to the conclusion that we should be a bit more honest in this particular debate. Yes, we do keep salaries down, which increases profitability and competitiveness for companies, keeping the supply-side of the economy well-lubricated in the age of global competition. This is largely necessary, unless you want to stagnate like early-00s Japan. It just has to be compensated with higher corporate taxes and more quality services / low prices for everyone, to keep society fair.
There's belief that lack of demand from locals is prejudice, when imported workforce is a system and established business processes, one can't really go and change this system.
Please forgive me for my lacking knowledge of the US immigration system, but does this mean that folks on H-1B currently waiting for a green card must withdraw their applications the next time their H-1B expires unless their salaries are greater than this threshold? Are there any publicly available numbers on how much of the insane GC backlog (greater than a 100 years for Indian nationals) this might affect?
[Not a lawyer, but a former H1-B and Green Card holder]
1) Under current law, that seems unlikely. The hurdles are mostly to get the first H1-B, renewal is practically automatic.
2) If Trump gets re-elected… well, you may have noticed that he, and some of his closest advisors on immigration, e.g. Stephen Miller, consider capriciousness in immigration policy setting a feature, rather than a bug, so who knows?
3) On the other hand, the US has a somewhat functional legal system, and legal immigrants, once admitted, enjoy the presumption to certain rights, so any action is likely to be tied up in legal proceedings for several years.
Actually, you need to invert that. Doctors, at least, make more in rural areas than they do in urban areas. The estimations vary, but they're in the 5-30% more than their urban counterparts range.
The average wage for internal medicine doctors in urban areas (as an aggregate) is still above $208,000. It's actually roughly right, imo, to prevent depressing doctors' wages. It's right around the average, so you're paying above average rates to get an H1B, which is the intended purpose of the program isn't it? The idea being that it drives up salaries for those jobs, encouraging more people to train to do them.
What’s terrible about it? Who needs to import world class talent other than world class companies, working on world class problems?
Let’s take the narrative for the full ride, the mythical unparalleled skilled developer that only exists in these other mystical countries and absolutely could never be found locally, even with remote work within the US being validated. The god-like programmer that must be flown here immediately, for how else will this software be built?
Pay the unicorns, unicorn prices. What’s the issue?
One demographic this policy seems to unintentionally trample is international students. There’s a pretty well-trod path of F1 Visa -> OPT -> (OPT STEM Extension) -> H1B -> (green card, if you’re from the right country). It’s a tall order to expect that all new grads from this path will be able to command such high salaries, and there’s an existing set of international students who have planned their lives on being able to get the H1B before OPT runs out.
In my opinion, we should encourage immigration through our higher-education system (and we have been doing so for decades). I generally agree that the loopholes allowing for below-market H1B roles should be closed, but I think that students/recent graduates should be treated differently. There’s a big difference between sourcing lower-wage foreign workers who don’t already have roots in the USA, and paying entry-level salaries to recent graduates who’ve been living in the US for years already.
Of course, some may take issue with the premise here, and might say that the F1 shouldn’t be issued with intent to immigrate. But I think that’s terrible policy; nearly all of my (uniformly brilliant, top-shelf) friends who came here on F1 had horrendous, soul-crushing experiences with work authorization, even though they provide tremendous value to companies and the country by being here.
> we should encourage immigration through our higher-education system (and we have been doing so for decades)
Having gone through the numbers just yesterday, I was very surprised. So, here's the correction for you. No, america does not encourage immigration through education and subsequent employment. Out of roughly 550k green cards per year, only around 15k are for educated immigrants coming through employment categories (eb1,2,3).
For comparison, there are around 50k diversity visas given in lotteries, and 8k investors visas given out to anyone willing to buy a green card.
Perhaps they should do a better job of taking ties into account somehow. But when there's a line a million people long, the rules need to be very clear and fair, else it's just up to the mood of the agent you end up dealing with that day.
And a problem with any path being a sure thing is that it turns into a route to buy residency. People will line up to hack it. There's a lot of low-tier colleges in the US. And are you including MS degrees? Apparently some can be done in a year, plus internships (CPT) which is yet more work visa.
What makes you think it's unintentional? In addition to depressing educated, skilled immigration, it has the desirable side-effect of depressing revenues for "lefty, liberal, coastal, elitist" universities, who admit those international students and charge them full non-resident tuition.
I am no fan of Trump but this is an interesting experiment. It seems like a last minute grab bag for votes and it would have been more interesting if it happened 2 years ago.
Seems like this would be a problem for smaller companies (not much cash) and startups (remuneration is stock based).
Large companies can absorb the cost if someone is that important. They can also just employ remotely and do an internal company transfer later (L-something visa).
I mean the big people it screws are those companies that abuse the system - the IT "consulting" companies, that are functionally a market undercutting scam.
Why should small companies get subsidized, below market rate programmers?
It’s already pretty expensive in legal fees to sponsor an h1b, so really small companies are already suffering due to big firms.
Software is an industry where size isn’t as important as other industries. A five dev company can do great things and as such can afford market salaries.
nope. But against all rationality big tech firms still seem to want people working locally, despite ample evidence from the last 9? months that it isn't necessary for most.
Pre-pandemic I would have said that if they were willing to off-shore, they would have already been doing it for those jobs. But the timing for this change is pretty bad because so many companies are learning to work remote anyway.
This is good atleast now Indians will stay in India and develop our country instead of going to the US and contributing to a country which is already ahead in everyway.
What makes you think the big tech companies didn't lobby for this? It conveniently kills many of the startups that can challenge big tech. It will continue no matter who's elected.
This law damages the American economy. Now companies will just have people work overseas for far cheaper and that money will leave the American economy.
It is fallacious to say that with decreased supply, demand will dictate wages will go up. It is quite possible that demand is elastic at a particular price point, but at higher prices demand falls to zero (aka set up an office in Canada). There is no reason to assume linearity in any of this.
What's missing is that, even with the potential for high wages after graduation, it is still a big risk for an individual to borrow for a college education. These employers should be taxed, perhaps 10% of their H1-B expenditure, with that tax subsidising education in that field.