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The H1-B immigration visa is a sticky issue. I of course support immigration and I have no problem with an immigration program targeting highly skilled workers, although I see no reason that they should have preference over the world’s tired and poor either. But when you have outsourcing companies working with Disney and other huge corporations to cut American jobs directly in order to import cheaper labor and then make the American labor train the new workers, well, that’s a huge huge problem.

Even after Leo Perrero was laid off a year ago from his technology job at Walt Disney World in Orlando, Fla. — and spent his final months there training a temporary immigrant from India to do his work — he still hoped to find a new position in the vast entertainment company.

But Mr. Perrero discovered that despite his high performance ratings, he and most of the other 250 tech workers Disney dismissed would not be rehired for at least a year, and probably never.

Now he and Dena Moore, another American laid off by Disney at that time, have filed lawsuits in federal court in Tampa, Fla., against Disney and two global consulting companies, HCL and Cognizant, which brought in foreign workers who replaced them. They claim the companies colluded to break the law by using temporary H-1B visas to bring in immigrant workers, knowing that Americans would be displaced.

“I don’t have to be angry or cause drama,” said Ms. Moore, 53, who had worked at Disney for 10 years. “But they are just doing things to save a buck, and it’s making Americans poor.”

Ms. Moore had also trained her replacement. After she was laid off, she applied for more than 150 other jobs at Disney. She did not get one.

Responding to the frustration of American workers, Congress in December renewed and increased a fee on outsourcing companies that it had allowed to lapse. Larger companies employing many H-1B workers in the United States will pay an extra fee of $4,000 for each new H-1B visa — up from $2,000 — and another $4,000 to move an H-1B immigrant who is already in the country to a new employer.

Senator Bill Nelson of Florida, a Democrat who has been openly critical of Disney’s layoffs, offered a bill to reduce the H-1B quota by 15,000 visas a year to 70,000. The issue came up in the presidential race, as Senator Ted Cruz of Texas, a Republican candidate, introduced a bill with Senator Jeff Sessions of Alabama, a Republican hard-liner on immigration, to sharply increase the minimum wage for H-1B workers to $110,000 a year, to discourage outsourcing companies from using the workers to lower wages.

Cruz and Sessions are terrible people. Racism may well be their motive. And $110,000 is too much for an H1-B minimum wage. However, there does need to be curbs on bringing in individual workers with the direct intent of laying off specific American workers. It’s simply inhuman to force people to train their own replacements. The H1-B program helps build a diverse and successful America. In principle, I support it. But between the gaming of the system by big outsourcing corporations and the widespread use of it not to find needed workers but as another way to get a nice quarterly profit report by Disney and other companies, reforms are indeed needed. Well-trained workers from India do have a place in the United States. But this is a bridge too far.

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  • Hogan

    How is it a layoff if there’s someone else doing the same job?

    • Murc

      Yeah, this. A company that is having a worker training their H1-B replacement is openly in violation of the law, is it not? Because there’s an American willing to do the job, and there’s an American capable of doing the job, the proof of which is that the company trusts him to train the H1-B holder.

      • CrunchyFrog

        IANAL, but I’ve been through a lot of managing within the law training, and some of it back when I lived in California. A layoff, a.k.a. “RIF”, says that positions are being eliminated. A layoff is a lot less difficult to process than actually firing someone – even in an “at will” employment state – because when you fire and replace someone you have to have cause for termination. Sometimes this is easy (person is late to work a lot, etc.), but when you want to get rid of an entire group of employees and hire cheaper replacements *at the same location* you can’t just play the layoff card without risk of losing a big lawsuit.

        Now, employment law is fluid due to court rulings and occasional tweaks to the law itself, and the trend is in favor of the employers, so maybe Disney’s position here is stronger than it sounds reading the article. But perhaps the most plausible scenario is that they calculated that of the employees laid off only X% will file lawsuits and those will cost $YYY to negotiate and settle, and that’s still cheaper in the long run for Disney.

        However, I really would love to see a review of their H1-B applications as I can’t imagine they would stand up to any scrutiny. Part of the H1-B process is that you have to advertise the job and then document that no domestic qualified candidates applied. (This is why many of the jobs advertised on company web sites aren’t real – they are for H1-B renewals and the like.) There is no way that in retrospect they could argue those jobs had no domestic qualified candidates when they were about to layoff 250 such people.

      • Derelict

        Hence the other two companies involved here: HCL and Cognizant. I’m sure both of those companies advertised for Americans to fill the positions: “WANTED: Experienced SAP programmer. Minimum 10 years experience required. Salary: $12,000/year. No benefits.”

        Obviously, such an ad would draw few if any applicants. And that is “proof” that there are no Americans willing to take the job, thus justifying the need for a fleet of H1-B visa imports.

        Disney’s role is simply to contract out the SAP programming part of its operation. Thus, Disney can demand its current SAP programming staff train their replacements since their jobs have been outsourced to HCL or Cognizant. All perfectly in accord with the law!

        • NYD3030

          How about, ‘Must have eight years experience windows 10 admin.’ Saw that one recently…

          • Captain Oblivious

            HR department FAIL!

            Of course, 8 years experience in adminning any version of Windows is ridiculous. That’s a job any reasonably intelligent person should be able to learn in a couple days by reading Windows for Utter Dumbshits.

            • mikeSchilling

              Or to say it another way, it’s more or less impossible to administer Windows machines well, but it doesn’t take all that long to figure that out.

  • wjts

    I’m genuinely a little surprised to see you argue that a minimum wage is too high.

    • $110,000 is a lot of money. Mostly, I just don’t want to see the program shut off entirely unless necessary, which is what this would do.

      • GoDeep

        I never thought I’d hear you argue that a minimum wage was too high. If anything $110,000 is too low. In a country of over 300 million people there is no job we can’t find an American to do. That’s bollox. But it is probably true that you can’t always find an American to do the job at the wage you want to pay him. And that’s the point of the h1b. I say raise the minimum to $250,000. Then they can outsource some executive vice presidents.

        • Captain Oblivious

          This. If someone’s special knowledge/skill set is so special that nobody in the US can do the job or be trained to do it, then this SUPERGENIUS is worth at least $250,000. Plus $50,000 for the visa app. If this person isn’t worth it, then your case for just absolutely having to have this SUPERGENIUS is pretty weak tea.

          I’m not against immigration per se, but the H1-B program is not an immigration program. It’s an employment program.

          • Ronan

            Well one of Dean bakers arguments, iirc, is that “low wage” high skilled immigration (ie doctors) would lessen inequality by helping to drive down inflated high wages, and cut healthcare costs. This was a good thing, in his opinion, and by my recollection

            • Ronan

              “Since I recently poked at my friend, Dean Baker, let me agree with him strongly on a recent post of his dealing with an important issue widely ignored, the need to relax our strict immigration rules for physicians. It is widely agreed that the major threat to future US fiscal solvency is the rising cost of medical care. US physicians are paid on average $250,000 per year, more than twice what European ones are, and simply higher than any others in the world. If salaries were to fall to European levels, we would save $100 billion per year in medical costs. However, neither political party is pushing this, and it is rarely discussed among the many ideas that get put forward regarding controlling medical care costs. Almost certainly this reflects the power of the AMA with both political parties.

              A sign of this ignoring is a recent NY Times article on STEM immigration that Dean links to. He very reasonably points out how there is no mention of the physician issue, and indeed the US has a shortage of physicians, particularly of primary care ones. He has also long complained about high income professionals such as doctors and lawyers being for free trade, but imposing immigration restrictions on potential competitors for themselves.”

              • postpartisandepression

                The reason Doctors in other countries make less than their counterparts here is 1) the AMA which limits the number of physicians that are produced each year precisely to keep those wages high ( exactly the opposite of the goal of the H1b program) and 2) in no other country is a doctor a graduate degree- it is an undergraduate degree.

                Having it be a graduate degree in the US does not necessarily give us better doctors but it encourages them NOT to become GP’s or pediatricians which is what we need more of. Changing medicine to an undergraduate perhaps 6 year degree that incorporates your internships and removing the control from the AMA would solve the shortage in the US without stealing physicians from poor countries around the world. That would be fairer for both american workers and the those poor countries that need those physicians that they have spent all that money to train.

                Mr Loomis why should there be a program that specifically is targeted to make the US more diverse? Do Germany or China or France or Russia or Nigeria specifically create programs to make their populations more diverse? Humans are tribal if there were no races we would find some other characteristic to discriminate against ie straight hair vs curly hair ;sunni arabs vs shia arabs and ideally we work toward that but creating an H1b program for the purpose of bringing in more arabs or chinese or Indians into the US is not in and of itself a good. And if that is the purpose of the program then it should be eliminated until there is no unemployment or hunger in the US and everyone, college grad or not has the fulfilling job that they want.

            • Lee Rudolph

              lessen inequality by helping to drive down inflated high wages

              The worst inequalities (by far) are enjoyed by those (the 0.01%) whose wealth doesn’t come from “wages” in any sense. And I’m fairly sure that the next worse are enjoyed by, e.g., upper-upper-executives (and others in the 0.1%) whose positions are not going to be filled by “high skilled immigration”.

              ETA: My comment is not meant to apply (particularly) to medicine; just to “inequality” generally.

              • Ronan

                That’s true. He might not have made an inequality type argument. My recollection was possibly faulty. It seemed to be more connected to health care cost cutting

                • alex284

                  Yeah, baker makes this argument every other day. It’s always about health care costs, with some “of course rich doctors think that free trade should only apply to the lower classes” thrown in there but that’s not a serious equality argument.

          • Pat

            A lot of H1-B workers from India are practically slaves. I think a minimum wage could work for some industries, but the law would have to stipulate that money is received by the worker. Otherwise the companies that manage their services would steal it all.

            Please remember, though, that post-doctoral scholars are typically paid off NIH grants. You can’t institute a minimum wage over what a US post-doc would be paid (~$48K and up) if you want to get anybody over here.

  • Murc

    I disagree strongly with Erik that $110,000 is too high. The stated purpose and rationale of the H1-B program is to bring in workers to meet demand that can’t be met in America. If these workers are indeed working in a field that’s so labor-tight a company can’t find a suitable American employee, $110,000 is probably to low.

    • I can easily be converted to your position.

      • Thom

        Many professors in US colleges and universities are on H1-B visas, and most professors in the US are paid a good deal less than that (me, for instance, 21 years after my Ph.D–nowhere close to even $100k). As I understand it, the employer doesn’t have to show that there is no one who can do the job who is a citizen, just that the person hired is the best person for a job that has been widely advertised. But I don’t know the details of the law.

        • Captain Oblivious

          This is a case where there needs to be a special visa category. Educational institutions should be given considerable more latitude than, say, tech companies, in hiring. If the H1-B program were limited to Ph.D.s hired by universities to do teaching and research, I would have no problem. But even then, I would require the insitution to make the case that this candidate’s specialty and expertise is pretty special. If they’re hiring him/her to teach Chemistry 101, fuck that.

          • Thom

            I could see the special category of visas. But I disagree that this could not apply for a Chemistry professor. Are Americans with Ph.D.s being squeezed out of academia by foreigners? I don’t think so.

            • Captain Oblivious

              You don’t need a Ph.D. to teach Chemistry 101. Or most other first- and second-year undergraduate courses for that matter. And you certainly don’t need to be a leading expert in your field to teach such a course.

              Universities shouldn’t get the visa approved unless the hire will be doing research in his/her speciality and/or is teaching upper-level and post-graduate classes in his/her area of expertise.

              • Thom

                Our accrediting body requires that our tenure-track positions be filled by people with terminal degrees. And we don’t hire people who aren’t pursuing research and teaching advanced courses. This is in a college with a faculty of 100. I guess you are arguing that foreigners should not replace US citizen adjuncts and graduate instructors, but is there any evidence that this is happening?

        • ChrisTS

          I think academe is a more complicated situation. How can a court decide that this American with this degree really is just as good as this non-American with this degree?

          I’m assuming universities would point out how nuanced (or something) these decisions are: the notorious ‘fit,’ our students’/program’s particular needs, this candidate does A & B an the other one does A & C and we have good reasons for wanting C more than B (maybe we already have someone who does B and Q). Or, yes, the both do scholarship in whats-it, but this one seems ‘more promising.’

          • Captain Oblivious

            I don’t think the standards should be all that tight for universities (see my reply above). But there should be follow-up, and if it turns out the hire is not doing the research or teaching the courses the university stated, then the visa gets yanked. I do think universities ordinarily have sufficient incentives, in terms of prestige and their ability to grant-whore, to try to get the best people they can for the top-level jobs.

            My concern is that they use imports to displace troublesome non-tenured instructors who are tired of shitty pay while administrators and trustees are dining on caviar.

        • Lurker

          I helped a friend to get a green card to the US in E-1 (exceptional ability) category. A person qualified to be a professor should not need to rely on H1-B visa. They should be able to meet the requirements for a E-1 immigrant visa in exceptional ability category. The requirements are not really so difficult to fill. I know that I fit within those requirements without a problem and I am not really that exceptional, just a decent scientist-engineer.

    • bluefish

      I think the onus is on you and Eric to prove that there are really jobs that no American can do. Are there really examples of this?

      • Brett

        I doubt it, although at some point the wages to get an American to do it might be so high that they’re unaffordable and the job ceases to exist as we know it.

        It’d be interesting to see how that would work with farmers. If they got cut off from the vast well of workers from abroad for farm labor, would they heavily raise wages to find workers? Implement a ton of automation? Both?

        • Murc

          Farm work is actually nearly as automated as they currently can get it, at least in big agribusiness.

          One of the reasons farming is so labor intensive is that harvesting is actually really fucking hard to automate for a lot of crops. Take fruit-picking. Picking a piece of fruit off a tree, bush, or vine without damaging it is actually an impossibly precise job; we, as humans, can do it without thinking, but machines actually can’t. Every effort to develop a mechanized, automated replacement for a human plucking grapes by hand has either been staggeringly expensive, woefully inefficient (lots of grapes left on the vine because the machine can’t tell they’re there), has resulted in a shit-ton of damaged grapes, and often all three. Similar problems exist for other fruits and some fragile vegetables. You can harvest grain with a thresher; you can’t do that with tomatoes.

          If they got cut off from the vast well of workers from abroad for farm labor, would they heavily raise wages to find workers?

          Actually, yes, they would!

          A few years back Alabama implemented a shockingly racist anti-illegal immigrant law. It was draconian, police-state like, and awful in many ways; but because it was drafted by people who really took seriously the idea of chasing all the brown people out of their state, as opposed to keeping them around as an exploited underclass, it went hard after people employing illegal labor as well.

          The result is that employers had to drastically raise wages, because they didn’t want to go to prison and it turns out you can’t treat legal workers quite as shitty as migrants who live in fear of la migra.

          We talked about this law right here on LGM, although it would take me some time to find the link.

          • Bill Murray

            not according to this article. Both Georgia and Alabama had similar immigration laws and both had big problems harvesting their crops

        • cpinva

          “I doubt it, although at some point the wages to get an American to do it might be so high that they’re unaffordable and the job ceases to exist as we know it.”

          if that’s the case (job ceases to exist), then I would argue that the job wasn’t particularly mission critical to begin with, and probably has no valid reason for existing.

          the H1-B program wasn’t designed as a “reduce your labor costs, by importing low paid/easily threatened foreigners” program, it was supposed to help make it easier for US employers to fill slots they couldn’t from the US talent pool. it did this by cutting the amount of red tape normally needed for someone to come here on a work visa. if that skill is so rare, and so necessary to the company, then they should be happy to pay a decent salary to the person possessing it/them, US citizen or not.

          the Disney situation is clearly a case of employment fraud, because they already had employees doing the work, that they then claimed to not be able to find here in the US. I’m not an attorney, but I’m guessing they’re working under the theory that their fraud is so flagrant, and so overtly aggressive, and they are Disney, that anyone looking at it would think, “This must be legal, for a huge company like Disney to do it. Surely their legal counsel signed off on it.”

          I’ve seen stuff like this before, in the tax arena. it’s so blatant, they figure they’ll get away with it just because of that, and many times they do. the financial risk isn’t necessarily that big, the real concern comes with the level of risk for criminal charges. CEO’s don’t like spending time in jail, even Club Fed.

          • Tyro

            the Disney situation is clearly a case of employment fraud, because they already had employees doing the work, that they then claimed to not be able to find here in the US.

            Disney was a bit more sly about that. They didn’t “claim” anything. The outsourcing company claimed that they couldn’t find people to work for their “outsourcing” company with the requisite skills. And maybe that was true! For example, the employees at Disney liked their jobs enough that they were unwilling to leave to work for an outsourcing company. So the outsourcing company brought in the H1-Bs and went to Disney and said, “we have all these contractors that can solve your IT problems for less!” So Disney fired its in-house staff and contracted it out to the consulting company. Disney can thus pretend that they didn’t replace their employees with H1-Bs at all.

      • Murc

        I think the onus is on you and Eric to prove that there are really jobs that no American can do.

        The onus isn’t on me; it’s on companies trying to get H1-B visas for foreign employees, is it not?

        I’m a big open borders guy. But put that aside for now. As I understand things, the stated rationale of the H1-B visa program, backed up by the law that authorizes it, is to allow foreign workers who possess skills and expertise for job roles that a company cannot fill domestically to come to America and work in those jobs.

        It seems to me that such jobs are going to be very, very rare indeed; scientists working in specialist fields without a lot of practitioners, MDs doing the same, highly skilled engineers in niche fields, etc. I can totally buy that there are, say, neurosurgeons in India or China or what have you that have specializations that are rare and in demand here in the states for which their domestic equivalents just don’t exist.

        This rationale seems to be accepted by the people who wrote the H1-B laws, as the quota for them is very, very low, reflecting the notion that there aren’t going to be a lot of people who meet the requirements.

        And it seems like in those circumstances, $110,000 is actually a lowball. If this guy you’re bringing in from overseas really is a special snowflake, well, he’s probably worth more. And if he isn’t worth more, can you really not find his domestic equivalent?

        This seems a reasonable “don’t lie to us, corporate America” requirement to implement.

        I freely admit I am a layman and may not be versed on all the nuances of the law.

        • cpinva

          “The onus isn’t on me; it’s on companies trying to get H1-B visas for foreign employees, is it not?”

          yes, it is. supposedly, that requirement is built into the H1-B program criteria.

    • DocAmazing

      We have a fairly severe problem in the Bay Area with older engineers and tech workers being laid off/not re-hired after initial project phases and H-1B holders being preferentially sought to replace them (as they don’t/can’t organize). Tech is simply not labor-tight around here–certainly not enough to justify the equivalent of the pre-emptive importation of strikebreakers.

      • Philip

        To Be Scrupulously Fair I don’t think this is H1B specific. Lots of companies do the same, but with American kids right out of college rather than H1B holders.

    • Philip

      +1. That’s barely above new grad starting salary for the big tech companies at least, who are heavy users of the program.

  • Jhoosier

    My aunt worked for a Midwestern bank, and was laid off but forced to train her replacement or she wouldn’t get her severance pay. So goes the family story, anyway.

    • Warren Terra

      I am required of last year’s story of SunTrust Bank:

      SunTrust Bank (market value: $21 billion) is currently laying off full-time IT workers and outsourcing their jobs overseas. The bank does require them, though, to stay on call for two years. For free.

      Earlier this week, ComputerWorld reported on an eye-catching clause in the severance agreements of SunTrust IT workers who were being laid off.

      The bank’s severance deal includes a “continuing cooperation” clause for a period of two years, where the employee agrees to “make myself reasonably available” to SunTrust “regarding matters in which I have been involved in the course of my employment with SunTrust and/or about which I have knowledge as a result of my employment at SunTrust.”

      SunTrust later backed down due to bad publicity, at last as I recall it, but in this case they not only got their outgoing IT staff to train their replacements, they tried to make their severance pay dependent on a pledge of future wage-free labor.

      • PohranicniStraze

        That seems like a risky policy anyway. Would you, as a company, really want people who are no longer under your direct control, and who have good reason to wish you ill, to be in a position to “accidentally” damage your systems?

        • CrunchyFrog

          The only time I was in a position of training people to perform my responsibilities was in a dying company in which I recommended the elimination of my position. The situation was amicable all around, and I was given plenty of support and time to find a replacement job.

          However, if ever I was put in the position of these Disney employees I’m not sure how much effort I would put into training my replacements. Sure, you need that severance, but working to minimum standards would meet that requirement. I wouldn’t have an argument with my replacement, but I sure would with the upper management. If my replacement didn’t have the knowledge to deal with or prevent that once-per-year issue that crashed the whole web site after I left, well, that was the calculated risk they took.

        • mikeSchilling

          And how would SunTrust hope to enforce that?

          “Hi, yeah, you’re having a problem with what? Never heard of it. My name’s on the docs? Huh. Must be another Mike Schilling. I know. Have you tried turning it off and back on? Sometimes that helps. Sure, no problem. Good luck with it.”

          (Weird but true: A long time ago I worked on an open source IDE, and some time after I left they did hire a different Mike Schilling to work on the same part of it.)

          • Lurker

            Or simply, and quite believably:

            “Oh yeah, I think I was distantly involved with that document and someone decided to put my name on it to avoid responsibility. Maybe it was Jeff… but it’s some time since then… I really can’t remember, but I think that changing the record number data type to 64-bit float might help. It did help for me sometimes.”

            • mikeSchilling

              Even better, arrange a circle with some other ex-co-workers:

              Mike: “Yeah, the expert on that part of the system is Jeff. He’s your guy.”
              Jeff: “No one ever understood that shit besides Alice.”
              Alice: “Me? No, that was Mark. He was famous for optimizing stuff into total incomprehensibility.”
              Mark: “No, it got rewritten after I left the project. You need to talk to Mike.”

      • Bill Murray

        I think in this case “make myself reasonably available” would mean I would never be available. That seems pretty reasonable

        • +1.

          I firmly believe one should offer to make yourself reasonably available.

          For instance, my on-call rate is half my daily rate per hour, three-hour minimum, with rates doubling on the third call in any 30-day period.

  • bluefish

    Erik,

    Everyday you highlight examples of regulatory failures in labor law and environmental protection. Do you really think an H1B visa program can ever be monitored comprehensively and honestly enough to stop abuses?

    • NYD3030

      If the program exists to fix systemic shortages of high skilled labor in the economy, allow high skilled immigrants to participate in the labor market as normal people and not indentured servants.

      • erick

        Exactly. I suspect that for a lot of employers H1B visas aren’t really about saving money, if is about having a captive work force that aren’t treated as employees on the books.

        • twbb

          I think there’s also a widespread conscious or unconscious acceptance of the foreigners-are-smarter-and-more-hardworking myth.

    • Brett

      I think you need to design it so that it mitigates some of the problems by its nature. If you had a work visa that wasn’t tied directly to an employer, then it would be much harder for that employer to coerce the immigrant worker into accepting bad working conditions and low wages.

    • Do you really think an H1B visa program can ever be monitored comprehensively and honestly enough to stop abuses?

      Of course it can. Regulatory failures are failures of political will and power inequalities. And while those things will never go away entirely, they can be massively lessened. In Out of Sight, I argue that only international regulations can solve global inequality. While I do not underestimate how these problems of regulatory capture and corruption are going to make enforcement difficult even if the parameters are passed, it is still our best hope for an equitable future.

  • NYD3030

    I work in a very specialized high demand field of IT and have worked with perhaps seventy or eighty H-1B holders over the last five years. Everyone knows about the brazen attempts to illegally lower labor costs but what is often unsaid is the rampant incidence of outright fraud in the program.

    I can count on one hand the number of H-1B holders who actually had the skills listed on their resume and were capable of executing the parameters of the project . Employers continuously get burned by this but I suspect the CYA culture of management prevents anyone from admitting they paid a shit load of money for a team of frauds.

    Unfortunately most people I know blame `the Indians` for this instead of the real villain, the bosses. It’s hard to feel sympathy for someone who lied to get on your project and can’t execute but they are responding rationally to the system and oftentimes didn’t have a choice in the assignment. I put effort into convincing my fellow IT comrades that the solution is to let them participate in the job market like regular people, with limited success.

    • Derelict

      Joe Executive here. My department has been tasked with building the new Neo-Trinity Matrix system. I already have a team to 20 IT specialty people in harness. But MAN! are they expensive! They get the job done quickly and efficiently, and then it’s time for me to go fight for my bonus again.

      But since I tapped into the H1-B program, well, take the new Neo-Trinity Matrix project. I got to shitcan 18 of my 20 IT people and replace them with a bunch of imports who barely speak and rarely comprehend English. The imports cost me only a fifth what the originals did–AND they can’t possibly complete the Neo-Trinity Matrix because they’re not actually competent in the programming! But, my bonus for the year was tripled due to the cost savings, my salary got bumped 20% because of my increased managerial load, and I’ll never get canned because the project will never get finished before I head out the door on my golden parachute.

      So, what’s not to love about the H1-B program?

  • PohranicniStraze

    While $110K does seem a bit high as a blanket rate, in some industries it is probably reasonable while in others it would kill the program entirely. Maybe the rate should vary by field, perhaps at 125% of the average rate for that specific profession in your commuting area? So if programmers in your area are averaging $80K, the H1B minimum to import a programmer would be $100K. That would give employers an incentive to truly use the program only when a domestic alternative wasn’t available, without shutting whole industries out entirely.

  • efgoldman

    How are layoffs/H1B hires qualitatively different from offshoring the jobs?
    The very large company from which I recently retired (I was not in IT) set up a programming group in Ireland as early as the late 90s. They also tried an Indian call center, but the customers raised hell, so they brought that function back – but moved it out of expensive New England to cheaper Texas and North Carolina. They did move certain QC and IT help desk functions to India and kept them there.

    • How are layoffs/H1B hires qualitatively different from offshoring the jobs?

      Only around the edges, like those hires paying taxes in the U.S. and adding to the nation’s ethnic diversity. But the principle is the same.

  • AMK

    I would pay to hear the internal monologue of someone like Jeff Sessions on this issue. On the one hand, the plutocrats he lovingly fellates are all very enthusiastic about H1-Bs because they end up pocketing more of their workers’ money, as God clearly intended.

    On the other hand, the people who they bring into the country are a bunch of filthy Hindoos and Godless Chinamen who inevitably end up with civil rights that threaten our white race “values.”

    But on the other hand, if we exclude all of these people, some of them who have actual skills will apply those skills in India and China, which will hasten the day when Wall Street and Silicon Valley become wholly-owned subsidiaries of Alibaba.

    But on the other hand, Silicon Valley and Wall Street are already just run by a bunch of Jews, gays, unbelievers and various other fake Americans anyway, even if they do butter his bread.

    • efgoldman

      I would pay to hear the internal monologue of someone like Jeff Sessions on this issue.

      I think first and foremost Sessions is a stone racist. If there was a way to restrict H1B visas to white people I’m sure he’d propose and embrace it.

  • DrDick

    Just further proof that the H1-B program, like offshoring, is all about driving down labor costs.

  • Bleeding Heart of Texas

    I’m all for immigration, but don’t like the H1-B program at all. If there are people in other countries who’s skills are essential to American commerce then offer them citizenship. The H1-B program is designed to acquire high-cost skills cheaply by creating an easily exploitable group of workers. They’re beholden to their corporate sponsors for their jobs and their immigration status. That puts a lot of pressure on them to keep their mouths shut and do whatever they’re told. Give them citizenship and let them compete as equals for for the jobs.

    • mikeSchilling

      That puts a lot of pressure on them to keep their mouths shut and do whatever they’re told.

      In addition, it means that they can’t earn their market wage because they can’t offer their services to the highest bidder. This drives down wages in exactly the same way that collusion does.

    • Latverian Diplomat

      Yes. Thank you for pointing this out. This is how H1-B is different from traditional immigration, and is why tech employers like it so very much. (Although I would say visa rather than citizenship, which is probably what you meant. Many H1-Bs do eventually get green cards and citizenships, but only after years chained to their corporate sponsor).

      The starting point for discussing H1-B should be to ask why it’s necessary to have this rule, instead of just giving some form of priority to skilled immigrants in the general pool of applications.

  • primedprimate

    Do they have any articles where they talk to the H1-B workers? It would be interesting to see how they feel about ‘stealing’ jobs and how poor they were/would be without this job opportunity.

    I am on H1-B myself, but in academia – I have a PhD and teach in an excellent Liberal Arts College but I don’t think for a moment that I am special or irreplaceable. As an economist, I understand the ‘lump of labor’ fallacy etc. but sometimes I end up thinking emotionally rather than analytically and at those times I feel that by continuing to teach in the US, I am ‘stealing’ a job from an American but if I go back to India I’d be ‘stealing’ a job from an Indian. Just by working, regardless of location, I’d be ‘stealing’ a job from another human. When I get into that kind of a spiral, I end up feeling miserable and on at least one occasion I was near-suicidal.

    One of my friends came to the US on an H1-B for a job where she knew she’d be replacing an American. She had a nervous breakdown as she couldn’t face the understandable hostility at her workplace or her own sense of shame and guilt. She returned to India (to much, much worse financial prospects, since she was summarily fired) after just a few weeks on the job. But she did tell me that if she, like some of her co-H1-B-workers, had a family that was in need, she would have found a way to bite the bullet and stay.

    • efgoldman

      I feel that by continuing to teach in the US, I am ‘stealing’ a job from an American but if I go back to India I’d be ‘stealing’ a job from an Indian.

      By that logic, every one of us who has a job is “stealing” it from someone else. That, among other things, is the main anti-affirmative action theory.

    • alex284

      If you’re spending the money you make in the US then that’s creating work for others. And you say you already know that your thinking is a fallacy anyway…

      I’d just add that I don’t see why Americans should have a special privilege for that job anyway. There’s an undertone of “if you have incredible foresight and choose to be born on the right piece of land, then you simply deserve more money than others” in some of these arguments.

      Yes, I get that h1-b visas prevent foreign workers from getting a fair wage and that this is a not a fair competition between an American and a non-American. But it’s not the workers who are “stealing” anything from Americans, it’s the terrible employers working with a terrible policy who are doing so. Direct our anger upwards, not side-to-side.

  • Tyro

    $110,000 is too much for an H1-B minimum wage.

    For technology jobs, it absolutely is not, when it comes to the purpose of the H1-B, which is for highly skilled workers whose skills cannot be found in the USA. In the tech industry, if you’re not making more than $110,000/yr, then your skills are definitely not hard to find.

    There are some H1-B’s that can justify lower salaries (freshly minuted biotech PhDs and people in academia, for example), but I’d rather we up the salary threshold now and fix the problems later.

    • nixnutz

      Aren’t there a lot in healthcare too? I can see how a particular community could have trouble finding nurses or occupational therapists or similar. Of course I think we could and should solve that problem by offering Americans debt-free education but that situation does seem like one where a $110,000 minimum could have negative effects in the short-term.

      • Tyro

        Aren’t there a lot in healthcare too?

        I might buy into that, but we might want to make healthcare into its own separate visa category.

    • ColBatGuano

      freshly minuted biotech PhDs

      There is no shortage of U.S. citizens in this category.

      • Lee Rudolph

        Yeah, but the Incredible Shrinking Man is pretty old by now.

  • Tyro

    There is a need for H1-Bs. The problem is that “body shop” employers like Tata are using them for which they are not intended: importing consulting/contract workers to do contract work at other companies.

    It would be fine if Disney itself tried to fill IT positions, couldn’t, and hired H1-Bs to do so. But they didn’t. They hired a contracting company to fill those roles, and the contracting company sucked up a lot of H1-Bs. But what were those contracting company employees hired to do? Work for the contracting company which would contract them out to other companies.

    And for every H1-B visa taken up by Tata, that means there is a small tech company or a Google who wants to hire a newly-minted PhD with foreign citizen to do cutting edge work who can’t because Tata wants to hire someone to do IT contracting work to keep Disney’s database running.

    That said… I am going to hire an H1-B for my startup. She is in academia and has an H1-B for the (humanities)research institute she works at. She also would be good for a role I am trying to fill. More importantly, I trust her and have worked with her, and she is my friend. Plus, since she already has an H1-B, I can transfer it over to my company. Could I find someone with her skills who has US citizenship? Yes, probably. But I’d rather hire her. And in any case, someone with a Ph.D. from a top level US university who has lived in the US for 10 years should be allowed to stay here, anyway.

    • Lurker

      In Finland, we have a simple law: if you have a degree from a Finnish university, polytechnic or a vocational school and a job, you’ll get a resident permit with no further questions asked. It really makes no sense to educate people for foreign labour markets.

  • Bill Murray

    Luckily the President has a new initiative to help solve this problem. He is requesting $4 billion “to dramatically increase the number of children who have access to computer science classes in school, a move he said is necessary to ensure that students are competitive in a job market that rewards technological know-how.”

    • AMK

      A related issue in the educational system is college spots for foreigners. Many LGMers seem to be in academia, so perhaps they can enlighten me as to why American universities are giving so many spots away to foreigners that could go to kids here….particularly to talented kids from middle and working class backgrounds. The feds should impose quotas.

      My experience at “elite” private and public universities is that the major credential most of these foreigners bring is the ability to pay full sticker price, because the vast majority of them are wealthy princelings from elite cliques in various emerging-market kleptocracies who want the social cachet of an American degree before they enter the family business. The idea that even a fraction of these kids are future entrepreneurs is ridiculous, unless “entrepreneur” just means “invest family money in US stocks and real estate,” which of course they could do without setting foot here, much less taking some American kid’s seat. Even more laughable is the idea that they–the biggest beneficiaries of the status quo–will all absorb liberal democracy so they can go home and turn China or Kuwait or Thailand into Jeffersonian democracies.

      • Tyro

        why American universities are giving so many spots away to foreigners that could go to kids here

        At the top levels of academia, it is because American universities are looking for the top talent in the world to fill their slots. I myself was glad I went to college alongside the science contest champion of his home country.

        As you get further down the academic totem pole, it’s because it is relatively straightforward for foreign students to get a visa to study in the USA, and foreign students pay “full fare” tuition without any financial aid. But at that level, the slots are essentially interchangeable between schools, rather than being a scarce resource.

      • efgoldman

        why American universities are giving so many spots away to foreigners that could go to kids here….

        the major credential most of these foreigners bring is the ability to pay full sticker price

        Answered your own question.

        • mikeSchilling

          Also out of state students for public universities, for the same reason.

  • CHD

    In my field – consulting engineering for what is more or less operations research, there is a definte effect of H1bs on my salary. $110,000 is probably about right for a minimum to cointeract that. Below that, it allows employers to continue to think of us as commodities, completely interchangable. At that level or above they’d actually have to think about the skills.
    If you find a way to define fields so they wouldn’t be gamed (fat chance of that of course) then setting the minimum H1b wage at the higher of 125% of avearge or the 75th percentile would work.
    Seems to me though it would be easier politically to just change the rules to allow direct employers only, no outsourcing firms, or at least to severely limit the number of visa employees per company to, say, 2%/of the company’s US workforce?

  • Shantanu Saha

    I fully support a program to replace all the c-suite executives of Fortune 500 corporations with H1B workers making $110,000 per year. American corporations would save a lot of money, and would probably get better governance besides.

    • DrDick

      Now this is an H1B program that I can get behind, though I think it would be cheaper and more effective to replace them with a Magic 8 Ball.

  • Legion

    Why is “ethnic diversity” a good thing?

  • Troll comment deleted

    Troll comment deleted

  • mikeSchilling

    One other point about H1B’s — the paperwork for sponsoring one is not cheap. I’ve been at a startup trying to hire prospective grads and having to skip any who don’t already have the legal right to work in the US. So the H1B program works out to be a subsidy to larger businesses. (Shocking, I know.)

  • starbuckle

    Too many comments here seem to be approaching this problem from an academic outlook. I can state very assuredly that a big number of American tech workers see this topic hitting very close to home. It may surprise some LGM readers, but H1-B is not an issue that popped up out of nowhere in just the past year. The program goes back 25 years. As a career IT worker, I trained my H1-B replacements on the last job I was laid off from about 12 years ago. The tech leaders that the media love to drool all over (like Gates and the late Jobs, as just two examples) have been putting their considerable money behind lobbying efforts to expand H1-Bs for longer than that. It was only last September that I saw Zuckerberg on my TV singing the same tune. Don’t get distracted by what you imagine to be the inner motivations of Cruz and Sessions, because Sens. Grassley and Durbin (hey look, bipartisanship!) have been introducing bills going back at least 8 years to limit the number of H1-Bs and hike their minimum annual compensation. Those bills just simply have no chance of going far at all with a Republican majority house. Of this year’s crop of presidential candidates, it has been Sanders and Trump (yes, really!) who were first to criticize the H1-B program. They may each have different motivations (and Trump might not remember that he said it), but they both hit on an issue that’s on the minds of many more voters than the media will care to notice.

    • smott999

      Spot on.
      In IT this has been going on for a decade and a half.
      In my experience the lay-off/train your replacement to get severance process is the norm.

      For Joe the IT Mgr as above, it’s a gravy train, because projects go on forever. And yes it’s so easy to sell when you show an xls with Labor cost at 20% of what it would have been using internal resources.

      And as an aside the inexperience of US IT execs in negotiating with the Tatas of the world has been startling, I’ve seen more than a couple of projects go for years and millions over budget but keep on sucking the company dry because the IT execs forgot to look up Fixed Bid in their negotiating manual.

      Entertaining actually,

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