Whenever lower wage markets are open to higher wage markets, what happens is the higher wage markets lose - especially their up-and-coming developers who normally would get hired and trained, but instead get replaced.
This normally happens near the bottom, historically. Low wage workers come and work on farms and at other minimum wage jobs, they do actually have an effect on the labor market that is negative for American workers, but since there are usually many jobs on the bottom it doesn't have a large effect.
But at the top - where jobs are far more limited and scarce - it has a large effect.
Further, the companies using H1B are almost entirely large companies. Small businesses are not being hurt at all by a shortage of H1B's.
International trade is highly susceptible to imbalances. Lower wage workers will replace higher wage workers if not protected against, and it isn't always a win in terms of lower cost goods - it often can displace an entire industry that normally would have done well. Especially industries that are important for America to stay strong in, like manufacturing. It also is highly susceptible to distortionary trade policy - see subsidies in foreign nations designed to take over entire industries long term.
Finally, a note on hover governments should work. They should look out for their citizens. That is their modus operandi. There shouldn't be charity, unless the charity in some way truly helps our citizens. And especially, they should care about the average gal. H1B visas are literally taking out a big pool of well-paid jobs that otherwise we could easily be feeding with community college graduates and younger citizens.
This isn't even close to hacking anything, by any definition of the word. It's literally what he campaigned on years ago, if anything it's super long overdue.
When the US subsidizes corn production so much it destabilized local corn markets everywhere else in the world. Suddenly, it's cheaper to import corn from the US than buy at a local farm house in other places. This alone doesn't mean bad news to those other countries. The likely response may not be to increase import tax on corn.
You need to see where the net positive results are accumulating as a consequence.
I don't have a solution to these complicated problems. My observation is today's policy won't solve the problem even slightly.
The US specializes in innovation, incentivizes economy to create innovation. IT consulting is not innovation. When you start hiring local employees at a higher salaries, influences inflation.. and what does this inflation from IT mean to other sectors?
The right question is: What would be the cost of home grown IT consulting that can compete with Indian IT consulting? How fast can those policies be deployed? is it even in the US interest to pursue this direction?
What I don't see is a framework that doesn't look like a patch work.
It's definitely targeted to win elections. The real promise is not delivered.
So your claim is hiring locally somehow “influences” inflation... and does what?
What is the cost of home grown IT? There’s no “cost”, it’s just a shift in market, the wage may go up a bit but business would also adapt, either by being more efficient or shifting budget, etc.
I’m not really putting together where your questions are leading. They don’t feel like they have a coherent point, and they don’t seem to be pointing in any way.
This is an incremental improvement, one that absolutely will reduce H1B which is a good thing for Americans. There’s no shortage of Americans able to take these jobs, and if there is ever at times, the increased demand will solve itself - companies will raise wages, Americans will respond to higher wages by filling the jobs, America will grow stronger with more white collar jobs going to our own citizens.
And it will help win elections because it’s what citizens want, are you claiming any other way it helps win? It’s a popular policy and this is an effective change to it, if it wasn’t effective I doubt you’d be arguing about all these downstream effects you’re worried it will cause - you can’t say it won’t be effective but also it will be effective in a negative way. Tell me how raising wage requirements + requiring higher education does anything but lowering H1B usage and force companies to only get more qualified people on the visa. Win win.
The market's network effects will negatively effect this new tax.
There is cost-benefit analysis to everything one spends from their limited resources. The "just shift" in the market is painful like you said before.. to the weakest Americans the most.
the US companies and individuals are economically so fragile they do have enough operating expenses to absorb a month loss of revenue. When the consumption and stimulus doesn't rise as much as needed within the time, shops close because of inflation.
Lowering H1B only solves the problem when hiring local person does not increase budgets. And there is shortage of Americans applying to these jobs or studying for these jobs.
And US companies operate on lean culture. A food, insurance company does not want to maintain in-house technology team for every project. Again it has to do with complex net of financial entanglements..
So it really has to be a consulting partner, whether American or not, but definitely meeting their current budget constraints.
It is a worthy goal to aspire white collar jobs. Especially when the country specializes in production of high-technology. Something government should provide more to its people..
But I don't see a policy on the horizon in this direction.
--
When the forest is on the fire, arial firefighting does not stop it, rain doesn't stop it...
Solutions designed for small-scale problems do not work when those problems become large-scale.
There never should be policy that purposely adds temporary competition to American workers with no proven large benefit to society as a whole. Where it the proof? What it seems you’re arguing is that H1B is proven to be absolutely necessary for American companies to be effective, can you back that up? Because in the absence of evidence of it being truly necessary for us to compete, there’s no argument for it existing.
Americans are more than willing to consult and do IT, we are good at it and it’s our bread an butter. China is not importing cheaper labor sources to take over their white collar jobs, no country that cares about its future would make such a short sighted mistake as to distort its own markets to suppress wages of its most valuable sector employees. It’s pure regulatory capture by the big IT consulting firms and big tech firms who have shown time and time again they will do whatever they can do suppress wages.
Apple and Google got caught colluding to suppress wages. Google is one of the biggest proponents of H1B, and yet since they got busted for illegal wage suppression practices, have they been at risk of going under? Have their stock prices dipped?
It’s not small companies who are relying on these H1Bs it’s the Fortune 500, the most successful companies are benefiting from this in majority.
You’re doing a lot of defending of big rich companies in favor of wage suppression and disincentivizing the next generation of American employees from learning tech.
Even from a long term view: do we want to encourage Americans to move into tech or no? Does this policy increase incentives for Americans to learn IT or no? Simple questions.
And if you truly believe the big companies can’t thrive without 40% more expensive IT (which wouldn’t even be the case, in house firms would optimize over time to compete better), then advocate for higher legal full immigration - at least then Americans win in the long run by retaining good talent. But you need to prove that it’s necessary first, and then you should argue for full legal immigration and be happy H1B are going down.
The only people happy with H1B are those who think indentured servants should be imported to America to suppress wages and save big companies extra bottom line. Even if you support importing more white collar jobs, you should be happy at this news.
First I am not defending big rich companies. If anything I am complaining the government is not doing enough in the right direction to improve the proportion of Americans in tech jobs.
Every H1B petition from American companies is precisely saying the same thing: they need that worker to run the company effectively and they had no other choice.
I suppose each count of the petition ever made is legally binding. Should this be another such anti-trust lawsuit you mentioned, it will be very big! I don't think they are joking this time.
Those H1B workers contributing to the state of the art technology are not replaceable anyway practically should the US want to innovate within its jurisdiction. Companies hiring for these positions are not declaring a ceiling on the number of positions, at least to pubic.. so anyone qualifying their interview gets the job, to large extent if not all the time. But fewer Americans study STEM or apply to those jobs meeting prerequisites. These companies consistently publish in media that they have shortage.. and the H1B petitions point they had no other choice.
Those H1B workers in IT consulting earning somewhat lower wages are easier to replace but still practically hard. Their petitions tell the same story: they had no other choice.
The right policy framework I believe could work is first making the foundation stronger:
- Heavily subsidize university STEM tuition for Americans next 5-10 years.
- Encourage them to pursue STEM in school. There is no way one focuses on English literature in high school and shows interest in engineering at university.
Then there might be enough talent pool that creates local companies and give strong competition to Indian IT companies.
How many home-grown IT companies are there in the US? What's their size and valuation? The pipeline must be fixed from the beginning.. not just at the end.
With enough local sellers could the competition from outside gets weakened.
It's impossible to "compete" with countries with far weaker currencies, you can't refute that, there is no competing.
First, you are absolutely taking the side of large companies, there's no refuting that even if you say it a hundred times.
Second, of course the companies say they need it, that's the only way they can get the visas. But it's not true.
Third, let incentives do the work. Banning H1B immediately would open hundreds of thousands high paying jobs in the US. No need to subsidize and add distortion to distortion, the jobs would be filled as demand would increase.
Fourth, very very few H1B are contributing to "state of the art" anything, the vast majority are taking the exact types of jobs that your entry level college graduate could take. And if they contributing to state of the art, then raising the H1B pay to be more fair is exactly the reform needed to pay them properly and ensure we aren't replacing slightly higher paying and equally capable workers.
No one is master of everything. Economies with weaker currencies by no means have upper hand on every trade. Like the example I gave before: corn exports. Economies could be subsidized by regular interventions like how China blocks international companies competition in its local market, devaluating currency to make their products cheaper on global marketplaces. Such a market is far from "free market". Right now for those reasons they are embroiled in a trade war!
> First, you are absolutely taking the side of ..
I can't help you see fine distinction.
> Second, of course the companies say they need it
Can you please point me to one source where that says majority STEM students are Americans? Let's just get the percentages and see whether they are high enough for unemployment to so high that needs immediate short-term intervention.
I have not come across one respectable peer-reviewed publication that actually argues that position. Are you really saying the companies are discriminating job applications by country against favoring Americans?
> Third, let incentives do the work.
No they don't! LOL.
> Fourth, very very few H1B are contributing to "state of the art" anything,
I don't know what you consider state of the art. But take any STEM peer-reviewed research conference or journal and scan through the number of Americans publishing as first author in comparison to others. I know the numbers but since you are not convinced, I suggest you do the homework.
--
The current administration is like -- We didn't solve the problem, but let's just move pieces here and there in a broken system to make our voters feel good. We need votes in 3 months.. probably the right time to register illusions in their minds.
--
I don't think you fully appreciate the complexity of entanglements in international relations. How they effect science and technology markets.
Your arguments are weak and it’s obvious you’re losing steam here. Having to appeal to complexity when you’ve failed to explain anything complex at all.
Americans publish a ton of top stem stuff what are you on? We dominate high end stem research, especially hard sciences, drug research, advanced medical research. Also number of publications != quality.
Number of top peer-reviewed conference publications is the closest reasonable indicator of state of the art. I didn't make this up, the community did. Yeah, let's see some numbers in STEM - stack up the university departments and see the numbers.
Obviously I am aware what I don't know and not shy to hide from you. What is funny is you are confident of something you don't know.. and conveniently ignore the statements that require looking at hard numbers.
Well, feel free to provide the data, you’ve failed to so far.
Almost all H1B are working in IT/CS and not publishing, 95%+ of the stats I posted would not be H1B, maybe even more. Only a tiny fraction go into other sciences and even less of those publish.
This is well established, the vast majority of H1B are not doing research at all but working at big tech companies and IT mills. Your points don’t stand, not even close.
And to comment about importing cheap labor. China has 1.3B population, US 400M, Canada as 40M. Population sparsity is proportional to the extent of shocks a local economy can absorb. Immigrants are not distorting the market as much as strengthening.
I've worked at small companies while on an H1B, if you look at the who's hiring posts on HN I think you will see many places willing to sponsor H1s, so it's not just big companies.
This normally happens near the bottom, historically. Low wage workers come and work on farms and at other minimum wage jobs, they do actually have an effect on the labor market that is negative for American workers, but since there are usually many jobs on the bottom it doesn't have a large effect.
But at the top - where jobs are far more limited and scarce - it has a large effect.
Further, the companies using H1B are almost entirely large companies. Small businesses are not being hurt at all by a shortage of H1B's.
International trade is highly susceptible to imbalances. Lower wage workers will replace higher wage workers if not protected against, and it isn't always a win in terms of lower cost goods - it often can displace an entire industry that normally would have done well. Especially industries that are important for America to stay strong in, like manufacturing. It also is highly susceptible to distortionary trade policy - see subsidies in foreign nations designed to take over entire industries long term.
Finally, a note on hover governments should work. They should look out for their citizens. That is their modus operandi. There shouldn't be charity, unless the charity in some way truly helps our citizens. And especially, they should care about the average gal. H1B visas are literally taking out a big pool of well-paid jobs that otherwise we could easily be feeding with community college graduates and younger citizens.
This isn't even close to hacking anything, by any definition of the word. It's literally what he campaigned on years ago, if anything it's super long overdue.