Joe Doakes from Como Park emails:

The H-1B visa program was started because Americas were such a bunch of dummies, we couldn’t supply the tech industry with enough qualified people not matter how much we offered to pay them.

 But according to this article, it’s now being used to bring in foreigners who can be paid less than qualified Americans.  The problem now isn’t that there aren’t enough qualified Americans, it’s that they cost too much.

 The program was never supposed to be about cost, only supply.  If we have an adequate supply, we don’t need the program.

 Joe Doakes

Oh, it’s about cost.  How else can our high tech industry compete on commodity products like code?

21 thoughts on “Pivot

  1. The H-1B program and the related outsourcing of IT jobs, has always been about cost. Originally, workers in the US on that program, were supposed to leave the country when their project was over. Unfortunately, there more than one contracting houses that would just stash them away until they got more job orders. The results have meant that there are more than 1 million people now in the country illegally, because they stayed after their visas expired. Of course, our inept government lost track of them.

  2. There is ravaging wage deflation everywhere and the government is doing every single thing wrong in the face of it.

  3. Remove the $60K loophole and limit the number of applications per employer, and it sounds like the majority of the concerns would be taken care of.

  4. I’m torn on this one–I read the horror stories, but in my own work life, the group that basically makes my job possible is a mini-United Nations, just without the anti-semitism. A few ways to solve the problems; first allow H1-B holder to go to new jobs without a lot of rigamarole, second raise the floor for observation of wages, and third ask questions about why we’ve got a bunch of engineers out there not working in the field already.

    Love my immigrant coworkers, hate the way we handle things.

  5. The $60k floor for an H1-B acts as floor for the H1-B holder, but acts as a ceiling for the native worker (once his compensation hits $60K, and H1B can compete for his job).
    Raisng the $60K floor to $100K would help, but the ceiling only applies to outsourcing firms that essentially own a large number of H1-B’s (firms like Infosys, Tata, and Cognizant).
    The $60K floor applies to firms with 15% or greater H1-B employees , so other firms (like IBM) could make a sideline of going into the H1-B staffing biz, and as long as they stay under 15% total H1-B employees, no floor.

  6. MP: exactly why it’s important that H1-B visas not be bound to a company. We used to call that “indentured servitude”, and I seem to remember that the 13th-15th Amendments were passed to deal with that. That $60k or so is a floor and ceiling for workers who cannot leave.

  7. bikebubba on March 17, 2017 at 2:44 pm said:
    MP: exactly why it’s important that H1-B visas not be bound to a company.

    But then you run into the problem that, conceptually and legally, the H1-B holder is not supposed to be competing for a job an American can do.
    If GDP growth is your only concern, there is nothing wrong with importing labor. It is a positive. For efficiency’s sake, work should be done by the lowest bidder.
    It is a social and political problem. Sending all the old, sick people off to death camps would be more economically efficient than setting them up with medicare and social security, but we set them up with medicare and SS because instead because we have decided to do this as people for social and political reasons.
    The issue comes down to “rents,” or “economic profit.” A rent is a surcharge tacked onto what is the normal free-market cost of an item. Rents affect costs many ways.
    H1-B employers want to be able to charge rents (copyright laws give software publishers a monopoly rent for a very long time), but they do not want to pay an American worker rent for his being an American worker. American software publishers want to buy labor in a commodity market and sell the product of this labor in a protected market.
    Screw ’em.

  8. I’m all for canceling a number of visa programs and consolidating into simple short and long term work visas. Good point, MP. You are correct that my point rests on the notion that we’ve junked the notion that Americans cannot do these jobs.

  9. I strongly believe in free trade. I believe that the labor of the planet and the planets resources will tend to be best allocated to their best use over time within a system that has minimal barriers to trade and commerce. The benefits of such a system include lowest prices, best total wages, and the best access to goods and services for all. However, there is no such free system in place today. There are a large number of labor policies, trade barriers, tax loopholes, regulations, and other mechanisms that seem to grow and grow each year to the benefit of the few at the cost of the many. The H-1B program is a prime example of such a program that could be seen as supportive of free trade, but in actuality has been corrupted to benefit the few at the cost of the many.

  10. The problem with “free trade” is that it is never really “free trade.” The restrictions and rents are merely shifted around from less powerful to more powerful industries and institutions.
    Pure, free market capitalism is a solvent. It destroys what it touches. Applying pure free trade would mean the Chinese could flood the US market with copies of MS Windows for a few dollars each. Pure free trade would destroy industries based on IP.
    The foundation of free market capitalism is the idea that individuals define their own best interests. Who is in favor of the current “free trade” regime? Who is against it?
    And please do not bring up smoot-hawley. This is not 1930.

  11. Worth noting is that when Bastiat wrote of free trade, it had no resemblance to NAFTA or GATT–he covered it in a few pages, while those treaties take hundreds of pages for the table of contents alone. He merely noted that there were customary duties completely compatible with free trade, and then there are punitive tariffs.

    Yes, we’ve gotten more “clever” about the matter since 1850 or so, but it does not make things better. Count me among those endorsing some restrictions simply for IP as well.

  12. I don’t know enough economics to give a definitive answer. Vox Day does. He’s written extensively on trade and concludes that free trade in goods is fundamentally different than free trade in labor; therefore, the theory of comparative advantage does not hold in modern times.

    I’ve got no problem with stealing the best and brightest from around the globe. But not if they’re taking jobs away from our own best and brightest.

  13. Vox Day isn’t my cup of tea. He enjoys dropping a turd in the punch bowl too much for me. It is not always appropriate behavior 🙂
    But in this case he is correct. Human labor comes with both hands and heart.
    These days a capitalist can shift millions of dollars from one investment to another, or from Timbuktu to Tennessee with a few mouse clicks. Human labor is not like that. I have never heard a convincing explanation of how any program — Adam Smith’s Invisible Hand or a government job training — is going to turn a fifty year old truck driver into a software engineer.
    Human beings are more and better than simple measures of value. They are everything.

  14. Global central bank policy—goosing the economy with forced low interest rates— favors capital over human beings. They do this because our financial system and government can’t work without inflation, credit growth at any cost, and asset bubbles. Prior to the USSR falling, NAFTA, China opening up, and technology, it sort of worked. So people want Trump and Bernie.

  15. In other words, TFS, they’ve done everything they could to boost GDP growth, but it hasn’t worked. Adam Smith demonstrated two centuries ago that in a no-growth/slow-growth economy, wealth is transferred from those with little or no capital to the rich. What kind of wealth can be transferred from those with little or no capital? Wages.
    I think this is what Pikkety was going on about in his Capital in the Twenty-First Century book that made a splash with the left-economists a few years ago.

  16. @Mammuthus Primigenius One of the best things that has ever happened to me is Jason Lewis beating it into my head that demand economics does not work, and just makes everything worse. You do not understand this f’ing Truman Show we are forced to live in otherwise.

  17. <iApplying pure free trade would mean the Chinese could flood the US market with copies of MS Windows for a few dollars each. Pure free trade would destroy industries based on IP.

    Pure trade would still be subject to laws of IP protection, no?

  18. JPA, yes and no. Ask yourself the question; if tariffs can not be used as a stick, the goal of a lot of free trade negotiations, then what do you do with the nation that allows a billion copies of Winders to be produced with nary a penny of royalty to Microsoft? 20 lashes with a wet noodle? Declare war?

  19. Hence there can be no “pure free trade”. For it would condone/ignore theft, and theft is not “pure”. Actually, ‘pure free trade” sounds more like soci@list construct and not capitalist

  20. Should there be in the sense of no tariffs, even? If the reality of trade requires navies to punish or prevent piracy, what is the best tax to fund navies? Should the poor and middle class be on the hook to get their competition’s products to market? Really? Why?

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