Silicon Valley Pushes for Immigration Reform for Its Own Purposes

[NED funded]

A short OP-ED by George Borjas on H1-B visas and if H1-B is the new coming of Jesus to natives.

Silicon Valley Pushes for Immigration Reform for Its Own Purposes

Tech companies are currently driving the biggest lobbying efforts on immigration reform, mostly so they can expand the H-1B visa program for high-skilled workers.

The possibility that the H-1B program speeds up innovation and increases productivity is used to argue for its expansion. Bill Gates, for example, claims that Microsoft creates four new jobs, ostensibly for citizens, for each H-1B immigrant hired.

Is the H-1B visa program that brings in high-skilled immigrant workers benefiting the American people? The evidence is mixed.
But there is an obvious self-interest for high-tech tycoons — more programmers reduce wages and increase profits — so it’s wise to ignore their promises and look at what the data actually say about the benefits for the American people, especially in a time when immigration reform is in such a heated debate. Unfortunately, the evidence is mixed.

The conclusion that Americans are better off with more H-1B workers comes from studies showing higher levels of innovation in cities that host many H-1B immigrants. But sometimes the results are not credible. The correlation reported in a well-known study, for instance, suggests that if Congress would just print another 15 million visas, the wage of U.S.-born college graduates would nearly double! One must have a financial stake in the H-1B program or be very gullible to take such a “finding” seriously.

The most persuasive evaluation of the program examines a peculiar lottery. Firms can apply for visas on a first-come, first-served basis until the visas run out. On some random day, the visas run out and on that day more firms typically apply than there are visas available. A lottery determines the lucky winners. It turns out that the firms that won the lottery do not patent more, and that each H-1B visa crowds out one native worker. This evidence is far more consistent with the flood of news reports documenting how employers abuse the program and force the displaced natives to train their foreign-born replacements.

Despite the contradictory evidence, there is a sensible way to proceed. Some native workers undoubtedly lose. But let’s take Bill Gates at face value. If Microsoft really creates so many new jobs, Microsoft is profiting substantially and should be willing to pay many thousands of dollars for each visa. Let’s use those funds to compensate and retrain the affected workers. Actions speak louder than words: Would the high-tech tycoons actually be willing to pay substantial amounts for those permits?

[Baelic]

Bill Gates, for example, claims that Microsoft creates four new jobs, ostensibly for citizens, for each H-1B immigrant hired.

Yeah, I call bullshit on that. Evidence from fired workers would suggest that it does the exact fucking opposite.

[Tradewind]

H1B's and the TFWP here in Canada are the biggest pile of shit going right now. They exist to help keep businesses in actual need of employees for projects and to save themselves from collapsing in the wake of labour shortages. But now, they're being exploited as nothing more than a cost savings scheme. Slash the wages, artificially create a shortage by offering completely uncompetitive rates and then say "awww, looks like we can't hire anyone locally, better hit the asian market." Bring them in, pay them dogshit for the job, curb their rights in terms of overtime and safety regulations under fear of deportation.

[Independent voter]

2012, so the numbers are much higher now.




All Beneficiaries, Initial Employment, Continuing Employment

FY 2011 FY 2012 FY 2011 FY 2012 FY 2011 FY 2012

India 156,317 168,367 55,972 86,477 100,345 81,890
China, People's Republic 23,787 19,850 10,165 11,409 13,622 8,441
Canada 9,362 7,999 3,584 3,660 5,778 4,339
Philippines 7,582 5,304 2,020 1,863 5,562 3,441
South Korea 6,689 4,579 3,407 2,662 3,282 1,917
United Kingdom 4,629 3,535 2,573 2,013 2,056 1,522
Mexico 3,473 3,047 1,367 1,528 2,106 1,519
Japan 3,274 2,542 1,276 1,171 1,998 1,371
Taiwan 2,937 2,387 1,455 1,368 1,482 1,019
France 2,653 2,232 1,517 1,377 1,136 855
Pakistan 2,552 1,997 891 851 1,661 1,146
Germany 2,193 1,816 1,210 1,083 983 733
Turkey 2,161 1,774 967 989 1,194 785
Brazil 2,010 1,712 1,105 996 905 716
Nepal 1,566 1,636 719 932 847 704
Venezuela 1,734 1,494 846 807 888 687
Colombia 1,786 1,392 705 623 1,081 769
Italy 1,351 1,332 816 804 535 528
Russia 1,514 1,321 873 829 641 492
Spain 1,198 1,015 684 632 514 383 Other

[May90]

Whether immigration costs native citizens jobs or not, I don't think it should be relevant when discussing immigration system. If you can import people who do the job better than many Americans do, then it is only right to import them, and let those Americans who want to remain competitive improve their skills. This "immigrants are taking our jobs" comes from confusion between the cause and the effect: if they are taking your job, then maybe you weren't good enough for that job and should improve yourself, instead of complaining that more competitive people are let in in the system? Or do you want less competitive people to work on your market, to reduce competition and make your life easier? Well, guess what, less competition = lower quality of work = lower quality of product = lower quality of life.

Does it increase unemployment? With a decent system, it does not, and free market is decent enough for that. With a crappy system, sure, the more immigrants you take, the more citizens will be jobless. But, again, it simply means that you should fix the crappy system, not try to circumvent its problems by closing the doors for those who would be a better worker in your companies.

[NED funded]

Whether immigration costs native citizens jobs or not, I don't think it should be relevant when discussing immigration system. If you can import people who do the job better than many Americans do, then it is only right to import them, and let those Americans who want to remain competitive improve their skills. This "immigrants are taking our jobs" comes from confusion between the cause and the effect: if they are taking your job, then maybe you weren't good enough for that job and should improve yourself, instead of complaining that more competitive people are let in in the system? Or do you want less competitive people to work on your market, to reduce competition and make your life easier? Well, guess what, less competition = lower quality of work = lower quality of product = lower quality of life.

Does it increase unemployment? With a decent system, it does not, and free market is decent enough for that. With a crappy system, sure, the more immigrants you take, the more citizens will be jobless. But, again, it simply means that you should fix the crappy system, not try to circumvent its problems by closing the doors for those who would be a better worker in your companies.

What are you talking about? If I can pay someone to do the job you are performing but cheaper, Ill do it even if it means a slight decrease in productivity. So it often boils down to choosing to live with stagnant wages or GTFO.

Besides Borjas is not arguing against immigration, he is just pointing the flaws in the arguments made by tech tycoons.

[unbound]

H1B's and the TFWP here in Canada are the biggest pile of shit going right now. They exist to help keep businesses in actual need of employees for projects and to save themselves from collapsing in the wake of labour shortages. But now, they're being exploited as nothing more than a cost savings scheme. Slash the wages, artificially create a shortage by offering completely uncompetitive rates and then say "awww, looks like we can't hire anyone locally, better hit the asian market." Bring them in, pay them dogshit for the job, curb their rights in terms of overtime and safety regulations under fear of deportation.

Been that way for the US for several decades now.

[satimy]

Any CEO that pushes for H1b visas deserves to be hung and quartered red

[Damajin]

Whether immigration costs native citizens jobs or not, I don't think it should be relevant when discussing immigration system. If you can import people who do the job better than many Americans do, then it is only right to import them, and let those Americans who want to remain competitive improve their skills. This "immigrants are taking our jobs" comes from confusion between the cause and the effect: if they are taking your job, then maybe you weren't good enough for that job and should improve yourself, instead of complaining that more competitive people are let in in the system? Or do you want less competitive people to work on your market, to reduce competition and make your life easier? Well, guess what, less competition = lower quality of work = lower quality of product = lower quality of life.

Does it increase unemployment? With a decent system, it does not, and free market is decent enough for that. With a crappy system, sure, the more immigrants you take, the more citizens will be jobless. But, again, it simply means that you should fix the crappy system, not try to circumvent its problems by closing the doors for those who would be a better worker in your companies.

The problem with what you’re saying is the automatic assumption that they’re better employees when the only thing that is actually certain is that they’re cheaper. Your whole point is far too case by case specific to use as any kind of guiding principle, whereas to the tech CEOs the cost factor is the only principle, or more accurately said the one on which all other principles ultimately depend on for any kind of consideration. As was noted they’ll take a slight productivity hit if the cost savings more than make up for it over the calendar year.

[Tradewind]

Whether immigration costs native citizens jobs or not, I don't think it should be relevant when discussing immigration system. If you can import people who do the job better than many Americans do, then it is only right to import them, and let those Americans who want to remain competitive improve their skills. This "immigrants are taking our jobs" comes from confusion between the cause and the effect: if they are taking your job, then maybe you weren't good enough for that job and should improve yourself, instead of complaining that more competitive people are let in in the system? Or do you want less competitive people to work on your market, to reduce competition and make your life easier? Well, guess what, less competition = lower quality of work = lower quality of product = lower quality of life.

Does it increase unemployment? With a decent system, it does not, and free market is decent enough for that. With a crappy system, sure, the more immigrants you take, the more citizens will be jobless. But, again, it simply means that you should fix the crappy system, not try to circumvent its problems by closing the doors for those who would be a better worker in your companies.

People need to understand that there's a difference between an H1B/TFWP and straight up Immigration; the latter is individuals and their families going through the process, the former is corporations importing workers to avoid paying industry standard wages. These people (H1B's/TFW's) are exploited for cheap labour, have limited rights and serve no other purpose beyond lowering the bottom line of corporations and displacing local workers.

Being against H1B's and TFW's is not anti-immigration. It's anti-exploitation and anti-corporatism.

[Rasulis]

People need to understand that there's a difference between an H1B/TFWP and straight up Immigration; the latter is individuals and their families going through the process, the former is corporations importing workers to avoid paying industry standard wages. These people (H1B's/TFW's) are exploited for cheap labour, have limited rights and serve no other purpose beyond lowering the bottom line of corporations and displacing local workers.

Being against H1B's and TFW's is not anti-immigration. It's anti-exploitation and anti-corporatism.

I don’t know about the cheap labor part. Those H1B visa holders working in Silicon valley are paid enough to be able to afford to buy a house in the Bay area. I know I can’t afford to buy a house in that area.

[Crissi]

Dad's in the software / tech industry. Its not that America lacks talant, its that companies dont want to bother paying more / training new workers so they abuse the H1B visas instead to import already trained ones.

So yes, this is bullshit. Companies are screwing the future economy by going cheaper right now.

[May90]

What are you talking about? If I can pay someone to do the job you are performing but cheaper, Ill do it even if it means a slight decrease in productivity. So it often boils down to choosing to live with stagnant wages or GTFO.

Besides Borjas is not arguing against immigration, he is just pointing the flaws in the arguments made by tech tycoons.

If you can do that, then their cost-effectiveness is better than that available to you in your country. Which, again, means that your government should be concerned with improving cost-effectiveness of your work force, rather than trying to solve the problem by limiting competition.

The problem with what you’re saying is the automatic assumption that they’re better employees when the only thing that is actually certain is that they’re cheaper. Your whole point is far too case by case specific to use as any kind of guiding principle, whereas to the tech CEOs the cost factor is the only principle, or more accurately said the one on which all other principles ultimately depend on for any kind of consideration. As was noted they’ll take a slight productivity hit if the cost savings more than make up for it over the calendar year.

If they are cheaper for the same amount of work they do, then, indeed, they are better employees, in my eyes

People need to understand that there's a difference between an H1B/TFWP and straight up Immigration; the latter is individuals and their families going through the process, the former is corporations importing workers to avoid paying industry standard wages. These people (H1B's/TFW's) are exploited for cheap labour, have limited rights and serve no other purpose beyond lowering the bottom line of corporations and displacing local workers.

Being against H1B's and TFW's is not anti-immigration. It's anti-exploitation and anti-corporatism.

In many cases, H1B is a first step towards permanent residence. And even otherwise, H1B is just a legal basis for hiring a workforce from overseas. H1B is not just about cheap labor; a lot of high-paid skillful workers fall under that category. And regardless of anything, H1B and free market go hand in hand. Except, I completely agree with Bill Gates: there shouldn't be quotas on H1B; this protectionism doesn't do any good, and does a lot of harm. Again, from my perspective; I dislike protectionism a lot.

[Tradewind]

That's because you're painfully naive.

[May90]

That's because you're painfully naive.

Thanks for your contribution.

[Crissi]

May, I dont really think you see the long term effects on local employment, youth training, and exploitation that i know the people in these industries see 9because again, Ive got family in it at high level positions).

It may be good for the company SHORT TERM cause profits, but it is rather bad long term for everyone involved. Why train youth when you can import people for cheaper? That just leaves US youth stuck between a rock and a hard place after university.

Basically, the companies do not want to invest in AMerica's workforce long term, which is all sorts of bad.

[Celista]

Dad's in the software / tech industry. Its not that America lacks talant, its that companies dont want to bother paying more / training new workers so they abuse the H1B visas instead to import already trained ones.

So yes, this is bullshit. Companies are screwing the future economy by going cheaper right now.

Yes, agreed. Unfortunately it's not just software/tech, some level of outsourcing is prevalent across nearly all industries.

[Crissi]

Yes, agreed. Unfortunately it's not just software/tech, some level of outsourcing is prevalent across nearly all industries.

heh. Managed to create a short term job for myself, but that was based purely on who I know. I dont think others will be nearly as lucky.

[Celista]

heh. Managed to create a short term job for myself, but that was based purely on who I know. I dont think others will be nearly as lucky.

Congrats, that's great to hear!

[May90]

May, I dont really think you see the long term effects on local employment, youth training, and exploitation that i know the people in these industries see 9because again, Ive got family in it at high level positions).

It may be good for the company SHORT TERM cause profits, but it is rather bad long term for everyone involved. Why train youth when you can import people for cheaper? That just leaves US youth stuck between a rock and a hard place after university.

Basically, the companies do not want to invest in AMerica's workforce long term, which is all sorts of bad.

The point is, by importing those who offer a better productiveness-per-cost stat, you encourage your own population to improve its productiveness-per-cost stat. Which is good for the economy long-term. If you are afraid of companies exploiting workers, set some standards, such as minimum wages in different fields. Rather than isolating yourself, removing potential competition and letting your citizens feel safe and unchallenged, while the economy is stagnating.

This country was formed by immigrants, and became so successful due to immigrants. It is a perfect example of what rejection of protectionism can achieve. I see no reason to turn this around now.