I've been on H1B for years in various companies and I totally support this proposal. I personally have not seen any case where H1Bs were underpaid in salary terms but I definitely saw people being threatened and worked to death because their green card application was dependent on the company (this made, hourly wise, a minimum wage job for them).
They aren't underpaid wrt their nominal career level. Many of them definitely are underpaid if you consider their actual experience and what they'd get if they were in the market. That price point can only be established if you can safely change jobs, which on an H1-B you can't.
I've seen stock grants much lower. Really though, how do you negotiate if you have no alternatives? Of course comp will be lower if you can't negotiate.
I have an easier solution. Companies routinely use supply and demand to whine their way politically. It's simple: any H1-B who comes into the US should be paid at least 30% more than the prevailing market average because it's clear that there's more demand than supply for their talents. The truly talented still get to come to the US, and they get paid handsomely for it. The rest won't, and more employers will be willing to train young developers, engineers, nurses, and scientists rather than pay the difference. Having a talented and educated native populace is far more important than propping up companies that abuse the system.
There's no such thing as "prevailing market wage", at least not in software engineering. Your comp can vary by a factor of 3 or more, depending on where you work, for the exact same skill set.
That's basically the same thing as what's proposed, except the extra cost goes to the developer in your proposal whereas in the original it is used to fund public projects.
This proposal (run an auction for the H1-B slots) would likely make it even harder for startups to offer H1-B visas compared to say Microsoft.
For arguments sake, lets consider an average potential hire. Lots of startups are willing to pay ballpark $130k in San Francisco right now (low end $70k, upper end $180k). Since the company most likely don't have funding lasting more than 18 months, this means they're budgeting just about $200k plus taxes and benefits for this person over that duration.
You might be willing to pay 10, 20 or even 30% as a fee for the right candidate (just like headhunter fees) but that translates into either that many fewer employees or that much less runway. Taking 18 months of capital and turning it into 12 is a quick way to end up dead. By contrast, large companies are paying much more in total compensation and can easily afford to spread this cost over multiple years (assuming the candidate doesn't nearly immediately utilize his ability to transfer his visa).
If anything this proposal seems like it would lend itself towards ensuring only large companies apply for H1-Bs and that smaller ones just have to hope people will transfer, despite not being able to promise that they'll be in business long enough to sponsor a green card.
Under the current system an employer has to wait 6 months to a year for their new hire to start, with a 1 in 4 chance in the H1-B lottery. That's just too far out for a startup.
Yes, and this would make it even worse (because the cost wouldn't be known until after the April 1 auction). That's my point: it's already bad for a variety of reasons, but introducing an auction just makes it worse.
Srinivas is right though: the price is clearly too damn low.
Moving to an auction system will in fact improve a startup's chances - most VC funded startups can comfortably outbid an outsourcing company. The outsourcers' business models are dependent on visa costs being on the low side.
Wow! Thanks for this link. For those that didn't click through: all the big tech firms combined only took about 5000 of the 85000 H1-B applications in 2014. Tata/Wipro/Infosys etc. each took more than 3000 a piece (Tata alone did more than all the big tech firms combined).
Still it seems like an auction isn't necessary, just a higher fixed fee upon selection. If it was say $10k, that's a pretty big chunk of the $45k to $90k that PayScale reports for software engineers at Tata Consultancy Services.
I actually think it's a good thing that startups won't be able to easily hire H1Bs. Here is what happened to me: I got convinced to join a startup with all sorts of promises of stability. I got H1B and I relocate my family to silicon valley. I go to my first day at work. First is meeting with founder, who tells me company has 1 month of money in the bank and currently at the stage of raising capital. Imagine my reaction that I might not have a job in a month after all they told me to recruit me. If I was citizen I could just get another job but with H1B it means leaving the country after the move and if company goes bankrupt they would not even be able to pay for me relocating back. Everything turned out to be fine at the end, but I don't wish anyone to experience that situation.
I don't disagree that the H1-B system is fairly broken, but you could have found another company to transfer it to, correct?
The once a year lottery for H1-B visas makes it nearly impossible for both employee and employer to forecast and to plan. While I'm not defending their actions, how long before moving here did you interview? I'd guess the "real" problem is that they didn't tell you as the date got closer that they weren't in great shape and maybe you should reconsider...
I think this is a great idea, let the H1B prices be freely controlled by market, and let companies buy/sell H1Bs among themselves.
People have mentioned that this makes things more expensive for companies. This is true, but i wish someone would take the side of the immigrants (there are only a few of us, and we can't vote!). Companies oppose this because its more expensive, and politicians oppose it because its "taking jobs away from Americans" and anyways immigrants on H1B can't vote. Of course, if we don't like it we should just "go back home", even if we have been here for years, have houses, spouses, jobs and friends here and don't have roots back home anymore. Immigrants have to put up with a lot of crap:
- a very short deadline to find a job if you are unemployed on H1B. Technically 0 days! - its only an unofficial grace period at the mercy of the whims of an immigration officer. meaning constant uncertainty and scrambling to find a job ASAP lest the immigration gods smite you down.
- ridiculously long wait times for green cards. in some cases 10+ years.
- unable to move companies while in the green card process. if you do, you go right back to the end of the line. many companies know and abuse this. during this time, you are pretty much a slave to the company - think about it, if you don't ultimately have a choice to switch companies without throwing away years of waiting, you have no means of recourse when they treat you poorly.
The top tech industry seems to be totally unaware of underground H1Bs. Some companies "charge" people to file their H1B, run fake payrolls and pay below legal salary. Government probably does not have much resources to catch all of them and hence catches only fraction of tip of iceberg.
F1 is another route through which lot of Indians enter the country and then struggle bribe their way to OPT/H1B.
It is really sad that the dishonest people get rewarded more.
Ouch. I disagree with this, so much. The US takes over a million new legal immigrants into the country every year. These immigrants are free to choose their career path in response to market signals and their own personal interests. This sort of immigration has nothing to do with the H1B visa.
A lot of people are certainly skeptical of claims that there is a severe shortage of tech workers. Many of us simply believe that when people are free to choose their own path in life, those with the skills necessary to become excellent programmers are able to apply those skills more profitably and find greater personal fulfillment in other areas. We believe that the government should not coercively force people to work for a period of time in certain fields and for certain employers as a condition of gaining the right to become a free participant in the US labor market, and that this sort of corporate power invites mischief.
In fact, I'd say that a program that provides a captive workforce whose ability to enter new fields and jobs is limited will create bad market distortions. It will prevent or at least suppress the kind of changes that would make programming and other tech fields attractive enough to start drawing that top talent out of other fields and into programming.
Employers, even "good" ones, should not control their employee's right to live in the US. People should be free to choose their path in life, and should not be coerced into studying or working in a particular field as a condition of living in the US. Those beliefs do not make an immigration sceptic. I'd say they are consistent with a very pro-immigration mindset.
This is my own opinion here. I think if you increase the price of H1B significantly then jobs would just move to Bangalore, Dublin or Vancouver. There is a higher limit to how much you can jack up the prices of a H1 visa and that higher limit should be set taking into account what the companies are willing to pay and still keep employing people in the US, assuming they have an option to hire people elsewhere in the world. If its too high, you might just have incentivized a behavior that stops companies from hiring people in US and instead hires them in other countries, these are the reasons why this will happen
- Companies increasingly have a global presence, almost all Tier 1 (AMZN, MSFT, GOOG) and Tier 2 (CSCO, JNPR, HP) firms have an office in Bangalore, Dublin and Vancouver these days.
- Work can be done from anywhere really. At least the kind of work that H1B's are hired to do. A majority of these roles are not client facing. And you can always fly in and back on business visas when you need some face time with the team in US.
- And you don't have the hassle of dealing with a non working immigration system. I can hire a guy from anywhere in the world and have him working at my Dublin office in a month. It takes a year of planning to get the same person in the US if I am lucky. I won't even consider it if the prices are too high.
- As a precedent, Almost all of the Tier 1 companies and most Tier 2 companies, move workers from US to India, Ireland and Canada routinely if they cannot secure a H1B visa in the US. If the prices are dramatically increased this will just become the default behavior.
That does not compute. The US is already the most expensive place to move employees even with H1B scams factored in, so if employers were price sensitive they would just hire those people in Bangalore, Dublin, and Vancouver right now. What motivates employers is the use of presence in the US as a perk as people badly want to get out of those other places. Individual managers also like H1B because it gives them a high level of power and control over those individuals.
This "solution" seems a bit naive. If H1B's were actually auctioned off at market rates, the companies involved would lobby even harder to increase the number allowed, in order to drive the prices down.
The H1B process already has a mechanism built in to prevent this 'abuse' - employers have to pay the prevailing market wage for the position. Perhaps the existing rules just need to be enforced better?
This article's idea will immediately makes everything worse. The only good outcome from this program is higher revenue for the government. Good companies will suffer. Foreign workers will suffer. American economy will suffer. All this revenue you collect from higher H-1B fees, you lose out in tax revenues because many companies will fail. The best way for government to enjoy healthy revenue is to have a super healthy economy! There is no other way around it.
The spirit of H-1B program is such that foreign workers get equal pay for equal work compared to their American counterpart. Assuming that is true, employers are already paying a premium for foreign workers because they have to pay thousands more dollars for the visa. The only reason they would do this is that they cannot find enough American workers. If they have to pay the same salary, why would any company in the right mind hire foreigners instead of Americans? If this very fact is not enough for you to show there is shortage of qualified American workers, read on.
Foreign workers will only hurt American workers if they cost less to companies and out-prices American workers. This could be the case for companies that do not follow wage requirement established by the H-1B program. However, if this is the case, then enforcement of H-1B wage requirement should be the thing that needs to be addressed. A new program based on H-1B auction is really addressing the wrong problem, in the wrong way.
Making H-1B fee auction-based will simply drive up the cost of hiring on H-1B. Yes it will become a disincentive to hire foreign workers, however given the same H-1B quota, companies that is able to get away with lower wage for foreign workers are more likely to be willing to pay more for the right to hire H-1B. Companies that are paying foreign workers competitively has no incentive to bid up and will just give up and suffer from under-staffed engineering team. So this program will reward employers who are fraudulent and who depress wages for H-1B worker and punish good companies who provide equal pay for equal work. And guess what, those employers who uncut pay for foreign workers will now undercut their pay even more because the foreign workers have fewer choices of good employers and all the potential employers remaining are the ones who want to pay foreign workers less to justify the higher cost of hiring them. Alas, you have the exact opposite outcome one would expect.
The shortage of highly skilled tech workers in this country needs no further proof. Do you really believe if you kick out all the foreign workers or making them really expensive to hire, then all the Americans who can't find job because their skills are irrelevant can suddenly find a job? They still won't find a job until they learned the things necessary to make them relevant again! Do you know why coding bootcamps are so popular? It is because the Americans who attend these programs know that they need to learn the new skills that will make them relevant in the tech sector.
If anyone works at one of those bootcamps, let's do a survey among your students and publish the results on the Internet. Do your students feel they are disadvantaged from foreign engineers/workers when it comes to finding a job? Which is going to help them more in finding a job they want and like? Attending a coding bootcamp, or sending all foreign engineers home.
The notion that foreign workers are taking jobs away from Americans is an ill-informed one. Illegal Mexicans are doing dirty work that many Americans don't want to do. Foreign tech workers are doing work that many Americans don't have the capacity to do. The pampered Americans(just some of Americans, not all) need to stop whining about their job being taken away and start to up their game and think about how they can contribute to this economy. To quote JFK, My fellow Americans, ask not what your country can do for you, ask what you can do for your country. Ask not what easy job your country can hand out to you, ask what you ca...
It's not just that H1B has lower salaries, but that they are locked into the employer as it is difficult for them to get new sponsorship and change jobs. You have to apply in March, but can't start working until October and cost to the employer is $5k - $10k or more depending on if they hire a firm that bribes the right officials so their candidates win the "lottery"
The system as written by law isn't bad. It's companies that flat out abuse it and violate the law and get away with it. There is no way Disney should have been to openly admit they were replacing US workers with H1B's as the whole system is setup so that you have to prove you can't find US workers for the position.
27 comments
[ 3.1 ms ] story [ 73.0 ms ] threadFor arguments sake, lets consider an average potential hire. Lots of startups are willing to pay ballpark $130k in San Francisco right now (low end $70k, upper end $180k). Since the company most likely don't have funding lasting more than 18 months, this means they're budgeting just about $200k plus taxes and benefits for this person over that duration.
You might be willing to pay 10, 20 or even 30% as a fee for the right candidate (just like headhunter fees) but that translates into either that many fewer employees or that much less runway. Taking 18 months of capital and turning it into 12 is a quick way to end up dead. By contrast, large companies are paying much more in total compensation and can easily afford to spread this cost over multiple years (assuming the candidate doesn't nearly immediately utilize his ability to transfer his visa).
If anything this proposal seems like it would lend itself towards ensuring only large companies apply for H1-Bs and that smaller ones just have to hope people will transfer, despite not being able to promise that they'll be in business long enough to sponsor a green card.
Srinivas is right though: the price is clearly too damn low.
The biggest H-1B users are offshoring/outsourcing companies (source: http://www.nytimes.com/interactive/2015/11/06/us/outsourcing...)
Moving to an auction system will in fact improve a startup's chances - most VC funded startups can comfortably outbid an outsourcing company. The outsourcers' business models are dependent on visa costs being on the low side.
Still it seems like an auction isn't necessary, just a higher fixed fee upon selection. If it was say $10k, that's a pretty big chunk of the $45k to $90k that PayScale reports for software engineers at Tata Consultancy Services.
The once a year lottery for H1-B visas makes it nearly impossible for both employee and employer to forecast and to plan. While I'm not defending their actions, how long before moving here did you interview? I'd guess the "real" problem is that they didn't tell you as the date got closer that they weren't in great shape and maybe you should reconsider...
People have mentioned that this makes things more expensive for companies. This is true, but i wish someone would take the side of the immigrants (there are only a few of us, and we can't vote!). Companies oppose this because its more expensive, and politicians oppose it because its "taking jobs away from Americans" and anyways immigrants on H1B can't vote. Of course, if we don't like it we should just "go back home", even if we have been here for years, have houses, spouses, jobs and friends here and don't have roots back home anymore. Immigrants have to put up with a lot of crap:
- a very short deadline to find a job if you are unemployed on H1B. Technically 0 days! - its only an unofficial grace period at the mercy of the whims of an immigration officer. meaning constant uncertainty and scrambling to find a job ASAP lest the immigration gods smite you down.
- ridiculously long wait times for green cards. in some cases 10+ years.
- unable to move companies while in the green card process. if you do, you go right back to the end of the line. many companies know and abuse this. during this time, you are pretty much a slave to the company - think about it, if you don't ultimately have a choice to switch companies without throwing away years of waiting, you have no means of recourse when they treat you poorly.
F1 is another route through which lot of Indians enter the country and then struggle bribe their way to OPT/H1B.
It is really sad that the dishonest people get rewarded more.
Ouch. I disagree with this, so much. The US takes over a million new legal immigrants into the country every year. These immigrants are free to choose their career path in response to market signals and their own personal interests. This sort of immigration has nothing to do with the H1B visa.
A lot of people are certainly skeptical of claims that there is a severe shortage of tech workers. Many of us simply believe that when people are free to choose their own path in life, those with the skills necessary to become excellent programmers are able to apply those skills more profitably and find greater personal fulfillment in other areas. We believe that the government should not coercively force people to work for a period of time in certain fields and for certain employers as a condition of gaining the right to become a free participant in the US labor market, and that this sort of corporate power invites mischief.
In fact, I'd say that a program that provides a captive workforce whose ability to enter new fields and jobs is limited will create bad market distortions. It will prevent or at least suppress the kind of changes that would make programming and other tech fields attractive enough to start drawing that top talent out of other fields and into programming.
Employers, even "good" ones, should not control their employee's right to live in the US. People should be free to choose their path in life, and should not be coerced into studying or working in a particular field as a condition of living in the US. Those beliefs do not make an immigration sceptic. I'd say they are consistent with a very pro-immigration mindset.
- Companies increasingly have a global presence, almost all Tier 1 (AMZN, MSFT, GOOG) and Tier 2 (CSCO, JNPR, HP) firms have an office in Bangalore, Dublin and Vancouver these days. - Work can be done from anywhere really. At least the kind of work that H1B's are hired to do. A majority of these roles are not client facing. And you can always fly in and back on business visas when you need some face time with the team in US. - And you don't have the hassle of dealing with a non working immigration system. I can hire a guy from anywhere in the world and have him working at my Dublin office in a month. It takes a year of planning to get the same person in the US if I am lucky. I won't even consider it if the prices are too high. - As a precedent, Almost all of the Tier 1 companies and most Tier 2 companies, move workers from US to India, Ireland and Canada routinely if they cannot secure a H1B visa in the US. If the prices are dramatically increased this will just become the default behavior.
The issue is the insistence that they do need employees here, because of a supposed local shortage.
The spirit of H-1B program is such that foreign workers get equal pay for equal work compared to their American counterpart. Assuming that is true, employers are already paying a premium for foreign workers because they have to pay thousands more dollars for the visa. The only reason they would do this is that they cannot find enough American workers. If they have to pay the same salary, why would any company in the right mind hire foreigners instead of Americans? If this very fact is not enough for you to show there is shortage of qualified American workers, read on.
Foreign workers will only hurt American workers if they cost less to companies and out-prices American workers. This could be the case for companies that do not follow wage requirement established by the H-1B program. However, if this is the case, then enforcement of H-1B wage requirement should be the thing that needs to be addressed. A new program based on H-1B auction is really addressing the wrong problem, in the wrong way.
Making H-1B fee auction-based will simply drive up the cost of hiring on H-1B. Yes it will become a disincentive to hire foreign workers, however given the same H-1B quota, companies that is able to get away with lower wage for foreign workers are more likely to be willing to pay more for the right to hire H-1B. Companies that are paying foreign workers competitively has no incentive to bid up and will just give up and suffer from under-staffed engineering team. So this program will reward employers who are fraudulent and who depress wages for H-1B worker and punish good companies who provide equal pay for equal work. And guess what, those employers who uncut pay for foreign workers will now undercut their pay even more because the foreign workers have fewer choices of good employers and all the potential employers remaining are the ones who want to pay foreign workers less to justify the higher cost of hiring them. Alas, you have the exact opposite outcome one would expect.
The shortage of highly skilled tech workers in this country needs no further proof. Do you really believe if you kick out all the foreign workers or making them really expensive to hire, then all the Americans who can't find job because their skills are irrelevant can suddenly find a job? They still won't find a job until they learned the things necessary to make them relevant again! Do you know why coding bootcamps are so popular? It is because the Americans who attend these programs know that they need to learn the new skills that will make them relevant in the tech sector.
If anyone works at one of those bootcamps, let's do a survey among your students and publish the results on the Internet. Do your students feel they are disadvantaged from foreign engineers/workers when it comes to finding a job? Which is going to help them more in finding a job they want and like? Attending a coding bootcamp, or sending all foreign engineers home.
The notion that foreign workers are taking jobs away from Americans is an ill-informed one. Illegal Mexicans are doing dirty work that many Americans don't want to do. Foreign tech workers are doing work that many Americans don't have the capacity to do. The pampered Americans(just some of Americans, not all) need to stop whining about their job being taken away and start to up their game and think about how they can contribute to this economy. To quote JFK, My fellow Americans, ask not what your country can do for you, ask what you can do for your country. Ask not what easy job your country can hand out to you, ask what you ca...
The system as written by law isn't bad. It's companies that flat out abuse it and violate the law and get away with it. There is no way Disney should have been to openly admit they were replacing US workers with H1B's as the whole system is setup so that you have to prove you can't find US workers for the position.