Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley by Antonio Garcia Martinez contains an explanation of the H-1B visa system:
Skilled immigrant tech workers in the United States have effectively one method of entry: the famous H-1B visa. Capped at a small yearly number, it’s the ticket to the American Dream for a few tens of thousands of foreigners per year. Lasting anywhere from three to six years, the H-1B allows foreigners to prove themselves and eventually apply for permanent residency, the colloquial “green card.” Like the masters of old buying servants off the ship, tech companies are required to spend nontrivial sums for foreign hires. Many companies, particularly smaller startups, don’t want the hassle, and hire only American citizens, an imposed nativism nobody talks about, and which is possibly illegal. Big companies, which know they’ll be around for the years it will take to recoup their investment, are the real beneficiaries of this peonage system. Large but unexciting tech outfits like Oracle, Intel, Qualcomm, and IBM that have trouble recruiting the best American talent hire foreign engineers by the boatload. Consultancy firms that bill inflated project costs by the man-hour, such as Accenture and Deloitte, shanghai their foreign laborers, who can’t quit without being eventually deported. By paying them relatively slim H-1B-stipulated salaries while eating the fat consultancy fees, such companies get rich off the artificial employment monopoly created by the visa barrier. It’s a shit deal for the immigrant visa holders, but they put up with the five or so years of stultifying, exploitive labor as an admissions ticket to the tech First World. After that, they’re free. Everyone abandons his or her place at the oar inside the Intel war galley immediately, but there’s always someone waiting to take over.
Strictly speaking, H-1B visas are nonimmigrant and temporary, and so this hazing ritual of immigrant initiation is unlawful. Yet everyone’s on the take, including the government, which charges thousands in filing fees. The entire system is so riven with institutionalized lies, political intrigue, and illegal but overlooked manipulation, it’s a wonder the American tech industry exists at all. So into this bustling slave market, echoing with the clink of leg irons and the auctioneer’s cry, did we ignorantly wade. If Argyris was to join our as-yet-unnamed company, he’d need a work visa. In fact, forget working: he couldn’t even legally stay in the United States once Adchemy terminated him. Immigration law stipulates a former H-1 holder must leave the country within days. Thanks for building our tech industry, you dirty foreigner, now beat it. Was there a way out? Argyris, a proud Greek with an admirable display of Southern European enterprise and skill at sniffing out legal loopholes, found a solution. His longtime Turkish girlfriend, Simla, was studying for a PhD at Stanford under an F-1 student visa. Were they to marry, Argyris would qualify for an F-2 student spouse visa. This wouldn’t let him officially work in the States, but it would let him remain there.
More: read Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley
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There’s also visa-related worker competition at the bottom end of the wage scale as well. Anyone familiar with the J-1 (Visitor Exchange Program) Visa?
It apparently allows foreign visitors to come “experience United States (U.S.) society and culture and engage with Americans”, and generally is used by non-profits and government organizations.
Apparently a local profit amusement park didn’t want to pay teenagers a “clearing wage” to work in the park so it found a way to bring in unskilled foreign workers using the J-1 visa program.
I became aware of the J-1 visa when some of the workers did what kids do –
http://www.wsoctv.com/news/local/carowinds-employees-with-visas-getting-kicked-out-of-country/416535823
Here’s a description of the program –
http://j1visa.state.gov/wp-content/uploads/2016/06/FactSheet_J1Visa.pdf
You talk about how unfair it is to the foreigners. But how about how unfair it is to the Americans get laid off or don’t get hired because H1B peons work for 1/2-2/3 as much?
Should American politicians maximize the overall welfare of “current Americans”, or of “current Americans plus all the foreigners who want to come here”? Well, ask yourself, what would happen if the CEO of one of those companies, instead of issuing a stock dividend solely to current shareholders, gave some of it to shareholders of his corporate rivals because of “fairness”? The people who put him in his job would quickly remove him. Who puts American politicians in their jobs?
H1-Bs are transferable without requiring the former employer’s cooperation as long as the employee can find a new employer in a month, something not hard in the Bay Area right now. That reform was introduced about a decade ago. The employee can also leave you himself, and I don’t think wages are much lower. We certainly pay the same for our handful of H1-Bs as we do our American staff.
The real hold the “people mills” have is their sponsorship for a green card. If the employee leaves, the former employer will stop the proceedings and they are back at square one.
There’s no question that Antonio was in the corporate rank that wanted the program expanded, back when it was an issue. Still, if conditions in those foreign countries are so bad they’re willing to kill themselves to try to escape, why are they voting for all the same policies in US except prostitution? It’s been amusing to watch Chinese & Indians evolve in the last 30 years of the program. Each generation eventually becomes American & can no longer get jobs. Chinese once benefitted from the H-1B program. They gained citizenship, got lazy, & disappeared. Indians used to work their asses off. Lately, they’ve been showing up more & more on bike trails & real estate offices. Credit is something they ever had before coming to US. Their taste for borrowing 50 times their salaries for houses is legendary. Once leaving India, their net worth goes from 0 to negative 8 figures. If the government didn’t subsidize their mortgages, coming to US would mean financial ruin for all of them.
Ha, rather incomplete presentation – MS is missing from the list of companies.
Also there is L1 – internal transfer. Company hires a person in the foreign office, then waits for a year, then bring them to US. MS approached this at scale and has a huge clearing house office in Vancouver, for example.
I addition to this there are combinations of student work permit/talent visas.
@Joe Shipman – you really have no idea about situation. It’s impossible to hire skilled developers, foreign or native, at basically any reasonable rate – anyone with skills already working. H1B cap can be easily doubled, and still it will be totally fine.
There is zero need for the H1B program and it needs to be canceled. There are already separate “extraordinary talent” visa categories.
In the context of West Coast tech companies H1B is intimately tied to the absurd cost of living and low quality of life. The qualified Americans don’t want to live with roommates or endure three hours of commuting and also the weird office culture, so they refuse to relocate to the Bay Area for the salaries on offer. Rajiv will swallow the lifestyle because he thinks he can maneuver for a green card once he’s in.
The whole thing is a scam on many levels but it’s funny that one of the main drivers is that VCs and favored managers are too lazy to open and manage American offices in lower cost of living cities. They’d be able to fill these roles no problem somewhere that decent housing and schooling isn’t $7K a month.
“It’s impossible to hire skilled developers …”
No, the laws of supply and demand apply to developers, just like everything else in the market. If there were a scarcity of developers, then salaries would be skyrocketing, but they are not going up at all.
The whole H-1B program is anti-American.
As someone who spent 11 years on H1B to earn my GC, I would say that no one in the program has any illusions about what it is: a tightly controlled grey market for the US permanent residency.
A lot of money is made in the process, and our humble civil service (both state and municipal) are one of the most active players. Being taxpayer funded and hence careful with their (our?) money, they do manage to cut a decent deal.
For instance, how about a suggested billing rate of $200/day for SharePoint administrator for a city office in the largest city on the East Coast? I have no doubt that the consulting company would have paid their H1 employee the prevailing wage 🙂
I think if the US really cared about attracting skillful immigrants, we would have established a point-based immigration program similar to what Australia and New Zealand have had for decades.
The article doesn’t even mention the “stock” of current vida holders. One Google search says this is upwards of 10x the annual permits, so it’s on the order of 650,000. That’s a lot of good-paying jobs.
I work for a consulting company who has squirreled out a nice little market in supplying the town’s Fortune 150 with local H1-B visa holders, and dealing with all the paperwork and government hassle that goes along with it. Don’t get me wrong: the Fortune 150 also hires plenty of foreigners for permanent roles, and they have a wholly-owned subsidiary in India which does the majority of the programming, but there’s a non-insignificant number of visa holders right here in our sleepy little midwestern town. They’ve essentially taken over entire apartment complexes, and 3 out of 5 neighbors are Indian.
I like the culture, and most of them seem to want to integrate with America. The one problem I have with the immigrants is the mother-in-law. Most of the families here will eventually bring their parent(s) over, and they never seem to smile or wave. I guess I’m the wrong race to them.
That niggle aside, what bothers me about it all is that there’s nothing particularly technical about the positions I see visa holders doing around me. There are a couple in my group that can do Excel macro coding, but there’s nothing they’re doing that you’d need a college degree for, let alone a masters in engineering. These are jobs that the government is letting the Fortune 150 fill with transplants, when I know several young people at my church who would be great at these jobs, and who would triple their income if they could get them.
Everything else I could say about the program has already been said here. I just lament the drag on native employment that I see it produces. I don’t get it. I mean, I get it. It’s about money. It’s ALWAYS about money. But I don’t understand why the leaders of our government would artificially manipulate the natural supply and demand of local “white-collar” talent. Call me old fashioned, but, from a macro perspective, doesn’t it make sense to let the market dictate investment in local employment? Oh, who am I kidding? There’s no one in Washington who cares about what happens to the country after they’re unable to be elected.
We don’t need a points based system. We don’t need to worry about cultural differences involving mothers in law. We simply don’t need these people. They are of no use to us.
Antonio Garcia Martinez is out of date. H1B’s at my company are being snapped up by some of the major Bay corporations before they even get a green card. The effect of H1Bs bailing out early has caused companies who could bank 3-6 years of low salaries to have to raise their salaries so they don’t walk. It has gotten to the point where the highly effective ones are making only 10-15% less than the “possibly illegal” American citizens.
Corporations doing this include a fruity outfit in Cupertino, a car company run by an individual who likes to sue people, and and a company named after a mathematical term for the number represented by the numeral 1 followed by 100 zeros. One of the guys who quit his job at a semiconductor company with a logo represented by a stylized windowed sinc function whose founder had a sex cave underneath his house had his H1B transferred by the fruity company. He literally doubled his salary.
Lolz, here we can see people benefiting from globalization by living in the country that de-facto has world reserve currency and as a result low credit rate to let them essentially enjoy incredibly high standard of living while doing not that much short-sightedly ask for labor-force protectionism. We need to expand H1B programs and all other such programs as much as possible (and introduce one for doctors) to brain-drain other countries and to continue to sustain innovation, while other can’t. Supply of qualified high-tech, science, etc workforce is limited, if they don’t work in your country, they work somewhere else.
@anonymous > whose founder had a sex cave underneath his house
You say that like its a bad thing – what’s the point of being a billionaire if you can’t have drug-fueled orgies in your secret underground sex cave?
SK: I worked as a software manager for a company which hired almost all H1Bs, and as a software developer at a big company which hired mostly American developers and college grads whom it trained internally, and I’ve been following this closely since 1991. The point is that wages in the entire industry have been stagnating for 25 years because of the influx of H1Bs and similar immigrants. Of course people with good enough skills will still find work, but it will pay much less because of H1Bs depressing wages, and many people with merely adequate skills will get squeezed out entirely.
And most of the H1Bs aren’t very high quality, and you know it. Maybe your company only hires top people all of whose American equivalents are already employed, but that’s not the numerically typical case. I personally never suffered directly from H1B competition because I was very highly accomplished, but I certainly suffered indirectly because the whole salary structure suffered downward pressure.
@Joseph Shipman
Globalization continues and is unlikely to stop, few benefit at the expense of many.
You can choose protectionist, aka Brexit, stance, which is while valid choice, is unlikely to be successful long term.
Alternative is to position yourself to benefit from it. On the country level it means to deny other countries talent workers and make them work for yourself. On personal level it means to get educated and experienced to stay on the demand side, while living in the country which outperforms other countries at innovation. Now, despite stupid policies, US is still such a country, but short-sighted morons are working hard to kill the goose that lays golden eggs.
US tech salaries seem to be 2-3 times higher than those in Western Europe, about twelve times higher than those in Eastern Europe. Compared to India and China, I’m sure the difference is greater still.
In the past, when Sillicon Valley was home to the semiconductor industry, and Universities were decades behind the state of the art, it made sense to hire locally.
Today, most ‘tech’ seems to involve overpaid CS graduates to do labor-intensive work using javascript frameworks. You can pay people in Talinn and Hyderabad to do the same work, and you’d save a lot of money.
The US tech industry has expanded almost continuously over the last few decades. Cost-cutting simply hasn’t been on its radar so far. There hasn’t been much reason</em to find cheaper developers, because the labor costs have always been dwarfed by the (potential) revenue.
I don't know if the H1B programme is such a great thing, but I think US tech workers are likely to be the potential losers of globalisation, just because they occupy such an incredibly privileged position right now.
The conflation of “immigrant” and “guest-worker” is deliberate, and the latest scheme of corporate shills and propagandists. This after failing to sell a long list of previous falsehood that include:
“Best and brightest”
“Skill shortage”
“Thousands of open jobs”
“Jobs American don’t want”
Etc.
Perhaps just one of these propagandists might point to any recent corporate executive who has sworn under oath any such shortage? But no, of course not. As evidenced by multiple decades of flat salaries and ongoing and widespread layoffs, that is NOT going to happen. Indeed, perhaps the last to testify under oath was Microsoft’s chief lawyer, Bill Smith, who said that, well yes, sometimes it was hard time to fill certain positions.
Yet despite the latest claim, guest workers are NOT immigrants. Guest workers serve at the will and convenience of their employer; employers who control both their visa and their future. The fraud and abuse in US guest workers is well documented. Indeed, even the Department of Homeland Security estimates over 20% of H-1B visa are fraudulent. And despite abuses that often involve excessive work hours, lack of healthcare, four+ worker sharing one bedroom appartments, and threats to families at home for non-compliance, it rarely rosy future. These employers sponsor a mere 5% of these guest workers for a green card.
Get the picture? No one should be deceived — this IS about cheap labor and corporate profit — at the expense of OUR nation and citizens. And these are corporations willing to spend hundreds of millions on lies, liars, and politicians. But why? By my calculation, their last “almost” attempt at buying Congress would have yielded them in excess of $4 trillion dollars.
But these plutocrats also fail to see is how close they stand to the guillotines.
Joseph Shipman, I think there’s more to say about the quality of the typical H1-B visa holder. I read an article a long time ago that claimed that the “A” students stay home, and run the show, so the ones who apply for the visa are the “B” students. Thus a program that was intended to bring top talent to the country, which couldn’t be found locally, winds up attracting the average folk who happen to want to travel. This coincides with my personal experience, but that’s pretty limited, in the big scheme of things.
And I think that’s part of the problem with this whole debate. Every one here has a limited and biased perspective on the program, and the government isn’t helping to disseminate accurate information about it. If you have to apply to INS (or whichever TLA department) to GET an H1-B visa, you’d naturally think that you could find out EXACTLY how many visa holders are currently in the country, but the government doesn’t publish this figure. To me, that’s a big red flag that the system is corrupt — regardless of the level of talent it brings in — and they know it.
NoGig, I think you’ve summed it up pretty well, but there’s a counter point, and it’s the sticky wicket in the debate. While I’ve previously pointed out that there’s nothing particularly technical that the H1-B’s are doing where I work, they DO work harder and more diligently than the “office workers” union employees doing the same thing. So the value proposition to the company is very clear: with the H1-B visa, they get someone who’s well able to do the job, who works harder than their American counterpart, and who isn’t going anywhere any time soon. As long as the government is offering this service — to let companies engage in legal conscription — they’d be foolish not to take advantage of it…
… and then spend a lot of money promoting “diversity” as the highest moral good that can be attained.
Large but unexciting tech outfits like Oracle, Intel, Qualcomm, and IBM that have trouble recruiting the best American talent hire foreign engineers by the boatload.
I doubt these large companies have trouble recruiting American engineering talent; it’s just that these companies do not want to pay market rate to engineers when the can get cut rate H-1B immigrants. This might explain why, after flying me to the west coast three times for a series of interviews, I still wasn’t offered a job at Intel.
http://h1bdata.info/index.php
I like your article, do some light in this maze of rules. Even I find it helpful in the job I applied for some time.
All this shrieking about H1-B visas amounts to nothing but a basket of wool pulled over your eyes by the corporate overlords who don’t want you sheeple to notice what the snow-backed Canadians coming on their NAFTA TN-1 work visas have been doing to the native wage structure. Every 5th *nurse* in Silicon Valley hospitals is from Canada, never mind the tech workers.
@ NoGig #17 […] “these plutocrats also fail to see is how close they stand to the guillotines.”
That’s partly because, judging by a number of blackout riots, any violent upheaval that may happen the “American way” will end up in wanton, if also mass-destruction of neighboring property, not of (equally armed) lives; and partly because the ‘crats have made the prætorians that guard their peace, the line police personnel, into fellow haves, property and mutual funds owners. So they share an interest in protecting the status quo even when it is beyond salvage, and expect to be protected behind the gates of their gated communities, and the panic rooms of their midtown Towers, even ablaze. Nolo contendere to the rest.