The Hypocrisy of Helping the Poor?

Parent Cafe
81

^ I once heard that, depending on the country of origin, the time to get through the whole process (OPT, H1B, PR) could vary significantly. I heard of a case at our company that it takes 8+ years because she came from a “wrong” country

Managers usually love, love someone in that position. They will be “chained” to the company for a very long time and it is much easier to manage them for an apparent reason. On the other hand, I heard the turnover rate at many companies in India (and working in India only) is very high. This could be a headache when a US-based company uses the engineering resources (as contractors) over there. But in the eyes of top management, it is all dollars and cents that count in the end.

82

Are we off topic again?

83

Yes. Outsourcing of tech jobs has nothing to do with employment in poorer areas of the country, whether the rural South or the formerly industrial North.

And outsourcing of manufacturing jobs is a different kind of thing: instead of bringing workers into the market, you export workers to somewhere else, notably to the maquiladora factories. While workers coming into a market may displace people - often temporarily - they add money and purchasing power to the community. Jobs leaving do the opposite. In the eyes of many, it is a large positive for the US that we are able to attract top layers of brain power from other societies and that the dislocation associated with that is much less than the benefits.

I’m not denying there is outsourcing, meaning the loss of jobs, to other countries higher up the job/income ladder. I used to deal on occasion with a tech company which offered lower rates because it relied heavily on workers in India for some coding. And we’ve all had the experience of talking to someone with mediocre English doing customer service from the Philippines.

As another note, if we go back to Henry Ford, he raised pay to $5 a day not so workers could afford to buy cars but to reduce employee turnover and the associated costs of hiring, training, payroll, management, etc. The same is proving true of some exported jobs, like many in customer service: cheaper up front based on labor rates but lower customer retention, more problems for management, etc. reduce the wage differential. Other companies have found that giving their reps more responsibility and tasks increases productivity so a higher US wage is a better deal. How this shakes out over time is unknown. Some people believe customer service will become more efficient at directing people to more empowered/trained reps, meaning a more obvious tiered system, perhaps one fed by better AI.

84

Not very easily, no. First off, he’d be looking at a 4 year time horizon. He has to start spending money to educate these people 4 years before any of them will go to work at Facebook. Second, he doesn’t know if he’ll want them. It doesn’t benefit Facebook to hire ordinary people, they only want extraordinary. So his investment may not even pan out for him.

I don’t know exactly how H1-B is really used in practice beyond the H1-Bs I’ve met which would be a skewed sample. But one additional concern is that some of the EB-5 “market” is cannibalized by H1-B. There are plenty of people who get H1-B visas with access to the capital for an EB-5. Many of whom would probably go the EB-5 route if they couldn’t get the H1-B. Seems a bit inefficient on the part of the US.

85

I have a vacation home on Cape Cod/islands area of MA–a vast majority of the young people who are working in the restaurants, driving the taxicabs, cleaning homes, working with landscapers/gardeners, or in other services jobs are here on special H-1 visas. In my area, most of the young people are from Eastern Europe, but other areas as well (Jamaica).

Is this the same visa that people are discussing in previous posts? If so, the young people in these jobs don’t have specialized skills at all. Anyone with training could handle these jobs.

86

I do not know the particular designation right now. 30+ years ago, there was something called H-4 (or some other number than 1 in H-1) which meant for unskilled or low skill workers.

The bottom of all the issues: How can the interests of the business and that of citizens be addresses? All the unproven theory of “pie being larger for everyone”. But it seems that a huge number of people outside of the US will be willing to do the same job with a fraction of the rate for paying American workers now. Hiw can we address this?

87

Its not just low-skill call center jobs that are offshored. A lot of high-end legal & medical (especially radiological diagnosis) work is already offshored. Low-cost legal teams in india does the work, and one American lawyer can just sign off on it. M.D. radiologists in india get xray scans over the internet, and read them from there.

I’m not sure what the solution is for saving American jobs-- maybe a mega electromagnetic pulse that kills the internet?

88

Here is a data point that has been bothering me recently:

A friend’s son is a senior in engineering down in Texas. One of his good friends graduated last year with his BS, ethnic Indian but born in the US, without any job offers. Every single foreign Indian student received offers but he, the only US citizen of the ethnic bunch and the most qualified of all of them, did not. We have hit an inflection point where it is easier for a US-educated foreign engineer to get an H1-B job than it is for a native born engineer.

Back on the original topic, I know several people from the rural hills outside of Russellville, Arkansas (mentioned in the article), people who didn’t have plumbing until the 1970s. Other than a couple of service jobs, the population is divided among farmers, chicken processing plant workers, and stay-at-home welfare recipients. You would have to go to Little Rock to get much in terms of industry.

89

Re: #87

Were the foreign students bachelor’s level or master’s / doctoral level?

What kinds of companies did they find jobs at (i.e. outsourcing companies, or those hiring them for their own work)?

90

I’m still trying to understand how the recently signed Trans Pacific Partnership (TPP) Treaty will affect American jobs. The TPP impacts an estimated 40% of the world’s economy. TPP is the new NAFTA.

WSJ article on the potential winners & losers:
http://www.wsj.com/articles/several-u-s-industries-applaud-trans-pacific-partnership-1444078117

91

With the H1 visa program, there are 65000 slots for undergrad degrees, and an additional 20k for grad students. I don’t know how it is right now, but there were complaints not long ago that foreign grad students had a hard time staying here, that the system was broken. From what I read, it seems like they have softened the requirements, there are intermediate programs that allows grad students to stay her.

With the bulk of the H1, though, it is basically outsourcing to cheap labor. The H1b once was about special skills, but what it is these days is a way to get cheap labor where the person under the H1b doesn’t have much leverage with wages. There were specific laws passed in the last 5 or 6 years where a company is supposed to prove that they tried to hire US citizens and that they are paying the same as they would for a native, but the reality is no one checks (I know that for a fact, my own company hires visa holders). I totally lost all respect for the current administration when in an immigration reform bill, they tried bringing the number of H1B’s to 180k (when that bill ended up DOA in congress, there were reports of rioting in India and other places in Asia that had been counting on the increase in visas). And these are not unique skills you can’t get here, a lot of the people we are talking about are drone workers, they aren’t the best and brightest (the guys getting grad degrees in engineering and physics and comp sci generally are).

@Lergnom :
Henry Ford was directly quoted when asked why he increased the wages of his workers to 5 dollars a day, as saying because they could buy the cars they were producing, Gene Fowler in his Memoir “Skyline” about being a reported in NYC in the 1920’s interviewed Ford, and besides talking about why he was taking Ford private again (that Wall Street didn’t allow you to run your company correctly, too concerned about the next quarter), he directly was quoted as saying so his workers could afford the products they produce. Producing goods with dirt cheap labor only works when you can export it to markets or areas where people can afford the product, it doesn’t stir internal demand. China is a classic example, for all the talk about how big their economy is, even given the size of the country the internal demand is concentrated in a relatively small swath of the population. Yeah, I have heard Phil Knight saying how paying people 30c an hour to produce Air Jordans or whatnot that cost several hundred bucks "pulls people out of poverty’, but that is misleading, it does pull them out of the grinding poverty where people live on the equivalent of a buck a day, but it doesn’t exactly crreate a working or middle class that you once saw in the US. Basically, they are exploiting people desperate for jobs, and trying to make themselves look like Philanthropists, rather than opportunists.

92

If the following info is correct, it is somewhat interesting that the top two “players” are only interested in sponsoring workers for the first step (H1B) but are not interested for their second step (H-1B to Permanent Resident.) Maybe this is what both the business leaders (esp. in the tech industry) and politicians prefer to have.

H-1B Rank Firm New H-1Bs Received PERM Applications for H-1B Workers Immigration Yield
1 Infosys 6,269 7 0.1%
2 Tata Consultancy Services 6,163 0 0%

Total H1Bs received by these two companies alone: 12,432 per year I think. Isn’t total numbers per year 85,000?! (60,000 for anyones, 20,000 for MS and above.) I think there was a proposal to double this number to 180,000? (but I am not sure.) The trend seems to be that a competitive corporation will have no border and it could tap whoever they need at the right price from everywhere in the world. I once read somewhere that the department in California State government which is responsible fior printing the unemployment checks is mostly run by H1B contractors because it is more cost effective.

In another chart, it seems over 85% of the 12,432 have BS degree only, not MS and above.

93

If that proportion is true, then they should reverse it. MS/PhD graduates are the ones H-1B visas should be used for, since they are the higher skilled ones (most of whom did their graduate work in the US after graduating top of their class in another country). The BA/BS graduates are much more likely to be the low end outsourcing company hires.

The outsourcing companies (see link in reply #77) probably hire everyone at their low pay levels, though few US citizens or permanent residents would work for them.

The companies hiring directly (see link in reply #77) do seem to have pay levels that do not appear to be unusually low for 0-6 year experience MS graduates.

94

A woman I know had to leave the country recently. She is British and got her law degree in the US. She had been working for the public defender’s office but when she applied for her green card, she was rejected. She said they may have made a mistake with her application since most people who get their grad degree in the US are approved. She didn’t want to fight it though so she headed back to Europe.

95

Maybe because there are too many unemployed lawyers in the US already?

96

@ucb:
I agree that it should be reversed, I have to laugh when I hear tech companies and politicians talk about the H1B getting rare skills and such, when the bulk of the jobs we are talking about are people with bachelor’s, or if they have master’s not in rare skills, who simply are low cost labor. It isn’t just the consulting firm H1B’s who are low paid, the H1B’s companies hire directly (where the company or the worker holds the H1 visa) are significantly lower in salary, in large part because with H1 visa holders, it is a lot more difficult to change jobs, the company hiring them has to sponsor them, and it is in fact not all that much different than indentured servitude. It is telling what the H1 program has degenerated to, as part of the law the program is supposed to be suspended during times of high unemployment, like in the post 2008 economy, yet the 65000 limit was never reduced or eliminated, despite their being relatively high unemployment among tech workers. Among other things, if tech workers are unemployed (visa holders don’t count in that number), but they kept the level at 65,000, that strongly implies that visa holders were taking jobs that could have gone to unemployed tech workers, or potentially that they may have been what caused the tech workers to be unemployed. The H1B visa used to have strong checks and balances, but these days basically companies are allowed to self certify that they meet the requirements, and no one checks.

97

The H1B visa holders have to stay at a company for a while that’s why companies prefer them. While non-H1b can jump ship whenever they want.

98

With an H1B, there is a limited term with the visa. If an H1B holder wants to jump ship, they have to get another company to sponsor them for a visa which limits their mobility, and as a result companies can pretty much pay them what they want, if they underpay them it can be difficult to get another company to sponsor you.

99

The companies that hire directly complain for the obvious reason that they are squeezed into a small portion of the H-1B visas, while the outsourcing companies hog most of them.

The pay levels listed in the page linked from #77 for the companies hiring directly (i.e. not the outsourcing companies) do not appear to be unusually low for 0-6 year experience people with master’s degrees. Or do you know specific pay ranges for those particular companies?

100

@ucb:
I am a hiring manager in tech, and I can tell you that direct hiring (forget infosys and wiipro) that based on comparitive salaries I have seen, an H1B is generally 20-25% lower at least than it would be for a green card or us citizen. More importantly, a lot of the people applying directly for H1B’s worked the consulting route a long time, and as a result were underpaid, so when they try the direct route the amount they can get is limited, and by that point they are way behind. I have people coming in with 10+ years experience who are at levels I would expect in the 5-7 year range. If let’s say a job would pay a us citizen or green card 90k, if someone is currently making let’s say 60k, no one is going to jump them that much, so they stay behind. Unfortunately, every attempt to fix the H1B program has been blocked, and it was telling that the current administration never even researched the real needs, but based on what industry claimed wanted to increase the numbers to like 180k.

The reforms that have been proposed were:

1)Forbid consulting companies like infosys and wiipro from holding H1B visas, that it should only be for end users (though that would be a difficult call, companies like Accenture routinely hire H1B for their consulting arm, would it apply to them as well?)

2)I agree that most of the H1B should be reserved for grad level in specific fields, like comp sci and engineering (not MBAs!) that are relatively rare.

3)Companies should be forced to show that they are paying the same wages they would for a us citizen or green card

4)Likewise, there should be auditing of companies when they hire H1B’s, and when they find, like with Disney, they are firing US citizens or green cards and replacing them with H1B’s, they should be hit with massive fines, which they are supposed to be. I hear routinely that if the government would do that, companies would simply send the jobs to India or wherever, but that isn’t true, if they were going to do that they would have done it (it is a lot cheaper to hire employees in India from outsourcing places), there are reasons why they want to ‘insource’ them here, among other things when you outsource to India especially, you never know day to day who will be working your stuff, turnover is very high.