H1B Abuse Affecting American Workers

[Russianwolf]

Here's the current unemployment statistics. I don't see "54M working age Americans don't have a job" anywhere in there. The unemployment rate is historically very low (4.6%). Some states like Arizona are statistically "fully employed" (3+%).

I do agree that we should fix abuses to the law. But I'd be a little more wary of what the unions say about these issues. The unions have abuses of their own.

So that says there are 7.1 million people who are registered as unemployed. Right? What about all the housewives that don't register (as they aren't eligible)? and all the other that aren't eligible and don't register. As a currently unemployed person, I can tell you that after 6 months my benefits will be exhausted and most probably I will drop off the registry at that point if I don't find a job in the mean time.

I don't know if there is a good way to see how many "employment age" people do not have a job. Is there a statistic on what percentage of the population is employed? Maybe we could back into it.

[footprintsinconc]

well well well, this is very interesting. another example of corporate powers! profit is the bottom line, NO ONE is more important that it. when that is the mentality, then what were we expecting?

H1B program is perfectly legit program when used properly. there are many industries that are serviced by this visa. not all of those industries have corporations that are taking disadvantage of it. i know for a fact (as an example), there is a shorage of structural engineers and we do get engineers that come from canada and other parts of the world (if they are on the map). these visas are only given for three for the first time, then a year at a time with a max of 6 years all togather. after that they have to leave the country and cannot come back for a year. so there very legit people (most of them are not hired by corporations) that came to the US on this program. while they are here, they have the opportunity to apply for the green card. since 2001 there are many of those who have applied for their green cards, but they are in limbo, because the government is not issueing any new green card to H1B people.

so there are two problems, cooperations that are misusing the H1B to get cheap labor and then the government that is playing with the lives of these people who are stuck with their feets in two boats.

jeffery i liked your response, it was funny. just to add to this, you may want to see this post on utube aswell and go the guys website and judge for yourself (there is always some truth in everything, but to what extent is the question): click here

regards,

[Jeffrey Schronce]

jeffery i liked your response, it was funny.

Thanks! I told my wife I was funny. Just trying to add a little levity to a heavy subject. I withhold my opinions as they are much too strong. This per my wife.

I will say that I was ready to strangle customer service rep today that I wished would have been based in the US so they had a chance of understanding my problem.

[footprintsinconc]

i agree with you on the customer service thing. keep in mind, if you ask for tier 2 costomer support (for technical support), it is usually based out of the US. this out-sourceing is killing us!

[Anna]

So that says there are 7.1 million people who are registered as unemployed. Right? What about all the housewives that don't register (as they aren't eligible)? and all the other that aren't eligible and don't register. As a currently unemployed person, I can tell you that after 6 months my benefits will be exhausted and most probably I will drop off the registry at that point if I don't find a job in the mean time.

I don't know if there is a good way to see how many "employment age" people do not have a job. Is there a statistic on what percentage of the population is employed? Maybe we could back into it.

Here's an explanation of how government gets its unemployment figures. One portion states:

...

Some people think that to get these figures on unemployment the Government uses the number of persons filing claims for unemployment insurance (UI) benefits under State or Federal Government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the number of unemployed.

...

Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940 when it began as a Work Projects Administration project. It has been expanded and modified several times since then. As explained later, the CPS estimates, beginning in 1994, reflect the results of a major redesign of the survey.

I don't know how well the methodology works, but it's there and it can be critiqued. It can also be modified given enough data, something that the government has apparently done pretty recently. As long as the methodology is not set in stone, and that there's a constant review as to how well it reflects the general population, I'd trust it over other numbers that seem to have been picked out of thin air.

As for counting the housewives, here's how the population is categorized:

- People with jobs are employed.
- People who are jobless, looking for jobs, and available for work are unemployed.
- People who are neither employed nor unemployed are not in the labor force.

I'm guessing housewives are not counted in the available labor force.

[Slik Geek]

H1B program is perfectly legit program when used properly.

Agreed. It serves an important, strategic purpose. Unfortunately, our country's corporate lawyers and executives are exploiting the program - and apparently nobody in the government is really making sure that it is getting used properly.

It isn't hard to find blatant abuse of the program. Want ads that call for an extremely particular skill set (that looks like it was lifted from a particular individual's resume) is the first clue. The clincher is when there are also high educational requirements and significant experience specified (Ph.D. / 10-15 years), but the stated salary is about what a new graduate with a bachelor's degree would receive. No one will fit the requirement except one individual in the world. Anyone already in the country with a similar skill set would normally command a salary at least double what is advertised, if not more.

It doesn't take a genius to figure out what is going on. And yes, this isn't a new abuse - I've seen instances of it for at over 10 years.

Hopefully this congressional attention will address this abuse without destroying the program.

My recollection is that the most recent block of H1B "positions" was gobbled up on the first day, leading advocates to claim that the limits on the quantity of H1B visas needed to be increased.

[scorrpio]

Happens at all levels. A contractor I know once told me, that when he needs extra hands, he goes to hire a few Mexicans. His reason: a Mexican will be paid same, but will do a lot more work and will do it better in same amount of time than any American.

At my company, R&D members often interview prospective hires, and interview reports for locals in general look abysmal compared to those from abroad - and they keep declining. We interviewers actually are not given personal info about a person, but it is kinda hard not to notice that "Siva Tangituri" showed a far deeper understanding of data structure implementation in C++ than "Michael Spencer" did. That, in fact, when asked about data structures, Michael Spencer started babbling something incoherent about "helping rebuild Iraq" (and South Africa)

But it is oh so easy to blame the evil corporation for snubbing the American, while what they really want is hire a capable worker, not an incompetent. Miss Teen SC need not worry - she can just sit there looking pretty and get paid for doing so, but where does it leave some guy who does not look that hot but sports same level of education? Especially compared to an ambitious guy from abroad who took his classes real serious, has a 'do or die' mentality and is totally determined to carve out a better life for himself? That mentality, which I understand was in full swing in times during and following the Great Depression, has been deserting the present day young Americans in droves - such as, they personally believe, having been born in USA and all that, such as, they are guaranteed a special place under the sun.

And at this point, globalization has got to a level where, should government try to squeeze businesses to hire more Americans, any company that can do so, will simply take its business elsewhere. Next thing you know, Americans who are competent, motivated and know how to use a world map, will focus on finding employment overseas.

[jseklund]

I don't think this is political in any way other than whether or not a certain political party utilizes or understands economics and logic. I don't mean this to be insulting to either part as both parties have the problem. Having said that, I am a rare republican who believes that outsourcing "American" jobs is actually a good thing. It has less to do with my political affiliation though, than my capitalist affiliation.

What I have always found funny is that certain people hem and haw about the "Sweat shops" in other countries, but then fight for illegal immigrants to work in the US. It's not OK for us to pay them very little if they stay at home and abide by their own laws, but if they break our laws and INVADE our country- then we need to let them rally and fight for them to work for very little. "It's good for our economy" is the line. Some very intelligent people seem to think this, I disagree. But I digress, slightly, because we are not talking about illegal immigrants necessarily.

Why do I think we should be sending certain jobs over to other countries? Because, by and large, these jobs are INDUSTRIAL. They are jobs that allowed America to thrive during its industrial age. What most Americans don't realize is, ages come and go and the industrial age, for us, is gone. We are no longer an industrial society- but we just won't let it go. We want to be paid to run the machinery, but we want to be paid $60,000 a year to do it. The guy in China will do it for $5,000 a year. If you were buying labor, where would you go? I wouldn't expect the American to run the machine for $5,000- there's no way he could live in our economy like that. Not when he wants to buy your house that you're selling for $400,000. We have always been creators, and we are in the lead. We can let go of our industial jobs and move on (which is hard) or we can stall. Actually, we are stalling.

Further more, despite what many people want to believe, we ARE in the lead. Everyone tests better than americans- but again those are still tests geared towards industrial knowledge. Proving more so that they are better suited for those jobs at this time. It is time to pass them the baton, let them build up their economy, and for us to build ours into something new. We are not passing the baton though, we are hoarding it. The only way for them to get the job is to break in and take it. Who is more wrong? Probably them. Who isn't being quite as intelligent as they should be? Probably us.

I had a teacher in 6th grade who talked about how when fax machines came out the US Postal Workers were up in arms that they would lose their jobs. They were afraid of change. In the end, more technology may have made their business better than ever- even retail is done over the internet and through the mail nowadays. It is a good example of how change is resisted- but shouldn't be.

Sawduster- You mentioned the minimum wage being brought down because of illegal immigrants. I beg to differ. I think the minimum wage is brought down because of the minimum wage. Illegal immigrants work for far less than minimum wage- and are a distinctly different market than legal workers. In other words, the wage I pay my illegal workers has little effect on the wages I pay my legal workers- although it may effect the number of legal/illegal workers I may higher to some degree.

However, by having a SET minimum wage, we have removed any bidding for employment. If I am trying to get a job as a computer programmer, I am in a market where the best companies will be paying more to attract the best programmers. If IBM is paying $75K a year, Microsoft may want to attract more programmers by offering $80K. IBM may respond with $82K. And so on until workers and employers are in equilibrium. If IBM and Microsoft got together and said, we're going to set the price at $65K and not break the rule no matter what - and if they don't break the rules (game theory)- they would be breaking the law.

However, when it comes to low-wage workers- it IS the law to price set. And of course we sell it as, "It's to benefit you of course. You're a low wage worker, you should be able to live on what you get paid." If that were true, mimum wage would be around $12-15/hour. It's merely a way to keep McDonalds and Burger King from fighting for employees. If McDonalds needs workers, especially in a low-unemployment environment- and starts paying $8/hour to every scrub off the street, BK will lose all it's workers and go under- unless they go to at least $8 and maybe $8.50 to win some people back. But they don't do this because it's easy to close the deal- we'll pay you minimum wage. That's what everyone pays for this job.

And one last note- unemployment figures may be misleading. They don't count people who are looking for a job and no longer eligible. But they also don't count people who are unemployed but not looking for a job- not just housewives, but people who just don't care too. These people who aren't looking, will not effect inflation at all. By this I mean- if you come to me and there is full employment and say, "Give me a raise or I quite", then I have no pool of unemployed people to replace you with so I am forced to give you a raise in order to stay in business. Ultimately, this leads to inflation as everyone requests more and more money. We combat this, in theory, by increasing the interest rate on money so that it becomes more difficult to borrow money and hire more people- thus creating more unemployment and keeping inflation in check. If you request more money and there's "full employment"- the housewife who doesn't want a job, or the bum on the street who won't work- will not or cannot replace you. They have no effect. So I would argue that the employment statistics DO have some validity, more so than they are given credit for so far in this discussion.

Great talk, keep it going.

[radhak]

Jseklund, you have very succintly explained market evolution, nice work.

The minimum wage has always troubled me - seems very counter-intuitive to the anti-competitive laws in place for other things like products or services.

[scorrpio]

The problem with saying good-bye to industrial age and moving on is that our society composition is not fit for it. On one end spectrum, we got college-educated and highly paid doctors, lawyers, engineers, financists, executives and such. On another end, we got janitors, waiters, cashiers, etc. No matter how advanced a nation gets, you still need someone to wash the toilets.

But in the middle, we got all those people who figure they ought to do something better than man a Burger King counter - but for some reason failed to make it to or through the college. What to do with those?

[Anna]

The minimum wage has always troubled me - seems very counter-intuitive to the anti-competitive laws in place for other things like products or services.

Your statement reminded me of this poem. Has nothing to do with H1B in particular, but all with government protectionism. As you can see, there's nothing intuitive about our anti-competitive laws.

The poem includes the following lines:

These very simple guidelines,
You can rely upon:
You're gouging on your prices if
You charge more than the rest.
But it's unfair competition if
You think you can charge less!
A second point that we would make
To help avoid confusion...
Don't try to charge the same amount,
That would be Collusion!
You must compete. But not too much,
For if you do you see,
Then the market would be yours -
And that's Monopoly!

[Ken Massingale]

But in the middle, we got all those people who figure they ought to do something better than man a Burger King counter - but for some reason failed to make it to or through the college. What to do with those?

Those are folks like me. I couldn't go to college, the reasons are not important. I did go to a technical school and taught myself beyond that. Currently my peers are all engineers with degrees, we all do the same tasks. On my particular team I am the lead and my pay grade reflects that.
In my company the production workers that make semifinished products and the end product earn ~$45-60k/year depending on whether they run machines or are in maintenance.
Outside of industry trained tradesmen and women (HVAC for example) make darn good wages.
Folks need to realize that the core of American wage earners aren't the Doctors, Lawyers or burger flippers, it is the hard working tradesmen and women.

[Anna]

And one last note- unemployment figures may be misleading. They don't count people who are looking for a job and no longer eligible. But they also don't count people who are unemployed but not looking for a job- not just housewives, but people who just don't care too. These people who aren't looking, will not effect inflation at all. By this I mean- if you come to me and there is full employment and say, "Give me a raise or I quite", then I have no pool of unemployed people to replace you with so I am forced to give you a raise in order to stay in business. Ultimately, this leads to inflation as everyone requests more and more money. We combat this, in theory, by increasing the interest rate on money so that it becomes more difficult to borrow money and hire more people- thus creating more unemployment and keeping inflation in check. If you request more money and there's "full employment"- the housewife who doesn't want a job, or the bum on the street who won't work- will not or cannot replace you. They have no effect. So I would argue that the employment statistics DO have some validity, more so than they are given credit for so far in this discussion.

JS, I just came across this New York Times article about increasing wages in China. At some point, I can see the Chinese government and businessmen complaining how the US is "exporting" our higher wages and labor standards to their country. In any case, it's raising the standard of living in that country and, I would not be surprised, India. These are two of the countries that are generally vilified for their cheap labor.

At some point, I think Chinese goods won't be as cheap as they are now because of the increasing demand for higher wages and labor shortage. I believe Japan was the same way before the Japanese boom in the 80s - and we no longer buy "cheap stuff" from Japan.

Inflation is already at work in China, where the southern provinces have a lot of jobs, attracting many workers, and subsequently inflation rates rising. That will eventually push development in other parts of China. The other thing of note is the eventual increase of immigration (legal and illegal) into China from surrounding poorer regions.

One other thing that struck me in the article was this paragraph:

David T. Hon, chief executive of the privately held Dahon Group, said that while he had been raising wages 10 to 15 percent a year, the average labor cost for each bicycle had actually edged downward. This is possible, he said, because sales are growing 30 percent a year and increasingly large-scale production has brought savings. The cost of engineering a new bicycle design, or handling the accounting and other back-office operations, is spread over more and more bicycles as production rises.

I think I have a lot of faith in a true free market economy, and I believe that dirigisme is an inefficient method to distribute goods and services in conditions of scarcity.

[newood2]

I am a rare republican who believes that outsourcing "American" jobs is actually a good thing.

What! A good thing for who? Certainly not the thousands of skilled and professional middle class workers who lost their jobs including myself. But it's a good thing for corporate executive.

What I have always found funny is that certain people hem and haw about the "Sweat shops" in other countries, but then fight for illegal immigrants to work in the US.

First off it's not the same people that do both, and I know that first hand. when the Company I worked for moved it's manufacturing facilities to Mexico my union did an investigation and found out it was "sweat shop" with no safety rules in place - no OSHA, good for Company-. Investigative reporters also discovered "sweat shops" all over Asia employed by American Companies. But then the people who are "fighting" for illegal immigrants to work here are not the unions and unemployed middle class, its the same greedy 5-percenters who wants them to work for two years without health coverage just like the "sweat shops" in the country they're from.

What most Americans don't realize is, ages come and go and the industrial age, for us, is gone.

Certainly, our industry was outsourced by a greedy and unconscionable corporate America with the blessing of those we elect to watch over us - both parties. and I,m sick and tired of hearing "it's because of globalization", America had the power to create the playing field.

We want to be paid to run the machinery, but we want to be paid $60,000 a year to do it. The guy in China will do it for $5,000 a year. If you were buying labor, where would you go?

Right here in America. If the CEO's take a pay cut then you can pay the worker $60,000. An American wage.

I wouldn't expect the American to run the machine for $5,000- there's no way he could live in our economy like that.

Then the logic is, he/she should move to China


Further more, despite what many people want to believe, we ARE in the lead. Everyone tests better than americans- but again those are still tests geared towards industrial knowledge. Proving more so that they are better suited for those jobs at this time.

Yea, they'll do the accounting and engineering work and we(Americans) will do the janitorial and construction.

It is time to pass them the baton, let them build up their economy, and for us to build ours into something new.

Good idea, but I hope this "new thing" wont catapult us into the new "Third World"

Illegal immigrants work for far less than minimum wage-

Not a blanket truth, not in NY anyway, most hirer will pay $60+/day. And what is "far less than minimum wage" mean in dollars and cents?

If IBM is paying $75K a year, Microsoft may want to attract more programmers by offering $80K. IBM may respond with $82K. And so on until workers and employers are in equilibrium.

Not under Capitalism or any other socio-economic order. But it would be nice to get the same pay as my boss.

However, when it comes to low-wage workers- it IS the law to price set. .....It's merely a way to keep McDonalds and Burger King from fighting for employees. If McDonalds needs workers, especially in a low-unemployment environment- and starts paying $8/hour to every scrub off the street, BK will lose all it's workers and go under- unless they go to at least $8 and maybe $8.50 to win some people back. But they don't do this because it's easy to close the deal- we'll pay you minimum wage. That's what everyone pays for this job.

So in a low-unemployment environment then, Big Mac and BK would stay in business if they hire illegals and pay them way less than minimum wages. It would make better sense than to raise the minimum wage. And that's what the pro-illegal employer wants.

By this I mean- if you come to me and there is full employment and say, "Give me a raise or I quite", then I have no pool of unemployed people to replace you with so I am forced to give you a raise in order to stay in business. Ultimately, this leads to inflation as everyone requests more and more money. We combat this, in theory, by increasing the interest rate on money so that it becomes more difficult to borrow money and hire more people- thus creating more unemployment and keeping inflation in check.

Here again, overpaid corporate executives are left out of the equation. It was not Enron employees asking for raises who cause the company to go bellyup, it was greedy overseers with no moral responsibility. Last year $5.4billons was paid out in salary to just 500 top executives, beside millions in bonuses and incentives and stock options. Is it wrong say that executive outlandish salaries should be a part - even in a minute way- of the discourse of America's industrial demise.
How could I ever get over getting laid off after 25 years because my job was outsourced and nine months later the CEO got a $12million good bye bonus. And by the way the product quality went after they outsourced.
Why did the chicken cross the street? To take a job from a decent hard working American.
Always a union man. Love my country and wont prostitute it.
Howie

[dtam]

Very few young americans today go into engineering, thus the need for high tech workers from overseas. I would estimate that 80% of the engineers with EE degrees in Silicon Valley are foreigners (or at least foreign-born, and came to US at a much later age). The ones with PhDs in EE are almost always from China/Taiwan/India. For example, at my current company, a startup, among the 22 hardware chip designers:

4 - american
10 - asian (7 chinese, 3 vietnamese)
8 - indian

However, almost all the people in marketing/sales/finance/human resource are americans.