The Foreign Visa Crackdown Is Putting Americans Out of Work

https://www.bloomberg.com/news/articles/2017-06-21/the-foreign-visa-crackdown-is-putting-americans-out-of-work

91 82 9 years ago

We need to start distinguishing between the H1B abuse of several large foreign consulting companies and the seasonal low skill jobs in our discourse. You yell "let's reform the visa process" in a crowded room in this country and everyone cheers for different reasons.

Zigurd• 9 years ago

That's right, it isn't black and white. There isn't one knob to turn. If you read the visa regulations, it looks perfectly fine. But "body shops" game the system. Because, short of litigating every job description, there is no visibility by regulators into job requirements and whether applicants meet those requirements, H1-B has hijacked for the purpose of wage suppression.

There's also no bright line between the generally bad actors and the good guys. Even R&D-oriented high tech companies that often use H1-B for the intended purpose of importing otherwise unobtainable talent also use H1-B (and other methods like anti-poaching agreements) for wage suppression.

Reform needs to be flexible and enforced by financial incentives, like auctioning visas at a high reserve. It does not need to be cheap for employers.

sjg0076• 9 years ago

I think wage suppression was a side effect despite good intentions. In addition, H1Bs are/were a mechanism for outsourcing companies to win US IT contracts. Auctioning visas may not solve this problem.

Other causes of recent wage suppression include the no-poaching and other gentlemen agreements among the big players in the Valley. In addition the basic, I'm not going to pay more than the other guy (or the minimum I can get away with).

Wage suppression comes in other forms too. Asking for previous salaries, asking for W2s etc... Some companies are so large that they just refuse to pay more as well. But that's just "the market" at that point. In every company there's some maximum value for you.

The only way to escape this is to start your own company.

24gttghh• 9 years ago

Maybe they should pay local people fairer wages for the work to make it more appealing hmm?

fleshBot• 9 years ago

I dunno. That might go against the narrative that literally everything is subject to market forces except for labor. The only thing for which we can arbitrarily set a magical, minimum value for some reason.

hedonistbot• 9 years ago

So your point is that indeed everything is subject to market forces and hence we cannot control the minimum wage. Or that market forces are not all encompassing and we should legislate the areas where they lead to unacceptable equilibria? I am confused...

davidandgoliath• 9 years ago

I'm confused why they're complaining to bloomberg & not bothering to put ads in some nearby towns/cities.

I imagine there's no shortage of low-skill workers available in the united states, shipping people in from afar seems outrageous.

viraptor• 9 years ago

I get the sentiment, but from TFA:

including the costs of the newspaper ads they have to take out as part of the process, plus (...), they’ve already spent thousands of dollars they won’t get back.

basseq2• 9 years ago

From the article, H1-B costs an estimated $2,500/person, plus flight and lodging. Let's pretend all 6 people Pentagoet wants to hire are staying in the mentioned apartment ($1,200/mo).

Assuming a 40 hour work week, they could increase the hourly wage by $4+/hr. and spend the same amount of money. That's a ~50% increase from minimum wage.

Now I feel for the business in this particular case. They had a process, they followed it, spend their money, and got staff. Now the process has changed, but they've already spent the money. It's a sunk cost. That sucks.

dafty4• 9 years ago

Ever heard of summer student labor? These are lame tears.

keithpeter• 9 years ago

Sounds like a project. Match students seeking jobs (and who have some experience) with employers similar to those in the OA.

UK: it tends to be waiting/bar staff in my local Universities as lower skill requirements and more flexible working times

empath752• 9 years ago

I'm strongly in favor of open borders and immigration, as long as immigrants have all the same workplace protections as American citizens.

But the argument that Americans won't take these jobs is and always had been bullshit. They'll take the jobs if you pay well enough. A whole lot of the American economy runs on effectively indentured servitude, either from illegal immigrants working under the table, or legal immigrants trapped in jobs because of the terms of their visa or literal prisoners or literal slave labor from sweatshops in developing countries and it depresses salaries for everyone.

We have an expectation for the price of goods and services that's based on the idea that the less privileged should do shitty backbreaking work for next to nothing.

One of the things that had lead to the rise of vile, xenophobic populists like trump has been the complete unwillingness of both parties to address this, and the unwillingness of Americans to recognize that the cheap shit they buy from Walmart and amazon has real human costs.

trhway• 9 years ago

They'll take the jobs if you pay well enough.

Taking a job and doing it with sufficient attention/quality/skills/etc. are two different things. No money would make most of Americans working 110F strawberry field for any prolonged period of time. Even $1M/day - most would just quit after a week with cool $7M (at least i'd :)

Of course, the immigration system making illegals pretty much slaves is just a shame for a civilized society and has to be replaced with more humane system. We should value and respect people doing such hard and undesirable jobs. Practically it means at least minimum wage and all the labor laws irrespective of status (one of the effects otherwise is just breeding predatory employers and that drugs the society back and lower). And of course the minimum wage in US should already be 2x-3x what it is now (the current minimum wage in US is another shame for a civilized society)

frgtpsswrdlame• 9 years ago

Actually I think $40/hr (obviously not a real number) would get quite a large labor migration to the strawberry fields. North Dakota saw a huge influx of out-of-work men when oil was booming.

louithethrid2• 9 years ago

The slave system only prevents further automation

ABCLAW• 9 years ago

Yet somehow the mining industry doesn't seem to have problems paying highly trained people to sit underground for 10+ hours a day sitting around explosives and heavy machinery.

Perhaps you should look up Woofing.

sedachv• 9 years ago

No money would make most of Americans working 110F strawberry field for any prolonged period of time.

Anecdotal counter-point: there are plenty of Americans making decent money in similar conditions working marijuana farms on the West coast during harvest seasons. I have met a few and they do not complain about the work.

xxSparkleSxx2• 9 years ago

This is the bubble you live in.

I grew up in the Midwest and my white middle class brothers spent some summers in strawberry fields picking and in corn fields detassling (not 110F, but mid 90's). There aren't many immigrants there so you'll find tons of lower-middle/lower class white Americans in those jobs.

Landscaping is mostly white, maids are mostly white, and construction work is mostly white. Becase most people there are white. Take a trip to the Midwest and see how the rest of the country lives.

vinceguidry4• 9 years ago

You're not making a meaningful argument.

If you want to pay market rates for labor, there is nothing stopping you from doing so. You are more than welcome to pay $30+ an hour for babysitting. You'll find people tripping over themselves to take your job.

Everybody wants immigrants to be paid more until it's you that has to pay them. Then you'll find you're just as price conscious as everybody else.

The truth here is that this is a really hard problem. Nobody likes the externalization of costs onto the disenfranchised. But once price expectations are set, the expectation that they're always going to go down, that you're going to get more for less, is also set. That's just how markets and human nature work.

You can make an individual decision to pay more for a particular class of good, but on the whole the entire market is focused on delivering more for less, and even if you hang out your shingle and deliver more for more, you will always have a niche clientele because if it were more than niche, then your model wouldn't be profitable anymore. Someone else is going to offer your product for less, and they will eat your market share.

pjmorris• 9 years ago

But once price expectations are set, the expectation that they're always going to go down, that you're going to get more for less, is also set. That's just how markets and human nature work.

I'd offer counter-examples of houses, and stocks. Not everything goes down in price, only things that people don't borrow for.

empath752• 9 years ago

Which is why you have treaties and laws that protect people.

By your argument, actual slavery should have never been made illegal because it would just hurt the us in the marketplace. After all, anybody could have paid more for non slave produced cotton, if they chose.

6t6t6t6• 9 years ago

as long as immigrants have all the same workplace protections as American citizens.

The contrary is called Social Dumping:

https://en.wikipedia.org/wiki/Social_dumping

That's, for instance, what Margaret Thatcher did during the 80' in the UK when the working class people asked for better conditions.

southphillyman• 9 years ago

Recently heard someone argue "If you can't afford to pay livable wages, then you can't afford to be in business". Have to say I agree with that. It's hard for me to feel sorry for businesses who rely on importing cheap labor to survive.

rfrank2• 9 years ago

What percentage of companies in SV pay their customer support staff a 'livable wage' for the bay area? If I recall correctly, this community wasn't kind to the Yelp letter girl.

CaptSpify• 9 years ago

yelp letter girl?

a3n• 9 years ago

And I'll bet the office and engineering staff at Uber, for example, absolutely love their drivers who have to work long days to barely break even-plus, many of whom sleep in airport parking lots and similar while they're away from home, working where the money is.

Sure, they have a "choice," they don't have to drive 250 miles and stay at their jobs for a week for low pay. But sleeping in your car to be able to work is, as the say, "not normal." The only reason Uber is able to get away with this is because their drivers' choices are limited. Just like the Jamaicans and similar that come to America to pick and serve strawberries. They're exploited because it's possible.

It's a dilemna, I realize. I rarely go stay at a B&B, for example, and if the B&B paid "American, livable" wages, they'd be too expensive for me to ever go. So maybe a business that provides "services" for things like a place to sleep (and someone to clean up after you) and something to eat (and someone to cook and clean up after you) is simply not sustainable (even though those exploited people would probably rather have the job than not).

Maybe there shouldn't be lots of hotels, restaurants and car services, except for the niche that serve people willing and able to pay enough for those services to in turn pay equitable wages.

Pretty tough to figure out, for me.

kelnos9• 9 years ago

I'm sure you'd also be totally ok with the _much_ higher prices this would cause?

HarryHirsch• 9 years ago

The greater part of operating cost isn't wages, it's rent for the premises, cost of energy and of raw materials, and yet this pernicious meme gets trotted out every damn time the subject of minimum wage comes up. What I cannot understand is why that is.

e12e2• 9 years ago

There was a news report[1] that for h&m to pay workers in Asia local living local wage (an additional ~120 USD/week), prices of shirts would go up ~50 cent. Accordingly, if prices went up ~3.50 the workers should make around 40-50k usd/year.

Doesn't sound all that terrible.

[1] https://www.dn.no/nyheter/2017/06/02/0942/Handel/nordea-sjef... (Norwegian, statement by head of the Nordea bank)

cottonpicker4• 9 years ago

um... yes. If a product costs $1 to produce, why should I be unhappy that it costs $1.10?

I may choose not to buy it, but that doesn't mean I am unhappy. It may mean I can't afford it.

If a product costs $0.25 to produce plus a few finger off little children working in the factory, but we don't pay for fingers... then the product doesn't really cost $0.25 to produce. So I can pay $0.25 plus higher taxes to pay for dismemberment medical, or higher taxes to pay for police to arrest dismembered people from stealing for a living, or higher costs from being mugged every so often by fingerless bandits.

Not paying a living wage has costs to the consumer and everyone else in society.

sjg0076• 9 years ago

The wages are livable for the temporary foreign workers who came in seasonally. This was standard operating procedure. These towns are tourist towns. So now you have whole local economies shutting down because Americans need jobs. Oh the irony.

basseq2• 9 years ago

Two diametrically opposed quotes from the article:

"Employers find the H-2B program expensive and bureaucratic, and tend to reserve it for hard-to-fill jobs that are critical to expanding operations." (American Enterprise Institute for Public Policy, 2011)*

vs.

"In the Pentagoet’s case, that’s meant six women from Jamaica (about a fifth of the total staff) who work in housekeeping and in the kitchen."

Are housekeeping and kitchen jobs hard to fill, critical to expanding operations, and worth significant investment? I'm just confused about H1-B in general and what it's supposed to do. Bring high-skilled workers? Provide cheap, seasonal labor? Both?

*Paraphrased for readability. Original quote hedges the conclusion.

emidln• 9 years ago

Are housekeeping and kitchen jobs hard to fill, critical to expanding operations, and worth significant investment?

No. In the Pentagoet's case, this is about being able to find pre-trained workers without paying the market rate. This place has gone out of their way to establish travel and housing, yet completely failed to look in any major urban area for staff. Ask yourself why that is.

s0uthPaw88• 9 years ago

H1B and H2B are two different visa programs. The H2B program which is discussed in the article is designed for short term seasonal workers.

sudosteph• 9 years ago

If they need low-wage unskilled laborers, surely there are high school students or college students who would do the work while on summer break. I worked in a kitchen as my first job (age 16) and it was a great experience, even though it was hard work with low pay. Some of the people working there were immigrants (not seasonal though) and it was a great cultural learning experience in that respect too.

Sure there will be increased turnover and more expenses spent on hiring, but that should be accepted as a standard cost of doing business. Also, hiring young people is better for the community. When a young person has their own job they learn responsibility, money management, and are contributing to the economy instead of getting into trouble.

The numbers of young people working part-time or over the summer has dropped significantly in the past 30 years. I wonder if the ease of getting visas for seasonal labor has contributed to that.

Chardok• 9 years ago

Looking at the broader scope of things, it seems to be that the idea of Americans filling low paying jobs directly competes with the relatively small pay these foreign workers are getting.

The question is, are these businesses being artificially propped up by foreign low paid workers, or is it a symptom of jobs paying too low for any American to actual work?

gozur88• 9 years ago

There's no such thing as a shortage; only a clearing price. If these businesses paid more they could get local workers.

maehwasu• 9 years ago

"Many Businesses Are More Viable When They Can Pay Employees Peanuts"

Looking forward to more insightful articles from Bloomberg.

nkrisc• 9 years ago

Perhaps this reduction in visas and foreign workers will make voters realize how much of the economy they currently enjoy is buoyed by cheap, foreign labor. We aren't paying the real costs.

realtheow• 9 years ago

We are paying the real cost, just not in the price of goods. We spend it on public assistance, food stamps, medical care for these cheap laborers. A direct parallel would be the outrage over walmart employees being asked to go on supplementary services in order to survive. I'd rather know what this magical extra cost is so it can be compared to the other real hidden costs.

gshulegaard• 9 years ago

“I don’t think that people who talk about defending American jobs with this policy have ever looked into the economics of it,” says Giovanni Peri, chair of the economics department at the University of California at Davis.

Amen...and I find it doubly cool because my degree is from the economics department at UC Davis.

nfriedly• 9 years ago

Maine, meanwhile, is set to be hit so hard by the shortage that Republican Governor Paul LePage has conditionally commuted the sentences of a number of prisoners so that they can fill some of the needed positions.

That's interesting - I wonder what the conditions are?

johngrefe3• 9 years ago

Came here for the comments.

Just wanted to make sure that FOSS hadn't made everyone open borders evangelicals.

Many demographics have huge unemployment problems, mostly NEETs, because the jobs they used to do are replaced by absolute lowest wage immigrants. This problem has been long brewing in the US, and I just don't understand how making it worse (more immigration) is going to solve it. At the same time I know I'm a massive beneficiary with overseas production of my products and cheap food at home.

Also, why is HN posting pure political articles so much now? I understand technology intersects with politics, but at this point anyone strongly advocating for saving the H#B programs are probably H1B beneficiary companies which are only the Big tech companies, so a story like this feels like it's rolled out to the tech community to soften you up to the plight of the H2B community.

If that's the case, this is nothing more than a propaganda feed.

sjg0076• 9 years ago

What's a NEET?

johngrefe3• 9 years ago

"Not Seeking Employment Education or Training"

Economics term, growing subset of mostly disconnected young men across NA / EU.

mc32• 9 years ago

Counterpoint to their argument. Japan has negative population growth and an aging population. Yet, outside of Tokyo and even in Tokyo it's rather rare to see foreigners do the "immigrant" work that we see in the US.

Go to a restaurant in Tokyo, for the most part the cooks server and other staff are Japanese --you will see a smattering of foreign staff, but it's not nearly the same as in the US. And that is in an economy with an aging population and decreasing population.

And things are not super expensive. Food is healthy and reasonably priced. Some foodstuffs cost more than the equivalent in the US but Japanese are quite willing to pay the price difference to keep their farmers afloat --many times have they imposed barriers to cheaper imported foodstuffs but they like things their way.

Point is, it's not pre-ordained to ruin an economy.

The Foreign Visa Crackdown Is Putting Americans Out of Work

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