The Education Visa: It’s Everywhere We Need It To Be

http://mattmaroon.com/2009/04/11/the-education-visa-its-everywhere-we-need-it-to-be/

by mhb • 17 years ago

38 27 17 years ago

This essay is internally contradictory.

"Startups often make money primarily by reducing costs, and cost reduction nearly always means job reduction."

"If a company hires an employee whose efforts earn the company three times their salary, that gives said company the cash flow to hire two more people."

So basically, creating www.replace-your-secretary-with-web-2point0-technology.com and selling subscriptions destroys jobs. Probably true. But writing replacethesecretarywithvisualbasic.exe for a salary creates them?

The only real difference I see is that a startup will (hopefully) have a bigger impact.

ScottWhigham• 17 years ago

Probably won't go over too well on HN lol. You can't go against pg for goodness' sake!

mhb• 17 years ago

I think the missing piece of his essay is that the ultimate goal is not job creation; it's for everyone to be better off. That is accomplished by increasing productivity.

Increased productivity doesn't necessarily imply fewer jobs. It might mean that everyone works less hours. There hasn't always been a 40 hour work week. It's only that low due to society's increasing productivity.

abstractbill2• 17 years ago

Will "startup investors" discover a lucrative black market in selling H1-Bs? Rich foreigners could pay them $200k under the table to invest $100k in their new startups, thus buying citizenship.

Just following up on this particular point, what would be the problem with letting rich foreigners buy American citizenship?

Personally I think Paul's startup visa is a great idea, but orthogonally to that, I just don't see a problem with letting wealthy people buy their way into the US.

Celcius• 17 years ago

This might be a bit cynical of me but I'm quite convinced that if a rich foreigner wanted to become an American citizen that wouldn't be much of a problem.

Steve Jobs for example got Feist, American citizenship: http://www.tuaw.com/tag/leslie-feist/ it's not the same thing but there obviously has to be different channels to go through for the wealthy.

yummyfajitas3• 17 years ago

I've often thought this might be the best way to select immigrants. Pick the number of immigrants we want, and distribute green cards via dutch auction. We can give bonuses to areas of national interest, e.g. nurses.

Doing this, we import people who are most likely to be productive. To allow high human capital pople to compete, we could allow the immigration fee to be paid out over 10 years with a nation-dependent down payment required up front (e.g., $75k for brits, $10k for indians).

Of course, politically this is a no go. Politicians push immigration as a way of importing people to vote for them (e.g. dems want poor Mexicans and reps want skilled former Soviets); the good of the country comes second.

lutorm5• 17 years ago

So you're saying importing more people like those that worked in Bear Sterns would have been in the national interest? This sounds completely backwards to me.

Besides, with your particular method, how do you prevent people from over-bidding and then being unable to pay the fee?

No, whatever algorithm is used to select immigrants, wealth surely is not the thing to use.

lutorm5• 17 years ago

Wealthy people can already buy their way into the US with the investor visa (EB-5). I don't think they exhaust their annual quota.

bitdiddle2• 17 years ago

exactly, I believe this is still done. I'm just jumping into the middle of these threads and perhaps this has already been said but I believe that the H1-B program is all about importing cheap labor, period. In other words, reducing costs. In many areas programmers are in high demand, so much so that it is worth it for many programmers to constantly learn new skills to stay in the game. The H1-B is all about getting a steady supply of 3-5 year programmers at 50-75K rather than paying citizens 75-100K.

I'm not sure how the hefty requirements of the investor visa fits the Y Combinator model. It could create exploitation issues if not handled properly. One could imagine the investors putting the money up but that changes the dynamic of ownership. I believe the investor visa can be satisfied with job creation or money but then there's the issue of minimum wage laws, founders typically work at a loss since they own the company.

I've always felt our immigration law is absurd with respect to graduate students. I think a green card ought to be attached to an advanced degree so that these folks will stay here, enter the work force unencumbered in order to compete fully and start paying taxes immediately, raising families, etc.. Instead we try to keep them out whilst encouraging small businesses to hire illegal immigrants with poor skills thereby creating resentment over access to public services.

Sorry to rant, it's a touchy subject.

falien• 17 years ago

Poorly written response with as many bad arguments as good ones, but I agree with the sentiment. The startup visa idea strikes me more as one that comes to you and seems good for the first hour until you come to your senses, than one that is well thought out and backed by good data. Luckily I haven't yet started to blog, so I don't need to back that feeling up with good data or reasoning of my own. :)

dbul• 17 years ago

Unless you have about the education of a PhD in economics and have studied the impact of the US economy by allowing more visas (e.g. will the median income of Americans increase?), then I don't think an essay or a blog post will have much influence.

what we need now isn’t another Google, it’s another Wal-Mart.

Add the adjective "vertically-integrated" before Wal-Mart and you may have something.

lutorm5• 17 years ago

... what we need now isn’t another Google, it’s another Wal-Mart.

Yeah, because Wal-Mart is known as a big net job-creator...

zaidf• 17 years ago

"Startups often make money primarily by reducing costs, and cost reduction nearly always means job reduction."

It seems that is the crux of your argument against Founders Visa.

(1) The flaw of course is that you are only looking at job reduction--and not the jobs that were created as a result of blogs and online news.

And even if the jobs created were fewer than jobs lost, that is free market: sooner or later it had to happen. The worst thing we can do is be delusional that it won't happen. The best thing would be to figure out jobs that are not going to exist and re-train those people for more sustainable jobs.

(2) You don't seem to be so much against Founders Visa as against startups in general. You might as well be arguing against ALL startups--not just those started by immigrants--using this line of argument.

psranga• 17 years ago

The book Illusions of Entrepreneurship claims that existing companies create more jobs than new companies. Starts at page 153: Here's the google books link: http://bit.ly/m4vXV

mattmaroon• 17 years ago

Fascinating. Thanks for that link. It's always good to see data replace hunches.

gcheong• 17 years ago

I don't see how this is an argument against entrerpreurship. Every existing company started out as a new company at some point. If anything this is an argument for entrepreneurship.

ggchappell• 17 years ago

Another 3 cheers for HN!

Obviously, this place is full of PG worshippers. Therefore, the fact that this article made the front page, while disagreeing with PG, suggests that lots of people vote up based on thought-provoking-ness, not on agreement.

And if so, that's cool. :-)

lutorm5• 17 years ago

People like a good target... ;-)

jacoblyles• 17 years ago

>"Startups often make money primarily by reducing costs, and cost reduction nearly always means job reduction."

This is an old, old, old mistake people make when talking economics. "The Luddite Fallacy" - to be exact.

Yes, technology that reduces costs and automates production means the loss of jobs. However, it also increases the total production of society, which increases demand for other jobs.

We used to be a nation of 90% farmers. Now about 2% of workers are involved in agriculture. What happened to the other 88%? They aren't unemployed. Rather, they are employed in other jobs that never would have been created if those agricultural jobs were not destroyed by technology.

gaika• 17 years ago

While your statement is true long term, short term there's still lots of pain from adjustment.

jerf• 17 years ago

And when you build your economy on the short term, rather than the long term... well... look around you.

The long term has a way of happening.

dpatru• 17 years ago

Here's why the current government won't back PG's startup visa idea: Walmart is hated by too many in the Democratic party. A program to create a bunch of Walmarts owned by foreigners will be even more hated.

A distinguishing characteristic of a start-up is that it has the potential to make big profits for its owners: either by creating an new technology (like Google did), or by drastically reducing the cost of an existing technology (like Microsoft did). Walmart is an example of a company that made its founders rich by reducing costs. Walmart is also hated by many Americans and their elected politicians because it causes many employees of its competitors to lose jobs. I don't think that a government program that encourages foreigners to come to America in order to create businesses that make its owners rich by drastically reducing costs (including labor costs) will be any more loved by the Walmart-hating crowd.

The Education Visa: It’s Everywhere We Need It To Be

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