The H-1B visa program is a scam

http://www.cringely.com/2015/06/15/the-h-1b-visa-program-is-a-scam/

by omnibrain • 11 years ago

38 19 11 years ago

furyg3• 11 years ago

Complaining about domestic supply is a legitimate complaint. Clearly asking for permission to solve a supply problem by importing foreign labor would mean 1) that you would have to pay the same rates as domestic employees in that function are paid (thus excluding the imported labor from that calculation) and 2) Those employees should be able to switch jobs at will. Without this you're complaining about domestic cost and not supply.

That is, if you believe that these type of immigration schemes should be necessary at all.

dummy7953• 11 years ago

"Complaining about domestic supply is a legitimate complaint."

The business community will complain about supply regardless if there's a problem or not.

alexbel• 11 years ago

Where can I see the information about approved H-1B visas? They have these data in the article, but what I see in the internet it's only LCAs and their status.

rfreytag3• 11 years ago

While visiting a Maker Faire in my area last week I happened upon a Cognizant booth staffed entirely by 30-something Indians. While they showed my daughter how to make a windsock out of duct-tape, one of their number told me about his background and their difficulty being separated from their family back home and why it is still a better choice than living in India.

As I listened the term "Digital Sharecroppers" came unbidden to mind. But this is worse than sharecropping because an H-1B worker can't switch employers.

What Cognizant and the rest of the H-1B abusers are doing is exploiting the promise/hope of US Citizenship while suppressing near-term wages (and the value of the citizenship they use as a lure), with indentured servants.

Cringely is right. The E2-B program is an appropriate alternative. Another good option would be the Entrepreneur Visa. I say trade an Entrepreneur Visa program which creates new jobs in exchange for killing the H-1B visa which only suppresses wages and supports corporate dinosaurs trying to cut their bottom line rather than actually innovating.

abhiv• 11 years ago

Cringely doesn't understand the difference between immigrant and non-immigrant visas if he recommends the EB-2 as an alternative to the H-1B. The EB-2 is a green card application for a foreign worker who wants to live in the US permanently; the H-1B is for people who just want to work in the US for some period of time. All countries have similar distinctions between workers and long-term residents, and confusing them is a strong indicator that the writer doesn't know what he is talking about.

Cringely is also wrong in at least one important respect about the EB-2 visa: its numbers do indeed fill up every year, just like for the H-1B, for Indian and Chinese applicants. So if you file an EB-2 based visa application this year, it will take you about 10 years to receive your EB-2 based green card if you are Indian, and 5 years if you are Chinese. The US Government was, as of February 2015, processing EB-2 applications received in September 2005 for Indian applicants, for example [1].

Is Cringely then suggesting that companies wait 5-10 years for new foreign employees to join them?

I've posted about this before on Hacker News, but it's a common misconception here that H-1B workers are somehow "indentured", or that they cannot switch employers. Under the AC-21 act of 2000 [2], H-1B employees can switch employers with a single H-1B transfer filing, and even start working at their new employer while their H-1B transfer application to their new employer is in process. Further, the H-1B transfer application is not subject to the yearly cap (which has been regularly reached in recent years), so there is almost no chance of it being denied. In practice, this means that H-1B workers have as much job mobility as native American workers.

The bad actors in the H-1B program are indeed the Indian outsourcing companies, which need to be investigated and punished for violations of the program, including paying below market wages. But there are many more good actors who use the H-1B program extensively -- Google, Facebook, and similar reputable American tech companies -- and they don't use it because they underpay their employees, but because they can't find enough qualified employees even given their high wages. There was a recent post on HN about the very high salaries paid by these companies to their H-1B employees, as disclosed in their H-1B visa applications.

Summary: For someone who claims to have written a long running series on the H-1B program, Cringely is disappointingly misinformed. The H-1B program has violations, which need to be properly investigated, but the EB-2 is not even close to a viable replacement for it. H-1B employees are not indentured labor and have high job mobility, except in the case of a few large outsourcing companies which do indeed deserve to be punished.

[1] Monthly Visa Bulletin from the US Department of State: http://travel.state.gov/content/visas/english/law-and-policy...

[2] H-1B Visa Transfer: http://www.usavisanow.com/h-1b-visa/h1b-visa-resources/h-1b-...

scrumper2• 11 years ago

Indeed - this is a pretty basic mistake. Also, note that the government recently lifted the blanket ban on spouses of H1-B's holding employment in the USA (which was for me and many others a factor in choosing an L1 intracompany transfer visa rather than a more portable H1-B when I moved here). The H1-B can also lead to a green card too (given time), so workers on it are by no means locked in.

rfreytag3• 11 years ago

Cringely singles out the H-1B abusers to whom I and you refer, and that pay substandard wages, not Google, et al..

Also, switching employers is encumbered if there is any risk of deportation without continuous employment which "vosper" (see peer comment to yours) notes IS a growing risk as the H-1B ages. This is the "indenture" effect in question.

Lastly, H-1B workers working for the aforementioned abusing employers accept their lower wages and often poor conditions because of the hope that once in the USA they will find a Green Card sponsor. This makes the H-1B equivalent to the EB-2 when speaking of the abusing employers to which Cringely refers.

vosper• 11 years ago

H1-B visa holders (like myself) can and do switch employers. Granted, you need to find an employer willing to take sponsorship of your visa, but this poses significantly less paperwork and expense for the new employer than the original sponsorship does. The entire process can be arranged between the visa holder and the new employer, which means the existing employer doesn't need to be notified in advance [1] and can't interfere.

I can't speak to other locales, but in the Bay Area I've found no shortage of employers willing to take sponsorship of an H1-B visa holder. Not all such companies are willing or able to then sponsor a green card if the employee wishes to stay in the US permanently, but many of the larger companies will also do this.

It can get a little ropey towards the end of the H1-B period - some companies will not hire people who are down to only one or two years on their visa. So, if you want to stay then after the first few years in the country, you'll need to start thinking about finding a place that will sponsor your green card.

[1] This does, unfortunately, mean that it's not always possible to give as much notice as one would like. Nonetheless, the standard courteous notice period in the US seems to be about 2 weeks - much less than the 4-6 weeks common overseas - and most new employers are okay with that.

rfreytag3• 11 years ago

I personally knew an H-1B holder that was ratted out to their current employer by an unscrupulous HR department as punishment for not taking a poor offer and refusing to switch! His "punishment" lasted years and definitely affected his income. I say the term "indentured servant" definitely applies.

scrumper2• 11 years ago

No, the H-1B program is a useful tool for tens of thousands of immigrants to get established in the USA. Its structure lets it be abused by bottom feeding offshoring shops paying below market rates for onshore workers, who are enabled by their clients buying low-value IT services in bulk without any real thought as to what they are trying to achieve. You can't fix that without ending a comparatively low friction immigration channel for a very large number of people.

At one of my past employers we used H-1B visas to transfer Indian workers from our offices in Hyderabad to New York. The paperwork was much easier for us than trying to do L1s; the tradeoff being that, once here, they were free to seek employment elsewhere. None did: we treated and compensated them the same as our US citizen workers.

The visa is not the person.

yankoff• 11 years ago

If there are indeed exceptional jobs that can’t be filled by ANY domestic applicant, there’s still the EB-2 visa program, which somehow doesn’t max-out every year like H-1B

I'm not sure this guy knows what he is talking about. EB-2 will take 1.5 years best case scenario. For people from some countries (India, China) it will take much more. Also you can't lowball h1b worker on a salary and pay him less than average, the h1b petition will likely be not approved.

SneakerXZ• 11 years ago

I think the biggest problem with H-1B visa program is that quota is for entire world. It would be better to have 10k places for Europe Union, 10k places for India, 10k places for China and so on for other big countries and then have another pool for small countries. This would diversify population of US and would yield much better results.

Because currently H-1B is mostly used by Chinese and Indian people.

mattbrewsbytes• 11 years ago

Another aspect is the accounting rules. When a company has direct employees working, they show up on a P+L statement in the labor section. When a company is "buying a service" from an outsourcer, staffed completely with H1B and offshore people, it gets treated differently and can be accounted for in a different section of the P+L. I believe this is enough for larger companies to see moving hundreds or thousands of jobs to this model for pure tax implications. Especially if they can "amortize" out the cost of building something by 3 years. This is in addition to the 1/3 to 1/4 cost.

Change the accounting rules to make companies track H1B and outsourcers as labor and it may make some companies second guess this model.

Nobody is mentioning quality either... since that doesn't show up in a spreadsheet or accounting system. The fact that your projects are taking longer and are buggier is more of a soft metric but definitely will impact the bottom line.

serge2k• 11 years ago

Why not just raise the price and crackdown on companies actually abusing the system?

If it now costs you 1.25x the price of a US worker, and scamming the system means you can't get any more visas that would fix the problem.

davidxray2• 11 years ago

As someone who worked through the H1B system and is now a US Citizen, I can say that it’s a decent program when executed properly.

H1Bs are temporary high-skilled workers who are hired when domestic workers are unavailable and can also get sponsored to become permanent US residents if the company is still unable to find domestic workers after a few years. In my case, I had to relocate to a small town in Kentucky for the job where (at the time) no American tech worker was willing to move to. I was essentially hired out of frustration on part of the hiring manager. I had other job offers but decided to go with that company because of it was a reputed (Fortune 500) company.

That said, numerous issues plague the program:

1. I noticed my fellow H1B co-workers who were Indian were paid much lower than I was. (I’m not Indian and I was paid market-rate). I’m not sure why but it seems companies think Indian workers are more desperate and will take less money.

2. H1B workers have absolutely no power. Your boss/company really does OWN you. You have little room for negotiating raises/work environment/responsibilities/schedule etc. If your boss doesn’t like you, you might end up in legal limbo in a few years.

3. H1B workers are constantly worried about the company’s bottom line/future/decisions. It’s very difficult to change jobs and a layoff/termination automatically invalidates the visa. Even if a H1B worker manages to switch jobs, the time limit on the visa doesn’t reset and the new working conditions might actually be worse than previous company. This lack of mobility also has a dampening effect on the H1B worker’s career. Six years is a long time in the tech industry and H1B workers usually end up stuck with old technological stacks because they were unable to move on to jobs with better opportunities.

4. Many companies bring H1B workers on board with promises of sponsoring a green card knowing fully well that they have no intention of ever doing so. Some companies tell H1B workers that they have filed an LCA or are working on some other step without actually doing anything. Reason: It costs money.

5. Some companies ONLY hire H1Bs even if domestic workers are available. This is because they can get away with paying SOME H1B workers lower wages and H1B workers are more easily controlled. Also, some unscrupulous managers use the H1B system to hire their friends and relatives who are absolutely unqualified for the job. I can’t prove it, but I’m sure their is a shadow market where some managers demand BRIBES from H1B applicants in illegal pay-for-play hiring schemes.

6. H1B workers have been brought in by companies (like the Disney case) to replace American workers. Sometimes, the domestic workers are forced to train their replacements before being laid off. This has caused a lot of resentment towards H1B workers.

7. The Indian “Consultancy” companies: Tata, Wipro, Cognizant, etc. — Too much to talk about. These companies are the worst offenders and chronic abusers of the H1B system. I’d implore both American workers and H1B applicants to stay away from any company that has a large swath of H1B workers — read: INDIAN

akshat_h2• 11 years ago

I am confused by one thing here. If you and other person had similar jobs, why was the other H1B approved, considering legally they are required to pay comparably? I keep hearing Tata, Wipro, Cognizant as the main culprits, but being a Grad student in the US, I know quite a few Indian students(being one myself as well) and none of them aspires or even thinks about working for these companies.

davidxray2• 11 years ago

The other H1B gets approved because:

1. The government mostly rubber-stamps H1B applications.

2. The company is required to pay "prevailing wage" which isn't necessarily market rate.

3. Companies play fast and loose with titles. They can present "Computer Programmer" as the title in the application but in reality the worker is a Linux Kernel hacker.

brownbat• 11 years ago

I'm not very good at maintaining an even tone on this issue, because it increasingly strikes me as an issue of fundamental human rights. So forgive my aggressively anti-border position, probably far out of the mainstream.

I'm not completely alone in my minority view though. The UN human development report put it this way, "mobility is a fundamental element of human freedom [and] entails the freedom to seek opportunities to improve living standards, and health and education outcomes, and/or to live in safer, more responsive communities."[1]

Doesn't that have at least some intuitive appeal? What if you've relocated to a city from a surrounding town, (as most people in America have been doing since at least 1950 [2]). Suppose someone took you out of your current home and returned you to the town you grew up in as a child. Would that be fair in any sense of the word?

If someone from Wyoming can move to Miami for a better opportunity, then why not someone from far closer, and likely even far more culturally similar? Someone from Haiti or Cuba?

More than anything, when people rebut the notion that everyone should be allowed to pursue a better life, regardless of the circumstances of their birth, it reminds me of Texas's argument against abolition. Its articles argued that abolitionists were foolishly "proclaiming the debasing doctrine of equality of all men, irrespective of race or color--a doctrine at war with nature, in opposition to the experience of mankind, and in violation of the plainest revelations of Divine Law."[3]

It seemed pretty horrible then, and it seems pretty horrible now.

Or as Caplan put it, Your fellow "Americans are not the master race." You wouldn't kill for them. Why condemn others to poverty for them? Why not have hearts that bleed, not only for your compatriots, but also for the hard working immigrant? [4]

Besides, computer science grads are fine anyway. I know it feels besieged if you're working in the field, but it's really not.[5-10] There are more pressing problems than protecting one of the safest bachelor-only disciplines available.

[1] http://hdr.undp.org/sites/default/files/nhdr_migration_gn.pd...

[2] http://ufdc.ufl.edu/UF00087158/00001/7j

[3] https://www.tsl.texas.gov/ref/abouttx/secession/2feb1861.htm...

[4] http://econlog.econlib.org/archives/2006/03/are_lowskilled.h...

[5] http://www.bls.gov/ooh/computer-and-information-technology/h...

[6] http://www.npr.org/sections/money/2013/09/10/219372252/the-m...

[7] http://www.theguardian.com/news/datablog/2010/jul/15/employm...

[8] http://www.bloomberg.com/bw/articles/2014-07-10/college-grad...

[9] http://www.studentsreview.com/unemployment_by_major.php3?sor...

[10] http://www.bls.gov/ooh/computer-and-information-technology/s...

The H-1B visa program is a scam

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