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How middlemen are gaming the H-1B program

bloomberg.com

21–30 of 62 posts

Re: How middlemen are gaming the H-1B program

#21
post #13

How did the middlemen get so much power in the US economy ? So much of the economy is just middlemen doing bullshit work and seeking rent. Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. I don't think other countries have such a big problem with middlemen inserting themselves everywhere and seeking rent. Is there something unique about the US ?

Middlemen are people who spent time specialising in a market and you pay them as guides. You never have to go through them, but you'll get your ass raped. There s nothing wrong about them, they work hard and are not rent seekers (a commission on successful deal is the exact opposite of a rent). Every countries has them (Im French, live in Hong Kong) and what you bemoaned is mundane in my experience.

Car salesmen are guides and we'd get raped without them? Wild take.

Re: How middlemen are gaming the H-1B program

#22
post #15

Staffing companies are extremely profitable and mostly operate on the edge of the law, exploiting visa workers for maximum profit. Any attempt by USCIS to regulate staffing agencies use of H1B has been fought tooth and nail by armies of lawyers. With the fall of Chevron, I don't think there is a way out of this without legislative changes. The other side of the coin is the extremely arbitrary and capricious nature of…

The simplest solution is to automatically give an H1-B a green card in 12 months--24 at the longest . Force the sponsoring company to pay for and complete all of the required background and security checks. Make failure to complete or shitty completion of those checks criminal liability directly on the CEO. This would immediately deprive these kinds of staffing companies of the economic incentive as they would have t…

This requires Congress to pass legislation, so cannot be done tomorrow. Legal immigration isn't a high priority in general and Congress hasn't moved on immigration in decades.

Re: How middlemen are gaming the H-1B program

#23
post #15

Staffing companies are extremely profitable and mostly operate on the edge of the law, exploiting visa workers for maximum profit. Any attempt by USCIS to regulate staffing agencies use of H1B has been fought tooth and nail by armies of lawyers. With the fall of Chevron, I don't think there is a way out of this without legislative changes. The other side of the coin is the extremely arbitrary and capricious nature of…

The simplest solution is to automatically give an H1-B a green card in 12 months--24 at the longest . Force the sponsoring company to pay for and complete all of the required background and security checks. Make failure to complete or shitty completion of those checks criminal liability directly on the CEO. This would immediately deprive these kinds of staffing companies of the economic incentive as they would have t…

Huh? How could passing multiple new laws (anti-business laws at that), including fundamental changes to legal residency (especially in the current political environment) be done quickly (tomorrow according to you)?

Re: How middlemen are gaming the H-1B program

#24

How did the middlemen get so much power in the US economy ? So much of the economy is just middlemen doing bullshit work and seeking rent. Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. I don't think other countries have such a big problem with middlemen inserting themselves everywhere and seeking rent. Is there something unique about the US ?

>How did the middlemen get so much power in the US economy?

I think it's always been this way. It takes a lot of work and resources to deal with individual customers at scale.

>Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc.

Staffing firms, real estate agents, and attorneys are not unique to the US at all. Staffing firms are used by many companies because they don't want to hire full-time HR people to do "talent acquisition". (Personally, I haven't had good experiences when I've tried interviewing at these companies, and have always done better by going with companies that do their own recruiting and hiring.) People selling their house don't have the time or resources to sell it themselves usually, dealing with all the prospective buyers. And attorneys are pretty necessary if you have non-trivial legal issues anywhere.

Health insurance isn't even unique to the US; lots of developed nations have systems that look sorta like ObamaCare. But they all do it MUCH better, with FAR lower costs. Someone's probably written a long book somewhere explaining why the US is so uniquely bad here.

Car dealerships aren't unique to the US (how else are you going to buy a car?), but the requirement that they be independently owned is, and adds to the cost of cars in the US, and I think especially results in a lot of (less-than-savvy) customers being ripped off with unnecessary charges.

The thing I see about the US is that it seems to be uniquely bad at actually fixing problems. Most of these middlemen services you list are natural outcomes of real-world constraints. A company that makes milk, for instance, can't realistically sell it individually to customers all over your city or state, so they sell it to distributors, who distribute it to their retail stores, where customers buy it to take home. Similarly, a small car manufacturer, like Studebaker, can't set up dealerships all across the US, so they partner with local dealerships that are probably selling other mfgrs' cars too. Back in the early days of cars, all the carmakers were small, remember. A century later, they're mostly big, but the US made laws long ago requiring independent dealers, and now they can't change.

For whatever reason, as time goes on and things change, the US is uniquely bad it seems at adapting and fixing the problem. In better-run countries, they'd see this independent-dealership law is no longer necessary, and change it. In the US, it stays, because car dealers are politically connected to local politicians.

Re: How middlemen are gaming the H-1B program

#25
post #15

Earlier quoted context omitted.

The simplest solution is to automatically give an H1-B a green card in 12 months--24 at the longest . Force the sponsoring company to pay for and complete all of the required background and security checks. Make failure to complete or shitty completion of those checks criminal liability directly on the CEO. This would immediately deprive these kinds of staffing companies of the economic incentive as they would have t…

Huh? How could passing multiple new laws (anti-business laws at that), including fundamental changes to legal residency (especially in the current political environment) be done quickly ( tomorrow according to you)?

What he meant is that it could be done quickly if there were political will for it. Obviously, there's no political will for this, so it won't be done.

Re: How middlemen are gaming the H-1B program

#26

How did the middlemen get so much power in the US economy ? So much of the economy is just middlemen doing bullshit work and seeking rent. Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. I don't think other countries have such a big problem with middlemen inserting themselves everywhere and seeking rent. Is there something unique about the US ?

Why did you ask this question on the web site of a news middleman, rather than in the comment section of Bloomberg.com?

Re: How middlemen are gaming the H-1B program

#27
post #5
post #4

Another year another H-1B article exposing the truth. It might get fixed by the time we all retire.

Can i venture a guess that you aren't an immigrant? Because otherwise you'd say "by the time we get Green Card" :)

Not all immigrants are Indians with a 20 year wait

Re: How middlemen are gaming the H-1B program

#28

How did the middlemen get so much power in the US economy ? So much of the economy is just middlemen doing bullshit work and seeking rent. Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. I don't think other countries have such a big problem with middlemen inserting themselves everywhere and seeking rent. Is there something unique about the US ?

In Australia few years back the highest paid CEO was not from industries you might expect like mining, banking... but a company doing international student placements, whatever that is -

https://www.abc.net.au/news/2020-08-07/idp-education-ceo-and...

Re: How middlemen are gaming the H-1B program

#29
Multiple registration became an issue for a couple years but the root cause for the large number of applications this year which will continue to happen is because a small change USCIS made in their application process recently which made the application process more democratic and accessible.

Prior to 2021, everyone had to submit a full application packet along with the application fees to enter the lottery. Which meant an IT staffing company had to spend ~2000 USD on immigration lawyers to prepare the application for one employee and another cheque of ~2500 USD to USCIS as application fees. The application fees would get refunded back from USCIS if the application was not picked in the lottery for 85,000 slots and the IT Staffing company would have to at minimum bear the costs they spend on lawyers preparing an application they had to submit to enter the lottery.

From 2022, USCIS I believe made a change with a good intention to reduce burden on the large number of applicants whose applications were bound to not get picked in the lottery. USCIS always received about 225,000 applications typically every year and the 85,000 slots allocated for the full year would get filled in the first week itself. USCIS made a change to the application process and allowed IT staffing companies to pre-register for the lottery by paying a nominal fee of 10 USD. They now do not have to bear any lawyer costs to enter the lottery since they do not have to submit a full application upfront.

This small change makes the whole process more democratic to a vast number of people who work at IT firms in India and allows them to apply now since they fully meet the specialized work conditions set by the H1-B visa system and the cost to enter is almost non-existent.

Re: How middlemen are gaming the H-1B program

#30

How did the middlemen get so much power in the US economy ? So much of the economy is just middlemen doing bullshit work and seeking rent. Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. I don't think other countries have such a big problem with middlemen inserting themselves everywhere and seeking rent. Is there something unique about the US ?

It's not unique to the US at all, it's fundamentally just how power dynamics work. Power comes from controlling access over valuable resources (ie power = control). Being a middleman gives you some control over something, and therefore some power.

The interesting part is how power tends to centralize into the hands of an elite few (ie oligarchies), rather than equalize or concentrate completely into the hands of one. And I think this tends to happen as to reflect the collective wills of society's members.

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