IBM: The cost difference is too great for business not to look for H1B workers

> H-1B workers are cheaper than Americans — "and the cost difference is too great" for IBM not to look for foreign workers first. The H-1B statutes are designed to allow employers to legally pay H-1B workers less than Americans and IBM (and a lot of others) is taking full advantage.

This is interesting, because the H-1B process costs about 5k in processing and lawyer fees, plus an additional 2kish fee for larger companies.

In addition to this, companies are required to pay the prevailing wage for that profession and location to foreign workers, so that they can not undercut Americans (or at least that was what was intended).

Prevailing wages are determined by the Dept of Labor, the same guys who set minimum wages. Unless this data is way off-base, H-1B workers are by definition not cheaper than the average worker.

What I see as being likelier is that H-1B workers are an easy-to-hire pool of workers (the average H-1B worker is super happy to get a job / visa), who are willing to work hard for just above prevailing wage.

Not to mention that if there is a lack of supply of american workers who are working for around prevailing wage (because they already have jobs and can't be hired), it's easier to hire people from abroad than to wait until those workers are available or more workers come in.

P.S. The CIS is known for its slightly odd conservative stance on immigration, which is something like "we don't want foreigners to come in if they can compete with Americans (who were also immigrants), but otherwise we're pro-immigration (under these very stringent requirements)"

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edit: Now that I think about it, it's likelier that a ton of these workers come in L-1 visas. These are for intra-company transfers for multinationals. These have no prevailing wage requirements. So IBM india can hire a worker and move them over here for the same wage. And it still allows dual-intent, so you can eventually get a green card via L-1.

I worked for IBM for almost 12 months before I got out of undergrad. There were 4 hiring managers and a senior VP in a hardware unit who was personally vouching for me. Yet, IBM didn't hire me because they were ridiculously careful with hiring H1-B visas because of a snafu they had in the early 80s when the immigration dept cracked down on them. At least IBMs engineering divisions were only hiring H1B folks only if you had 2 years of experience with a Bachelors, or a Masters. I was extremely pissed at the time because I felt like I had more credibility based on merit and my time at IBM than many other interns who were getting offers left and right after spending most of their time playing counterstrike in the labs. They were being ridiculously paranoid about sticking with the books on this one. And sure enough, after I got my Masters I did have and continue to be able to get offers from IBM.

Like some folks said, this probably has to do with third parties who place folks at IBM. Keep in mind, I'm not trying to support them (I'm still sour about my undergrad days and not getting a job purely based on immigration status), but I'm just refuting the whole point about IBM hiring H1B folks just to save money. Just ask around your H1B friends who work at Fortune 100 companies (I'm sure most of you have many). The only ones that I've heard of doing shady things with H1B candidates are small consulting shops and third party staffers.

Here's a thought experiment. Suppose hypothetical Product X was mandated by law to sell at the same price no matter what the store. Now suppose this fact was not widely known and not even rigorously enforced. Some people would insist on buying Product X at Wal-Mart because they perceive Wal-Mart's prices to be cheaper. It doesn't matter if the prices are actually the same, or not.

The upshot is that some people with hiring power will insist on getting some of that "cheap immigrant labor" whether it actually exists or not. I have no doubt that this harms American workers' pay.

But at the core the employment market is about supply and demand. Increases in supply relative to some demand decreases what a rational party will pay. It doesn't matter how kind, qualified, equally paid, etc. The increase in supply weakens the employees negotiating position.

Are the employees entitled to the 'artificial' supply limitation created by national boundaries? Is it socially beneficial to reduce those barriers? Do increases in supply protect the industry and leave all employees better off in the long run and cause little harm because the demand is already so great? What policy decisions can mitigate the harm and maximize the benefits? These are interesting questions.

But I don't think there is any real room to question if H1B's— no matter how well managed— harm employees short to medium term financial interests.