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

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

#71

Post by realrocker »

This sort of thing is also harmful for native IT development for an outsourcing destination such as India. Since the motive of work channeled to India is simply cheaper costs, good software engineers have a limited run. One of the direct fallout is time-based promotions instead of merit-based. Some salient points: a) Average entry salary(0 years exp.) for an IT worker is about $6k. After applying PPP(purchasing power parity) of 2.9(source:http://www.thehindubusinessline.com/opinion/columns/harish-d... amounts to $18k. In the US the average is about $60-65k (http://www.whatsalary.com/us/salary/SOFTWARE-ENGINEER-T6812....). TLDR:Entry level, India($18k after PPP) vs USA($60-65k).

b) Why is the above data relevant to this discussion?

H1B is a red herring basically saying, "Look we tried looking for locals alright. They are just not qualified. Look at the Indians we got, they work all the time." I don't think the 800-900 workers IBM imports translate to a huge savings compared to 100,000+ workers it employs in India. While in India, the H1B is a carrot for workers to continue slogging on.

c) How is it bad for India?

It's bad for India for exactly the same reasons. There is no desperation for innovation as a software job is easily available. This is also the reason India has not produced even a single Google or a Nokia.

Recently I was offered a contract job. I quoted the global market rate(after applying PPP). The response I got back was shocking and humiliating.

"India's GDP is $3700. Why is your quotation so high?"

I apologized for earning more than India's GDP and refused.

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

#72

Post by [deleted] »

rada wrote: post #53
greggman wrote: post #11

If there's a smoking gun for IBM great, fine $$$$$$$ IBM. But my personal anecdotal experience is that the companies I've worked for pay the same for HB-1 vs local. They don't look at it as trying to find cheap employees. They look at as trying to find qualified employees anywhere, world wide. Companies I've worked for, Virgin Games (run by a British immigrant), Shiny Entertainment (also run by a British immigrant an…

The H1B issue is not simply salary as measured in absolute numbers. Naked salary numbers may be the visible tip of the iceberg but there are bigger issues to consider. 1. Most H1B workers are under 30, and most unemployed American programmers are over 35. This is by far the biggest part of the iceberg, made invisible by the fact that these people drop out of statistics. 2. Visa handcuffs are not slavery per say, but…

[deleted]

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

#74

Post by thewisedude »

debacle wrote: post #65
yummyfajitas wrote: post #58

Earlier quoted context omitted.

artificially inflating the cost of living for the US consumer (through the cost of medicine, software, textbooks, food, clothing, etc), Could you explain this in more detail?

I think the most simple example is software. I don't know about Windows 7, but I know Windows Vista was 1/4th the price in China as it was in the US. Prescription medications in other countries often cost far lower than in the US: http://en.wikipedia.org/wiki/Prescription_drug_prices_in_the... . A coke in India costs half the price as it does in the US.

The thing is, I would say the cost of production of Coke is less in India too. In other words, even though I believe price arbitrage happens, I dont think that would be the main culprit.

I would say the lower standard of living in a particular country puts the country in a good vantage position to export more goods (or services). For eg:- A person from a developing world might be in a good position(financially) when he decides to return to his home country for good, even if he has saved what an American would call "not much".

Now, I think true globalization which means (tariff free import and export of all goods including groceries) might eventually solve this problem. But before that happens- that might eventually mean a hard life for people currently living in the developed world.

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

#75

Post by blinkingled »

rayiner wrote: post #64
nullc wrote: post #30

Earlier quoted context omitted.

I've seen many kinds of H1B employment. People with excellent skills and experience being paid competitive wages, people with reasonable skills being exploited at low wages at the clear expense of locals, and people who were hardly qualified to warm a seat being pulled in to pad up some contract as cheaply as possible. As usually when you paint with broad strokes you cover some dissimilar surfaces. But at the core th…

A country is a community. Multinational companies don't want people to believe that, but it's true. A community is entitled to control its membership. An H-1B is not just a contract between employer and employee. It is a contract between a foreigner and a community. We the community agree to make that person one of us. To educate his or her children at the public expense. To allow him or her to affect our elections.…

H1-B VISA has a limit of 6 years. H1-Bs get no social security benefits even though they pay social security taxes just like anyone else. Their children do not educate for free - they pay local, federal and city taxes just like anyone else. They aren't allowed to vote.

You are thinking immigrants not H1-Bs. Due to severe shortage of immigrant VISAs and due to MNCs not filing Green Cards for most H1-Bs - there is a small percentage of total H1-Bs that actually end up staying and becoming citizens.

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

#76

Post by EricDeb »

As a recent STEM graduate (Masters in CS), what irks me is the relentless focus on job experience. I don't even get interviews for jobs requiring a high school/GED equivalence + 3 years of experience. There seems to be little faith in our STEM programs among tech recruiters/companies.

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

#77

Post by mahyarm »

PureSin wrote: post #2

As a Canadian who will be going to work in the US through a TN Visa. I wonder if Canadian hires are also seen as a "cheaper" alternative to hiring locally.

The barrier to getting another TN for Canadians for another employer is too low to allow for these kind of shenanigans. Having to move back to Canada isn't that horrible either, and they don't get the foreigner isolation effect that ESL people have.

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

#78

Post by chaostheory »

rada wrote: post #53
greggman wrote: post #11

If there's a smoking gun for IBM great, fine $$$$$$$ IBM. But my personal anecdotal experience is that the companies I've worked for pay the same for HB-1 vs local. They don't look at it as trying to find cheap employees. They look at as trying to find qualified employees anywhere, world wide. Companies I've worked for, Virgin Games (run by a British immigrant), Shiny Entertainment (also run by a British immigrant an…

The H1B issue is not simply salary as measured in absolute numbers. Naked salary numbers may be the visible tip of the iceberg but there are bigger issues to consider. 1. Most H1B workers are under 30, and most unemployed American programmers are over 35. This is by far the biggest part of the iceberg, made invisible by the fact that these people drop out of statistics. 2. Visa handcuffs are not slavery per say, but…

> 2. Visa handcuffs are not slavery per say, but close enough.

I can confirm this. A few of my former H1B coworkers described how an unscrupulous manager would take advantage of them by dangling a sponsorship carrot (for a green card if I remember correctly). None of them were very happy about it and most felt trapped.

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

#79

Post by patmcguire »

yummyfajitas wrote: post #58
debacle wrote: post #52

Earlier quoted context omitted.

Corporations are using free trade to introduce foreign-made goods at huge margins, while at the same time trying to prevent consumers from practicing price arbitrage. If corporations were not artificially inflating the cost of living for the US consumer (through the cost of medicine, software, textbooks, food, clothing, etc), then there would be no issue with an open labor market. But the corporations want to have th…

artificially inflating the cost of living for the US consumer (through the cost of medicine, software, textbooks, food, clothing, etc), Could you explain this in more detail?

It's like the senior discount on a grander scale. Your typical old person on a fixed income can pay less than someone still working, so you split the market into two segments and do a pricing strategy that gives maximum profit in both - you keep the high margin on the young but increase the quantity the old can afford more than the price cut. You keep people from moving between the segmented markets by setting an age break.

Same goes for the international vs. the American market - there's no way you're going to be able to charge $150 for a textbook, $200 for a Windows license, or thousands a month for HIV meds in Africa and get any reasonable number of customers. Since the marginal cost of both is low, companies can cut their prices to close to the amount it costs them to make a unit and make it up on the massively increased volume.

Any time you segment a market like this you have to keep it apart somehow. Sometimes it's natural - a senior discount seems fair and few will make false claims of being elderly - but sometimes it's not. Clearly everyone in the US would prefer to pay 95% less for their medication than they are, but the pharmaceuticals wouldn't like it and probably wouldn't be able to survive on that. So they make it very difficult to do any kind of arbitrage.

If you're an individual you can probably get away with it with a lot of effort (I got a lot of Indian textbooks (Identical to US versions) because I was desperate and put a lot of work into finding someone who wouldn't refuse to ship to the US.) If you try to break the segmentation on any kind of scale you'll get a legal smackdown. Maybe it's completely legal, but it's hard to prove, and the possible losses are so great most companies will go to war over this.

I guess that the irony is that third-world wages are allowed to compete more often than third-world prices. Maybe there's something valid to that - if HIV meds cost everywhere what they cost in the cheapest country, then there would be no new ones, or at least an end to wildly cheaper versions - but that's the grievance.

(Don't know if third-world is the right term, so let me just say when I say that I mean "places significantly less economically developed than America")

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

#80

Post by syntaxerrornow »

debacle wrote: post #52
blrgeek wrote: post #47

Please consider the following two points. What's the difference between them? 1. The US pushed free-market + lower tariffs for imports of products into other countries. This lead to lower production in those countries, replaced by imports from the US. Leading to lower employment in many cases. [Today that's replaced with imports from China] 2. Other countries export 'services' to the US, in the form of BPOs/KPOs, or…

Corporations are using free trade to introduce foreign-made goods at huge margins, while at the same time trying to prevent consumers from practicing price arbitrage. If corporations were not artificially inflating the cost of living for the US consumer (through the cost of medicine, software, textbooks, food, clothing, etc), then there would be no issue with an open labor market. But the corporations want to have th…

AND, they want to be able to restrict flow of goods bought abroad into the US, so they can keep US profits artificially high. All of the benefits, none of the liabilities.
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