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Do Immigrant Engineers Depress Engineer Wages?

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Re: Do Immigrant Engineers Depress Engineer Wages?

#21

Post by trustfundbaby »

jellicle wrote: post #11

Who should we believe, the "columnist who doesn't think it's obvious" that pulling in piles of low-paid immigrants depress local wages, or the capitalists who do think it's obvious? What possible reason would there be for hiring foreign workers if they WEREN'T depressing local wages? And indeed, the studies confirm our intuition: http://hothardware.com/News/Study-H1B-Visas-Lower-US-Program...

That article is from 2009, the study they link to doesn't actually have what it says its supposed to have in the abstract and the article that claims that

"Most foreign tech workers, particularly those from Asia, are in fact of only average talent. Moreover, they are hired for low-level jobs of limited responsibility, not positions that generate innovation. This is true both overall and in the key tech occupations, and most importantly, in the firms most stridently demanding that Congress admit more foreign workers."

is 404. I'd like to see some better data if you have it though.

Re: Do Immigrant Engineers Depress Engineer Wages?

#22

Post by Amadou »

The column does not directly mention H1B, but it is clear that H1B is the subtext.

Here are a couple of points not mentioned.

The top 10 H1B employers account for about half of the visas issued in recent years. All 10 are contract houses that specialize in out-sourcing. They bring people in, train them up and then send them back to work on the same programs remotely at local rates. These actions are totally against the stated principles of increasing the number of technically skilled workers in the US.

http://www.npr.org/blogs/alltechconsidered/2013/04/03/176134...

H1B people are supposed to be paid a prevailing wage. There are two big problems with that - there is absolutely no money at all allocated for enforcing that requirement, and due to technicalities (or loopholes) in the legislation, companies are legally able to pay rates for the lowest skilled categories rather than ones commensurate with their skills and jobs.

http://www.cringely.com/2012/10/23/what-americans-dont-know-...

FWIW, I am totally willing to go with the concept of a network effect, that skilled engineering job market is not a zero-sum game. But the H1B program is practically the worst possible implementation to take advantage of any network effect in the labor market. To me, it looks like it is designed to wreck it.

I'd rather H1B be treated like a fast-track immigration visa - if you qualify for an H1B visa you are guaranteed a green card in 2 years or less. I think that would remove much of the ability for H1B employers to use them in ways contrary to the rhetoric that sells H1B to the uninformed.

Re: Do Immigrant Engineers Depress Engineer Wages?

#23

Post by [deleted] »

trustfundbaby wrote: post #18

This really is a no brainer, if you have the best and brightest coming here to work, then its only going to make everybody in the industry better as everybody has to raise their game to compete, as long as these workers don't flood the market (which the h1-b quota does a good job of keeping in check) The problem is with some of the foibles of the h1-b visa. H1-b workers cannot compete in the job market the way an Ame…

[deleted]

Re: Do Immigrant Engineers Depress Engineer Wages?

#24

Post by bicknellr »

yummyfajitas wrote: post #16
rayiner wrote: post #7

Earlier quoted context omitted.

> If we let someone in from a poor country, we're increasing the income of someone who might be below the 50th percentile into the 99th percentile. It's awfully hard to make a case that we should be enriching the richest people in the world at the cost of the poorest. It's not hard to make that case at all. Indians and Chinese prospective immigrants are not part of the American body politic. The American government h…

Using that same logic, it's not hard to make the case for imperialism. If the sole goal is to benefit Americans at the expense of others, why not steal everyone's natural resources and use them for our own benefit?

[insert communism comparison rebuttal here]

Re: Do Immigrant Engineers Depress Engineer Wages?

#25

Post by pandaman »

yummyfajitas wrote: post #16
rayiner wrote: post #7

Earlier quoted context omitted.

> If we let someone in from a poor country, we're increasing the income of someone who might be below the 50th percentile into the 99th percentile. It's awfully hard to make a case that we should be enriching the richest people in the world at the cost of the poorest. It's not hard to make that case at all. Indians and Chinese prospective immigrants are not part of the American body politic. The American government h…

Using that same logic, it's not hard to make the case for imperialism. If the sole goal is to benefit Americans at the expense of others, why not steal everyone's natural resources and use them for our own benefit?

There are no resources left that you could "steal" for less than you could buy on the open market.

Re: Do Immigrant Engineers Depress Engineer Wages?

#26

Post by rdouble »

pbiggar wrote: post #19

Immigrant engineer here. Do immigrant engineers depress wages? Of course. Trivial supply and demand (and I'm surprised to see a supposed economics blog make unintuitive assertions without providing any evidence). You can already see wages rising rapidly as a result of the already low supply of engineers. Kids coming out of Stanford are getting 6-figure offers at Google. If there were less engineers, lots of companies…

The downside of living in SF with a good salary is that everybody has a good salary.

It's more that having a good salary in SF doesn't necessarily level up your quality of life compared to someone with a bad salary. In some ways, it might make it worse. Three bartenders splitting an apartment in the Mission are likely having a better time than three Twitter employees splitting an apartment in the Mission.

Re: Do Immigrant Engineers Depress Engineer Wages?

#27

Post by rayiner »

yummyfajitas wrote: post #16
rayiner wrote: post #7

Earlier quoted context omitted.

> If we let someone in from a poor country, we're increasing the income of someone who might be below the 50th percentile into the 99th percentile. It's awfully hard to make a case that we should be enriching the richest people in the world at the cost of the poorest. It's not hard to make that case at all. Indians and Chinese prospective immigrants are not part of the American body politic. The American government h…

Using that same logic, it's not hard to make the case for imperialism. If the sole goal is to benefit Americans at the expense of others, why not steal everyone's natural resources and use them for our own benefit?

One bit of conventional wisdom that I find interesting is the belief that what was responsible for American prosperity post-WWII was the fact that Europe was devastated and the U.S. was the undisputed industrial superpower. To the extent that theory is true (and I'm not saying it is or not, I don't have enough of a grounding in economics to say)--doesn't that suggest that the rational course of American policy should be to bomb India and China instead of trading with them? People trot out this idea all the time, but nobody really thinks through the implication...

My point isn't that the U.S. should be imperialist. I don't think it should be. There are lots of good, practical reasons to not just go around bombing everyone, namely that it's an expensive game of "king of the hill" in the long run. But in my mind the idea that we have some greater moral obligation to humanity is not one of those reasons. The American government is instituted to secure the prosperity of Americans. That is the beginning and end of the purpose of its existence. The only moral obligations binding upon it are those that reflect the will of its constituency. If the U.S. refrains from imperialism the only reason it should do so is because Americans want to be peaceful, not out of concern for the well being of non-Americans.

It should be noted that, China doesn't subscribe to any such silly notions. If they thought they could get away with bombing us to cripple our infrastructure and that doing so would increase their own prosperity, the Chinese government would do it in a heartbeat.

Re: Do Immigrant Engineers Depress Engineer Wages?

#28

Post by aspensmonster »

A piece on immigration as it relates to skilled labour with no mention of H-1B? If you aren't investigating the primary manner by which skilled foreign labour finds itself in the states, then you're never going to get a good answer to the question: "Do immigrant engineers depress [native] engineer wages?"

Of course, an H-1B visa is technically a non-immigrant visa, which goes a long way in investigating the question by itself. It's somewhat misleading to even call them "immigrant engineers" if most them are on a temporary visa that ties them to a sponsoring company and requires them to leave once time is up. This clouds the issue of supply and demand, as the labour pools are really quite different: foreign nationals who are tied to a specific company and are only permitted to reside for X years, versus natives who are free to work for any company and can live here indefinitely. It _is_ obvious that the native is going to be able to command a far higher salary than an H-1B that is stuck with his "sponsor."

Now, whether companies are pushing for more H1-B's because of this wage suppressing factor, or because there is an unresolvable shortage of native talent, is the million dollar question. And it's a question that, in my mind, is readily answered. Convert the H1-B into a full-on green card, wherein the skilled foreign labour is granted all of the rights and privileges of a native. If the shortage really is unresolvable --for whatever reason-- then companies still have all the skilled foreign labour they would need; the companies' staffing concerns are still addressed. And since the foreign national is permitted to live and work wherever he pleases (he is essentially identical to a native applicant at this point), the argument of wage suppression is significantly weakened, since the main argument is that there really _are_ natives willing and able to do the jobs but they're getting priced out of the market because they can't compete with locked-in H-1B holders.

The skilled immigrants win. The companies still get their skilled labour and win. If there really are natives ready and willing to do the jobs, then they too will win.

Re: Do Immigrant Engineers Depress Engineer Wages?

#29

Post by pbiggar »

trustfundbaby wrote: post #18

This really is a no brainer, if you have the best and brightest coming here to work, then its only going to make everybody in the industry better as everybody has to raise their game to compete, as long as these workers don't flood the market (which the h1-b quota does a good job of keeping in check) The problem is with some of the foibles of the h1-b visa. H1-b workers cannot compete in the job market the way an Ame…

> The problem is with some of the foibles of the h1-b visa.

H1B worker here. I think what you describe is actually completely offset by the strong demand for engineers. The cost of a H1B, which is as you say $5K or so (though its the same to transfer), is tiny in comparison to salaries, and also relative to recruiter fees (which can often be $30K). The only common reason companies don't do H1Bs is the hassle, and even then it's not that big a deal for any funded or profitable company.

There is really no power over the H1B at the moment. There was during the bust following the dot com boom, and you'll always find unscrupulous employers, but I have literally zero worries about this. One employer did try to change the deal for me, but it took me literally 5 days to find a new job. In an economy like this, there is no danger.

However, that's not to say your fix wouldn't be welcome (esp if a bust comes around again). I don't see it happening though, given both the aims of the H1B and the green card programs.

A final correction: you're not allowed contract out H1B workers. That's not to say it doesn't happen, and there is one big company with a reputation for this (infosys? I dont remember), but your final line is hyperbole.

Re: Do Immigrant Engineers Depress Engineer Wages?

#30

Post by altcognito »

Amadou wrote: post #22

The column does not directly mention H1B, but it is clear that H1B is the subtext. Here are a couple of points not mentioned. The top 10 H1B employers account for about half of the visas issued in recent years. All 10 are contract houses that specialize in out-sourcing. They bring people in, train them up and then send them back to work on the same programs remotely at local rates. These actions are totally against t…

> All 10 are contract houses that specialize in out-sourcing. They bring people in, train them up and then send them back to work on the same programs remotely at local rates. These actions are totally against the stated principles of increasing the number of technically skilled workers in the US.

I've seen this a number of times at the company I work at.

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