I wonder if switching from a lottery to an auction would help curtail some of the abuse?
That is, for each position a company wants to fill with a non-citizen they also have to bid on the visa fee they're willing to pay. The highest ~7,000 bids that month are accepted and paid to the government in exchange for a visa.
We could debate things like sealed-bid versus open auction and uniform-price versus paying your bid but whatever details we pick I suspect this would allow us to discover which companies are actually desperate for skills and which primarily use it as a cost-savings measure.
(I'm also curious how much H-1B visas would cost if there was a market: thousands of dollars? tens of thousands? hundreds of thousands? more?)
Remember, H1B isn’t always about tech, even if we’d all like to pretend it is. You’ll have to have separate bidding process for different occupations, otherwise you’ll end up with a system where Facebook will get all the visas, while in some cases, doctors would not be sponsored.
There are plenty of jobs as a doctor that pay 350k+/yr that are vacant and are being filled by H1Bs. This mostly is in areas that have low cost of living. You could literally buy a good house with that salary within a year and fully pay for it in two. But people just don’t want to live or work there. Even doctors would prefer to be in NYC or LA over Jackson, Mississippi.
I'm curious what makes you think tech workers would monopolize the top spots? I would expect that companies desperate for experts in medicine, research, engineering, law, business (which, like tech, already pay high salaries) would be similarly willing to pay a premium to be able to hire the best from other countries.
I actually think that could end up having the opposite effect in lower paying fields.
An mid level engineer at Google averages $280k/yr according to levels. A principal mechanical engineer at Boeing averages $170k/yr according to levels. If Google can pay an H1-B engineer 70% of what a non H1-B employee would get ($196k), they can bid up to 80k and still save money.
Since Boeing is going for a high level employee who actually highly skilled, it's less likely that they would be able to underpay their candidate, but even if they could pay their H1-B employee 70% of the market rate ($117k), they only have ~$50k to before they hit the break even point.
Obviously if the person is highly skilled and Boeing actually needs them it would make sense to bid beyond the break even point, but Boeing needs to be more choosy than Google. In that scenario, Google should put every single L4 candidate up for and H1-B because if even one gets their bid accepted it saves them money. Boeing actually has to decide which candidates they're willing to overpay for which will result in a smaller pool of mechanical engineers being put up for H1-B visas.
The implication that companies use H1-B visas primarily to find candidates willing to work for less (e.g. 70%) of a qualified domestic candidate seems like the underlying loophole we should try to close, not just the "fairness" of allocating which companies and fields deserve to exploit this loophole.
But your post raises a good point that money is an imperfect proxy for "value" -- a company with high profit margins can outbid leaner companies (or nonprofits) for a visa, even if the relative value of that visa to the rich company is not as high as it would have been to the other companies.
Three thoughts in response:
First, this "unfairness" doesn't seem unique to a visa auction. Isn't it already "unfair" that mediocre developers at Google earn more than expert mechanical engineers at Boeing?
Second, assuming H1-B visas lower average salaries in the fields where they're used most, then if this program ends up primarily applying to the highest-paid positions (like mid-level engineers at Google) then this might end up reducing some of the "unfairness" above.
Third, I wonder which scheme (lottery or auction) Boeing and their hypothetical H1-B candidate would prefer themselves. Tech companies already game the system and let other companies fight for scraps so having a more predictable (if expensive) pathway may end up being slightly preferable to all parties.
Appreciate the response. I think you make some good points, on your response my thoughts would be.
1. Fully agree, but I don't think we should use that as justification to implement another unfair system. My thinking is that the current H1-B system isn't perfect, but at least we understand its shortcomings. We shouldn't implement a new system that we know has flaws because we don't know what the effects of those flaws will be. It's a devil you know vs devil you don't know type thing. If the current system was a bidding system and people were advocating for a lottery system, I would likely be advocating for staying with the bidding system.
2. To some extent I do think it does affect salaries, but I think there just aren't enough H1-B visas available to have had a super noticeable effect. Also, the rise in companies using H1-Bs has coincided with a massive rise in tech salaries and we don't have a control group to compare against. If tech salaries are up 300% in the last 10 years, but they would have been up 400% without H1-B it's really hard to prove that and it's hard to gain a ton of sympathy from the general public when tech workers are already paid far above average. No one wants to spend their political capital defending the 28 year or making 300k who is upset about not making 400k, even if they are pointing out a legitimate issue.
3. I have a couple of H1-B employees on my team and they all hate the lottery system, so I'm sure they would say a bidding system. To be honest though, in a bidding system, I don't think my company would pay enough to win a visa for them and if I told them that, that would change their mind. My guess would be that a lottery system is actually better for most people currently in the H1-B process because my personal experience has been that most of the people aren't actually all that specialized.
> My guess would be that a lottery system is actually better for most people currently in the H1-B process because my personal experience
Regardless of your personal experience, if H1-B visas are currently allocated randomly to less than 50% of the applicants, then this is mathematically true.
Only the base salary counts, not the total comp. That 280k/yr sounds like total comp - includes base+bonus+RSUs. The average base would be more along the lines of 150k-190k.
Uniquely skilled is probably a better word to use. H1-Bs are meant to be used when American worker's can't be found to fill a role. I think there are more people qualified to be a mid level software engineer (even at the FAANG level) than principal mechanical engineers at Boeing.
I doubt that many mechanical engineers can become a principal level engineer at a Fortune 500 company in 3-5 years, but I know plenty of software engineers who've gotten to L4 at FAANG companies in that timeframe.
I don't think that's what they were implying, but with the way google has been going this past decade, I don't think anyone is still under the impression that google employees are highly skilled. They're the butt of tech jokes for a reason.
This would prevent abuse of foreigners who are underpaid. It would also allow most of the applicants to go to good jobs (FAANG) which can pay premiums salaries.
Reverse auction is the best way to go. Good for foreigners, good for top companies, economically the best option.
Lottery only applies for initial employment, not for renewals.
Most physicists and biologists and geologists work in universities or labs or other institutions, which are cap-exempt anyway and don't go through the lottery.
An auction is a great idea. If a foreign worker is valuable enough then companies should be willing to pay up for them. Then the American People can benefit in multiple ways, we get the revenue paid into the auction, and we get the economic benefits of high skill foreign workers. Let the market decide.
The American People built this country into the economic powerhouse it is today; we should reap the benefits of all this economic activity not random outsourcing firms.
The simplest way to improve the H-1B system is to abolish it.
The better but slightly less simple way is to abolish it (and a bunch of other employment-related visa categories), but also allow individuals who aren’t personally barred from entry because of past misconduct, etc., but who are not eligible (or wish to bypass wait times) for admission under other existing visa categories to pay an fee (which others, including employers, can subsidize if they wish, but gain no special power over future status by so doing) for a limited term, renewable employment-eligible status that becomes eligible to transition to permanent residency automatically after a set time in status. (This also fixes a number of other problems in the immigration system beyond the H-1B.)
Probably hundreds of thousands. A big reason master programs can command such a massive price tag is that they are tickets to enter the US labor market.
It also has the benefit of giving the government an incentive to increase the quota to get more revenue.
That is, for each position a company wants to fill with a non-citizen they also have to bid on the visa fee they're willing to pay. The highest ~7,000 bids that month are accepted and paid to the government in exchange for a visa.
We could debate things like sealed-bid versus open auction and uniform-price versus paying your bid but whatever details we pick I suspect this would allow us to discover which companies are actually desperate for skills and which primarily use it as a cost-savings measure.
(I'm also curious how much H-1B visas would cost if there was a market: thousands of dollars? tens of thousands? hundreds of thousands? more?)