I really want to believe this, but I'm not sure that I do.
Of course the tech companies want to hire people from overseas; being able to hire someone from India for half the cost but have them live in the US so there's some level of accountability/trust is a no-brainer. Huge new, cheap talent pool.
But, if I'm an entry-level, US-based programmer, what I see are floods of cheap talent, some with questionable skills, coming over to compete for my job.
On the surface it seems as simple as a conflict of interest between employees and the companies that employ them. Supply/demand.
Dig a little deeper and the argument becomes that the top programmers we're bringing over are going to start great companies. That makes sense; part of the reason the United States is so powerful is selection bias: If we create an environment the hardest-working and smartest people in the world want to come to, the end result is a lot of great companies that create enough jobs for everyone. Elon Musk isn't starting Tesla or SpaceX in South Africa (where he's from). So we create an all-star selection of the human race in one country, make laws that are favorable to people coming/staying, and the economy explodes.
What I'm not clear on is what the effect of opening the doors to programmers would be. Would truly great companies be started enough that the entire economy is shored up, or would it just dilute the talent pool to the extent that being a programmer isn't a "special" job you get paid $150,000/year for being decent at? The long-term, macro result of this would be interesting.
I think it's important for all startup founders to realize that non-executive salaries in the U.S. tech industry have been incredibly distorted by the illegal wage fixing practiced over the last 10-15 years.
The wage fixing set an artificial ceiling on programmer salaries. And if it's now stopped, we should expect a major correction over the next 5 years as market wages adjust. I'm hopeful that recent salary increases by large companies are evidence that things are moving in a good direction.
But it will take time to rebuild trust between labor (programmers) and management in the tech industry. I don't think we're there yet, and in the meantime I am cynical about any effort to address hiring difficulties by increasing immigration.
After a certain level (especially in California, especially with two-income households, especially after retroactive Prop 30) any additional raise at the salary level is so minuscule in real money that it's just not worth fighting for.
Now the equity and/or options are a completely different ball game.
What "wage-fixing" are you talking about? Are you referring to the brief period in which a handful of tech companies colluded to tamp down salaries and cross-recruiting? Because that involved only a tiny percentage of the software developers in the US and had no significant impact on the national average salaries. Or has there been broader wage-fixing that you're aware of?
> Are you referring to the brief period in which a handful of tech companies colluded to tamp down salaries and cross-recruiting?
Ignoring for the moment I don't think four years is very "brief" or eight is only a "handful"[1] (and it may actually be even more[2])
It's a bit naive to think this "had no significant impact on the national average salaries" - some of these companies are/were among the largest and most desirable companies in tech, what they do is going to affect the entire industry.
e.g. if you are a hiring manager at a company not involved and are trying to hire someone who is also considering an offer from an involved company the amount you need to offer to be more attractive is less. This brings down the average you pay, which brings down the average you offer. Likewise companies now competing for candidates also receiving offers from you now have an easier time sweetening their offers, and so forth and so on.
What is naive is to assume without evidence that the actions of a handful of companies that employ a tiny percentage of software developers had a significant impact on average salaries nationwide. In the absence of any such evidence, it makes more sense to assume it had little impact, which is what I do. The example you cite is mere speculation, and one could easily speculate about an opposite effect, i.e., companies that would not ordinarily be able to compete with Google et al could offer candidates more than they otherwise would have, that is, they might be inclined to stretch salary offers for star developers rather than shrink them. But, there's no evidence that either thing happened to any significant extent.
The example is hypothetical, but it is not speculation. A candidate [usually] decides to accept an offer or not on a number of factors. As a hiring manager you are unable to change most of these factors (e.g. you cannot change the tech stack, or the company culture, or the location). What you can change (to make your offer more appealing than others a candidate is considering) is the pay.
If you're considering another offer for X, I can make my offer more attractive by exceeding X. The lower X is the less it cost me to exceed it. If some companies (particularly large and desirable ones) are lowering X that will affect far more than "just" the 64,000 members of the class action.
Correct me if i'm wrong, but didn't the wage fixing affect precisely the programmers to which the essay is referring? It may have been a tiny percentage of programmers, but it was the programmers occupying the best positions at the most desirable companies who were specifically targeted.
Here's a related question that I never see addressed: how big of a programmer shortage do you think there would be if salaries were 50% higher? All the talk seems to assume that the makeup of industry is utterly inelastic. Fine, maybe your small company in Cleveland can't go out tomorrow and hire 10 A+ developers, but do people really not believe that if starting salary for an A+ developer was $150k, or whatever, that we might get more high-achievers choosing CSCI majors than pre-med or pre-law?
Nobody could sanely argue that there isn't tons of talent outside the US; and maybe it would be good to bring some of it in. But I have yet to see the argument for why these companies with balance sheets that Switzerland would envy couldn't solve this problem by getting out the checkbook. Yeah, the problem wouldn't go away tomorrow, but I'm not sure that making it go away tomorrow should be the only acceptable solution. Guess what, guys: I can't hire people to come and drywall my office tomorrow at whatever price I feel like paying, either.
Put another way, there's probably a reason we don't hear about the great doctor and lawyer shortage. Not apples to apples, obviously, but maybe it's oranges to grapefruits.
Well, there is a doctor shortage, particularly in the general practitioner space, where salaries are much lower than specialist medicine; likewise, while there's not a shortage of lawyers, oversupply has pushed down wages (and pushed would-be attorneys out of the market), and law school enrollments have fallen appropriately.
Comp-sci salaries are really, really good, to the point that a single experienced developer is single-handedly in the top ten percent of earners; a household with two developers is easily in the top 3-4% of household earners. And a superstar developer can make a hell of a lot more, if you're willing to play the casino economy of startups.
Yes, a b- or law-school grad who went to school in Boston is going to economically outperform their brethren from land-grant schools, but a lot of that has to do with background privilege and the ability to build a relationship graph. (If Harvard excluded the academically-mediocre children of the rich and powerful and admitted solely on merit, nine-tenths of the wealth-generating potential of its diploma would be extinguished.) Your average MBA or JD is lucky to do as well as a senior software developer.
Computer science, like medicine, is hard, while it's easier to tune one's grad school experience for less-rigorous subjects. And we all know that even credentialed programmers often can't pass the FizzBuzz test, while even fewer can speak authoritatively about complex system design and architecture. We could add more bodies to CS curricula, but it's far from clear that robbing from MBA and JD programs would add to the stock of high-quality programmers.
My point was less that we bring in the big guns by poaching them from these other fields, then that we address the issue the way it's traditionally been addressed, which is to let the market take care of it. If these development jobs are really magnificent engines of wealth creation, then pay more to hire for the positions and more qualified people will appear. If, as you point out, there's now a lawyer glut, and now lawyers must roll naked in five dollar bills instead of fifties, then that's a sign the process works.
The idea that developers already make enough money, and so instead of letting the market set prices and the shortages work themselves out, that we should rather blow up the current system because some giant companies would just, you know, really appreciate it -- I can't even finish the sentence.
I would really enjoy paying less money to get my transmission rebuilt or the plumbing in the downstairs bathroom fixed. I would love a glut of massage therapists so that I could get my shoulder worked on for the price of an expensive coffee. I do not, however, suggest we change immigration policy to make my dreams a reality. That seems to be what it comes down to.
You know, I just got around to looking at the current FLC wage tiers for my area, and I have to admit I'm shocked -- I knew "prevailing wage" was a joke, but I didn't realize that it meant H-1Bs could come in at $64K a year for a senior developer, for whatever value of "senior" you get at what's an entry-level wage. It seems to me that a lot of trash H-1Bs could be avoided if we got a senator or rep to introduce the following legislation:
Subclause (II) of section 1182(n)(1)(A)(i) of the Immigration and Nationality Act is amended by inserting "median" before "prevailing wage level".
This would at least prevent companies from using the lowest possible wage tier in the BLS data.
And all those services you keep comparing against, you know, can't be moved outside the USA (I'm not going to china to get a back rub or my transmission rebuilt). And of course, software doesn't work like that at all (I can open a software development office in China with the money I make there; as a bonus, I avoid repatriating the money back into the states for extra taxes).
That's a fair point, but it remains to be seen what the frictions are. I doubt that the domestic software industry has had my welfare particularly in mind all these years up till now, and yet they're all still here, paying what everyone wants us to think is our exorbitant American salaries.
What is the point at which these giants collectively tell us to fuck ourselves and run off to the Chinese nirvana you describe? Is it just north of where we are already, so if we don't get some immigration relief immediately we're all doomed?
Maybe. Or maybe the whole process isn't as clean as you're implying that it is. I do know that for as long as I've been paying attention a standard Republican refrain has been that if we don't lower our taxes to zero then all industries, in their game-theoretic wisdom, will evaporate from our lands. And yet businesses keep failing to migrate en masse to whichever Dakota has no taxes, and Minnesotan industry draws another day's breath.
To reiterate, I'm not saying you're wrong; but the causal chain is considerably more entropic than you or pg are letting on.
It is actually quite economical to make software in the states, one of the reasons being our relatively sane immigration policy. But it wouldn't take much xenophobia to make china look good. America also can't sit on its hands and remain competitive; its a constant battle and we have to continuously adapt and tweek our policies to remain #1.
Disclosure: I'm an American who has worked for Microsoft in Beijing for 7+ years.
So basically you're proposing protectionist policies to limit supply and thus inflate the price of labor (that is, you).
Would you also support similar arguments for say, oh I don't know, taxi or hotel prices in the area where you live so the existing pool of taxi drivers or hotel owners can protect the income they are making?
It may be useful for you to actually read TFA, which (spoiler alert) is not by me saying that we need to screw down the number of people we allow into the country, but is rather by another gentleman who has been stranded someplace unpleasant due to the ill winds of supply and demand, and wants to transform immigration policy until he washes up someplace more suited to his temperament.
Downvotes don't faze me but I find it telling that I don't see an actual reply to my point regarding protectionist policies. If you find yourself instinctively downvoting my comment, please also take a minute to form a coherent reply to it and post it. Why is it ok for the (American) hacker news crowd to demand a legally mandated supply shortage to keep the prices of their labor inflated while it's not ok for (usually much poorer) taxi drivers to demand the same (campaigning against Uber and such)?
I didn't downvote you, but maybe other people did because, as my original reply suggested, you're arguing against a position that nobody was taking. Nobody was talking about eliminating immigration, and not re-legislating immigration policy at the behest of MSFT and GOOG or Paul Graham cannot reasonably be translated as a 'mandated supply shortage.'
"Nobody was talking about eliminating immigration,"
That's a strawman. Eliminating immigration is not the only way to restrict supply of software developers.
"and not re-legislating immigration policy at the behest of..."
The fact that you felt the need to add a couple of other "baddies" after "at the behest of" should be an indicator that the original argument is weak. This entire thread thread is filled with software engineers making the argument that increased supply of software engineers is going to decrease wages. That's exactly what happens in a free market of labor.
As a thought experiment, imagine a world who got a job offer from a US company was free to move to the US and start working. Any situation short of that is a legally mandated labor supply shortage.
"Any situation short of that is a legally mandated labor supply shortage."
Well duh. But again, that's not the point of TFA.
You're clearly eager to advocate that laborers should be free to move about the world and work wherever they want. That's cool, knock yourself out. But it's another thread than this one.
You make a few valid points. But the issue is like always, every one feels their work is the most important occupation in the universe and every one else must just accommodate to whatever the conditions there are.
Even more specifically if there really programmers out there who are best of the best. Making a lot of money would be least of their problems.
> but do people really not believe that if starting salary for an A+ developer was $150k, or whatever, that we might get more high-achievers
First, US is already the third country in list for highest paid programmers, there is not much room to grow.
Second, Companies are in business, not for charity.
Companies are there for profit so if they could hire a beginner programmer for 50k, they should, otherwise they would be out of business and you would be buying everything made in China.
Not much room to grow? Says who? Did I miss the referendum in which the computer science salary cap was enacted into law?
The fact that companies are not charitable institutions is exactly the point. If they want more or better engineers they are welcome to pay salaries that will motivate such people to work for them, much as the petroleum industry is currently doing.
Then let them carry on. Most of these companies are global in nature already. My naive view of the plea for more foreign tech workers to enter the US is that the majority of those controlling the money just really really really like like in SF and don't want to leave. When there's talk of tech worker shortage, there's not even any really serious effort to look around the US. Nope, the hive mind is in SF, and they'll move heaven and earth before they have to move someplace else.
The US is third? Well jeez, you'd think that a country arguing that they need to attract all the top programmers in the world would at least try and pay the highest in the world to start with.
1. There is, as dictated by the law of supply-and-demand, not an undersupply of good programmers, otherwise good programmers would be in a negotiating position such that they would reject your 50k offer for a 150k offer elsewhere; or
2. The market cannot support this hypothetical company's business model. If my restaurant fails because labor costs leave me overrunning my revenue, few people would argue that is evidence we need immigration reform so I can find cheaper labor.
But unlike a resteraunt, you can open abroad and capture labor resources in other countries. So if programmers get too expensive in the states, or Silicon Valley, relative to the world market, there is a point where you are forced to open an office elsewhere (if not your competition does and eats your lunch). Without immigration, that would happen sooner (rather than the mythical doubling of American programming salaries).
Programmers in the US are already wildly, wildly expensive in the USA relative to the world market, often by an order of magnitude. So, if that's the case, we're already screwed and we're only being saved by some market inefficiency. We should all prepare for the inevitable future where we are doing very well to make 15-20k.
Ultimately it's a world market for labor at the top end. Barring artificial distortions (immigration/emigration restrictions), people will move to where they can get the best deal; since good Chinese programmers can immigrate to the states, it puts a floor on Chinese salaries, the same is true in India actually.
It is a whole different game for soso programmers. If you want a soso programmer in China, they will be much cheaper in the states, but the bottom is also much lower than one from the states could imagine, and often you just get what you pay for (or worse).
> Barring artificial distortions (immigration/emigration restrictions), people will move to where they can get the best deal;
No, they won't. Many people value staying near home more than they value additional salary. That's especially true for people who'd have to move house thousands of miles into a new culture, but it's true even of people within the US.
There is some of that, but not when wages are a magnitude off. If I can only make $50k in saint Louis and $150k in SF, there is huge pressure to move and start climbing the ladder. The programmer making $20k in Bangalore will move to the Bay area to add an extra zero to the end of their salary if they have the ability.
This mobility checks salary bottoms for those who do want to stay (e.g. for the market I'm in over in China).
There certainly is some pressure, but be careful not to overestimate it. Most programmers are not in Silicon Valley and feel no pressure to be even though they would make much more money. And this isn't even about "great" programmers versus competent programmers.
I'm one of them. If you can excuse my lack of humility, I am a great programmer. I've been described by management and teammembers regularly as a rock star. I could easily make 10x the salary were I to move to SV.
I have zero desire to and I've never felt like I was missing anything. Out of my graduating class, only one guy moved to California - in fact, he's the only guy I know of at all who moved to California. I know at least a dozen "great" programmers who live here quite happily.
Of course the extra money is an incentive and there obviously has been and is an influx of programmers to Silicon Valley and the surrounding area. But the wage impact (in terms of setting floors) of the migration is pretty minimal relative to other effects. That's why there are hundreds of thousands, if not millions, of programmers worldwide, including very close to the full 5% of "great" programmers from those areas, that are working for what you and I would consider garbage wages.
> ut, if I'm an entry-level, US-based programmer, what I see are floods of cheap talent, some with questionable skills, coming over to compete for my job.
I don't understand this dichotomy. Why would companies here go out of their way to hire cheap labor of questionable skill outside the U.S.?? Bad cheap labor is easy to find. Call up a recruiter and say "I need 20 horrible programmers", they're not going to say "oh wow that's a tough one".
Either you think: 1. Outside labor is good and thus I should be scared for my job, BUT those people legitimately deserve to be working here and are net positive for their employers, or 2. Outside workers aren't good and so what difference does it make if they compete with me here? I'm already competing with a saturated market of bad workers and if companies are stupid enough to hire them it'll work itself out -- they're not really competing with me.
During my career I've witnessed a stark contrast between different visa holders:
1) Exceptional — the best and brightest from all walks of life. IIT Delhi to NUS Singapore. Hands down amazing folks who consistently outperformed their peers.
2) Cheap(er), mediocre — predominantly H1B holders from India and China. Varying degrees of output and communication skills. Mostly “slow tracked” for promotion and given the lowest salary in a given position’s range.
My perception is that the startup community has generally ignored group #2’s existence. It’s not very surprising when you consider who the top 5 h1b sponsors last year: Infosys, Tata, Wipro, Deloitte, and Accenture[1]. Most startup folk would likely be surprised since we usually associate tech companies -> Google instead of Wipro.
Logically your thinking is spot-on, but I'm not so sure the truth is so black and white. Consider the psychology of an h1b holder from India who has a 7 year wait to get a green card -- how is that person thinking about aggressive career moves? The answer is that they probably aren't.
I bet if you looked at relative rates of employee churn you'd find visa holders stay with employers longer than their counterparts. They are probably also less likely to push for raises / promotions since their negotiating position is somewhat compromised by them needing another employer to transfer this visa to (possible, but very stressful). There is also likely a sense of indebtedness to a company when someone is first sponsored. This is probably the biggest difference when considering the cost of Group #2 vs similarly qualified domestic labor.
Now consider those top 5 h1b sponsors again -- how does their workforce stack up? My intuition says they aren't the best and brightest from group #1 (don't know how to prove or disprove this just my qualitative observation).
What seems to be happening is that we have huge consulting firms sponsoring labor from Group #2 -- and these companies are run by smart folks. They've developing a well-oiled machine for employing a more loyal workforce, at less cost -- and while the quality isn't as high as it could be, it's good enough to make their business model work. This is the exact opposite model of startups (and large, but highly innovative companies like Google) who want to only hire from Group #1.
As a founder I've experienced the Group #1 labor shortage first-hand but I also worked with Group #2 in the industry and both experiences left me leaving a lot to be desired with our current immigration policy. I see both sides of this debate, but from my standpoint everyone is right. The disconnect seems to be that "anti-immigration" camp is fighting against expansion of Group #2 while startups and innovative companies like Google, et al. are fighting to increase visas for Group #1.
What can we do to bridge that communication disconnect?
> since their negotiating position is somewhat compromised by them needing another employer to transfer this visa to (possible, but very stressful). There is also likely a sense of indebtedness to a company when someone is first sponsored.
This is part of the point: this aspect of immigration labor would ironically disappear if it was easier to get into this country. The fact that its hard to get in and get a job is precisely what creates the imbalance of power in negotiation and further leads to a sense of indebtedness.
BTW, this also negatively affects startups. I've been in situations where its difficult to poach someone because of their visa situation (they don't know how easy or hard it is to transfer, they feel indebted, etc etc), and additionally, its way easier for large corporations to go through the paperwork to hire outside talent than a small startup thats just 3 founders. Regulation, as usual, creates all sorts of strange counter-intuitive incentives and imbalances.
If companies could just hire whomever they wanted, then sure, you might be competing directly with someone from india, but you'd also be on a more equal footing because that guy from india would have the same mobility to other jobs that you do, and thus would not be so desirable for his "capturability". Not to mention the fact that whether you like it or not you'll eventually all be competing anyways: at some point it just becomes easier to open offices there and then there's just no job here period.
So how do we implement this as policy? What we can't do is just say anyone can immigrate. We need to find ways to make it easy for exceptional people to live and work here but make it difficult (sliding scale to impossible) for everyone else.
One random idea I was thinking about was regional, industry specific visa committees that would review each application to ensure that we are able to more accurately identify exceptional individuals and filter out the mediocre / low-quality talent.
Allow anyone to immigrate, require they be paid an equal wage as a citizen of similar skill (hard to enforce I know), and then charge the employer a tax on the wage (10%?). This would force employers in any industry to only take people who are at least 10% more valuable to the company. You can change the tax appropriately to get the desired result.
I wonder where do you get your data for "hire someone from India for half the cost". Of all the facts thrown around - this is easily verifiable - http://www.h1bwage.com/index.php
If you ignore those employed on hourly basis, a majority of people on H1B are paid quite well. Apart from salary and benefits - add Visa processing fees for their Kids and Spouse as well (which can easily amount to > 30k+)
I think people underestimate how fortunate US is for being top destination of good programmers (and engg. in general). US has tons of companies founded by immigrants - Tesla, Bose, Sun Microsystems, Hotmail, Yahoo to just name a few.
I agree that, something ought to be done so as Services companies (Infosys, Cognizant) have limited access to H1B visa pool and process is fairer to smaller companies.
I'm a dev manager at a prominent employer of software engineers and I did a search for my company at your link. I can't speak for other employers, but it appears that salaries for H1-Bs are ~25% lower than what I know Americans to be making at those same job titles. Half is almost certainly an exaggeration, but to deny that there's an H1-B discount is equally disingenuous.
On the topic of the essay, I worry that Paul is also being disingenuous. The US might only have 5% of the world's population, but we have a much larger percentage of the world's population where children have been exposed to computers from an early age. He's right that exceptional programmers can't really be trained, but that doesn't mean that they aren't made. They're made by being put in an environment where they can explore computing and let a natural creativity/curiosity that they have flourish. I've yet to meet an exceptional programmer that begrudgingly chose to write code for a living.
And that's my problem with the H1-B situation and why I think they've got an overall lower percentage of exceptional programmers. In the US, those who are driven by extrinsic motivators like money don't become programmers. They become salesmen, stockbrokers, lawyers or any of a host of other professions that sacrifice doing something interesting for high compensation. But most of those career paths aren't available to people in poorer countries whereas software engineering is. What I've seen among H1-Bs is a far higher percentage of people who basically hate their job, but do it because it allowed them to come to the US and afford a comfortable lifestyle for their families. I don't blame them for that, but I also don't think that it makes them particularly good developers. Don't get me wrong...I have met quite a few H1-Bs who were drawn to software development from an early age and love doing it in the way that usually results in being an nx developer (anywhere from 1x to 10x), but I just don't see them in the same proportions that I do among American developers.
If Paul can figure out a way to filter in the great developers while filtering out those that are only coming to make money, then I'd be completely behind his plan to let them all in. Somewhat ironically, his plan to let everyone in would somewhat accomplish that at the cost of decimating developer salaries (i.e. if the labor pool is increased and salaries dip accordingly, we'll find out pretty quickly who's only here for the money and which of us would be doing this no matter whether we were paid significantly less.)
> If Paul can figure out a way to filter in the great developers while filtering out those that are only coming to make money
Perhaps the ones that just want to work hard and make other people money, rather than aspire to money of their own could get a great big "I'M A SUCKER" stamp on their foreheads?
> What I've seen among H1-Bs is a far higher percentage of people who basically hate their job, but do it because it allowed them to come to the US and afford a comfortable lifestyle for their families. I don't blame them for that, but I also don't think that it makes them particularly good developers.
Most people from China, India, etc who immigrate to the U.S., Canada, and Australia/NZ are, in my observational experience, primarily focused on whatever aids the immigration process from an early age, often prompted by their parents. Their secondary focus is the backup plan of rising in the ranks of business, government, or academia in their home country. There is a significant minority of people whose primary focus is on the hierarchy at home, and choosing immigration as a secondary concern happens later on in life, often after marriage, perhaps to someone of the first group. For both groups of people, though, an interest in something geeky like technology, programming, gaming, or whatever comes a distant third. People in China who develop such consuming interests outside of work or forgo higher status jobs to do more interesting work will almost certainly miss out on some crucial step in the arduous immigration process. And of course you won't see many Chinese who totally forgo saving for a car, apartment, spouse, and child to spend all of their time on a geeky interest because their parents simply wouldn't allow it in the one-child culture here.
> If Paul can figure out a way to filter in the great developers while filtering out those that are only coming to make money
Maybe he did. They become founders. They start companies worth 100x - 1000x their annual salary. As you go up the continuum of exceptional performance a great programmer becomes a startup founder.
>If Paul can figure out a way to filter in the great developers while filtering out those that are only coming to make money, then I'd be completely behind his plan to let them all in.
You are implying that all (most) of the American programmers are exceptional. That is not the case. If you have a good team, you had to do it yourself, weed out fakes from real ones, didn't you? The onus is on the company/manager who is hiring to pick the right ones whether they are already on H1 or before company files H1 for them.
> I'm a dev manager at a prominent employer of software engineers
I find it hard to believe. In large companies HR establishes salary levels (usually bands) which are tied to titles or levels within the career ladder. Does your company negotiate each compensation package on a one-off basis?
We have bands, but they can be pretty wide...the top of the band is easily 125% of the bottom. And managers are only limited by the top of the band when extending an offer.
And some of the salaries listed on that site are below band. We also get salaries below band through acquisitions. In those cases, managers aren't really given leeway to get their salaries up to market. We've go a mostly-fixed pool of raises to apportion across our teams. Every year, that's set by executives depending on the company's performance...this past year it was ~4%. Low-level managers can recommend higher for their team, but they need good justification and, at the level of the business unit, raises cannot exceed that value.
Based on what I've seen when extending offers, whereas US citizens sometimes push back on salary or equity, H1-Bs only push back on the INS stuff (they all want EB2s). My guess is a lot of managers will low-ball their offers when they know they can give the candidate an EB2. The more you do this, the more you can increase your headcount or hire more senior developers.
If this is overwhelming behavior, Department of Labor can crack down on the company for not paying the "prevailing" wage. If the offers do tend to be around the bottom of the band, but there's also a good supply of non-immigrant employees working at the bottom of the band then yeah, the company will have an easy argument saying the prevailing wage is closer to the bottom of the band.
> Department of Labor can crack down on the company for not paying the "prevailing" wage.
That is technically true, but effectively impossible. The DoL simply does not pursue H1B abuses. They do not have the political will nor the budget to even look for them.
There is literally zero budget allocated to "prevailing wage" enforcement. That is a deliberate oversight by congress and has been that way for the 20+ years I've been observing the H1B process. To the best of my knowledge the DoL has only twice ever initiated action for H1B prevailing wage violations and in both cases it was the result of a disgruntled employee tipping them off to a series of violations that were so egregious that the political fallout of ignoring them would have gotten senior bureaucrats fired.
You might also want to read up on how classifications are gamed in order to work around even the very minor risk of prevailing wage violations.
The real problem with h1b is that it appears to be primarily used to offshore jobs to other countries. The largest users of h1b visas are firms that bring people to the US for a period of time to get trained, then have them return to their country of origin, offshoring the work (see for example http://www.businessweek.com/stories/2007-02-08/work-visas-ma...)
So, tossing H1B would be a great start at immigration reform. Instead, we should prefer immigrants with educational backgrounds in skills we need, and who have the best chance at assimilation.
It is difficult for me to not say anything disparaging about Graham's analsysis of the problem being just "a handful of consulting firms" when it is actually the primary use of H1B visas.
No, if you want to do that kind of trainee stuff you would just use L1 visas, H3 visas or even the B1 visa if it's a short period. Since H1Bs are on a lottery, and you have to tell people to wait until October anyway, hiring someone in your remote office, having them work on projects and then bringing them over 1 year later on an L1 is pretty close in costs anyway. And you guarantee that the person can come over, vs the 'chance' that H1Bs give you.
Wipro & co are general outsourcing firms themselves that american companies hire. I don't know why they use the h1b vs the L1 visa although.
> The largest users of h1b visas are firms that bring people to the US for a period of time to get trained, then have them return to their country of origin, offshoring the work
Minor detail, but if it's the same employer in both countries, they don't need to apply for H1, L1 would do the trick. It's also not subject to a cap and is much cheaper administratively.
So if companies are using H1 program for foreign employee training, that's a very inefficient practice.
The L1 visa program forbids placing the employee at a third party site as part of a labor arrangement. Thus the L1 visa is not applicable to this sort of "training." I'm sure plenty of L1 employers play fast and loose with that rule because there is essentially no formal enforcement mechanism. Nevertheless, H1B is the official visa for that sort of work.
So, tossing H1B would be a great start at immigration reform. Instead, we should prefer immigrants with educational backgrounds in skills we need, and who have the best chance at assimilation.
Isn't that basically how Canada and Australia's visa programs work?
But why expand the H1B program vs. a more open immigration policy in general, or removing H1B lock-in restrictions?
So are you claiming that companies are paying an extra 30K for all their H1B employees on top of giving them a salary that exactly matches that of their non H1B peers?
They don't pay that extra $30k per year. That's a relatively sunk cost. If you can pay a $30k premium up front, then pay that employee less over time than the US equivalent AND that employee is locked to that employer, then it's well worth that $30k upfront. Of course we are stipulating that it actually does cost $30k on average, which I haven't seen the data to support (or refute) that.
To me the most interesting way of framing this is in terms of the changes that'll happen to the owners of businesses.
The question of the talent of the new employees is secondary when you realize they will have to move countries in order to be tied to a specific job on penalty of getting their visa revoked.
So suddenly, you create an unlimited class of employees with no bargaining power, and can play them against your native employees. This would be bad enough, but H1B visa holders usually make 20% less than their equivalent American coworkers.
> tied to a specific job on penalty of getting their visa revoked.
This is true if you hire from third world. I am from Northern Europe, and having a visa revoked and going back to my home country would not be a threat to me. I'd just happily move back home, and find a job there.
Most people consider a move to a new apartment in the same city inconvenient.
There are very few people who wouldn't consider being forced to move across continents, while giving up their rights, a highly biasing factor in the pros/cons of any decision they made.
As a result, I can see programmers from Western and Northern Europe, who as of know may consider relocating to the US, change their mind and say "why bother". Any EU citizen will have easier time relocating to London/Berlin - two places in Europe where a lot of tech companies are located.
PG's point is that a lot of people from outside the US (including from Europe) currently would prefer relocating to the US but they have difficulty getting a visa. Long term more and more people would prefer the second best choice that's available to them.
"PG's point is that a lot of people from outside the US (including from Europe) currently would prefer relocating to the US but they have difficulty getting a visa"
No, from my reading of pg's point: Most of the top programmers live outside of the US, so we should make it easier to get them by changing immigration policy.
> Most people consider a move to a new apartment in the same city inconvenient.
This is a good point. But finding out that your employer is so nasty that they use your visa status as a bargaining chip, can be even more inconvenient.
In addition to the cheap & bad / talented founders pools there's also the pool of expensive and talented workers who just want to code. I mean, I wouldn't move to the US to work for half of what you make if I'm doing the same job, right?
> what I see are floods of cheap talent, some with questionable skills, coming over to compete for my job
Let me be the devil's advocate and argue that even that is beneficial at the national policy level.
The alternative to cheap imported labor for a small company would be to hire a local guy, but for any medium to large company the alternative would be to hire a foreign consulting shop, and there are tons of companies working in the niche.
The "cheap" labor in programmer speak is usually around $50-70k salaries, adjusted for specific area, and I would rather have US capture the value of income taxes, sales taxes and other economic activity from that $50-70k than an outfit abroad.
Did you read the essay? You seem to be totally ignoring the point that excellent programmers will be paid well because they are scarce compared to "decent" programmers. The goal is not to import cut-rate talent at cut-rate prices.
Well, will great programmers line up at the "great programmers" H1B line? Probably not. Will the government screen applicants in order to increase the concentration of "great programmers"? Hah. There are no means available to us to increase the concentration of great programmers in a pool of programmers without great cost, and this inevitably means that in order to get more great programmers, one has to go through more programmers.
Why can't programmers work as contractors from their location before filing for their H1B's? Yes, hiring process has to change. The companies those who have distributed teams have figured this out already.
The problem is that it's extremely difficult to identify whether someone will excel at a job just through an interview. Even if someone really impresses everyone during the interview phase, it's totally possible that once they get hired they'll hate whatever you have them do and just do a mediocre job at it.
Actually, studies have shown that IS the goal. It might not be Paul's goal, personally, but generally speaking it is the goal of immigration policy for tech workers - to make labor cheap.
Yeah, I concur. Basically the gradient in the price of labour between countries is driven up to a point by immigration policies. In the general sense increasing the pool of candidates will lower wages.
I suppose what PG is after is creating a policy of allowing 'black swan standard' programmers of outstanding skill more in to the US using a different mechanism than the current H1B?
I'm pretty sure that already exists in the form of an O-1 visa. However I doubt the vast majority of programmers who get an H1B come close to meeting the standards for an O-1 visa.
So yeah, if you are a really great programmer and the rest of the world knows this, then any employer in the US can help you get an O-1 visa based off of that. If your programming prowess isn't well demonstrated, then yeah, you have to go through other channels.
No it isn't. For great programmers, the O-1 visa is basically a hack that we use to get in the US. It was not intended to be used that way for programmer (you can note that the criteria fits more for profile of a reasonable successful working in entertainment industry, athlete etc.)
You will need to be something like a top 1% programmers, working on things that are semi-public to qualify for the O-1, but any decent (top 25%? I'm pulling number out of my ass) fashion models can probably get in.
If the O-1 is already admitting the top 1%, then we're already closing in on solving the ostensible problem.
At least inside an order of magnitude (1/5) at a naive guess, but probably much closer, in fact, if we run with two assumptions this piece rests on:
(a) The small top portion of a given talent pool have exceptional intrinsic abilities that give them a power-relation advantages over the rest of the pool when it comes to productive enterprise.
(b) Taking a small highest portion of a very large talent pool is going to give you the largest source of power-law productive talent.
If (a) is true, one would assume the top 1% of external programmers is going to be as much better than the next 5% as the top 20% is than the next 80%.
If (b) is true and we're already looking at the worldwide market, the top 1% is already a huge boost to the pool, almost certainly bigger than the number of open jobs on the market (if 5% of the top 1% of the world's smartest are programmers, then that's a number bigger than the ~4 million unfilled positions of any kind in the US). The top 5% is redundant.
It's a bit more nuisance than that. As I mention, I was pulling numbers out of thin air. The main point I was trying to make is that criteria for O1 isn't applicable as a good measurement for hackers. We don't have any award for what we do, and the nature of the work is that there isn't much publicity most of the time (it's even the reverse, people who works on really haRd stuff have to be silence about them). And that's no fault of anyone, we barely know how to judge good and bad programmer ourselves.
Another point to be noted is that if you try to get the top 1%, you might get 1% of that pool (1% of 1%). As many people noted, not everyone want to come to the US. You might as well trying to get all of them
Agreed, the goal is to drive down prices of IT salaries. I find it disingenuous of PG to indicate otherwise since he sits on the side of the table that directly benefits from a cheaper IT labor market.
I have worked at numerous places where they have hired on H1Bs. One of those employers did so because they were looking for good talent no matter where they could find it and H1B holders were paid fairly. Every other employer was doing it because they could pay lower wages and force longer hours on H1B holders since they are in a sort of held-hostage situation. In one case developers were frequently working such long hours that they would just sleep at the office and only go home once or twice a week. This same place was paying their entry to mid developers in the 25K to 35K range and their most senior developers were making less than 50K.
If you are just worried about keeping your salary up, that will go down no matter what, as the talent pool all over the world increases and companies will offshore more work, that not only means less salary but fewer jobs.
Most of those who argue against pg's argument here are concerned about lower salaries, no one is concerned about fewer jobs (because companies will move work offshore), less innovation (new product development moving away).
Creating boundaries and not letting talent in, is just a big downward spiral and if it accelerates to a certain speed it will be too difficult to turn it around. May be not in short term but in couple to few decades.
Fortunately we already have a system that lets only the exceptional talent in. It's called the "American" Higher Education System, and it's pretty good at bringing the top talent to the U.S. already. Perfect? Of course not. Good enough? I think it is.
Normally I don't hold someone's wealth against them, but on this issue it's hard for me not to be a little prejudicial.
Except talented graduates of the American higher education systems have to leave the country if they don't get selected in the H-1B lottery. Last year, there were 45,000 applicants for the 20,000 advanced degree H-1B cap.
Why would the number of languages you can speak indicate effectiveness of an educational system? Yes, I know the argument about cultural awareness. That won't make you better at building web servers. It might make you better at interacting with people of that culture.
Fundamentally though multiple languages is incredibly wasteful. I'd never propose that English should be a global language - it is such a steaming pile of shit thinking it the best we have is insane - it just has network effects in its favor. Of course, building a language scientifically that uses all enunciable syllables and minimizes word size and maximizes understandability is a major project and getting people to speak it is impossible.
And yes, the non-higher US educational system is colossal garbage, but we know that. We are talking about US higher education, where you pick your courses and rarely are students enrolling to learn two more languages for the fun of it. In that context, millions of students around the world strive to get into US schools, not because the teachers are any better - in my experience, one, individual students are different and learn better in different ways so one scale of "better" or "worse" education is insane, and two, there are diminishing returns on teaching skill such that the difference between the best public school teacher and the best teacher period is probably a fraction of a percent of student performance at worst. The US education system is good because of the business networks the prestigious schools get you into and how almost anyone will hire a US school grad.
What I'm not clear on is what the effect of opening the doors to programmers will be.
There would be many effects which would interact with each other. But one thing that is sadly true right now is that for an engineering manager to increase his/her hiring budget there is unlikely to be a significant quality increase. Think about what this means.
If there were more talent, then companies would be able to justify increasing budgets to build/grow a superior team. In this market if you double your budget you just get twice as many mediocre programmers or you end up getting into a bidding war for highly priced talent. Neither is good for the field as a whole.
What you touched at the end is part of a bigger problem, I think - people who write something as inconsequential as a shopping website, or Yet Another Chat App, are not worth $150,000/year. Maybe one out of one-hundred of those folks could use their talent on something that demands a wage like that outside of the absurdity that is the Bay Area. I don't feel the talent pool will be diluted so much as your run-of-the-mill developer won't be expecting a six-figure salary coming out of college anymore.
> something as inconsequential as a shopping website, or Yet Another Chat App
Alright so first off, 150k will give you a comfortable upper middle class lifestyle in SF/SV (assuming you have no dependents, in which case it's just middle class). It's really not the astronomical salary that you seem to be imagining.
Secondly, it is completely impractical to pay people based on the "difficulty" of their work. Difficulty, even if we can agree on a definition, does not correlate with revenue. Revenue is traditionally where salaries come from.
Intuitively, if person X in a team of n people writes an app that produces profit Z, then it would make sense for person X to get something on the order of Z/n -- not 100k because it's just a chat app. This is not actually how it works because of some artificial constraints. I believe the calculation in most cases looks more like pay = 120k + 20k if in expensive city + MIN(.01 * profit, 150k).
> Alright so first off, 150k will give you a comfortable upper middle class lifestyle in SF/SV...It's really not the astronomical salary that you seem to be imagining.
If we're going to say we shouldn't limit ourselves to 5% of workers then perhaps we shouldn't limit ourselves to 5% of the land. There's plenty of places in the country where 150k would be a very comfortable salary.
Also throw in all the college debt they require you to pile on before being hired, not to mention the hours spent studying instead of working. And that it is a cyclical feast or famine industry where it ping pongs between 70 hour weeks of deadline crunches and post-dotcom, post-bank bust periods where no one is hiring. And that the career of many ends at 40. Plus as you mentioned, the San Francisco rents for those requiring you work in the city.
The OP could have made their point more subtly, but I'm not sure either of the points you've made necessarily disagree with the argument they were making
$150k isn't astronomical in San Francisco (because rents have inflated to match the salaries) but startup employees who are prudent and don't have dependents will likely save money faster than comparable roles in most if not all other parts of the world. And a substantial proportion of the companies in the Bay Area don't generate revenue in excess of what they pay their programmers; many never will, even if they are blessed with unusually productive programmers
The potential profitability of a startup is even more difficult to gauge than the difficulty of a programming role, and the fondness of VCs for disbursing their money in the Bay Area is probably more to do with the distribution of potential acquirers than the distribution of productive programmers.
Yes. Over 100,000 H1-B's are coming over every year. This keeps discussing exceptional programmers. You mean we need more than 100,000 exceptional programmers coming over every year? The reality is that the idea that even 10,000 of these people are exceptional programmers is a laugh.
Every year 100,000 H1-Bs can come in. To believe this article, we'd have to pretend that we have a big wall up preventing these dozens or hundreds of exceptional programmers from immigrating to the US, and completely ignore the existence of the H1-B visa and the hundreds of thousands pouring in every year.
So the problem isn't the immigration restriction, it's the lack of screening. Using PG's logic, all of those 100,000 should be 'exceptional' or else we're wasting tens of thousands of visa slots that should be going to the 'exceptional.' And how is 'exceptional' determined? We should let everyone in with the hope that some percentage happens to be exceptional? What about the non exceptional? What would that do to the overall quality of coding if you 'dump' 95,000 unexceptional programmers with the intent of harvesting 5,000 exceptional ones. Is it fair to suggest that the Infosys recruiters aren't hiring 'exceptional' but lower cost? I get recruiter emails all the time; several per day, yet never once have I received an email from Accenture, Infosys or any similar company known for hiring lots or foreign workers. So interesting that their shortage obviously isn't such that they'd resort to bugging me. Of course, maybe my years of experience and companies I worked for would indicate that that I would not be as cheap as the thousands they bring over from India. Nor would I put up with being locked into a position as an effective indentured servant. So many it isn't that there's a shortage of engineers but a shortage of ones that are willing to work under conditions common to those who desire to import more labor. Facebook doesn't necessarily want to hire more imported devs, but an increase of supply would allow them to have a larger talent pool at a lower cost. Of course, this discussion is a bit old school..
With remote working, geography is somewhat irrelevant. Perhaps instead if changing immigration instead PG promoted companies embracing a remote culture -- then you could have the best of the best with minimal beareaucratic entanglements. After all, given that, according to PG, it's about 'exceptional' talent, working remotely shouldn't require the same level of management overhead as would a lower quality dev 'sweatshop.' However the fact that isn't even being discussed makes one believe that this isn't about finding 'exceptional' talent as much as it's about lowering the scarcity of developers willing to work for lower wages than they might have received otherwise.
Under the PG logic, we ought to simply open the floodgates to all people, because inevitably from the multitudes there's bound to be a few geniuses. But, does the cost of those geniuses outweigh the costs to everyone else? Should we strip mine the Rocky Mountains to find an ounce of gold?
I don't know the answer to the question and I am not advocating either way, however when a company like Facebook begins asking for something, I question the motives -- I don't think Facebook has a talent shortage at all, they have a desire to pay less for their inputs. Which is a fair desire; however we shouldn't just blindly allow policy decisions to happen just because some tech 'leaders' ask for it. It is and always has been about the bottom line.
You could do a salary auction, so the people offering the highest salaries get the Visa's. At least that would incentivise the people adding more value rather than less...
Here are the insidious effects of outsourcing and remote workers. Slowly and surely they will take over. Take a look at this and you will understand the dangers of offshoring and remote work. How Dell lost to Asus.
Easy enough to find through the Wikipedia citations.
153,223 visas were issued in 2013, although some of that is to continue the presence of people who were already here in previous years... It's not all new arrivals.
Of course the tech companies want to hire people from overseas; being able to hire someone from India for half the cost but have them live in the US so there's some level of accountability/trust is a no-brainer. Huge new, cheap talent pool.
But, if I'm an entry-level, US-based programmer, what I see are floods of cheap talent, some with questionable skills, coming over to compete for my job.
On the surface it seems as simple as a conflict of interest between employees and the companies that employ them. Supply/demand.
Dig a little deeper and the argument becomes that the top programmers we're bringing over are going to start great companies. That makes sense; part of the reason the United States is so powerful is selection bias: If we create an environment the hardest-working and smartest people in the world want to come to, the end result is a lot of great companies that create enough jobs for everyone. Elon Musk isn't starting Tesla or SpaceX in South Africa (where he's from). So we create an all-star selection of the human race in one country, make laws that are favorable to people coming/staying, and the economy explodes.
What I'm not clear on is what the effect of opening the doors to programmers would be. Would truly great companies be started enough that the entire economy is shored up, or would it just dilute the talent pool to the extent that being a programmer isn't a "special" job you get paid $150,000/year for being decent at? The long-term, macro result of this would be interesting.