H-1B Visas Are a Scam to Keep Wages Low

VisaH-1B visas allow high tech companies to hire foreign workers when they just can’t find “qualified workers.” And I’ve been writing about this for a very long time, because it is a total scam. But in saying this, I don’t mean to put down the people who work under H-1B visas. I’ve worked with many of them and they are generally quite competent and I’ve considered a number of them friends. But H-1B visas are a scam for the high tech industry. They hurt high tech workers in America. And above all, they hurt the people working under them because they end up being limited kinds of slaves.

Michael Hiltzik wrote a great article over the weekend, Tech Industry’s Persistent Claim of Worker Shortage May Be Phony. He’s far to careful to come right out and say it, thus we get “may be” instead of “is.” Because there is no doubt. But I only say that because I’ve worked in the field and I’ve seen it firsthand. But it isn’t hard to understand. There are incentives in this situation. And it is a hell of a lot easier to push the government to allow a flood of high tech talent into the country than it is to raise wages.

You may remember the big conspiracy to keep down wages in Silicon Valley. It was headed by every idiot’s idea of an entrepreneur, Steve Jobs. He didn’t like that other companies like Google were stealing his employees. So rather than do what one would in an actual free market, he went to Google and other companies, and made a secret deal that they wouldn’t hire each other’s employees. Problem solved! But that shows you that high tech is no kind of bastion of liberality. Those guys are just as cut-throat and anti-competition as George Pullman.

Hiltzik highlighted a great example of just how disingenuous these people are:

Alice Tornquist, a Washington lobbyist for the high-tech firm Qualcomm, took the stage at a recent Qualcomm-underwritten conference to remind her audience that companies like hers face a dire shortage of university graduates in engineering. The urgent remedy she advocated was to raise the cap on visas for foreign-born engineers.

“Although our industry and other high-tech industries have grown exponentially,” Tornquist said, “our immigration system has failed to keep pace.” The nation’s outdated limits and “convoluted green-card process,” she said, had left firms like hers “hampered in hiring the talent that they need.”

What Tornquist didn’t mention was that Qualcomm may then have had more engineers than it needed: Only a few weeks after her June 2 talk, the San Diego company announced that it would cut its workforce, of whom two-thirds are engineers, by 15%, or nearly 5,000 people.

Even after this was pointed out, Qualcomm claims that it really does need those H-1B visas, because it “continues to have open positions in specific areas.” I have no doubt that is true. Because pretty much every business in the world has certain employees that they really, really want. For example, right now I would love to have access to a top quality researcher who I could pay a dollar an hour to. And that’s the thing with Qualcomm. Is it setting up programs to encourage people to go into these high demand areas? Of course not. It just wants to use it as an excuse — a way to keep wages down here at home.

Skills Gap - Click for Whole CartoonHiltzik interviewed Michael Teitelbaum, author of, Falling Behind? Boom, Bust, and the Global Race for Scientific Talent. It argues that our need for STEM employees (science, technology, engineering, mathematics) is just a myth. And of course it is. When have businesses ever not complained that the workers were not good enough and that they were paid too much? Never. That’s why most rich people today earned their money off the back of the government.

Now the high tech industry is lobbying to more than double the number of H-1B visas — from 85,000 to 195,000. And it will probably get them. After all, there is no high tech union around that is going to lobby on the other side. Congress always talks about creating jobs, but here is an idea that will do something like destroy 100,000 jobs. That’s because the companies will replace existing jobs that clearly have Americans who can do them. But it isn’t hard to manipulate the law. But it will increase profits and income inequality. So hooray?

16 thoughts on “H-1B Visas Are a Scam to Keep Wages Low

  1. Re-reading Graeber’s “Flying Cars” essay and he gets right down to it: corporate taxes used to be much higher, giving companies a reason to either raise wages (buying worker loyalty and encouraging young people to pursue that profession) or invest in research. Now they invest profits in stock buybacks, mostly, raising CEO pay (and creating a market bubble.)

    • I just wrote something about this. What creativity America business has goes into manipulating the political system and rearranging their businesses to take from workers and give to the owners.

  2. The irony is that the skills-gap set usually are the type of people who, in every other context, espouse the magic of market prices and their ability to deliver superior outcomes compared to any other alternative form of allocation. If a hurricane is approaching the Florida cost, there is no need for rationing, high prices will encourage conservation and induce an increase in supply. We have no need for environmental regulations, we can just privatize the atmosphere. If unemployment is high and wages are low, we must let them sink lower so the labor market can equilibrate.

    Wages start to be a wee bit too high for the bosses’ tastes? now we must rush in low wage engineers from all corners of the Earth, we simply cannot wait and allow the signaling power of prices to induce more young Americans to become engineers.

    • Yep — free markets are a ludicrous fantasy. A simple question is “do you believe banks should be able to use the legal system to collect on loans?” If so, you don’t believe in a free market.

      In the Islamic world, in its heyday when it had the best scientists/philosophers, government had nothing to do with debt. If I loaned you money for a new trade route, I had a vested interest in seeing that new trade route succeed — because you had no legal obligation to pay the money back. (Of course there were social pressures to honor debts.) And this was a highly successful and innovative system for centuries.

      • Have you been reading obscure books again? Is so: what’s the book? That would make a great contrast to modern libertarianism, which is so dependent upon a perfect judicial system. I’d love to be able to throw that in their faces. (Not that I don’t already mock it: “Government can’t do anything right! But in my libertarian utopia, the courts will be perfect!” What nonsense.)

        • The book is Graeber’s “Debt: The First 5000 Years.” It’s hard to recommend because Graeber isn’t a natural writer: he’s all over the place and his books aren’t focused as much as they should be. However I find him a brilliant and original political thinker. He’s utterly right that lenders being able to profit even from loans they expect to fail is a construction of our system, not the “natural” state of the “free market.” The gist I remember from “Debt” is that what we think of as the natural state of market relations was more or less invented by countries creating modern-style money to pay for wars. Yup, markets and wars go together. Try not to have a heart attack from stunned surprise.

          Here’s a silly Graeber observation from his most recent book I enjoyed; it shows how off-topic he can get and how fun his mind is. Vampires and werewolves. Vampires are eager to suck blood; werewolves don’t want to be violent, it happens when they can’t control themselves. Vampires live in castles; werewolves are basically homeless. And the really great catch by Graeber; what kills ’em? You kill vampires with a sharp stick, something peasants would use to build fences. You kill werewolves with silver.

          (The SO, when I shared this, added that another way you kill vampires is beheading — something Graeber missed, but it adds to the class angle more than a little bit!)

          • I had that book at one time, but I couldn’t get into it. But I’ll give it another try. What it sounds like is intellectual property law. It was first created to encourage inventors. But after a while, it takes on a life of its own and actually harms the very process it is meant to facilitate.

            Another thing about werewolves is that they often don’t know that they are werewolves. But at this point, there are two approaches to vampires. They can be aristocratic. But increasingly, I see them as symbols for outcasts. But not powerless outcasts. Outcasts like junkies: not accepted, but feared. I’m curious where the silver bullet mythology came from.

            • It’s not the most enjoyable book. None of his are. He could use some of Dr. Noam’s on-topic determination; there’s such a thing as being too wide-ranging. That’s what makes Naomi Klein and Thomas Frank so good; they neither repetitively prove the same point nor veer wildly to demonstrate how many references they can pack into an essay. I admire the scholarship of Graeber and Dr. Noam immensely, but they aren’t skilled as entertaining prose writers.

        • Oh, and . . .

          Liberal Islam is still very big on banning usury (how Christians, Muslims, and Jews rationalized breaking their religious teachings about sleazy loans is another big part of “Debt.” With Jews, it was usually because they were persecuted horribly, and rotten swine kings could blame their sucking lendees dry on “the Jews.” Christians were much more eager to engage in usury, and Muslims recoiled from it until quite recently.)

          America and Britain were big on supporting fundamentalist Islmaic groups with right-wing interpretations of usury. Basically because Mossadegh tried to nationalize the oil industry in Iran and Nasser refused to be America’s bitch. Clever us; we killed off the Arab movements that smelled of socialism, leaving folks like Hamas and the Muslim Brotherhood who have no problem with capitalism but unfortunately disobeyed capitalist orders by setting up health clinics, food banks, etc, for the poor. (Very devout, very unconcerned with upsetting the economic order, considerate of the needy; not unlike Mormons, Vatican II Catholics.)

          So now we’ve spent gazillions stomping the MB and Hamas down (damn those clinics) and we gift the region with ISIS. (Who it’s quite probable we might do deals with if they don’t threaten our long-term interests.) From Mossadegh to the MB to ISIS; boy, we are helping the world.

          And wow, that’s bitter!

          • As I recall, Dante’s 7th level of hell was for usury. Funny how sins go out of fashion when there is money to be made.

            Yeah, if America actually stood for democracy, the world would be a very different place. But we might not be as rich. Or rather, our corporate overloads might not be as rich.

            • Yeah, I’m babbling now. Long week! Time to hit the hay.

              Thanks as always for taking every comment by every person here seriously. Who knows if you’ve converted anyone, but you’ve never turned away a liberal dipping their toe in the water of changing sides by being a noxious know-it-all dick. It’s always “damn, I found this amazing thing” here instead of “Lord, I have to remind you what morons you are, yet again.”

              It’s odd how important a respectful tone on the Internet matters, given that nobody’s actually getting into fistfights with anyone else. But it does matter, especially to convince right-wingers that we are actually the polite side.

              • Thanks. But I’m not that nice. I’m often quite rude to libertarians. I usually respond in kind. But I have less tolerance for libertarians, because they always seem to want to have broad conversations and claim that I don’t know what I’m talking about because I didn’t deal with everything they think in one article. Of course, as Matt Bruenig has pointed out, almost all libertarians think they are the smartest people in the room. And they rarely are. But over all, everyone here is pretty smart and respectful. I really appreciate the comments.

    • Absolutely! I’ve written a fair amount about this. Dean Baker talks about the real skills gap being managers that don’t know that if you want to get more skilled employees you have to raise wages. The problem is that modern business is so used to lobbying the government for everything they want. In the past, IBM actually trained employees. Now they want the employees to train themselves and then pay nothing. The “market magic” only works regarding tax cuts.

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