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Why the H-1B Visa Racket Should Be Abolished, Not Reformed
Billionaire businessman Marc Cuban insists that the H-1B visa racket is a feature of the vaunted American free market. This is nonsense on stilts. It can’t go unchallenged. Another billionaire, our president, has ordered that the H-1B program be reformed. This, too, is disappointing. You’ll see why.
First, let’s correct Mr. Cuban: America has not a free economy, but a mixed-economy. State and markets are intertwined. Trade, including trade in labor, is not free; it’s regulated to the hilt. If anything, the labyrinth of work visas is an example of a government-business cartel in operation.
The H-1B permit, in particular, is part of that state-sponsored visa system. The primary H-1B hogs—Infosys (and another eight, sister Indian firms), Microsoft, and Intel—import labor with what are grants of government privilege. Duly, the corporations that hog H-1Bs act like incorrigibly corrupt rent seekers. Not only do they get to replace the American worker, but they get to do so at his expense.
Here’s how:
Globally, a series of sordid liaisons ensures that American workers are left high and dry. Through the programs of the International Trade Administration, the Export-Import Bank, the Overseas Private Investment Corporation, the International Monetary Fund, and other oink-operations, the taxpaying American worker is forced to subsidize and underwrite the investment risks of the very corporations that have given him the boot.
Domestically, the partnership with the State amounts to a subsidy to business at the expense of the taxpayer. See, corporations in our democratic welfare state externalize their employment costs onto the taxpayers.
So while public property is property funded by taxpayers through expropriated taxes; belongs to taxpayers; is to be managed for their benefit—at least one million additional immigrants a year, including recipients of the H-1B visa, are allowed the free use of taxpayer-supported infrastructure and amenities. Every new arrival avails himself of public works such as roads, hospitals, parks, libraries, schools, and welfare.
Does this epitomize the classical liberal idea of laissez-faire?
Moreover, chain migration or family unification means every H-1B visa recruit is a ticket for an entire tribe. The initial entrant—the meal ticket—will pay his way. The honor system not being an especially strong value in the Third World, the rest of the clan will be America’s problem. More often than not, chain-migration entrants become wards of the American taxpayer.
Spreading like gravy over a tablecloth, this rapid, inorganic population growth is detrimental to all ecosystems: natural, social and political.
Take Seattle and its surrounding counties. Between April 2015 and 2016, the area was inundated with “86,320 new residents, marking it the region’s biggest population gains this century. Fueled in large part by the technology industry, an average of 236 people is moving to the Seattle area each day,” reported Geekwire.com. (Reporters for our local fish-wrapper—in my case, parrot-cage liner—have discharged their journalistic duties by inviting readers to “share” their traffic-jam stories.)
Never as dumb as the local reporters, the likes of Bill Gates, Steve Ballmer, Mark Zuckerberg, and Marc Cuban are certainly as detached.
Barricaded in their obscenely lavish compounds—from the comfort of their monster mansions—these social engineers don’t experience the “environmental impacts of rapid urban expansion”; the destruction of verdant open spaces and farmland; the decrease in the quality of the water we drink and air we breathe; the increase in traffic and traffic accidents; air pollution; the cellblock-like housing erected to accommodate their imported IT workers and extended families; the delicate bouquet of amped-up waste management and associated seepages.
For locals, this lamentable state means an inability to afford homes in a market in which property prices have been artificially inflated. Young couples lineup to view tiny apartments. They dream of that picket fence no more. (And our “stupid leaders,” to quote the president before he joined leadership, wonder why birthrates are so low!)
In a true free market, absent the protectionist state, corporate employers would be accountable to the community, and would be wary of the strife and lowered productivity brought about by a multiethnic and multi-linguistic workforce. All the more so when a foreign workforce moves into residential areas almost overnight as has happened in Seattle and its surrounds.
Alas, since the high-tech titans can externalize their employment costs on to the community; because corporations are subsidized at every turn by their victims—they need not bring in the best.
Cuban thinks they do. High tech needs to be able to “search the world for the best applicants,” he burbled to Fox News host Tucker Carlson.
Yet more cr-p.
Why doesn’t the president know that the H-1B visa category is not a special visa for highly skilled individuals, but goes mostly to average workers? “Indian business-process outsourcing companies, which predominantly provide technology support to corporate back offices,” by the Economist’s accounting.
Overall, the work done by the H-1B intake does not require independent judgment, critical reasoning, or higher-order thinking. “Average workers; ordinary talent doing ordinary work,” attest the experts who’ve been studying this intake for years. The master’s degree is the exception within the H-1B visa category.
More significant: there is a visa category that is reserved exclusively for individuals with extraordinary abilities and achievement. I know, because the principal sponsor in our family received this visa. I first wrote about the visa that doesn’t displace ordinary Americans in … 2008:
It’s the O-1 visa.
“Extraordinary ability in the fields of science, education, business or athletics,” states the Department of Homeland Security, “means a level of expertise indicating that the person is one of the small percentage who has risen to the very top of the field of endeavor.”
Most significant: There is no cap on the number of O-1 visa entrants allowed. Access to this limited pool of talent is unlimited.
My point vis-à-vis the O-1 visa is this: The H-1B hogs are forever claiming that they are desperate for talent. In reality, they have unlimited access to individuals with unique abilities through the open-ended O-1 visa program.
There is no limit to the number of geniuses American companies can import.
Theoretically, the H-1B program could be completely abolished and all needed Einsteins imported through the O-1 program. (Why, even future first ladies would stand a chance under the business category of the O-1A visa, as a wealth-generating supermodel could certainly qualify.)
Now you understand my disappointment. In his April 18 Executive Order, President Trump promised to merely reform a program that needs abolishing. That is if “Hire American” means anything to anybody anymore.
Published in Economics
Okay so who should we give greater care to? The people invested in our company that count on the return on investment? The customers who could on recieiving the most cost effective product? The laborers who go completely unemployed because I can no longer afford to hire them? The laborers who go unemployed because their skills don’t provide enough return based on an artificially determined labor price floor?
Apparently it is illegal, but this particular case involving Disney was contested in court. I cannot find anything with a resolution to this case from a court.
http://money.cnn.com/2016/01/25/technology/disney-h1b-workers/
Compassion for who, Robert? What about my US based employees who would lose their jobs if I wasn’t so obsessed with the bottom line? What about retirees who survive on dividen checks and selling shares with increased value? Who decides who is worthy of my compassion?
Here is another on the legality of this practice:
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-20150222-column.html
Where did I say anything that resembles this farsicle populist caricature of my views?
I get that Jamie, as I said above about iWe’s shareholders, but it seems to me that both of you are first, second, third, and last only about the shareholders in your decisions, such as the sue of H1Bs to produce a better looking bottom line. Now, whether you do or do not use this H1B mechanism in your company I don’t know, but if you do, it would seem to me that if it came down to a decision between the guy who is making 50K at your company with the mortgage, CC debt, a family of four, and God knows what else or that guy who is hoping to get a 5% as opposed to a 4.5% return on investment, you are going to opt for getting that half a percent. And as an added kick in the junk, without even a second thought for the 50K guy. Is it your fault that they guy has debt and so forth and so on? No, and I am not saying it is. But should you, as a human being, not take into consideration the situations of your employees when you make decisions for the benefit of your investors? Or is it always about “labor price,” supply curves, inflow-outflow, and other lingo of the large corporation?
When you equated my desire to view employees in terms other than “labor price” with price protections of raw materials like iron ore. People are not the equivalent of iron ore. “Labor price protection” is another way of saying “hire Americans first.”
This “you only care about the bottom line, but I care about people” is the worst kind of Marxist hogwash. Behind all of those dollars are real people too, investors, workers, customers all made better off through any given businesses drive for efficiency and quality.
There are other ways to accomplish that than artificially warping the labor market. Your way isn’t compassion, its economic malaise. And for darn sure it isn’t Liberty.
I did not explicit say that you only care about the bottom line. I said that your, and iWe’s, arguments have come off that way.
And when that 0.5% ROI compounds and allows me to start a new product line that provides jobs for 10 people with a mortgage, CC debt, a family of four and god knows what else? When the lowered costs and increased efficiency save my customers money which they can turn around and use to open up new lines of business? When their customers have a little extra money in their pocket at the end of the month and are able to go out to dinner providing income for the waitress that serves them?
This is all so much more complicated than people are willing to admit. And to write that I lack compassion because I make decisions based on what is best for the business as a whole instead of on individual is utter libelous hogwash.
Meanwhile in Canada, the Royal Canadian Bank has its own version of the H1-B shuffle:
I have two contentions
1. That all human beings regardless of birthplace have a set of fundamental rights.
2. That among those rights is the ownership of ones own labor along with the ability to buy and sell it as one sees fit.
Any barrier to the right to buy and sell labor freely need not fail on utilitarian terms, though I think most do, these barriers are strictly immoral and thus impermissible.
What about the workers they hire elsewhere?
Ethics wrt how other people invest their money don’t stop just where it’s convenient to you or to me.
Glengarry Glen Ross, baby.
To think someone might consider price when shopping for services! The audacity!
To think that someone might prefer their own countrymen to foreigners. Quelle horreur!
Prefer away, just allow others not to.
Tell that to the fired Disney employees.
We in the United States spend a lot of money on unemployment–whether that’s direct benefits or our myriad unemployment offices that we pay to help people find jobs. And there are indirect costs that result from unemployment such as depression, and tragically even suicide. Bankruptcies. Foreclosures. Lost tax revenues.
It seems to me that government policy makers need to analyze why and where we are bleeding jobs and adjust government policy to create incentives to keep those jobs. I would not ask the private sector to change. There’s a old axiom in business schools, that the purpose of the corporation is to make money. That works well. And some companies make money by being actively part of their surrounding communities. That is part of their competitive edge.
I would ask our government to change whatever tax or employment policies it has in place that have made it so attractive for companies to hire from outside the country. I’m sure Trump’s administration is looking at that sort of thing. Let’s make it possible for companies to improve their profits by hiring American workers.
Get out the charts and graphs and turn them over to the MBAs.
Changing a few EPA regulations would enable some companies to continue to operate profitably in the United States, and changing the capital gains structures would entice companies to keep their financial operations here instead of moving to Ireland.
I live in a state that has experienced many periods of economic expansion and contraction. When we need to compete with other states for business, we elect people who know what needs to be fixed. The federal government is the same. It needs to figure out how to better compete with foreign countries, who are doing the same thing in competing with us–exploiting our competitive weaknesses.
I live in a tourist area that employs many H-1B workers. If I were in a government agency, when I got an application for H-1B workers, I’d go knock on that business’s door and ask why it is cheaper–where exactly are you saving money by doing this as opposed to, for example, working with a local college and hiring those kids for these temporary jobs?
Seasonal employment situations are regional. As are the businesses. We have a fleet of airplanes that sit here on Cape Cod all summer and go down to Florida all winter. It seems to me that the employees need to be able to do that too. How do we make that happen so that businesses are happy with the cost to them?
You do not seem to understand: my obligation is to the people who have put their trust (and dollars) in my efforts. I owe NO obligation to employees. Indeed, our company has NO EMPLOYEES. Why would we take on the paperwork? The regulation? The hassle? How does having employees fulfill my duties?
It is a false premise. We do not use H1-Bs. We do not use visas at all. We partner and source our work with people who co-invest in the company, and where that does not make sense, we find the cheapest supplier who meets the requirements.
Producing a world-beating technology that will save significant time for billions of people, making an entire industry far more efficient, competing with the behemoths in the industry… these are challenging enough without wasting resources and cycles trying to needlessly increase our overheads.
Similarly, for example, we do not have conventional offices. That deprives the commercial real estate sector of business. But it means our shareholders’ money can be spent on things that need doing. Is that, too, somehow irresponsible? Should we be taking money from people and wasting it?
That’s one of our purposes, and it should be. Okay? The OP points out that a polyglot workforce isn’t an advantage to anybody.
Dont think you can whip us any longer with THAT broken reed.
There’s your “furriners” aspect.
And “dirty”? One does read that we’re importing pestilence and diseases not seen in this country for a century. To what advantage?
I am indebted to the OP author for telling us about the O-1 visa program. That puts paid to any possible defense of The H1B. Does anybody have Kellyanne Conway’s Email?
Agree and well said. All immigration has to be under the microscope for major reform.
I agree, especially with that last sentence. With modern day outsourcing the advantages of immigration have been eliminated and what results are mostly negatives to the society. There is no need for immigration any longer. Society has to deal and pay for with the problems that immigrants bring while the benefits can be attained by different means.
The law for H1-Bs is that they are supposed to be for jobs where you can’t find American workers, not where you can’t find cheap american workers.
Oh God no, please, not the [expletive] MBAs! Can’t we find someone who’s done something useful with their life?
The problem is, they think they’re importing “workers” but they’re really importing People.
Yes, that is a good way to look at it.
I want the smartest people working with me. (Makes me look good.) Helps the company make money. Companies making money hire people and keep the people they hire.
Some of the smartest people weren’t born here. If they don’t work here — or under contract to a company here — they work somewhere else. “Very, very bad” as a certain president with all the best words would quip.
So bring ’em in with an O-1, like Ms Mercer says..