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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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More on the H-1B Visa Nonsense

Comments (5)

My friend Ben Casnocha recently wrote a paper for school – he’s got an adapted version up on his website titled Analysis: H-1B Visa Issue in AmericaHe dug up a deliciously moronic quote and summary from a CRS Report for Congress titled Immigration Reform: Brief Synthesis of Issue

"Those opposing increases in temporary workers assert that there is no compelling evidence of labor shortages."  Norman Matloff of UC Davis, a forceful critic of H-1B expansion, says that U.S. companies do not import foreign workers to fill a labor shortage. If there were truly a shortage, starting salaries for grads with bachelor’s degrees in computer science or engineering would be rising (they are not), and technology companies wouldn’t hire only 2% of their job applicants as they wouldn’t have the luxury to be so picky.  And they don’t want more foreign workers in hopes of recruiting the best and brightest, according to Matloff. The average H-1B visa employee earns in the $65,000/yr range, far below what top talent commands. Rather, they want more foreign workers because they can pay them less to do the tasks currently done by domestic workers. (The law requiring employers to pay the "prevailing wage" is largely ignored in the industry.) In short, an increase in cheap H-1B talent would probably displace the American IT worker.

Aha – I’ve got it.  Let’s make sure we only hire American’s and keep everyone else out of the country.  And technology companies – stop being so damn picky with your hiring.  If you’d just hire people that weren’t as smart, you wouldn’t need non-Americans. 

Gross.

And – if you need more for your inner cynic, how about the article in today’s Rocky Mountain News titled Clouds hover in ethanol sky.  E85 (assuming you can find it) apparently costs 78% less than regular unleaded gas but gets 71% less per gallon.  Since it’s 85% ethanol, it presumably is less polluting (assuming that the total ethanol lifecycle consumes less energy than gasoline) but doesn’t save the consumer any short term money. 

  • John May

    Nobody takes into account the amount of power it takes to run an ethanol plant. In all reality most of this power comes from coal burning power plants that offset the environmental gains from using E85. Ethanol is a farce that has only had an offset uptick in prices for everything from food to other items. It has created wealth for farmers that grow corn. However, other farmers that used to rely on grain for other items are now reeling from the higher prices. Just look at the 35% gain in cost of milk this year.

  • sean

    Is the economic idea that shortages drive higher prices moronic?

    Maybe, I'm being moronic because it's early Sunday morning, but it's not clear which part of the quote is moronic.

    Is it that companies try to minimize salary costs to increase profits? Isn't that what they're supposed to do for their shareholders?

    I'm not even being sarcastic.

    Of course, all the quoted points may be wrong, is there any contravening data or logic?

    • http://www.feld.com Brad Feld

      This is the mornic part of the quote (well – the whole thing is stupid, but this is really stupid): “… and technology companies wouldn't hire only 2% of their job applicants as they wouldn't have the luxury to be so picky.”

  • http://www.prohiphop.com Clyde Smith

    I thought governmental restrictions were ridiculous until I read about how companies like Microsoft actually use their visas. Sorry I don't have the reference now but this description reminds me of what I read about Microsoft using the visas to circulate lower paid employees in and out of the country.

    Obviously you shouldn't take my word for that but I do think it's likely that other large companies are pulling similar maneuvers and undermining the process for everyone else.

    It looks bad all around to me. And I agree that the “picky” comment is ridiculous.

    The situation for visas is far worse in the arts, by the way, where nonprofits don't have the money to buy up all the visas they can at the beginning of the cycle like some of the big tech companies do. A huge number of touring artists have now stopped even trying to come to the US because of previous tour disasters.

  • Jeff D

    Applicants who need visas are often in no position at all to negotiate salary. If they want to stay in the US, they take whatever salary is offered because they need the visa (at least initially) to stay in the country.

    There are plenty of reasons to believe that visa holders would get paid less than citizens, the above the biggest among them. I've seen it myself firsthand in the actions of my fellow grad-school classmates.

  • John May

    Nobody takes into account the amount of power it takes to run an ethanol plant. In all reality most of this power comes from coal burning power plants that offset the environmental gains from using E85. Ethanol is a farce that has only had an offset uptick in prices for everything from food to other items. It has created wealth for farmers that grow corn. However, other farmers that used to rely on grain for other items are now reeling from the higher prices. Just look at the 35% gain in cost of milk this year.

  • http://intensedebate.com/people/bfeld bfeld

    This is the mornic part of the quote (well – the whole thing is stupid, but this is really stupid): "… and technology companies wouldn't hire only 2% of their job applicants as they wouldn't have the luxury to be so picky."

  • http://intensedebate.com/people/sean3778 sean3778

    Is the economic idea that shortages drive higher prices moronic?

    Maybe, I'm being moronic because it's early Sunday morning, but it's not clear which part of the quote is moronic.

    Is it that companies try to minimize salary costs to increase profits? Isn't that what they're supposed to do for their shareholders?

    I'm not even being sarcastic.

    Of course, all the quoted points may be wrong, is there any contravening data or logic?

  • Clyde Smith

    I thought governmental restrictions were ridiculous until I read about how companies like Microsoft actually use their visas. Sorry I don't have the reference now but this description reminds me of what I read about Microsoft using the visas to circulate lower paid employees in and out of the country.

    Obviously you shouldn't take my word for that but I do think it's likely that other large companies are pulling similar maneuvers and undermining the process for everyone else.

    It looks bad all around to me. And I agree that the "picky" comment is ridiculous.

    The situation for visas is far worse in the arts, by the way, where nonprofits don't have the money to buy up all the visas they can at the beginning of the cycle like some of the big tech companies do. A huge number of touring artists have now stopped even trying to come to the US because of previous tour disasters.

  • http://intensedebate.com/people/jeff_d3875 jeff_d3875

    Applicants who need visas are often in no position at all to negotiate salary. If they want to stay in the US, they take whatever salary is offered because they need the visa (at least initially) to stay in the country.

    There are plenty of reasons to believe that visa holders would get paid less than citizens, the above the biggest among them. I've seen it myself firsthand in the actions of my fellow grad-school classmates.

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