H-1B visas and layoffs


I just read: Nationalism Before Productivity & Quality over on the LRC blog by Karen DeCoster and that has reminded me of something that I wanted to point out.  I’d like to go a bit deeper drawing from my own experiences.

While the political hacks over simplify in one direction, the viewpoint that just out-working the H1-B visa holders is enough is simplistic in the other direction. Price competition on results is just the start. All too often people from technical discipline will manage another or the boss will be a pure pointy haired one out of the pages of “Dilbert”. This turns people into ‘resources’, that is replaceable cogs in a machine. Equal based on label. An H1-B visa holder who takes a week to do what an American born worker does in a day might keep his job simply because of the lower pay number on the spread sheet. 

When layoff time comes how productive a person is plays second in a lot of companies compared to their political standing. The more a person spends on his productivity the less time he’s spent on protecting himself politically. While the outright lazy and politically unprotected are the first to go the productive and politically unprotected are not far behind.

It’s not to say that the market doesn’t punish this behavior. GE and Motorola are probably the two biggest offenders on the planet with their ‘bottom 10%’ ranking system and the market is punishing them for it. The bottom 10% is usually occupied by those who are product centered and trying to turn a profit but have left themselves vulnerable politically or made enemies in the product development process. It is a politically driven turn over system designed expressly to lower employee costs, not to improve product. I could go on about it but the short story is that it depletes the company of its talent and the people who are the voices of change that a healthy company needs. Many more talented people see this and leave on their own out of frustration with the culture or to do it on their terms. GE suffered a loss of it’s most experienced people, Motorola copied GE and suffered, especially in their handset division. The talent is depleted while those who spent their time in CYA mode and never making decisions or being accountable for anything remain. These choices show up in the market, that is the silver lining of it all.If they really chose on merit they’d be in far better shape.

The H-1B visa system itself is a problem though. Many people in the US on such visas are looking to stay in the US as their primary (or at least significant) motivation. This is often due to US foreign and immigration policies. US foreign policy making them unable to have the life they want in their home country while immigration policies mean they’ll take lower wages in a field they wouldn’t otherwise have chosen to stay in the US. This causes the signal of demand for technical talent to be distorted. Foreigners see it as a way to better life (by moving to the USA), increasing the number of people overseas who enter technical professions. Meanwhile it hurts wages in the US sending a signal to American young people that the fields are too much work for too little pay. They can make far more in financial fields or with an easy business degree (thanks to the monetary system) so the number of Americans entering the technical fields gets smaller. The US schools scramble to fill seats and get foreign students. Companies use the shortage of qualified Americans to justify more H-1B visas and the cycle continues.

Solution? Forget about visas and the quotas. (yes, that would require ending the socialism) This way the people seeking H-1Bs won’t cut their price just to stay in the US and will choose their profession on their own desires rather than what will get them into the USA.   Better yet, fix US foreign policy and then many won’t even want to enter the US because they’ll have what they want at home.  Then wages will increase to the true market demand and that will encourage Americans to enter technical professions.

I think the H-1B situation is the usual of government interference begetting more government interference. (that is in addition to being for the benefit of some over others)