H1-B Cap Hit in Two Days

I think we need to add a stanza onto Emma Lazurus’ sonnet at the base of the Statue of Liberty:

Your huddled masses yearning to breath free.
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me.
I lift my lamp beside the golden door!
Oh, and if you’re really smart, hard working, and earned an advanced degree, take a number and wait in line. We don’t want your really smart people running around here all willy-nilly, starting companies, caring for our sick, and educating our young. Nope, you’re not wretched enough. Go home and start some competition for us, or something like that.

This has already gotten quite a bit of coverage, but this is a nice follow-on to an earlier post I made on the topic of innovation in America. Apparently, the H1-B visa application cap was hit in just two days. The covetted H1-B is the visa that skilled laborers need to work in the US. I’ve worked in tech startups before where over half the employees had H1-B’s, and every one of those guys were truly the smartest people on earth (as opposed to just in America) in their particular speciality. The good news for Americans is that they were on American soil, innovating for a domestic corporation that will hopefully someday make a set of American investors very rich. The good news for me is that I got to learn from them!

Even if there are Americans without jobs, we can’t afford to be protectionist about hiring particularly skilled people. Unskilled labor, okay, I can see an argument there perhaps; I think we do need some domestic job protection at the entry level and in our factories. I believe the more smart minds we bring into the US and we retain in the US, the stronger our overall future will be, and the weaker our global competition will be (and believe me, there’s competition out there!). I’m just a little concerned that if we are turning away smart people by the tens of thousands, well, they can all get together in a different country and start up some pretty fierce competition. I suppose the thing to do is to write a letter to your local representative and to persuade them to up the H1-B cap.

The larger, looming problem is the waning interest among American students in engineering and technology. There is no short-term solution to the problem–the pipeline is already emptying, and it will be about a decade before any new policy would bear fruit. The good news is that there are more engineering jobs in the US than there are draft openings in the NBA–at least for now.

21 Responses to “H1-B Cap Hit in Two Days”

1. Samh says:

Slightly worrying as I am looking to switch to an H once my present visa expires.

2. jon says:

From what I have experienced the H1-B is used by many companies to water down the employment pool which lowers the wages of everyone. My experience is that the typical H1-B holder is just that typical, like most of us. Also you worry about, “The larger, looming problem is the waning interest among American students in engineering and technology.” But if what we need is more and more people from outside, why would any American student want to study engineering where they will have to more and more compete for the lowest common denominator. I am not sure there is a case for raising the H1-B cap, especially when companies are not forced to even look for a qualified american vacancies before going the H1-B route.
Now if you are talking about getting the best of the best here, which is not your typical H1-B worker, sure I agree with you. But then again these people are starting to find better opportunities in Asia et. al.

3. Elmer Fudd says:

H1-B is a temporary visa for foreign workers who have skills that domestic workers don’t. You seem to be missing that part about temporary. It is not for immigration, which is what Lazurus’ sonnet is about. It is also not for getting the best and brightest into your country. You don’t want to boot the best and brightest out when their visa is up, you want them to stay and start companies, innovate, and so on. There are other visas for people who are the best in the world at what they do and want to immigrate to the US, and as of April 2007 there is not even a waiting list for them.

4. bunnie says:

Good point about the immigration versus the visa. The impression I got talking to all of the H1-B’s that I’ve worked with is that most of them intend to eventually go for a green card or naturalization, but they have tried for the H1-B because for some reason it’s easier or that’s just what the company lawyer would do for them.

I was also under the impression that part of the H1-B process was demonstrating that you couldn’t fill the position with US labor before you were granted the visa. At least, I’ve had to write supporting letters before commenting on certain positions and how an individual was uniquely qualified for the job as part of their application process. However, I could certainly see larger corporations trying to use the H1-B as a wage-reduction plan, because H1-B’s have a legal leash on them and pretty much have to deal with whatever the company dishes out to them. At least in a small startup I haven’t seen such tactics used.

As for why an American student should study engineering or not–the competition of the job market doesn’t seem to be as big a factor as simply the lack of a desire to get into the field. Engineering just isn’t a prestigious occupation in the eyes of the American youth, so they don’t apply themselves to it. We have a great education system for engineers in the US, so pretty much any young engineer that devotes themselves to the art will almost always come out world-class. On the other hand, engineers that are forced into the profession through parental pressures, tend to be good but understandibly uninspired, and therefore cease to grow their skills after graduating college or through extracurricular activities.

A difficult topic to grasp, at least for me. Thanks for the interesting perspectives.

5. daver says:

I’ve worked in IT for ten years and well the watering down of wages arguement is bunk, if you can’t get a good paying job in IT you don’t have the skills. And yes the H1-B is very often used as a path to citizenship. The fact is many of these people went to our universities have lived in the U.S. for many of years and want to stay and start a life here. And we say no take your US degrees and education a leave.

6. Samh says:

Bunny, it is generally the case that people here come in on H visas and eventually move towards green cards and naturalisation, primarily this is because it is easier to obtain, but also because you have to be sure you want to live here, and that really doesn’t happen in a week.

I believe the person I replaced left because their spouse hated it here, not being allowed to work and not knowing many people, being far from your family and not enjoying american life are all things that can put you off staying.

I love it here, but I did have to get the cable tv cut off because I just couldn’t stand american television, but netflix seems to be a good way on catching up on the programs I do like.

7. Grey Hodge says:

Bunnie, I’m so glad to see you were open to listening to the explanations about H1-Bs, as opposed to just holding on to one side. Even if you disagree, the fact you were open to listening is something more people need to be. Through a dialog we can solve these issues. Immigration IS a huge issue currently, and while people like me for example are against raising H1B visa limits and such, we’re NOT anti immigration. If H1B visas were really a long term path to immigration I’d be all for it. I love the idea of hundreds of thousands of the world most brilliant people coming to become US citizens every year, but as the other gent said, these are short term work visa after which you _must_ return.

As it is I’m fine with the limit on H1B workers, because while I agree there will always be some areas where there might be a short term when you can’t find qualified people for high tech jobs, corps do abuse them, so a limit like 95k a year is reasonable. If then later those H class workers want to migrate here permanently, I think they should be granted exceptions from the limits imposed on their countries of origin because they’ve proven they’re a valuable asset to the economy. This way we still allow reasonable numbers of those who can improve this fine land as valuable assets to the nation without being unfair to the poor and oppressed who merely want a chance at a better life. Some countries, such as many European countries are nearly impossible to emigrate to due to strict rules on what boils down to have valuable a person you can be to that nation.

8. X7R says:

It takes six months to process a work visa application. Only large body-shopping software companies can play the waiting game by rotating programming grunts on their ‘bench’, and the big US corporations are happy with that. To them the H-1B system is a 6 bit shift register clocked once every year.

The US stands to lose people trained in the finest universities, people who have absorbed the best of American knowledge and values. However, there is a provision in the H-1B bill that takes care of students graduating with advanced degrees from US universities.

The real problem will arise when green cards aren’t granted fast enough, or if these green cards are sucked by programming grunts. With a minimum 2:1 salary advantage even for qualified high-tech workers, the capitalist system will recover the ‘lost’ US-educated H-1B’s in Bangalore or Prague or Manila. After some years these folks will get tired of cube life and will be looking to start their own companies in markets with hot growth. So it’s not jobs, it’s where the next dollar is going to be invested.

9. StopH1Bprogram says:

“larger, looming problem is the waning interest among American students in engineering and technology” is where your answer lies. Do you know why American students avoid engineering and technology? Because it is not rewarding anymore:

A software engineer can hardly expect a salary of $65K in the Silicon Valley (much less elsewhere) with two years of experience. A dentist takes a W2 salary of$150K (again in Silicon Valley) with about two years of experience. Same with other professionals such as attorneys, doctors, etc. In all of these professions one has to keep on studying about new advancements in their fields after several grueling years of studying at the University. A student starting out on a college degree has to decide which line to pick. Tell me, unless you are a geek and a techie from your young age, which would you pick?

And if you ARE a geek or a techie, you would not care so much about the money anyway. An Xbox to tinker with or a PS3 with 2 Teraflop capacities would satisfy your need. Not so for people with other interests and orientation. Many people coming from outside US on H1B come over here, not because they are geeks or techie in their orientation, but because of the higher salary they make when they convert dollars into their own currency. They don’t need any other motivation.

A general software engineer in Philippines makes around $250 a month, which is considered pretty high in their country. And in India, fresh graduate with a Master of Computer Applications make less than that (around$200 a month) on an average. The ultimate payback for their effort is the chance to come to US after having five years of experience (as stated on their resume – most often a lie) and get paid $60,000 per year. Which US software engineer in the right mind in Silicon Valley would work for$60,000 per year after five real years of experience? There you have the water-down effect. Large Companies prefer to hire these H1Bs at that point and at the expense of more expensive American engineers. They have a pool of smart Engineers on their payroll anyway, who would mould these under skilled, less expensive resources into the “Corporate Culture” so essential for their success. Who needs expensive geeks anyway?

By increasing the number of H1Bs, you are just increasing the supply of such engineers in this country. This will certainly drive down the wages and drive away any non techie or non geek American students from joining the profession. I am totally against H1B increase just for this reason. As a software engineer with a graduate degree in computer science, practicing my profession for 14 years, I expect a salary of at least $200K per year. I am making far less than that. Where as all my previous bosses with Liberal Arts backgrounds made around$200K a year. Then why the f**k did I do a graduate degree in computer science. Oh, I know why I studied Computer Science – because I was a geek in the H1B era (H1B started in 1990). Other geeks like the ones who started Microsoft didn’t have to fight the H1B menace. I would have been much better off with a Liberal Arts degree in the age of H1Bs.

Those foreign engineers who are smart will come over here anyway – on F1 visas for advanced degrees and PhD programs and do not require H1B. And once they complete theirs studies they have Optional Practical Training (OPT) for one year in which to apply for the 20,000 H1Bs reserved for them. How many more visas do we need to give to get these so called brilliant individuals? General category H1Bs open up the door for those brushing the bottom, those who barely made it to this field in their country and are now sponsored by their super rich employers to replace more expensive American workers. These H1B-getters are not the geeks or techies who built companies like Google or Yahoo (as your article would suggest). It would be better for America to keep them off our shore.

Write to your congress person to vote against any H1B increases. Support IEEE-USAs effort in this regard: http://www.computerworld.com/blogs/node/5208

– StopH1Bprogram

10. John says:

An Auction of the visas would prioritize them, instead of having them all going to the body shops, who are just trying to make a quick buck on cheap labor…

http://johnfames.blogspot.com/2007/04/let-bidding-begin.html

11. bunnie says:

Thanks for the post. I would like to note that I believe your comparison to dentists is not quite fair. Dentists seem to require about 4 years of post-undergraduate training. You can’t compare that to an SB software engineer with 2 years of experience. The closer comparison is with a PhD with 2 years of experience. If you look at the salary stats there, the spread is much smaller. I don’t have stats on hand but iirc the average starting salary for a PhD out of my alma mater was solidly north of the \$100k point, and software engineers don’t need to pay liability insurance or run the risk of getting diseases from working on people who are sick. Granted, there will always be a salary gap between lawyers, doctors and engineers. Doctors get paid a lot because what could be worth more than your health? It’s hard to enjoy that iPod when you’re deathly ill. Lawyers get paid more because they control both the supply and demand for their profession–bored lawyers beget frivolous lawsuits that drives up the demand for defendents’ lawyers. The closest analogy I’ve seen to this in the computer world is among the security circles. I heard a brilliant comment on NPR once that security engineering one of the few areas where the same group can control both the supply and the demand for their skills by the same set of clients.

It’s a fair (and extremely relevant) point that the salary structure in large companies is lopsided and unfair, but that’s an orthogonal issue from supply and demand of engineers. I think there are a lot of cookie-cutter ho-hum MBAs out there as well, but I think by their nature MBAs are better at marketting themselves and negotiating salaries. I also know some fairly average EE’s out there who have pushed themselves to astronomical salaries because they are very good at politics and negotiation, but they are fairly average in terms of their ability to do anything engineering-related to the company’s bottom line; rather, they surround themselves with very smart and very loyal people who love their work more than their pay. More power to them for being so savvy.

As a hiring manager myself, I have precious few reqs to hand out and I’m finding its impossible to get good people, domestic or international. All the good folks I know are tied to their jobs with “golden handcuffs”. On the other hand, I’ve screened dozens of new college grads and it is unfortunately common for a Masters’ degree in EE from a big-name university to fail basic interview questions like how a diode works (no, diodes don’t “just turn on” at 0.6V). I’m ashamed to admit that I’ve interviewed MIT 5.0-GPA CS grads who don’t know what a gray code is, or what the difference is between rounding and truncation.

I think the supply for *good* engineers is always short, no matter if you look globally or locally. I think the question is how do you corner the market on the best people no matter where they are and keep them in your economy. A smart, hard-working engineer is a gold mine no matter what country he or she comes from. Therefore, the H1-B program should be crafted to target getting only the best into the country, and should discourage those who bring in mediocracy to lower the salary pool, because as you point out that just reduces the motivation of domestic students to get into engineering. Importing hordes of sub-average engineers to sandbag the salary structure is destructive, and should be avoided.

On the other hand, I’d offer that continuing to push the H1-B cap down could have unintended consequences quite the opposite of what you are hoping for. The premise of the anti H1-B campain is that corporations are greedy enough to import average labor to dilute the domestic salary pool. If you take the imported labor and push them out into third world economies where they can be paid even less, what do you think would prevent companies from simply saying “Great! Now I can get rid of *all* my domestic jobs because we’ve got a huge US-educated labor force in places where I can get away with paying them almost nothing.” After all, it would be hard for a US company to stay competitive with other US companies if they aren’t following the brightest people around no matter where they happen to be.

Ultimately, my thought is that if you suck all the oxygen out of the foreign job markets, the outsourcing fire can’t spread there, and if you can somehow get all the oxygen to stay in the US, our economic fires will continue to burn brighter and hotter than everyone elses’. The trick is how to avoid getting burned by unintended consequences.

12. bunnie says:

Some very relevant discussion happening there as well! US students are giving their perspective on the job and education situation in the US.

13. Jon says:

A little late but I found this story interesting.

I wonder if readers of this blog have any personal experience of any of these claims?

14. Brian says:

“(no, diodes don’t “just turn on” at 0.6V)”

Obviously, at 0.6V the band gap energy is satisfied and the magic smoke becomes an electron transport chain turning the ATP into ADP resulting in the release of Bosons proportional to the exit velocity of Titan cubed by the integrated arcsine of Texas.

You interview people who don’t know this? Wow, the west coast is slipping.

15. Gordon G. says:

“‘Therefore, the H1-B program should be crafted to target getting only the best into the country, and should discourage those who bring in mediocracy to lower the salary pool” –bunnie

This should be the case. But the way things are… H1-B is just a cheaper way to get cheaper labor, which is a GOOD thing. You rarely find someone that will actually say “lower cost == good” when it comes to H1-B.

Gordon G.

16. jones says:

I am currently waiting for h1-b petition to be processed for this year. I was one of the cases randomly selected from all the 115,000 applications received in those two days.

All of the above arguments are quite interesting. Usually very few people are aware of this visa and what it entails. The whole process is long and life changing.. It is hard to explain it in simple economic terms or in caps. It is a situation that not many will experience, unless you ever feel compelled to start over in some foreign country, ready and willing to play by a new set of rules.

17. Webbster says:

The program need desparately to be fixed. As Jon has revealed the program has been taken over by Indian Outsourcers. Examples:

7 of the top 10 applicants for visas are Indian Outsourcers. Infosys and Wipro took the top 2 spots, with 22,600 and 19,400 visa applicants. Most of this program go to body-shop, low skilled, get trained on the job, programmers whose ultimate goal is to support offshoring operations back in India.

Last year, Wipro applied for 19,450 H1B positions but only 69 green cards, a 0.4% green card to H1B ratio.

The other fraud is to get “the best & brightest”, but its to get the cheapest. There’s whining about 133,000 applications in two days, but there are an additional 20,000 application slots for Masters degree or better that has yet to be filled. The other 65,000 are targeted by Outsourcers bringing in lower skilled, paid techies.

The ultimate goal of these Outsourcers:
1. Facilitate their knowledge transfer operations, where they rotate foreign workers in to learn US workers’ jobs.
2. Provides them an inexpensive, on-site presence that enables them to coordinate offshore functions.
3. US operations serve as a training ground for foreign workers who rotate back to their country

The program needs to be changed to give priority to those wanting to immigrate, but in fact, the opposite is done. An H1-B is given the least priority for greencards, and if they change jobs, the greencard process has to start all over again. H1-bs have a limited time to get there immigration status in order.

So in fact, the system is so badly flawed that it gives incentives for knowledge transfer out of the US and dis-incentives to not stay.

H1-b reform needs to include greencard reform.

18. dorfus noton says:

As an educated american born engineer ,having many patents, many publications, and being hard working , I have personally been involved in starting 3 companies and been in 7 startups.

I find That the H1B and L1a visa program is a way for big corporations to keep the average pay rate down while allowing them a cover for not having to provide american jobs.
The reality I have found is that foreign born and educated engineers from certain countries both in and out of europe , (mainly out of ) ; are in general arrogant , self advancing , and quite frankly even with advanced degrees cannot match the skill and completeness that I have seen with experienced home grown engineers.
I have personally seen memorandom from our Government accounting office in the 1980’s that was sent out to Government suppliers that stated

” One way to keep your engineering costs down is to Hire H1B or L1A engineers from the UK , and France. They typically do not understand The american cost of living structure and are willing to work for a significantly lower wage than the Going rate for american produced engineers with the same level of experience. In addition Both countries have most engineers that are fluent in english, this simplifies any training costs. For both of these countries listed we ( the U.S. GAO) will give preference to visa status for military contractors and can usually fast track security clearences . Unlike US born engineers , the temporary nature of the visa allows a company latitude in Labor relations
If management work requirements are not met with joy and acceptance , the hiring company can choose to revoke the visa with very little;or even no legal ramifications to the company at any time . This allows cost containment even after program slow down and no notification requirement for the layoff of even over 600 workers according to us law.”

So based on the paraphrased document from the GAO
to defense contractors.

I would persnally favor a US design and manufacturing content legislation
and remove all H1b and L1a positions . This would fire up the universities to produce more engineers. In addition we need to have a 5 year return home policy for any foreign student educated in the us so that American companies must support U.S based education to meet work place needs.

NOTON

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if u cant satisfied ur current salary so u have to apply for h1b ….now i got h1b visa approval nd worry about interview …how can suffer visa interview? pls ….tell about me u have been faced visa interview….my contact is 09925091397

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