The H-1B visa program is a scam
This is the second of three columns relating to the recent story of Disney replacing 250 IT workers with foreign workers holding H-1B visas. Over the years I have written many columns about outsourcing (here) and the H-1B visa program in particular (here). Not wanting to just cover again that old material, this column looks at an important misconception that underlies the whole H-1B problem, then gives the unique view of a longtime reader of this column who has H-1B program experience.
First the misconception as laid out in a blog post shared with me by a reader. This blogger maintains that we wouldn’t be so bound to H-1Bs if we had better technical training programs in our schools. This is a popular theme with every recent Presidential administration and, while not explicitly incorrect, it isn’t implicitly correct, either. Schools can always be better but better schools aren’t necessarily limiting U.S. technical employment.
His argument, like that of Google and many other companies often mentioned as H-1B supporters, presupposes that there is a domestic IT labor shortage, but there isn’t. The United States right now has plenty of qualified workers to fill every available position. If there are indeed exceptional jobs that can’t be filled by ANY domestic applicant, there’s still the EB-2 visa program, which somehow doesn’t max-out every year like H-1B. How can that be if there’s a talent shortage? In truth, H-1B has always been unnecessary.
What the blogger misses, too, is the fact that the domestic IT workforce of today came into their jobs without the very educational programs he suggests are so important. There was no computer science major when I was an undergraduate, for example. For that matter, how many non-technical majors have been working for years as programmers? How many successful programmers never finished college or never attended college at all? I’m not arguing against education here, just pointing out that the IT job path isn’t always short and straight and the result is that the people who end up in those jobs are often more experienced, nuanced, and just plain interesting to work with. What’s wrong with that?
What’s wrong is politicians who can’t code or have never coded are arguing about how many technical workers can dance on the head of a pin, but they simply don’t know what they are talking about.
Now to the H-1B observations of my old friend and longtime reader who has been a CTO at several companies:
My first exposure to H1B was when I was consulting to multiple VC’s back in the dot-com era. Several VC’s I did work for, the portfolio managers would instruct/demand their portfolio companies hire H1B’s instead of Americans for 'common' jobs such as programmers, DBA’s (database administrators), network admins and even IT help desk people.
The reason of course was $$$. The H1B’s cost approx. 1/3rd or 1/4th the cost of the comparable American in same job.
I remember this one VC board meeting where the CEO of a portfolio company said the H1B’s in his company were complaining about their sub-standard pay, and one of the VC partners said, "Fuck them. Tell them if they don’t like it, we’ll toss their ass out, get another H1B to replace you and you’ll be on your way back to India".
Fast forward to mid- to late-2000s:
I learned (while working) at (an unnamed public technology company) a LOT about H1B. We had contracted with several of the Indian firms such as Infosys, Wipro, Tata, Impetus, TechMahindra for 'outsourcing' and 'offshoring' ordinary tech work like programming, dba’s, documentation, etc.
The rates were very enticing to any corporation: we were paying anywhere from $15/hour to a *max* of $28/hour for H1B folks from those Indian firms (which btw, had set up US subsidiaries as 'consulting/contractor firms' so that American companies were hiring "American workers").
The jobs we were hiring from TechMahindra, Wipro, etc., were jobs that American workers of same skillset and experience would be paid in the range of $80k-$170k (annual, which translates to $52-110/hour when you factor in benefits, medical, etc.). Quite a considerable difference in cost to the corporation.
At one point we had ~800 staff in India that worked for Infosys/Wipro/etc.) but had H1B 'project managers' onsite in the US from Infosys/Wipro/etc. to manage those armies of people in India (i.e. -- deal with language issues, scheduling, etc.).
I got to know some of the H1B’s that were in the US working for us. I asked them, "How can you afford to live here on $15/hour?" The answer was they were living in group homes (e.g. -- 8 guys would rent a townhouse and pool their money for food, etc.), plus had "no life" outside of work.
To which I’d ask, "why are you doing this?" The answer was "it’s better than what we can get at home (India)" and they would manage to save some money. But more importantly, they were getting valuable experience for when they would return to India, they were highly sought after due to their experience in the US.
I know of one case for certain when our intellectual property (software source code) found its way into other companies, by pure coincidence of course, where the other companies were using the same Indian firms.
IMHO, the intent of the H1B program is valid and correct. The implementation and administration are horrible.
The politicians have no clue.
The government administrators who manage the H1B program, and especially the overseers who review the cases on whether (the visa applicant) really has skills that are unique and uncommon, are not educated or experienced enough to make such determinations.
I read some of the forms that were filled out: throw in a lot of techno babble and terms, and the government admin is NOT going to be able to challenge NOR understand it.
The politicians say they’ve addressed the holes by tightening-up the process. But if the first line of defense are the admins who review/determine if the H1B position really is unique and uncommon and they don’t know the difference between C++ and C#, we’ve accomplished nothing.