The H-1B Fraud

Some of you may have seen this video explaining the placement of phony job ads that are subsequently used to prove to the Department of Labor that there is an IT labor shortage. Lou Dobbs also got in on the mix as shown in this YouTube video, or take a look at the transcript. This ammunition is used to secure green cards for H-1B Visa workers. It’s repulsive. Bottom line – there is no IT labor shortage.

Here are some more numbers from the Dobbs video. Universities are pumping out over 300,000 bachelors, masters, or PhD degrees annually in computer or information science, math, and engineering. The Department of Labor predicts the average yearly job creation in those fields to be 120,000 jobs.

I’m a believer in competition, but it must be fair. Data suggests that on average, H-1B Visa Holders are paid between $12,500 and $20,000 less than their American counterparts. I’m not anti-H-1B. I’ve worked with a large share of very good developers who were H-1B visa holders. Unfortunately, the H-1B visa program is being used to replace the jobs of U.S. IT professionals with cheaper labor.

A two pronged approach is required to fix the problem and requires a professional code of conduct between employees and employers. The result is a win-win-win situation for all involved. First, we need not eliminate or minimize the H-1B visa program, but instead must bring the salaries of visa holders up to levels equal to that of their American peers. Second, we must reform IT through incremental delivery of quality software. Until these happen, U.S. citizens will continue to suffer job loss due to anti-competitive and fraudulent practices.

4 thoughts on “The H-1B Fraud

  1. Let the market sort it out.

    The H-1B visa program may be in need of reform, but not in the way that Senators Durbin and Grassley propose. US companies should not be forced to favor US citizens over H-1B visa holders. This gives foreign companies an advantage in recruiting, as they can choose the best engineer regardless of citizenship.

    This proposed H-1B visa reform looks an awful lot like affirmative action to me. I am an opponent of affirmative action as reverse discrimination, and so I must also oppose this proposed reform.

    It’s simple supply and demand. If indeed there is no IT labor shortage, then the market should and will drive down wages. And if there is in fact an IT labor shortage, then US companies need to find those workers. Either way, this reform interferes with the market forces.

    I have worked along side H-1B workers, and I must report that there are good and bad engineers on both sides of the border. I know how to sell my services based on my own skill set, and I do not feel threatened in the least by my Eastern counterparts.

    The American software engineer is not in need of protection. We are quite capable of competing in an open marketplace. The American company, on the other hand, is in danger of over-regulation if this reform is enacted.

  2. I never stated that organizations should be forced to favor US citizens over H-1B visa holders. I’m not asking for protection. IT failure has contributed to the situation.

    I do believe it should be an even playing field, but that two things must happen to fix the problem. First, industry shouldn’t be allowed to artificially deflate salaries and displace US citizens with cheaper labor. Second, IT must become a trusted business partner and deliver quality software. One without the other will not work.

  3. I’m not sure what the proposed answer is supposed to be; I would think that the Right Answer to the problem would be to make the visas a LOT more transferrable, and NOT so tied to the company that sponsors it. The reason why companies can get away with paying H1-B holders less money is that they know that there is no competition; the employee’s option is to either accept the situation, or return to their former country. It’s not “indentured servitude,” but there is an uncomfortable similarity.

    If the H1-B holders were more readily able to transfer around, that should have “positive competitive effects.” Yes, indeed, make it an “open marketplace.”

    Note: I’m a Canadian (born in Canada, of Anglo-Saxon extraction) who spent 5 years on an H1-B during the start of the “controversial time” (1996-2001). I wasn’t one of the hordes of Indian, Russian, and Chinese workers where it’s entirely plausible that there’s *some* latent racism involved…

  4. The problem with H-1B is it exists in the context of a closed economy. There’s a wall on our border to mexico. There’s a customs screen at every airport. We aren’t letting unskilled workers in.

    When Indian programmers eat in India, they pay the fast food worker 50 cents an hour. We pay ours $8/hr in the US. While programmers may be making 2-3 times as much in the US; unskilled labor is making 60 TIMES their overseas counterparts! And yet, it’s the programmers who are accused of market protection of being overpaid.

    When Indians pay their maids in India, it’s–once again–50 cents an hour. When American programmers pay their–oh–I forgot, they can’t afford them.

    When Indians programmers send their children to the best colleges in India, they pay a reasonable rate. When American programmers send their–oh I forgot, they can’t afford them.

    We can’t ask American programmers to continue to compete on a global basis if noone else has to. If you want IT rates to fall AND you also want happy programmers, you have to start letting in manual labor and workers from other professions.

    Programming is DIFFICULT (compared to most other jobs.) There should be a shortage.

    Globally there is. Programmers make ten times more than truck drivers in nearly every country in the world–except the United States.

    If you want to be a third world country–just go ahead and be a third world country. But a free market one.

    There’s no reason to continue to coddle the unskilled.

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