Yes, I’m being a bit silly.
So one of the big issues from the Trump admin is immigration, especially with regards to the DEY TOOK ERR JERRRRRRRBS aspect.
For the longest time, people assumed these jobs being taken were more of the nasty “jobs Americans won’t do”, but the argument was there were “jobs Americans can’t do” because it required very specific skill sets.
Like the skill of getting paid half of what American citizens or green card holders would demand.
LET’S HEAR IT FROM ENGINEERS
For example, you point out that, according to H-1BPay.com, Facebook pays its software engineers in Menlo Park, on average, US $138,294, which is a pretty good salary. However, Smartorg pays software engineers on H-1B visas in Menlo Park only $80,000 annually, which is a ridiculously low salary for the San Jose region.
This difference illustrates an important point about H-1B visas. While some companies pay their H-1B employees’ salaries equivalent to what American workers get paid, many companies do not. In fact, most H-1B visas are used, not by Facebook and other big tech companies, but by outsourcing and consulting companies.
And the salaries paid by those companies tell a different story.
For example, Wipro, a large outsourcing company, paid its 104 program analysts in San Jose exactly $60,000 each in 2016. Brocade, in contrast, paid their programmer analysts $130,000 in the same city.
What’s the difference? Infosys, Cognizant, Wipro, and Tata are all outsourcing companies. Their business model involves using H-1B visas to bring low-cost workers into the United States and then renting those workers to other companies. Their competitive advantage is price. That is, they make their money by renting their workers for less than companies would have to pay American workers.
This is the real story of the H-1B visa. It is a tool used by companies to avoid hiring American workers, and avoid paying American wages. For every visa used by Google to hire a talented non-American for $126,000, ten Americans are replaced by outsourcing companies paying their H-1B workers $65,000.
This is why, IEEE-USA opposes efforts to expand the H-1B visa program.
So here’s the deal.
Every time I hear bitching & moaning about lack of STEM workers, once upon a time, I believed that there was a skill lack.
Now I realize that there was a “lack” of cheap STEM workers.
MICHELLE MALKIN INVESTIGATES
Where’s your awareness-raising event for untold thousands of our country’s high-skilled men and women victimized by H-1B visa havoc? Thanks to cheap labor-hungry big businesses and money-grubbing politicians in both parties, every day has become a “Day Without American Tech Workers.”
Our own best and brightest are vanishing in plain sight. It has been going on for decades — and it’s all legal. Several court challenges to the corporate abuse of the program have failed.
So last week, the same workplace nightmare that befell American tech employees at Disney, New York Life, Southern California Edison, and countless other U.S. companies struck the University of California, San Francisco.
That’s right: H-1B hell has engulfed a taxpayer-subsidized institution smack dab in the middle of the West Coast’s liberal paradise. Forty-nine information technology workers at the UC system’s health care and research nerve center officially got the boot last week.
I interviewed a group of those workers last fall at a protest organized by American workers’ advocate and lawyer Sara Blackwell after they got wind of the impending pink slips. Like the Disney workers and thousands of others before them, UCSF’s loyal employees were coerced to dig their own graves: No severance packages unless and until they trained their inexperienced, cheap foreign replacements from India-based HCL Technologies Ltd. by Feb. 28.
Remember the name “HCL Technologies”.
ACADEMIC ECONOMISTS INVESTIGATE
In addition: H-1B Visas Keep Down U.S. Tech Wages, Study Shows
I mainly want to pull out the subtitle:
Research suggests the influx of skilled foreign workers has historically led to lower wages for U.S. employees; economists caution against making too much of the result
Maybe if there were more H1B visa applications for economists (and they weren’t academics with tenure), you might find the economists not making that caution. But we shall see.
Let’s check if I was right about these cautioning economists:
Economists from the University of Michigan and the University of California, San Diego, analyzed employment, wages, and other factos over an eight-year period ending in 2001. They found that, while the visa program bolstered the U.S. economy and corporate profits, tech industry wages would have been as much as 5.1% higher in the absence of the H-1B visa program and employment of U.S. workers in the field would have been as much as 10.8% higher in 2001.
Okay, let’s grab the abstract:
Over the 1990s, the share of foreigners entering the US high-skill workforce grew rapidly.
This migration potentially had a significant effect on US workers, consumers and firms.
To study these effects, we construct a general equilibrium model of the US economy and
calibrate it using data from 1994 to 2001. Built into the model are positive effects high
skilled immigrants have on innovation. Counterfactual simulations based on our model
suggest that immigration increased the overall welfare of US natives, and had significant
distributional consequences. In the absence of immigration, wages for US computer scientists
would have been 2.6% to 5.1% higher and employment in computer science for US
workers would have been 6.1% to 10.8% higher in 2001. On the other hand, complements
in production benefited substantially from immigration, and immigration also lowered
prices and raised the output of IT goods by between 1.9% and 2.5%, thus benefiting
consumers. Finally, firms in the IT sector also earned substantially higher profits due to
In any case, I want to point out: the last year they look at is 2001.
I am curious as to why they didn’t look at more recent data. Or what happened for the few years after 2001.
This is their own explanation:
We focus on the period 1994 to 2001 for a number of reasons. During the latter half of the
1990s, the US economy experienced a productivity growth attributable, at least in part, to the
IT boom, and facilitated by the influx of foreign talent. At the same time, the recruitment of
H-1B labor by US firms was at or close to the H-1B cap during this period, enabling us to treat
foreign supply as exogenous. Finally, more recent growth of the IT sector in India and changes
in the law authorizing the H-1B have complicated the picture since 2001.
In addition, I remember what happened to the IT sector in 2000-2001, as many of my friends got swept up in that. They’re fine now, but some had a rough few years there.
A lot of companies went under or their stock prices collapsed and they had massive layoffs. Perhaps it wouldn’t be fun to look too closely whether there was high outsourcing/H-1B usage in those rough years.
ACTUARIES…NOT HARDEST HIT
So I decided to step over to the data, which are here, and have a bit of fun.
Meh, I’m lazy. Why can’t a bunch of other data heads do the analysis for me?
This data exploration has the most votes, so let’s check it out!
Dang… that’s an ugly graph. Anyway, let’s note: a lot of those employers are consultancies. This will come back in a moment. The employer with the highest number of applications was Infosys, which is an IT consulting firm. Notice that HCL America is there in the highest usage. Deloitte seems to be a bit higher — remember that for a little bit.
Let’s look at a different graph — how about some info on salaries:
Let me explain what you’re looking at. These are called boxplots, which is a way to compare distributions over different categories. Here is an excellent explanation of the features of boxplots, and let me grab this image from that page:
The idea is that the green box marks off the 25th percentile, the median (aka 50th percentile), and 75th percentile — the outer edges are the min/max within certain multiples of the 25th (1/32) and 75th (3/2) percentiles, and the dots are considered “outliers”.
It’s kind of based on assuming “normality” to your data set, though asymmetry and weird features/many outliers would be big indicators that what you’re looking at is not normal at all. We’re seeing a lot of very high and very low outliers on this data. It’s difficult to tell if there’s an underlying bias to the data. The really high points do indicate to me not merely looking for cheap labor, but that there may be specific people they really need for a job.
Those low points, however… let’s look by employer:
These are not for all their H1Bs, but for all the software-related titles. So it seems some of these employers are paying quite high salaries for these people.
But the biggest user of H1Bs, Infosys, is not.
ACTUARIES ARE IN THERE
I know this will only be of interest to actuaries, so I did my own filtering of the data (not from kaggle but from the official government site) and found the following:
- There were 143 named employers of Actuaries (SOC_NAME = ACTUARIES), with certified H-1B visas.
- This represented 2,042 workers…out of a file of 1.2 million
- Of those 2,042 workers, only 4 were hourly, with wages of $31 (2), $34 (1), and $56 (1) per hour.
- The largest employer of H-1B actuaries was Deloitte (remember the above?) at 1,366 workers. At an average prevailing wage of $78,217
- Unfortunately, some of the employers are in the file under various names – that’s what I get for getting a non-cleaned up file from the government.
- Most of the employers by name were insurance companies, not consulting companies. But the consulting companies — Deloitte, PWC, E&Y, Towers Watson, Hewitt Associates, Milliman — were up there with the most applications. Some of those consultancie, like Milliman, are explicitly actuarial consultancies vs. more generic financial consultancies.
I decided to look at denied H-1B applications, and that was only 24 for actuaries. Unsurprisingly, most of the denials were for Deloitte, at 20, and the average prevailing wage for the denied applications was $88,109.
Looking at this info, it seems that the numbers I’m looking at may indicate some duplications or rather, that this is just the certification of prevailing wages, and not if H-1B visas were actually awarded or extended. The number active within a year seems to be less than 200,000, which is clearly much less than 1 million.
But back to my data set — the highest prevailing wages I’m seeing are basically my level. I would think that there might not be much in the way of H-1B visas beyond my level, because you’d hope these people could get green cards and at least be legal immigrants if not yet citizens. The lowest I’m seeing is at $50K, which accords with entry-level salaries at lower-paying companies.
There are only about a few tens of thousands of actuaries in the entire world — that’s credentialed actuaries, mind you. In the last 10 years, less than 67,000 people passed the first actuarial exam (for the U.S. based actuarial orgs — but this exam is given globally). Only 23,000 for one of the later exams. That gives you an idea of the number of people involved. So 2K is pretty substantial… but really, it’s not a huge effect. As this thread indicates, many actuarial employers don’t sponsor H-1B visas, but it’s not a huge effect.
Anyway, yes, several job categories, especially tech-related, have H-1B issues in terms of affecting pay… but it looks like there really are H-1Bs for very highly-paid people.
Labor force participation rates, part 2: Younger Years (under 25) - Bad news?
Labor force participation rates, part 4: Old v. Young
Amassing Predictions for 2016