Will the Trump $100k H1B Visa Change have Unintended Consequences? \ stacker news ~econ

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Will the Trump $100k H1B Visa Change have Unintended Consequences?

890 sats \ 53 comments \ @kepford 22 Sep econ

Honestly, I'm not worried about this any more than most of the things Trump is doing but I think it is good to remind ourselves of trade-offs.

My understanding is that Trump is proposing a yearly $100k fee for corporations that import workers using the H1B program. That's per employee, per year. The idea is that this will discourage the importing of high skilled workers and instead encourage hiring domestic workers. On the surface this makes sense.

Here's the deal. Out-sourcing exists. I think we have seen a trend to out-source for decades and I don't see that letting up. The cost of employees has steadily grown over time thanks to the US governments at different levels. This creates a disincentive to hire employees and instead higher a outside firm. Smart entrepreneurs have smartly started companies in lower wage / high skilled nations for decades. This has grown over time.

To me, this trend will only increase and this change from Trump will only speed it up. I'm sure others have been talking about this. After all, many hate Trump and find all kinds of reasons to oppose him. Often areas that are in direct contradiction to their own politics and history. But still, this seems like an obvious tradeoff.

Its kinda funny because people that oppose raising the minimum wage because of the effects it has on the number of jobs and the costs of goods are in support of things like this. And the inverse is true. People that support the minimum wage oppose this action by Trump. Its kinda fun to watch both sides prove that its all about power and ideology is just a tool they use when they need it.

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287 sats \ 26 replies \ @Undisciplined 22 Sep

It's definitely counter to the stated goal of reshoring industry and jobs to America.

Personally, this bothers me more than many of his dumb policies because I have so many friends it might apply to. They're definitely people I'd rather share a country with than many natural born Americans.

63 sats \ 22 replies \ @HardMoney 23 Sep

I might be cooked lol

0 sats \ 21 replies \ @kepford OP 23 Sep

If you are serious don't take anyone's word. Go read the EO for yourself.

83 sats \ 20 replies \ @HardMoney 23 Sep

I’m on a different visa but the rhetoric won’t surprise me if that eligibility changes or is more difficult to renew.

Prepared mentally to have to move back on short notice

0 sats \ 19 replies \ @spiderman 23 Sep

If you are and immigrant (and statistically speaking, most likely to be Indian or Chinese), then you may consider UAE for work.

Safe, clean streets, no SJW or pride rallies, far lower living cost (compared to major American cities), zero income and capital gains tax and if you get a job at an international bank or hedge fund, they will match London, New York level compensation.

92 sats \ 18 replies \ @HardMoney 23 Sep

Canadian

93 sats \ 0 replies \ @Undisciplined 23 Sep

H1B visas have been a hot topic for a while. There’s a good chance other visa types slide under the radar.

0 sats \ 16 replies \ @spiderman 23 Sep

All the more then given the sorry state of Canadian economy, but up to you.

42 sats \ 15 replies \ @HardMoney 23 Sep

Definitely acknowledged the fleeting Canadian government and economy but there’s a lot of family and friends. I just hope Alberta separates lol

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143 sats \ 1 reply \ @SimpleStacker 22 Sep

I think this one is gonna go TACO. They're either gonna rescind or make such large carveouts that it functionally doesn't matter.

42 sats \ 0 replies \ @carter 23 Sep

well he already exempted doctors and said that it isn't every year like the original announcement

143 sats \ 0 replies \ @kepford OP 22 Sep

Yeah... I know what you mean. I can tell you this. There are many immigrants that are more American than most Americans. Because they chose to come here and have far more opportunities. Opportunities most Americans take for granted.

299 sats \ 13 replies \ @justin_shocknet 22 Sep

discourage the importing of high skilled workers

It discourages importing low skilled workers that suppress wages, think call centers and assembly lines. 100k is immaterial to the high end

You don't simply not use a firewall on your systems because it may block a port you need, you can just whitelist the port (doctors for example)

in lower wage / high skilled nations for decades

Wouldn't effect off-shoring, tariffs and industrial policy do that. What it does disincentivize is the importing labor into relatively fixed supplies of housing and government services on-shore

Often areas that are in direct contradiction to their own politics

Yea, leftists should love this because it's a direct tax on mega-corporations who are increasing the cost-of-living to Americans so they can replace workers with indentured servants

raising the minimum wage

There'd be less bitching about the minimum wage if market wages were higher, which this aims to achieve. On the inverse, the cost of importing these indentured servants is largely borne by the American, not only the administrative costs at the state department but the aforementioned burden on the housing market and government services... it's ending a government subsidy, very pro market.

0 sats \ 3 replies \ @kepford OP 22 Sep

tariffs

Tariffs effect IT off-shoring? That's news to me. If a US company uses contractors in the India they are paying tariffs for this?

10 sats \ 2 replies \ @justin_shocknet 22 Sep

That'd fall more in the industrial or tax policy camp since there's no "product" crossing the border, something to keep in mind when defense spending comes up, every dollar defense spending goes up is one more dollar you have Boeing by the balls when they're deciding to outsource MCAS to TATA.

0 sats \ 1 reply \ @justin_shocknet 23 Sep

17 sats \ 0 replies \ @kepford OP 23 Sep

Ha!

0 sats \ 8 replies \ @kepford OP 22 Sep

It discourages importing low skilled workers that suppress wages, think call centers and assembly lines. 100k is immaterial to the high end

This is not just how the news pitches it. Its how the admin pitches it and why some of Trump's fans in tech don't like it. Regardless, it has tradeoffs.

146 sats \ 7 replies \ @justin_shocknet 22 Sep

Where is the admin pitching it as saying we don't want high-end talent?

Bannon and hard core NatSec people will of course tell you we can count on 10 fingers, over the span of a century, the people we actually need to bring in. But, if that were the admin's position it'd be $10 million, not a measly 100k.

$100k simply doesn't change the math much on the high-end, this is directly targeted at mturks hired en masse via Infosys and TATA.... much of that money laundering / tax evasion to boot.

84 sats \ 6 replies \ @kepford OP 22 Sep

I stand corrected. I misheard this clip of the admin talking about it. They were describing what the H1B is supposed to be for and not suggesting they want to discourage high skilled workers.

17 sats \ 5 replies \ @kepford OP 22 Sep

So it is basically a fee hike which will discourage using the program for lower skilled workers but not high enough to discourage highly skilled workers.

10 sats \ 4 replies \ @justin_shocknet 22 Sep

66 sats \ 1 reply \ @kepford OP 22 Sep

Yeah, I don't doubt it. There are so many abuses of government programs. The government absolutely sucks at administering things at best, at worst they have dark intentions.

10 sats \ 0 replies \ @justin_shocknet 22 Sep

Yes and that's why any change, no matter how obviously positive, is getting unprecedented pushback because there's so much dark money at stake.

NGO funding to program the NPC's with disinformation to bleat against it is a drop in the bucket.

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0 sats \ 0 replies \ @optimism 23 Sep

FWIW I can attest to this as a former hiring manager in the US for an international mid-size company. What was (and I'd guess still is, looking at the stats) happening was that the large consultancy firms would get cheap labor from overseas under H1B because the commercial rate of a junior consultant (aka someone that doesn't know anything but has great education) in the US was/is 20x-50x that of someone in South Asia or Eastern Europe. So if you give them a 5x raise you'd make 4x more money from letting the person talk to the customer from the US instead of their home country.

We mostly needed to get experienced engineers (to make field service more robust, because it was hard to get people with proper experience in the US) over from Western/Central Europe, and we were often not getting H1B allocations - these would go to Accenture & co instead - when we needed them, so instead we'd get people to Canada where there was no upper limit for experienced engineers, and only managers (including me) were under L1 in the US. Then at least, if field support was in need in the US, at least they were relatively close, rather than having to subject them to 8-12 hour flight plans.

0 sats \ 0 replies \ @nitter 22 Sep

https://xcancel.com/USTechWorkers/status/1891345174183252300

100 sats \ 1 reply \ @ogE 22 Sep

I was a graduate professor at an R1 university teaching IT field where students went directly to Amazon, Uber, Microsoft, Meta, etc. Graduate school class sizes are small (~20 students) and in a normal class I had MAYBE 5 US citizens. The rest were primarily Chinese and Indian who needed an H1B to work.

If a large tech company needs a resource, H1B resources are the majority of what is available and large corps don't care about an extra $100k/yr.

Smaller firms will, however, and they will need to start switching their thinking as they cannot afford an additional $100k (effectively doubling what that resource costs). So overall there will be less opportunities for Int'l students if this passes and still doesn't solve the issue of so few US citizens going to grad school.

0 sats \ 0 replies \ @kepford OP 22 Sep

Smaller firms will, however, and they will need to start switching their thinking as they cannot afford an additional $100k (effectively doubling what that resource costs).

Very common side effect of government action. It hurts the smaller businesses more than the larger who can better absorb the costs. You see it in regulation and tax/fees.

50 sats \ 0 replies \ @Signal312 22 Sep

Apparently it's still somewhat unclear, but at this point it's looks like it's only for new petitions, or company changes, and not an annual fee. Some news sources are reporting that it's annual, though.

If it were really annual, I think it would kill this visa program dead.

100 sats \ 5 replies \ @Solomonsatoshi 22 Sep

Result will be acceleration of the loss of skilled technicians within the US workforce and acceleration of the relocation of high tech development overseas. US has not invested in the skills required - the cult of financialisation has resulted in a workforce bloated with property speculators, lawyers and investment advisors but hugely lacking skilled engineers and technicians. USA does not have the engineers and technicians required to produce things anymore. The ones it does have are almost all Chinese or Indian. The culture of financialisation has gutted the US manufacturing/engineering capacity.

21 sats \ 0 replies \ @SimpleStacker 22 Sep

I agree with this.

7 sats \ 3 replies \ @xz 23 Sep

I agree with the caveat that if you want to reverse such a trend, you should do something like this.

0 sats \ 2 replies \ @Solomonsatoshi 23 Sep

IMO you need to stop the banks issuing endless fiat debt to prop up non productive speculative assets.

And invest strongly in rebuilding a culture of engineering and production and crush the fiat debt leveraged financialised non productive speculative culture that has developed ever since all restrictions and requirements were removed from commercial banks (during the neoliberal deregulation of the 1980s) regarding the purpose to which they could issue fiat debt capital funding.

Restrict commercial banks to the funding of productive assets and infrastructure- they should have no business in issuing fist debt funding toward non productive speculative assets, like housing.

14 sats \ 1 reply \ @xz 23 Sep

Agree that these broad policy changes are needed. Not sure whether the 'non-productive' part is the problem. Housing, to my mind, is a huge problem because

Skewing the supply/demand metrics and encouraging speculation. Inflating the demand for housing, and simultaneously creating ill-designed new supply, is not working well, people need communities.
Demand: Housing is a basic survival utility for every person, not just per household (some people do not have families cannot co-habit etc.) so, demand should be priority.

So yeah, when governments break the basic utilitarian needs of most people, with price [x] earnings multiples ,of lowest cost housing supply, it's basically acting against the wishes of its people. Income generation through skills and education would come with community.

0 sats \ 0 replies \ @Solomonsatoshi 23 Sep

The reasoning behind fiat money banking is this- You can create new money when you create funding for productive investments that are likely to increase the net wealth creation of the economy. If this occurs then the debasement that results whenever fiat money is created via debt is compensated for. Commercial banks ability to issue fiat debt money/finance was based upon their claim to be able to assess investment proposals and to gauge the probability these proposals could succeed in being profitable and thus increasing the net wealth of the economy. But neoliberal deregulation removed that requirement- commercial banks were now allowed to issue fiat debt finance toward any purpose- one likely to create wealth or one that is purely non productive speculation. Guess what happened since that deregulation- a whole lot of fiat debt funding poured into housing and other non productive purposes that do not increase the wealth of the economy. And a whole lot less funding of potentially productive investment proposals because why would bankers take that risk when funding housing is almost zero risk... Yes there was the GFC where even the low risk of housing mortgages was realised, but since the 1980s there has been a huge shift away from banks funding productive investments and a huge shift into funding non productive speculation- because they could. Prior to neoliberal deregulation they couldn't do that but since they have and the wests productive assets and infrastructure have steadily declined while parasitic rentseeking housing bubbles have inflated and sucked wealth out of the economy...only kept inflated by more and more debt.

14 sats \ 0 replies \ @tomlaies 22 Sep

It might create unexpected rocket fast economic growth to unexpected places if the big tech companies employ these people in other offices around the world instead. Maybe Canada/UK/AUS/NZ. Maybe Singapore. Maybe somewhere else unexpected.

0 sats \ 0 replies \ @carter 23 Sep

literally already affected us at work

0 sats \ 0 replies \ @spiderman 23 Sep

Hard to know what are the intended consequences. I suspect parts of it may be

Yes, keep more jobs for Americans (green card holders or citizen)
collect a bit more in revenue (we all know the national debt is not going anywhere)

The unintended consequence

instead of in-shoring of employees (foreign workers), there is off-shoring of jobs