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You seem to be suggesting that the H1B pulls wages up because the median pay is higher than the median overall pay in the country? That’s not a valid comparison

You seem to be suggesting that the H1B pulls wages up because the median pay is higher than the median overall pay in the country? That’s not a valid comparison, you’d have to compare the H1B’s salary to the median pay in their specialty.

alephnerd 1y ago
The math of bringing an employee onsite on an H1B just to depress wages does not work unless it is below the 25th percentile of wages (which is $90k). Once you are breaking the $100k mark and want to only save costs, you are better off opening a GCC in Eastern Europe, Israel, or India, which is what most companies started doing once remote work became normalized in the early 2020s. All this did is make a free "Thousand Talents" program for India, especially in chemical, petroleum, biopharma, and biochemical engineering - industries where the delta between US and India salaries aren't significant but the talent gap in the US is real. There are much smarter ways to crack down on H1B abuse by consultancies - this ain't it. Edit: can't reply, but here's why this is dumb Assuming I am in Dallas (a fairly prominent domestic IT services hub) and hiring an H1B employee. In Dallas, a wage around $95k base is fairly standard based on JPMC, DXC, and C1's salaries in the area. That $95k an employee is has an additional 18% in employer required taxes and withholdings. Add to that an additional 5-10% for retirement account and insurance plans. That $95k employee became around $115k-125k. Once salaries start breaking into the 6 figure mark, that 23-35% in overhead starts adding up very fast. On top of that visa processing before this rule costed around $15-20k in additional legal fees on the employer's side. If I'm at the point where I'm paying a low six figure salary, I'm better off opening an office in Warsaw or Praha or Hyderabad where I can safely pay $50k-60k in base to get top 10% talent while getting a $10k-20k per head tax credit over a 3-5 year period depending on the amount I invest building a GCC because my after tax cost at that point becomes $50-60k per employee. These credits tend to require a $1M investment, and with the proposed H1B fee, this made that kind of FDI much easier to justify than it was before. At least with the current status quo, if I was hiring an ML Engineer at MS or an SRE at Google (a large number of whom are H1Bs as well), I could justify hiring within the US, but adding an additional $100K filing fee just gives me no incentive at all to expand headcount domestically. You don't use the stick if you also don't have the carrot. > You are not taking into account section 174, It takes you 15 years to depreciate foreign salary vs first year That's a rounding error now that it costs $100K to renew or apply for an H1B visa. And for larger organizations breaking the mid-8 figures in revenue mark, section 174 changes never had an impact one way or the other - it was mostly local dev shops and MSPs that faced the brunt of the section 174 onslaught. > Honestly, even Germany is probably better bang-for-the-buck than Hyderabad Germany needs to severely reduce employer contributions and taxes to become cost competitive against Warsaw, Praha, or Hyd for software and chip design jobs. That said, this is a net positive for Germany's biotech, mechanical, biopharma, and other engineering industries that aren't software or chip design related.
- prpl 1y ago
  Hyderabad is not that cheap for the top 10%, probably closer 90-100k base. Honestly, even Germany is probably better bang-for-the-buck than Hyderabad, but Hyderabad has the volume and the offices.
- dgs_sgd 1y ago
  I’m sorry but I don’t follow. What bearing does the 25th percentile H1B wage have on suppressing wages in a particular role or specialty?
- Vvector 1y ago
  If the local market for American DBAs is $180k, then hiring H1B DBAs at $110k does depress wages.
  - jopsen 1y ago
    Sure, but if the local market is that high you probably have sever supply constraints. If you don't fix the supply constraints, you'll depress growth. You could fix the education system - good luck - and then wait 5 years before you cut H1B. But yes, obviously it depressed wages, which at a certain point is probably a good thing.
- nobodyandproud 1y ago
  Care to provide a google sheets outlining why it doesn’t work?
- myrmidon 1y ago
  > Praha This is a pet peeve of mine, but there is an english name for that city and it's Prague. There is no point in using the local spelling because it adds no clarity, is less obvious to pronounce for any reader and the locals are not really gonna thank you for doing this either. Just seems like a form of light cultural white-knighting to me. You are not even consistent because Warsaw is not how locals spell that.
  - NoMoreNicksLeft 1y ago
guywithahat 1y ago
Not only that, but you'd have to do a study to show that the talent couldn't have been trained in the US, and that an increased supply of workers didn't drag down salaries, either short or long-term. Immigration helps the countries top-line metrics, but it rarely helps the citizens inside the country.
- sgc 1y ago
  There used to be a much stronger push for education in the US. Perhaps if companies could not "just hire from overseas" or "just outsource" there would be a longer term growth strategy that would focus more on the education of the US population (not just training for this or that job). It did seem in the past that there was much more of an all-hands-on-deck attitude towards education throughout US corporate activities, more broadly focused on the general fields the various companies valued the most. I suspect this fall off is very real, but don't actually know if that is just my impression or if there is a concrete effect from modern economic structures. It's an important enough question it should definitely be studied and taken into account in policy. However I can't agree with your conclusion that "Immigration helps the countries [sic] top-line metrics, but it rarely helps the citizens inside the country". That requires meta studies that I have never seen to prove it is so. I could cautiously accept that "some types of immigration rarely help corresponding sections of the local population" much more than such a blanket judgement. Overall, it is just not true that economics is zero sum. It doesn't have to be. An entire people can in fact flourish.
  - typewithrhythm 1y ago
    It's so hard to study; one of the key things you loose in an environment where you bring in bulk migrants is a cultural expectation to interact with juniors that are part of your community. It's not just a supply and demand equation; it's a fundamentally different environment that changes the social payoff for mentoring, networking, and building a reputation. Ultimately despite all the propaganda trying to convince us that diversity is inherently beneficial, we are trading economic benefits for social costs. So we need to carefully restrict migration to make sure the economic benefits are actually there.
legitster 1y ago
You can! If you look at the report it breaks down H1b pay range by occupation and education level. An H1b software engineer median is ~$120k. Using other official sources, the median pay for US software engineers overall is... ~$120k.
- dgs_sgd 1y ago
  Interesting. I think this gets at guywithhat’s sibling comment: > you'd have to do a study to show that the talent couldn't have been trained in the US, and that an increased supply of workers didn't drag down salaries, either short or long-term. If the median H1B for software is exactly the same as the overall median, it makes you wonder if the median would be different if the H1B was not an option available to employers.
  - lucketone 1y ago
    It would definitely be higher. Lower supply tends to drive the price up.
    - DaveZale 1y ago
      I saw this in my specialized science field too, in California a couple of decades ago. Real wages for that work have dropped 5 fold at least, partly due to automation, but I saw labs that were 100% immigrants, many H1Bs. Not complaining, just observing. were H1Bs necessary though? No. Many US born in that field found themselves jobless upon graduation. It was all about cheap labor
      - stanford_labrat 1y ago
        yup, anecdotally the majority of postdocs these days are internationals who are willing to work 60+ hour weeks on $50k a year, for the infinitesimal chance to land a R1 tenure-track faculty position. americans have no interest in getting a phd and then subjecting themselves to this kind of indentured servitude.
  - 1y ago

alephnerd 1y ago

The math of bringing an employee onsite on an H1B just to depress wages does not work unless it is below the 25th percentile of wages (which is $90k). Once you are breaking the $100k mark and want to only save costs, you are better off opening a GCC in Eastern Europe, Israel, or India, which is what most companies started doing once remote work became normalized in the early 2020s. All this did is make a free "Thousand Talents" program for India, especially in chemical, petroleum, biopharma, and biochemical engineering - industries where the delta between US and India salaries aren't significant but the talent gap in the US is real. There are much smarter ways to crack down on H1B abuse by consultancies - this ain't it. Edit: can't reply, but here's why this is dumb Assuming I am in Dallas (a fairly prominent domestic IT services hub) and hiring an H1B employee. In Dallas, a wage around $95k base is fairly standard based on JPMC, DXC, and C1's salaries in the area. That $95k an employee is has an additional 18% in employer required taxes and withholdings. Add to that an additional 5-10% for retirement account and insurance plans. That $95k employee became around $115k-125k. Once salaries start breaking into the 6 figure mark, that 23-35% in overhead starts adding up very fast. On top of that visa processing before this rule costed around $15-20k in additional legal fees on the employer's side. If I'm at the point where I'm paying a low six figure salary, I'm better off opening an office in Warsaw or Praha or Hyderabad where I can safely pay $50k-60k in base to get top 10% talent while getting a $10k-20k per head tax credit over a 3-5 year period depending on the amount I invest building a GCC because my after tax cost at that point becomes $50-60k per employee. These credits tend to require a $1M investment, and with the proposed H1B fee, this made that kind of FDI much easier to justify than it was before. At least with the current status quo, if I was hiring an ML Engineer at MS or an SRE at Google (a large number of whom are H1Bs as well), I could justify hiring within the US, but adding an additional $100K filing fee just gives me no incentive at all to expand headcount domestically. You don't use the stick if you also don't have the carrot. > You are not taking into account section 174, It takes you 15 years to depreciate foreign salary vs first year That's a rounding error now that it costs $100K to renew or apply for an H1B visa. And for larger organizations breaking the mid-8 figures in revenue mark, section 174 changes never had an impact one way or the other - it was mostly local dev shops and MSPs that faced the brunt of the section 174 onslaught. > Honestly, even Germany is probably better bang-for-the-buck than Hyderabad Germany needs to severely reduce employer contributions and taxes to become cost competitive against Warsaw, Praha, or Hyd for software and chip design jobs. That said, this is a net positive for Germany's biotech, mechanical, biopharma, and other engineering industries that aren't software or chip design related.

prpl 1y ago
Hyderabad is not that cheap for the top 10%, probably closer 90-100k base. Honestly, even Germany is probably better bang-for-the-buck than Hyderabad, but Hyderabad has the volume and the offices.
dgs_sgd 1y ago
I’m sorry but I don’t follow. What bearing does the 25th percentile H1B wage have on suppressing wages in a particular role or specialty?
Vvector 1y ago
If the local market for American DBAs is $180k, then hiring H1B DBAs at $110k does depress wages.
- jopsen 1y ago
  Sure, but if the local market is that high you probably have sever supply constraints. If you don't fix the supply constraints, you'll depress growth. You could fix the education system - good luck - and then wait 5 years before you cut H1B. But yes, obviously it depressed wages, which at a certain point is probably a good thing.
nobodyandproud 1y ago
Care to provide a google sheets outlining why it doesn’t work?
myrmidon 1y ago
> Praha This is a pet peeve of mine, but there is an english name for that city and it's Prague. There is no point in using the local spelling because it adds no clarity, is less obvious to pronounce for any reader and the locals are not really gonna thank you for doing this either. Just seems like a form of light cultural white-knighting to me. You are not even consistent because Warsaw is not how locals spell that.
- NoMoreNicksLeft 1y ago

guywithahat 1y ago

Not only that, but you'd have to do a study to show that the talent couldn't have been trained in the US, and that an increased supply of workers didn't drag down salaries, either short or long-term. Immigration helps the countries top-line metrics, but it rarely helps the citizens inside the country.

sgc 1y ago
There used to be a much stronger push for education in the US. Perhaps if companies could not "just hire from overseas" or "just outsource" there would be a longer term growth strategy that would focus more on the education of the US population (not just training for this or that job). It did seem in the past that there was much more of an all-hands-on-deck attitude towards education throughout US corporate activities, more broadly focused on the general fields the various companies valued the most. I suspect this fall off is very real, but don't actually know if that is just my impression or if there is a concrete effect from modern economic structures. It's an important enough question it should definitely be studied and taken into account in policy. However I can't agree with your conclusion that "Immigration helps the countries [sic] top-line metrics, but it rarely helps the citizens inside the country". That requires meta studies that I have never seen to prove it is so. I could cautiously accept that "some types of immigration rarely help corresponding sections of the local population" much more than such a blanket judgement. Overall, it is just not true that economics is zero sum. It doesn't have to be. An entire people can in fact flourish.
- typewithrhythm 1y ago
  It's so hard to study; one of the key things you loose in an environment where you bring in bulk migrants is a cultural expectation to interact with juniors that are part of your community. It's not just a supply and demand equation; it's a fundamentally different environment that changes the social payoff for mentoring, networking, and building a reputation. Ultimately despite all the propaganda trying to convince us that diversity is inherently beneficial, we are trading economic benefits for social costs. So we need to carefully restrict migration to make sure the economic benefits are actually there.

legitster 1y ago

You can! If you look at the report it breaks down H1b pay range by occupation and education level. An H1b software engineer median is ~$120k. Using other official sources, the median pay for US software engineers overall is... ~$120k.

dgs_sgd 1y ago
Interesting. I think this gets at guywithhat’s sibling comment: > you'd have to do a study to show that the talent couldn't have been trained in the US, and that an increased supply of workers didn't drag down salaries, either short or long-term. If the median H1B for software is exactly the same as the overall median, it makes you wonder if the median would be different if the H1B was not an option available to employers.
- lucketone 1y ago
  It would definitely be higher. Lower supply tends to drive the price up.
  - DaveZale 1y ago
    I saw this in my specialized science field too, in California a couple of decades ago. Real wages for that work have dropped 5 fold at least, partly due to automation, but I saw labs that were 100% immigrants, many H1Bs. Not complaining, just observing. were H1Bs necessary though? No. Many US born in that field found themselves jobless upon graduation. It was all about cheap labor
    - stanford_labrat 1y ago
      yup, anecdotally the majority of postdocs these days are internationals who are willing to work 60+ hour weeks on $50k a year, for the infinitesimal chance to land a R1 tenure-track faculty position. americans have no interest in getting a phd and then subjecting themselves to this kind of indentured servitude.
- 1y ago