Artificially Constrained Supply

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Vikram Bath

Vikram Bath is the pseudonym of a former business school professor living in the United States with his wife, daughter, and dog. (Dog pictured.) His current interests include amateur philosophy of science, business, and economics. Tweet at him at @vikrambath1.

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  1. Avatar Saul Degraw
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    says:

    I agree with your overall point that nation-state borders are a way of limiting supply for potential employees. I also generally prefer liberal immigration policies and would probably get rid of the part of HB-1 Visas which ties it to a particular employer.

    My question is why shouldn’t people people care about borders for any reason. Despite the fact that Americans get bashed for it more, I think most people would have a hard time accepting any form of government broader than the nation-state. There are a lot of examples of multi-ethnic states eventually splintering into smaller or relatively smaller nations. Examples that come off the top of my head are the former Chezchslovakia, Yugoslavia, India, Pakistan, Bangladesh, etc. These nation-states form for a variety of economic and non-economic reasons.

    There seems to be a small but sometimes powerful group of people who generally think that the nation-state is outdated. This was generally assorted with the left (rootless cosmopolitan commies) but is now increasingly assorted with the so-called global elite who have more in common with themselves than their fellow countrymen and also more zealous advocates of free-market capitalism. These people probably gain more from increased immigration than anyone else. Do you disagree?

    It shouldn’t be a shocker that people care about their incomes and are concerned about their incomes going down. It also shouldn’t be a shocker than when ultra-wealthy people and corporations complain about needing HB-1 Visas because there is a STEM shortage or people in the US aren’t up to snuff, it is not going to pass a smell test. Why should people care about the free-market economics more than their own livlihoods, incomes, or that of their fellow citizens? I think the second essay is correct. The really rich are jumping out and down and declaring market failure when part of the market includes nation-states and boarders and laws. There is never going to be a wholly free-market without boarders and immigration until you find a way to get rid of all-nation states.

    This feels like one of those times when people with an argument would rather just declare their opposition wrong instead of doing the harder task of telling people why they should be okay with lower incomes. Letting more people in on HB-1 Visas does not seem to be the kind of economics which will lower the price of goods, it seems to be the kind that will only lower pay without benefits to anyone except the already really rich and corporations.Report

    • Avatar Vikram Bath in reply to Saul Degraw
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      says:

      Why should people care about the free-market economics more than their own livlihoods, incomes, or that of their fellow citizens?

      Acceptable argument: I don’t care about free-market economics, I care about my income level.

      Unacceptable argument: Preserve my income level by restricting my competitors in the name of free-market economics.

      The two essays I quote are trying to do the latter.

      [Global elite] probably gain more from increased immigration than anyone else. Do you disagree?

      I disagree in terms of welfare. In absolute dollar terms, I also disagree. In terms of dollars per person, I agree.Report

      • Avatar Saul Degraw in reply to Vikram Bath
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        says:

        Who are the competitors? Other programmers? The employers? Other programmers in the same country?

        We still aren’t getting above the nation-state problem. So far the Nation-State is largely the highest level of government people are willing to accept for many laws and reasons except extremely limited circumstances and variations depending on the particular-nation and also in different manners. A nation that accepts the Kyoto Protocol and the Berne Convention might not accept the Geneva Convention and the International Criminal Court and vice-versa.

        The European Union was a noble idea but it doesn’t seem to be doing so well right now and they are having trouble figuring out how to simultaneously handle inflation in Germany and deflation in Spain.

        How are you going to get people to think beyond the nation-state beyond forcing them to do so against their political will? It seems the only way to get open boarders is by subverting democracy.Report

      • Avatar Vikram Bath in reply to Vikram Bath
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        says:

        Who are the competitors?

        In this case, other programmers willing and able to work but unable to due to regulations.

        I think you think I’m claiming more than I am. I haven’t argued here that we should allow H1-B immigrants. I’ve argued against pretending that opposition to any sort of immigration is somehow about respecting supply and demand.Report

      • Avatar Kimmi in reply to Vikram Bath
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        says:

        I don’t consider Refusing to hire Anyone who is American in favor of work-slaves under the H1-B to be free market economics.

        If the h1-B holders had the same protections as Americans, then we could maybe talk about a free market.

        There can be no free market without a level playing field, and you don’t have that here.Report

      • Avatar j r in reply to Vikram Bath
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        says:

        I don’t consider Refusing to hire Anyone who is American in favor of work-slaves under the H1-B to be free market economics.

        If this actually happened with any sort of frequency, you might have a point.

        In real life, employers will almost always choose to hire the American, because the cost and hassle of sponsoring someone for an H1-B is significant.Report

      • Avatar Kimmi in reply to Vikram Bath
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        says:

        http://it.slashdot.org/story/14/10/07/1730254/former-infosys-recruiter-says-he-was-told-not-to-hire-us-workers

        This is not uncommon in Silicon Valley. I’ll leave veronica to talk about this, as she’s lived there.Report

      • Avatar Patrick in reply to Vikram Bath
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        says:

        We still aren’t getting above the nation-state problem. So far the Nation-State is largely the highest level of government people are willing to accept for many laws and reasons except extremely limited circumstances and variations depending on the particular-nation and also in different manners.

        It’s almost as if the Eurozone doesn’t exist…Report

      • Avatar Jaybird in reply to Vikram Bath
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        says:

        It’s a construct.Report

      • Avatar Saul Degraw in reply to Vikram Bath
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        says:

        @patrick @jaybird

        I mentioned the Eurozone and it seems to be having problems because of Germany’s outsized influence and other factors. I also think it did increase a rise in anti-Eurozone parties like the U.K. Independence Party and Greece’s Golden Dawn which are anti-immigrant including from European countries.Report

      • Avatar Patrick in reply to Vikram Bath
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        says:

        Sure, the Eurozone has problems. So does the U.S.

        It just seems weird to me that Americans kinda forget that it’s there, or assume that because it has trouble with its fiscal policy that the whole kit and kaboodle is ready to unravel entirely.

        Right now you can be born anywhere in the Eurozone, pack up your stuff, and go to anywhere else in the Eurozone to work. All EU citizens have freedom of movement. Even if the Eurozone has problems with the economic part, I don’t see France telling Germany that Germans aren’t welcome in France any more. I also don’t see France or Germany not thinking of themselves as a nation state.

        Basically, the train of thought that “nothing bigger than the nation state exists” kinda elides over both the existence of the USSR and the EU, which means I think most of the folks who think that the nation state is some sort of inevitable top-stopping state of organization have a semantic problem.Report

      • Avatar Matty in reply to Vikram Bath
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        says:

        The fellow citizens bit is one that always confuses me a little. Like a lot of people I have friends and indeed relatives of different nationalities but this thinking seems to assume those I have never met but who hold the same kind of passport are more ‘my people’ than those family members.

        I can understand that it is in my self interest to prefer that I get the job but not why I should prefer that it goes to a British citizen I don’t know rather than my Canadian cousin.Report

    • Avatar Creon Critic in reply to Saul Degraw
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      says:

      @saul-degraw

      Letting more people in on HB-1 Visas does not seem to be the kind of economics which will lower the price of goods, it seems to be the kind that will only lower pay without benefits to anyone except the already really rich and corporations.

      I think one of the often overlooked competitive advantages of the United States is that we have a great deal of success integrating people from all over the world into our society. People can come here and become American more readily than people can go to Japan and become Japanese say. The US also benefits from being a sought after destination of prospective emigrants. It seems like willfully squandering those competitive advantages to erect boundaries to admitting bright, capable workers.

      And I think the software industry, and other skilled work fields, make a good argument that there isn’t a zero-sumness to this that’s inherent in the way you’ve framed the situation. Bringing a brilliant programmer from India helps catalyze software development in the US. That company can hire more US employees as a consequence. Furthermore, having a critical mass of highly capable programmers means attracting further talent. Turning down highly skilled labor is not a strategy for national competitiveness.

      Lastly, you’ve neglected the benefit to the consumer. Consumers benefit from higher quality products when a company has been able to assemble the workforce it felt it needed to put together a product, rather than when companies continually confront the fairly arbitrarily obstacles dictated by international borders in bringing together a talented team to work on a project. (And despite the advent of the internet, geography still matters a great deal. Face to face interaction matters.)

      My two cents anyway. Here’s a, less famous than it should be, exchange between Bill Gates and a member of Congress on the issue.

      MR. GATES: These top people are going to be hired. But just a question of what country they do their work in —

      MR. ROHRABACHER: I’m really not talking about top people here. You know, the —

      MR. GATES: — These —

      MR. ROHRABACHER: There are a lot of other people in the society rather than just the top people.

      MR. GATES: That’s right.

      MR. ROHRABACHER: It’s the B and C students that fight for our country and kept it free so that people like yourself would have the opportunity that you’ve had. Those people, whether or not they get displaced by the top people from another country is not our goal. Our goal isn’t to replace the job of the B student with A students from India.

      MR. GATES: That’s right. And —

      MR. ROHRABACHER: And the B students deserve to have good jobs and high-paying jobs.

      MR. GATES: That’s right. And what I’ve said here is that when we bring in these world-class engineers, we create jobs around them.

      MR. ROHRABACHER: Okay.

      MR. GATES: And if we don’t — so the B and C students are the ones who get those jobs around these top engineers. And if these top engineers are forced to work, say in India, we will hire the B and C students from India to work around them.

      Report

      • Avatar Saul Degraw in reply to Creon Critic
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        says:

        @creon-critic

        1. I agree with you about the comparative advantage of the United States when it comes to assimilation and making people American. It probably helps that people are exposed to a lot of American culture before they move here.

        2. As I stated below, I’d be more likely to support more immigration if it was not tied to a particular employer in any way, shape, or form. The reason employers like HB-1 Visas more is because they are tied to employment. Would there be as much pressure to increase the number of HB-1 Visas if this wasn’t true? My guess is not.

        3. I agree that there could be benefits to the consumer but I have a wholistic view of human beings and myself and don’t think it is unreasonable for people to think of how they benefit as workers as well as consumers. My biggest problem with the more free-market economists is that they tend to underplay people as workers-employees and overplay people as consumers. If my rent and insurance keeps on going up but not my income, I am going to care severely even if food is a bit cheaper or computer products, the lower costs there are probably not going to be enough to make up for the rising rent and insurance unless it is really drastic as price reduction.Report

      • Avatar j r in reply to Creon Critic
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        says:

        My biggest problem with the more free-market economists is that they tend to underplay people as workers-employees and overplay people as consumers.

        To me, you have this backwards. It is the protectionist on the right and the left who are forever consumed with nominal wages, when they ought to be thinking about real wages.Report

  2. Avatar Kazzy
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    says:

    Holy shit… that second quote is DISGUSTING!

    First off, exactly what genes code for the disposition towards selling drugs?

    Second off, what the hell is the point of comparing an after-tax salary to child support payments?

    Third, does he have any fucking clue how hard it is to raise 2 kids in most parts of Massachusetts on $57K a year? It is certainly doable — and many parents do more with less — but he talks about it like it is some walk in the park.

    What the F is that guy’s problem?Report

    • Avatar Vikram Bath in reply to Kazzy
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      says:

      I removed the drug thing. He was actually trying to say that genes do *not* code for wanting to sell drugs (and analogically that there are no genes that code for being a great programmer. He has my apologies for the poor job I did shortening the excerpt.

      comparing an after-tax salary to child support payments?

      He argues that computer programmers are paid comparatively low for the work they perform.Report

    • Avatar Alan Scott in reply to Kazzy
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      says:

      I just clicked on the link to see if there was any kind of context in the rest of the article to make this not random and horrible.

      There’s a little bit extra on drug dealers that Vikram cut from the quote, but it’s no less random and horrible. There isn’t anything else about child support in that article, but looking around on his blog, it seems like divorce, child support and alimony issues are his bete noire. It’s all very ugly in that “clearly something shitty happened to this guy once, and he’s letting it poison his feelings about women” sense.Report

    • Avatar ScarletNumbers in reply to Kazzy
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      says:

      One of Greenspun’s main topics of discussion on his blog is how women in America (in general) and women in Massachusetts (specifically) get paid too much child support.Report

  3. Avatar Jaybird
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    says:

    Just as there is no way to turn a retail clerk into a drug dealer (since he or she lacks the genetic disposition toward drug dealing)

    Two responses:

    1) This guy needs to branch out and have a conversation with a handful of retail clerks. I know a guy who knows a guy who knows a guy who worked retail and co-workers were dealing in the back room. So I have heard.

    2) What the hell?Report

  4. Avatar Stillwater
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    says:

    Slightly related: I read an article (written by an economist!) trying to figure out why wages for the construction trades haven’t increased even as demand for construction services is increasing and in fact outstripping supply. The one thing he identified as the cause was the reluctance of employers to increase pay rates. Now, that market is a little different, I reckon, in that industry standard plays a pretty big role in determining subcontractor price and that standard might be harder to move than total price to the customer. But the mechanism is sorta the same: the ability of employers to actually set labor prices. And in both cases immigrant labor (often illegal in the trades) plays a significant role in establishing the upper bound.

    One other thing: is it really correct to say that only 2.9% of all immigrants are here illegally? How is that number measured, I wonder, given that no one would formally cop to being here illegally or employing an illegal….Report

    • Avatar Vikram Bath in reply to Stillwater
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      says:

      the reluctance of employers to increase pay rates

      Well, I hope there was a bit more than that in the article!

      In almost every job out there, the reason rates go up is employers saying “we’re not able to get anyone halfway qualified paying this.” Also “we’re losing people paying this” works too. Absent that, they are rarely eager to raise pay just because. The exceptions are places where there isn’t much profit pressure for whatever reason.Report

      • Avatar Stillwater in reply to Vikram Bath
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        says:

        No, there wasn’t! That’s why he wrote the article. As the economy has rebounded and construction demand has increased, lots of general contractors are having trouble finding laborers, which is suppressing supply. So the guy wondered: why don’t they just increase wages? Which they aren’t doing. Which is why he found the situation so interesting and wrote it up.

        I’ll try to find it.Report

      • Avatar Vikram Bath in reply to Vikram Bath
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        says:

        Ah. Yeah, that would be an interesting problem. It can be hard to study such things though because the situation tends to fix itself within a few months.Report

      • Avatar Brandon Berg in reply to Vikram Bath
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        says:

        In economics there’s a concept known as “stickiness” or “nominal rigidity,” which refers to the tendency of people to resist (or fail to take advantage of) changes in price for various reasons.

        Notably, Keynes proposed that an important cause of unemployment during recessions is the fact that nominal wages are “sticky in the downward direction,” such that when the market is disturbed in a way that causes the market-clearing wage to fall, employers will lay off workers rather than cutting wages, and unemployment remains elevated until some combination of inflation (without compensating wage increases) and rising demand puts nominal wages back in line with the market-clearing price.

        I have no data and don’t know any details about the specific case you’re describing, but I’m happy to speculate wildly.

        According to the BLS, unemployment in the construction industry is still over 7%, so it’s not obvious to me that there’s any real mystery here. If unemployment is still elevated, is there any reason to expect wages to rise?

        Presumably if an actual licensed and bonded economologist says there is, I’m overlooking something. I’d be interested in seeing the article if you can find it.Report

      • Avatar Glyph in reply to Vikram Bath
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        says:

        employers will lay off workers rather than cutting wages
        @brandon-berg – Just to be a lazy bum and not google, is there a reason posited for this behavior? I’ve been with my company a while, and I’ve seen it do both in separate downturns – once, they did layoffs; the second time, they instead did across-the-board wage reductions, with everybody (no exceptions) under a certain $ line taking an X% cut, and everybody (again, no exceptions, all the way up to the top) above that line taking a larger-than-X% cut.

        In my layman’s opinion, the pay cut was by far the better move for company morale, since everyone seemingly felt like they were in this together (and didn’t have to go look for another job in a down economy); of course some people quit over it, but I’d imagine that’s still better for the company than having to let people go. When things turned around, salaries were restored (not retroactively, but going forward). This also preserved institutional memory (massive layoffs not only destroy morale, they also cause people who knew stuff to be gone with no one else available to fill that role).

        Anyway, like I said it certainly seemed wiser to cut wages than layoff, so I was wondering why companies so often go the other direction.Report

      • Avatar Kimmi in reply to Vikram Bath
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        says:

        Glyph,
        most people in America need every dollar they’ve got (or nearly so) to pay their bills. If you cut people’s wages by 10%, most people need another job. True, you might get to keep some of your worst performers (or more conservative people) — but laying off people gives you far more control over who you keep.

        Also, wagecuts are a BIG hit to morale — whereas if someone gets laidoff, you have fewer issues.Report

      • Avatar Brandon Berg in reply to Vikram Bath
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        says:

        @glyph And…I’m officially in over my head.

        Actually, the most common explanation I’ve heard is the opposite of the one you gave: It’s better for morale. Mainly because the people who get hit worst by the layoffs no longer work for you, and thus you’re largely insulated from the effects of your morale.

        Another explanation I’ve heard is that layoffs give you an excuse to dump your least productive workers. There’s a phenomenon where productivity (output per hour worked) tends to rise during recessions, and this may be a factor (another being that the least productive businesses tend to shut down during recessions).

        I don’t know, though. All I have are vague second- and third-hand impressions of the relevant literature.Report

      • Avatar Glyph in reply to Vikram Bath
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        says:

        @brandon-berg – interesting, thanks. In my experience, layoffs piss people off (because they lose friends and peers and colleagues and team partners, sometimes in ways they perceive as random and unfair) and scare them (since their necks could be next on the block), so layoff times are really fraught; the remaining people aren’t happy, and a lot of projects struggle with the brain loss.

        Guess that’s why I’ll never be a captain of industry. Don’t get me wrong, I understand why you’d want to get rid of bad performers, but seems to me you should have done that anyway already; maybe then you wouldn’t have gotten yourself into a position where you had to do layoffs.Report

      • Avatar Troublesome Frog in reply to Vikram Bath
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        says:

        Our last round of layoffs came just at the right time for me to lose a guy who I was going to have to fire for incompetence anyway. Made the conversation much less contentious than it might otherwise have been.

        Coincidentally, he was on an H1-B visa and panicked a little bit. But not to worry, there are plenty of contracting body shops who specialize in cases like his, so he didn’t have to leave the US.Report

      • Avatar Brandon Berg in reply to Vikram Bath
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        says:

        @glyph Some of the bad performers may be just good enough to justify their paychecks during the good times, but not so much during the bad times. Also, it seems to me that if you cut paychecks across the board, the workers most likely to leave are the best ones, who are most likely to be able to get a better deal elsewhere.

        But again, hell if I know. I have a sneaking suspicion that it’s so hard to do controlled experiments with this sort of thing that nobody really knows anything for sure.Report

      • Avatar Brandon Berg in reply to Vikram Bath
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        says:

        @troublesome-frog Coincidentally, he was on an H1-B visa and panicked a little bit. But not to worry, there are plenty of contracting body shops who specialize in cases like his, so he didn’t have to leave the US.

        Wait…what? I thought you couldn’t transfer employers with an H1-B visa. Is there a special exception if you get laid off?Report

      • Avatar Glyph in reply to Vikram Bath
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        says:

        @brandon-berg Also, it seems to me that if you cut paychecks across the board, the workers most likely to leave are the best ones, who are most likely to be able to get a better deal elsewhere.

        Well, this was in a market-wide downturn, so there may not have been many better deals to be had easily elsewhere either. There was certainly some grumbling, and to be sure a few people quit in high dudgeon, but most people seemingly looked around and decided it was better to tighten their belts for a couple years along with everybody else, and stay employed without (complete) interruption to pay and (maybe even more crucially) benefits.

        It may have been the way the company handled it, they really did seem to apply the cuts transparently and evenly; and when times got better again, so did the pay. So it felt like a good-faith effort on everyone’s part. But they probably just have me snookered…Report

      • Avatar Brandon Berg in reply to Vikram Bath
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        says:

        @glyph By the way, you must be older than I thought. There hasn’t been an economic downturn in thirty years.Report

      • Avatar Patrick in reply to Vikram Bath
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        says:

        Actually, the most common explanation I’ve heard is the opposite of the one you gave: It’s better for morale. Mainly because the people who get hit worst by the layoffs no longer work for you, and thus you’re largely insulated from the effects of your morale.

        That’s the rationale, typically, but it’s incredibly nearsighted.

        Argument from anecdote: I’ve been through a layoff on the retention side and it really hit my morale and not because of survivor guilt. My entire squad except me got laid off (which was a bit nice for the ego, I’ll admit), and I wound up doing most of all of their jobs at the same salary (which was also then frozen for a year) while they got two months severance and wound up with new jobs within half that time.

        “Here, do the work of five guys and then we’ll not pay you extra but we will pay them extra to go work elsewhere” is not the sort of message that a lot of people find good for morale.

        Granted, this might have felt different if they didn’t all get jobs right away, but the thing about “keep the best, laying off the rest” is that “the best” don’t feel all that appreciated if you don’t also pay them more.

        Generally, there’s org sci papers that show all sorts of mixed ideas about what does and does not damage morale and it’s hard to draw generalizable conclusions because they’re very context-dependent.Report

      • Avatar Glyph in reply to Vikram Bath
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        says:

        @brandon-berg no, I’m not THAT old, though I am coming up on 20 years with my company. Maybe a better way to say it would be industry/market downturn – everybody else in the same industry was in a similar boat at that time, so jumping to a “like” company wasn’t going to be super-easy.Report

      • Avatar Troublesome Frog in reply to Vikram Bath
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        says:

        Wait…what? I thought you couldn’t transfer employers with an H1-B visa. Is there a special exception if you get laid off?

        You can’t transfer them frictionlessly, but a new employer can file a new visa petition on your behalf. *Technically* I don’t think that even a short stay between employment stints is legal, but in practice people hang around for a short while, get a new employer, and continue to work.

        As far as I can tell there are several contracting firms that specialize in this. Hire people who can’t get better jobs elsewhere and are at risk of losing their legal status, fiddle around with the job description and title enough to save some money on them, and then roll them into teams as warm billable bodies doing contract work. Move them around like child molesting priests whenever customers start to notice that they’re paying for less than stellar talent and pocket the difference for as long as they don’t.

        And the latter part is all good and fine–it’s what most large contracting shops do to some extent. It’s just that the visa structure makes that worker easier to exploit and even more desirable, and even worse, he’s potentially using up a visa slot that could be used by somebody who doesn’t suck at his job.Report

      • Avatar Brandon Berg in reply to Vikram Bath
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        says:

        @glyph That was a joke about you being snookered by management into accepting a pay cut during a fake recession.Report

      • Avatar Glyph in reply to Vikram Bath
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        says:

        @brandon-berg – I should have realized something was up when they papered over all the windows and said there were zombies outside.Report

      • Avatar Troublesome Frog in reply to Vikram Bath
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        says:

        @patrick

        It always seemed to me that if you’re going to do a big set of layoffs and save a lot of recurring costs, it would be smart (if at all possible) to allocate a percentage of that money for 1 year to hand out retention bonuses to your best performers. Everybody gets a meeting with the boss. Some get let go, some get a pep talk and assurances that there are no plans for further reductions, and some get the pep talk and assurances (in writing) that they’re the cream of the crop and if they stay for 6, 9, and 12 months they’ll be rewarded for it.

        That’s not necessarily possible during small reductions when the ratio of people let to go top performers retained is very small, but I’ve seen a few cases of very large (1/3 or more) reductions without anything on the other side to keep the key players, and a lot of key players leave when it happens. I’m not an idealist who thinks that downsizing is never necessary, but you have to work hard not to look like a sinking ship if you want to keep enough people around to restructure successfully.Report

    • Avatar Kimmi in reply to Stillwater
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      says:

      Vik,
      Seconding Stillwater’s question. 8% of our GDP is in the underground economy. It seems unreasonable to suppose that so much of our immigration is aboveboard. What’s the rate of childlabor in America?Report

  5. Avatar Saul Degraw
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    says:

    I’ll phrase it a different way.

    Aren’t programmers just being rational economic actors by opposing HB-1 Visas because it decreases their own pay?

    The situation here seems to be more that both sides are perfectly understanding how supply and demand works. Business owners and corporations benefit from semi-increased supply. Except it is not really increased because HB-1 Visas are tied to sponsorship by a particular employee. Would employers support them as much if they were not?) The HB-1 employers do have lesser bargaining power because they would need to find another employer willing to sponsor them to stay in the country. This could be easy or hard depending on the employee.

    Employees understand that they do benefit from there being fewer HB-1 Visas because they get more bargaining power and are more desired.

    Why is supply and demand that benefits already rich people and ultra-wealthy corporations better than supply and demand that benefits workers/employees? Why is it more moral to give more benefits to the corporations?Report

    • Avatar Vikram Bath in reply to Saul Degraw
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      says:

      Aren’t programmers just being rational economic actors by opposing HB-1 Visas because it decreases their own pay?

      No, they are being political actors.

      Would employers support them as much if they were not?

      The “as much” question is difficult to answer. I would tend to agree that as a group that they would want the restriction retained.

      By the way, not all employers support allowing H1-B immigration.

      Why is supply and demand that benefits already rich people and ultra-wealthy corporations better than supply and demand that benefits workers/employees?

      I haven’t said it is. What I’ve said is that if someone says “hey, I want to buy from this person” and you pass a law saying that he can’t and he has to buy from you instead, calling that just just supply and demand isn’t a good description of what is going on. In fact, it’s incredibly disingenuous.

      Why is it more moral to give more benefits to the corporations?

      I don’t think anyone has yet said that.Report

      • Avatar Saul Degraw in reply to Vikram Bath
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        says:

        I am not of the thought that you can separate economics from politics. I don’t think you can separate anything from politics probably. This is not always good but we tend to filter everything through a political lens.

        I’d argue that employers arguing for more HB-1 Visas are also using the political process and being political actors for economic benefits to themselves.Report

      • Avatar Stillwater in reply to Vikram Bath
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        says:

        This is not always good but we tend to filter everything through a political lens.

        I think you meant to say you tend to filter everything thru a political lens, yes? Why speak for other people?Report

      • Avatar Saul Degraw in reply to Vikram Bath
        Ignored
        says:

        @stillwater

        There are lots of things that can’t be filtered through a political lens but more things are and possibly more than we would like.

        1. Want to reform the drug laws or legalize narcotics? That requires political acts.

        2. Want to increase or decrease the amount of immigration? That requires politics too.

        3. Environmental protection? Politics are required.

        Except politics is hard and slow and frustrating so people just want to claim that they are not political or their thoughts and actions are not political. Man by nature is a social creature and to be social is to be political.Report

    • Avatar Stillwater in reply to Saul Degraw
      Ignored
      says:

      Just to be clear here (since I was dazzled by your pretty prose :), when you say

      No, they are being political actors.

      that applies just as much to employers hiring H1-B employees as well, yes?

      Your point is that immigration is a political issue, and not strictly an economic one, yes?Report

    • Avatar Brandon Berg in reply to Saul Degraw
      Ignored
      says:

      Vikram isn’t making an argument for H1-B visas here. He’s calling BS on a particularly disingenuous argument being made against them.Report

      • Avatar Stillwater in reply to Brandon Berg
        Ignored
        says:

        Yeah, I get that. But insofar as we actually live in a world with artificially and perhaps justifiably constructed borders, immigration policy is a political issue, not strictly speaking an economic one. That is, immigration policy may follow from certain types of economic arguments even tho it is distinct from it.Report

  6. Avatar Brandon Berg
    Ignored
    says:

    …[I]f companies nationwide paid programmers more than the BLS’s median pay of $74,280 per year (source), additional Americans would be attracted to this field.

    In addition to the points you made, I’m skeptical of this. As far as I can tell, software development is about the best you can do with a bachelor’s degree in dollar-per-hour terms. If there’s a huge pool of people who are would make good software developers but are giving it a pass because it just doesn’t pay enough, I have no idea where they are.

    Also, regarding unemployment amount people with PhDs in CS, a lot of CS research has very little overlap with skills employers actually need. I’ve heard stories (from the actual interviewers, not third-hand) of PhDs who, in an interview, showed no signs of actually being able to program. I’ve personally interviewed a lot of candidates who, while able to program, don’t seem to be particularly good at it. Having a CS degree of any level does not necessarily mean you’re worth hiring as a programmer.Report

    • Avatar Mike Schilling in reply to Brandon Berg
      Ignored
      says:

      As someone with a B.A in Math, Hear, Hear!Report

    • Avatar Alan Scott in reply to Brandon Berg
      Ignored
      says:

      I’d be a little bit surprised if CS was the best in per-hour terms–my sense as a guy that knows a bunch of programmers and engineers is that the programmers are working a lot more 12 hour days than the engineers, while the Googles tell me the pay for software developers is only a little bit higher than the pay for electrical and mechanical engineers.

      Which sort of raises a related question: is there a group of people who could chose to be computer programmers but don’t not because of the pay but because of the work hours?Report

      • Avatar Morat20 in reply to Alan Scott
        Ignored
        says:

        It depends on where you and what you do as a programmer. As with anything else.

        I make good money for what I do as a programmer. But my buddies who do environmental engineering (Chem E majors) make WAY more than I do.

        Because, you know, Houston Texas — chemical engineering (oil and gas, mostly) is big bucks down here. Lot more room for upward movement, too.Report

      • Avatar Jaybird in reply to Alan Scott
        Ignored
        says:

        (Additionally, most of the programmers I know are programming while they eat, in the shower, and, when they dream, they dream of green text on a black screen. They only get paid for 8-10 hours a day, but it takes monumental effort to get them to stop writing stuff in their heads.)Report

      • Avatar ScarletNumbers in reply to Alan Scott
        Ignored
        says:

        @jaybird

        they dream of green text on a black screen

        They also dream of living in 1987, apparently.Report

      • Avatar Mike Schilling in reply to Alan Scott
        Ignored
        says:

        1987 was a great year. I was working with an obnoxious Dodger fan and the Giants won the division. It was great until Jose fishing Oquendo hit that 3-run HR off Hammaker in game 7 of the NLCS, anyway. (He’d hit 1 all season. 14 lifetime.)Report

      • Avatar ScarletNumbers in reply to Alan Scott
        Ignored
        says:

        @ben-domenech

        Are you really @mike-schilling ?Report

      • Avatar ScarletNumbers in reply to Alan Scott
        Ignored
        says:

        @mike-schilling

        LOL that I can recognize you just based on your posting styleReport

      • Avatar Brandon Berg in reply to Alan Scott
        Ignored
        says:

        I’ve heard stories of long hours, but I’ve worked at four different companies, and 40-50 hours per week was the norm at all of them. I think that in hourly terms, my compensation is competitive with law or finance.Report

      • Avatar Kimmi in reply to Alan Scott
        Ignored
        says:

        Brandon,
        yeah, that shows you have a spine and don’t work in video games.
        I know people who put in 24-hour days, and video games traditionally have a full month of crunch time each year. Sometimes more. They don’t leave the office for that month, often as not.

        You have sane programming, and you have insane programming.

        And then you have the sysadmins who have to deal with idiots who program — where it takes a full weekend to install a damn upgrade.Report

    • Avatar Brandon Berg in reply to Brandon Berg
      Ignored
      says:

      After thinking about it some more, I think this argument is even worse than I originally thought. Suppose software companies start paying enough to poach workers from finance or wherever these workers who aren’t doing software development because it doesn’t pay enough are hiding.

      And now those industries will want to import more workers to replace them. Unless there’s a surprisingly large pool of baristas who are waiting for salaries to rise a bit more before jumping in, all that paying more can do is shuffle workers around.Report

      • Avatar Troublesome Frog in reply to Brandon Berg
        Ignored
        says:

        I think that if we were talking about the medical industry, the same players would be talking about the need for “sectoral shifts” and problems with structural unemployment in our economy. Not to mention recoiling in horror at the idea that medical professionals are paid “enough” already.Report

    • Avatar Troublesome Frog in reply to Brandon Berg
      Ignored
      says:

      In addition to the points you made, I’m skeptical of this. As far as I can tell, software development is about the best you can do with a bachelor’s degree in dollar-per-hour terms. If there’s a huge pool of people who are would make good software developers but are giving it a pass because it just doesn’t pay enough, I have no idea where they are.

      That sounds suspiciously close to a rejection of an upward sloping supply curve. I’m not sure how steep it is, but it’s pretty hard to argue that more money wouldn’t attract more people to the job. Among other things, it might end the tendency for the better programmers to take management jobs because their pay hit the top of the scale (at least, the top of the scale for mere grunts and not special management snowflakes).

      If you have the knack for it, it’s good pay for a bachelor’s degree, but it also tends toward high stress and long hours. I’ve known a lot of skilled programmers who went other directions and took the pay cut for that very reason. I think this is also a big part of the bias toward younger workers in the industry. I barely remember my 20s because I spent every waking hour at work. Now I’m not so inclined to charity work, which makes me less desirable on at least one dimension.Report

      • Avatar Kimmi in reply to Troublesome Frog
        Ignored
        says:

        Programmers taking management jobs? ha. Not around here.
        Now, I know plenty of math majors who are in finance, and while with enough pay you could get them into computer programming…
        (discl: I think we put too much human capital into FIRE)Report

  7. Avatar Mike Schilling
    Ignored
    says:

    I think you’re all missing the point. In the immediate term, increasing the number of H1B visas won’t lower the costs of hiring programmers overall because it won’t significantly increase supply; what it will do is lower the costs for companies that hire H1Bs, because the H1Bs, being tied to the companies that sponsor them, can’t negotiate for a competitive salary. Creating a class of workers that can’t sell their skills to the highest bidder is absolutely interfering with the laws of supply and demand.Report

  8. Avatar Mike Schilling
    Ignored
    says:

    Another fun fact about H1B visas: they make it kind of expensive to sponsor people. A few years ago, I was screening candidates for a tiny little startup, and had to reject anyone who required an H1B, even if they were local graduate students, because we couldn’t afford the paperwork. So they’re a subsidy to larger companies at the expense of smaller ones (as well as at the expense of workers in general), also known as (gasp!) rent-seeking.

    Tell me again about how disliking them is anti-free-market.Report

    • Avatar Brandon Berg in reply to Mike Schilling
      Ignored
      says:

      Does the US have any alternative visa program for skilled workers? It’s one thing to support creating or expanding such a program rather than increasing H1-B quotas, but as it is now, expanding H1-B quotas is synonymous with increasing skilled immigration. Most of the opposition to H1-B expansion seems to be coming from people who just want fewer immigrants, period.Report

      • Avatar Mike Schilling in reply to Brandon Berg
        Ignored
        says:

        So you’re saying that when a badly designed government program is the only way to accomplish something, it needs to be expanded?Report

      • Avatar Brandon Berg in reply to Brandon Berg
        Ignored
        says:

        As a rule, no, of course not. Many government programs are worse than the baseline of doing nothing. I think H1-B is better than the baseline of no immigration. What I’m saying is that I rank these alternatives as follows, from worst to best:

        1. No immigration.
        2. H1-B program with cap of 0.5x, where x is the current cap.
        3. H1-B program with cap of x, i.e. the status quo.
        4A. H1-B program with cap of 1.5x.
        4B. Work visa program with a cap of x and no employer restriction.
        5. Work visa program with cap of 1.5x and no employer restriction.

        I don’t have any strong opinion on the relative merits of 4A and 4B, i.e. I don’t know the rate at which I should be willing to trade off H1-B visas for the other kind.

        Most opposition to H1-B expansion seems to come from people who want to move towards 1 or 2. I think that 5 would be great, but that either 4A or 4B would also be an improvement over the status quo. I’m having trouble imagining a worst-to-best ranking like 4A, 3, 2, 1, 4B, 5.Report

      • Avatar Kimmi in reply to Brandon Berg
        Ignored
        says:

        Brandon,
        when people illegally cheat on the system (refusing to hire capable american workers for ANY reason), because they can get the h1b folks to work 60 hour weeks… then I get pissed.

        Do I have a better solution? Sure. Open immigration.Report

  9. Avatar Lyle
    Ignored
    says:

    The H1B arguments are a subset of the larger immigration issue where the same ideas are used and have been since the 1820s that immigrants decrease the wages of folks already here. Of course back then the issue really only applied if you stayed in the cities, as in the 1820s there was lots of land and the chance to become a near subsistence farmer.Report

  10. Avatar ScarletNumbers
    Ignored
    says:

    Graham also assumes thats since 95% of the world population lives outside the US, that 95% of great programmers do as well.

    Umm, yeah…Report

  11. Avatar Damon
    Ignored
    says:

    Actually, that’s an understatement. I am angry that Graham argues, as a capitalist, that the US government should grant him exemption from supply and demand (of labor). [emphasis in original]

    See this is the fundamental problem: One cannot support free markets and capitalism and then talk about restricting markets-cause when you do, you no longer have free markets-you have corporatism. So the whole convo about capitalism / free markets and any restrictions to the free interaction of markets is foolish and a distraction from the real issue: getting or preventing gov’t favors.Report

    • Avatar LWA in reply to Damon
      Ignored
      says:

      “So the whole convo about capitalism / free markets and any restrictions to the free interaction of markets is foolish ”
      This is about where I come down.

      We’ve changed the structure of tariffs and banking laws such that capital and property can move effortlessly across borders, while labor is artificially constrained. Maybe this is good, bad or indifferent, but it sure as hell isn’t a “free market”.

      And such an animal can’t ever really exist- the only people who ever even use the term are people who wave it as a unicorn distraction from whatever their real goal is.Report

      • Avatar Damon in reply to LWA
        Ignored
        says:

        Well, I’d actually disagree with the last comment. I’d love truly free markets, or if not 100% free, very very near that. But I’m hardcore and most folks are. You are right about most people waving it to disguise their true intent, but really, how many folks fall for that? Non that look beyond the statement….Report

  12. Avatar Doctor Jay
    Ignored
    says:

    I have a different takeaway from Pepper’s argument than you do, it seems.

    To me the thrust of his argument is that they programmer that’s 100 times more effective than the median performer is a mythical creature. A unicorn, as they say. I agree with this premise. Hence I agree that an argument in favor of more H1-B visas based on “them foreigners are unicorns” is unacceptable, and a shining example of what I’d call ‘liberal racism’. (N.B. I am a liberal)

    If there were such a thing as the 100x programmer, then expanding the recruitment base is going to give you access to more of them. That’s not a racist argument. But notwithstanding, I don’t think they exist. The 10x programmer might exist, but mostly that’s an illusion based on “training” and social power. Programming is hard, and some people are better at it than others, and some people are faster at it, but produce lots of bugs, which kills off their productivity. But if they can arrange things so that someone else fixes their bugs, while they get to do the high-profile cool things, then they will gain status, and will be a wonderment to myopic management.

    Anyway, I support a fairly aggressive award of H1-B visas, but my general thoughts are that we definitely need to meter the flow of people into the country, since really big, fast, influxes of populations create lots of secondary problems. Stability is a good thing.

    PS. That Phil Greenspun quote gives me the Le Sigh. He’s been banging the drum about how underpaid people with doctorates/computer professionals are for a long time. The comparison with child support is really idiotic, since someone who is collecting it needs to, you know, support a child.

    Compare it with other jobs, Phil. Come on…Report

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