Posted on 10/29/2005 7:25:40 AM PDT by vrwc0915
It appears there is hard evidence to prove that employers are using the H-1B visa program to hire cheap labor; that is, to pay lower wages than the national average for programming jobs.
According to “The Bottom of the Pay Scale: Wages for H-1B Computer Programmers — F.Y. 2004,” a report by Programmers Guild board member John Miano, non-U.S. citizens working in the United States on an H-1B visa are paid “significantly less than their American counterparts.” How much less? “On average, applications for H-1B workers in computer occupations were for wages $13,000 less than Americans in the same occupation and state.”
Miano based his report on OES (Occupational Employment Statistics) data from the Bureau of Labor Statistics which estimates wages for the entire country by state and metropolitan area. The report’s H-1B wage data came from the U.S. Department of Labor’s H-1B disclosure Web site.
Miano went out of his way to be balanced, and whenever possible he gave the benefit of the doubt to the employer. For example, he used OES data from 2003 because this is the wage information that would have been available to the employers when filing an LCA (labor condition application).
Miano had some difficulty matching OES job codes with LCA job titles, which employers typically create. Where both the OES and the LCA listed a job as “programmer/analyst,” Miano took the conservative approach of assuming that the LCA was describing a programmer, a job title that typically earns a lower wage than a systems analyst.
Nonetheless, Miano’s report shows that wages paid to H-1B workers in computer programming occupations had a mean salary of $52,312, while the OES mean was $67,700; a difference of $15,388. The report also lists the OES median salary as $65,003, or $12,691 higher than the H-1B median.
When you look at computer job titles by state, California has one of the biggest differentials between OES salaries and H-1B salaries. The average salary for a programmer in California is $73,960, according to the OES. The average salary paid to an H-1B visa worker for the same job is $53,387; a difference of $20,573.
Here are some other interesting national wage comparisons: The mean salary of an H-1B computer scientist is $78,169, versus $90,146 according to the OES. For an H-1B network analyst, the mean salary is $55,358, versus the OES mean salary of $64,799. And for the title “system administrator,” there was a $17,478 difference in salary between the H-1B mean and the OES mean.
H-1B visa workers were also concentrated at the bottom end of the wage scale, with the majority of H-1B visa workers in the 10-24 percentile range. “That means the largest concentration of H-1B workers make less than [the] highest 75 percent of the U.S. wage earners,” the report notes.
While it would be difficult to prove that any one particular employer is hiring foreign workers to pay less, the statistics show us that, for whatever reason, this is exactly what is happening on a nationwide basis. Miano says lobbyists will admit that a small number of companies are abusing the H-1B program, but what he has found in this research is that almost everyone is abusing it.
“Abuse is by far more common than legitimate use,” he says.
Living in a dream world, are we? If they brought in someone with less experience or less education or from overseas who would be willing to do your job for a lot less money then aren't you, by your own definition, screwing your employer by demanding to continue receiving your current salary, a salary far in excess of the new prevailing wage?
Should this occur, the questions I'll ask, what have I failed to do to keep myself competitive? what should I do now to make myself competitive again?
The answer to that is simple. Slash your salary by 10% or 20% or 30% or whatever the new prevailing wage is. Not hard at all. In the overwhelming majority of the cases that is all that is necessary.
That is not what most IT people do, and certainly not most posters on such thread.
I've seen outsourcing up close. In the overwhelming majority of the cases the company laid off well trained, capable, competent, motivated programmers and analysts and replaced them with IBM assets who were no more motivated, no more competent, no better trained or capable but who were paid a lot less. That was the only difference I could see and the only thing that mattered. And the IBM assets were difficult to communicate in many instances and did not know the business or the systems. But since that knowledge base is hard to put a price on it didn't factor into the equation. I left that company on my own, and much to my amusement the company in question (and their outsourcing partner) have listing after listing in Hotjobs.com that they can't fill because they can't find people interesting in working there. At any price.
...to protect those whiners, poor soles that cannot any longer make $150,000 while often not knowing how to read or communicate well.
Isn't stereotyping fun?
I guess you don't understand how this will affect the future of America. Left as is, you won't be able to affort even the $400 computer, because the wage scale will be driven down pretty much across the board. In those third world countries, $400 is a few months wages? Would you like that?
Now, assume that there are no longer engineering jobs in the US simply because it makes no sense to spend a great deal of money to get a degree for which there are no jobs. That would mean that even defense related engineering would be outsourced. That is when the US would purchase defense equipment from abroad. Now, why would India or China need to sell the US first-tier defense equipment? They wouldn't. The US would be merely a third rate country, with those countries that make the exotic equipment the first rate countries.
The US is mighty because of American engineering, not American shoppong at Wal-Mart.
It's illegal. Do you approve of criminal activities? Are you a criminal?
There are now, but that won't be true 5 years from now. Many have got out of the industry all together and won't be coming back, and there are not enough students getting an education for a jobs that are not currently available to fill the gap. Imagine that, people not getting educated for a job that doesn't exist for Americans anymore; who would have thunk it? Certainly not Bill Gates.
You really ought to take a remedial reading course.
Please re-read my post. My bitch was with the middle men taking more than their fair share.
If the customer pays $100 per hour for contract work and the H1B worker gets paid $25, that leaves $75 per hour for the middlemen and that stinks.
I love Capitalism. I hate robbery.
Worth repeating.
My guy has been and is presently training by computer the person who probably will be his replacement.
The replacement is an Egyptian national who is receiving the training from here to there.
Leni
I am in the same boat, but I have allready diversified, and found another tech job. But have no expectations of staying in IT
Re: "Taxation and regulation have already driven many businesses overseas or out of business. " Actually in this instance taxation and regulation do not have a single thing to do with H1-B. Even if corporate taxes were eliminated, technical and service related jobs that can be performed remotely would still be transferred to the area with the lowest costs. My company for instance does not directly hire H1-B, what we do is "project out" development. Our current in-house IT staff is about a third of what it was five years ago. But the number of contractors is rising. It started with IT but the model is now being used for engineering, ever heard of Areva? Over the next several years you can expect to see large companies transfer their “Purchasing and Procurement Departments” to the Czech Republic and Russia. None of the major equipment is made in the US anymore most large parts currently come from Spain or Italy, with China making major inroads into the market. It all boils down to cost of living. High cost of living means high labor rates. Lets face it in India one could live like a king on $30,000/year. In China $10,000/year.
But the new term to watch for in American Business is Just-In-Time Employment. When a project needs to be performed it will not be performed by an existing staff but by a staff of contractors, when the project is complete the contractors will be laid off.
I am not saying it is good or bad just a fact of life. Given we are in a world economy the playing field will have to be leveled. That means lower costs. The big surprise coming for those at the top of the corporate ladder is that once all of the “employees” are virtual or JIT, we will not need CEOs maiking 20 million a year as there is someone cheaper in China that can do their job also.
Re: "When they move to the next contract you risk losing your intellectual capital to a competitor because they normally stay within the same business domain and can command a higher salary from knowledge gained at your expense." It is worse than that, years ago we had developed our own database security system as there was not on the market that was worth a damn. After we brought in some contractors to make changes to our procurement system, all of a sudden our front end security system started showing up in products created overseas, minus the Company Logo, and copyright notice of course. The company was miffed but likes the lower cost of contractors, and increased the number of contractors on site. Personally I have nothing against H1-B holders they are only trying to make a living, they make more here than in India. One of the ones I work with has a modest apartment in Houston and two houses in India, and yes they do pay taxes in the US.
It would be amusing to to see a bunch of foreigners brought in to do whatever it is that you do, undercutting your salary by 30 or 40 percent.
Since when? As far as I remember, median wages rose when productivity rose in the 1990s. They do stagnate when our productivity stagnates. There is nothing wrong with that: why should we get paid more when we don't produce, and therefore not worth, more?
On another note: why is a person as informed about the data as you are speaks about wages in complete disconnect from productivity? You see some kind of conspiracy and data manipulation while disregarding obvious explanands.
things people need to survive, such as housing, medical, energy and food prices have gone up,
Food prices have a very small inflation.
You should stop following the media in thinking that housing prices went up. I doubt you have the data for that and probably confuse the rise in house prices with housing prices. The truth is, housing prices (price per square foot consumed by an individual did NOT go up that much except for the few last years. An average house today is 45% bigger than in 1950s, whereas the family unit is almost twice smaller. Americans consume almost three times as much space than 50 years ago.
Thus, when people pay more for a house they consume a larger quantities of housing, and you confuse that with price of housing. The same is observed in health care: people DEMAND to b e cured at ALL costs, and consumer MORE health care.
The statement about "things needed to survive" is leftist whining unbecoming of a conservative. Since when two rooms per person was needed to survive? We have become a nation of whining, self-centered spoiled brats that no longer remembers what survival is.
hence why consumer confidence numbers have not gone up with the recent reprots on GDP.
Satisfaction of people and their beliefs depend only in part on what they have. Roughly, satisfaction is what is delivered minus what is expected. If the expectations are unreasonably high, people are dissatisfied with what they have, no matter how much they have. It's been observed by sociologist and psychologists, that we do have much, more than even a generation ago but satisfied much, much less. That is completely in line with the observation of self-centeredness in our culture and the feeling of ENTITLEMENT to things that cannot even be achieved.
Your remarks actually illustrate this phenomenon. If you feel that having a three-bedroom house, which your grandparent bought for retirement as a third house in their lifetimes is a basic need for you at 25 (as does an average American of that age), how can you possibly be satisfied? How can you possibly be confident that this will be delivered?
While the economy has been kept afloat by a record amount of govrenmnet spending
Again, for a person so well informed of the data, you are surprisingly one-sided. The economy in the last 25 years has been kept afloat by productivity gains.
and a real estate bubble that has allowed people to use their homes at ATMs, neither of these trends can last forever.
Very silly: there are two sides to the transaction. If you can spend more by borrowing against the now more expensive house, someone had to have paid for that house more. Where did THAT person get the money? Housing bubbles do not sustain the economy; they distort allocations.
I am 100% convinced that if neither immigration and job outsourcing issues are addressed, the political landscape will change dramatically.
With that, I agree completely. When people are frustrated, for whatever reason, they seek changes and often chose those that are detrimental in the long run.
The question is what should address job outsourcing. You appear to imply that it is the government. Socialist measures such as these have indeed solved political problems --- witness the Russian revolution and Hitler's rise to power that kept the masses very happy. But in the long run they have always failed. It is the markets that should solve the problem of job outsourcing, as they have done in the past (you appear to have bought into the MSM garbage that outsourcing is something new).
As for immigration, that is not a purely economic issue and a such MUST be solved by the government (citizenship and culture are public, not private, goods, and such are poorly provided by markets).
I'm amused by that argument. Every job I've lost in my entire life I've lost to someone who could do it more cheaply. I shrugged my shoulders and moved on, figuring that that's the way things are in sales/marketing. I certainly didn't come here and whine about it, like some are.
Well, for someone that does not have a clue about economics, information must look like a dream.
If they brought in someone with less experience or less education or from overseas who would be willing to do your job for a lot less money then aren't you,
That is where you error lies: NOBODY would be willing to do that. I gave enough even quantitative examples in the previous posts for you to see: the question is whether someone can produce the SAME output for less money. If someone else is willing to produce as much and CAN do so for less money, than MY services are indeed overpriced and I am NOT worth my keep. My duty is to ensure that this does not happen by remaining competitive.
You don't know how to compute economic costs and benefits, which leads you to an incorrect reasoning.
The answer to that is simple. Slash your salary by 10% or 20% or 30% or whatever the new prevailing wage is. Not hard at all. In the overwhelming majority of the cases that is all that is necessary.
Correct. That is what I previously said. What are you arguing against?
I've seen outsourcing up close.
Well, you know what happens when you look at the trees up close: you no longer see the forest.
Please go to your car, start the engine, and look at it really, really close. Now that you looked, do you understand the physics of combustion? Of course not. To SEE that, you've got to go elsewhere --- to the classroom and the laboratory.
I suggest that you do the same with economics: study it a little. Looking "up close" at the economy does not give you any more knowledge than looking "up close" at the working engine.
Isn't stereotyping fun?
Here too you do use the word the meaning of which you know not. Stereotyping is making conclusion about an individual on the basis of some representative of a class. Statistics, which I referred to earlier, are an altogether different animal.
Learn something about the subject matter and suspend judgment until then: you cannot learn management or economics by observing what your managers do.
Have a good day.
Then you are living in a dream world.
Perhaps, but you have certainly failed to demonstrate any need for that: I understood your post exactly as you intended, as your clarification confirms.
Please re-read my post.
I have done so.
Well, that's exactly what differentiates capitalists and socialists: the former view as fair what markets determine, and the latter think that THEY or the governments know. YOu are a socialist if you think that YOU know what fair is.
If the customer pays $100 per hour for contract work and the H1B worker gets paid $25, that leaves $75 per hour for the middlemen and that stinks.
Why?
When you pay $2.50 for a pack of cereals, how much of that actually goes to the manufacturer? the grower of wheat? Inquire, you'll be surprised.
In the case of packaged goods, it is not uncommon that 7-10% of what YOU, the consumer pay for them, goes to those that produced. The rest goes to the middlemen and facilitators: distributors of all levels, retailers, advertisers, lenders, etc. That is what it takes to bring an already created good to the market. Is that "fair?" According to you, is not. Why? 'Cause you omniscient demigod knows what's fair for other people.
More modest people that adhere to the same line of thinking say, "Well, I may not know exactly what's fair, for I don't have all the data. But surely we can create a committee of knowledgeable people that will determine what's fair and then prohibit unfair practices.
That's how all fair-minded individuals arrive at socialism.
If you asked, why in the case you cited the middleman gets a very large share, you'd hear a simple answer: because that middleman has specialized knowledge (would you be able to go to Russia or Pakistan to look for programmers?) and insurance (people that know him will not cheat him ---- in contrast to you and me --- because he has common cultural bonds), etc. These and similar considerations explain why returns of agencies dealing with foreigners have higher share than domestic ones. Pure economics, and completely fair: they are paid for specialized expertise (just like basketball players --- what's so "fair" for Michael Jordan get $40M per year for pushing a round rubber thing through a metal hoop? Is that not robbery?).
I love Capitalism. I hate robbery.
That's what all socialists say when they look at the market.
You are free to think whatever you want, of course. But you must know that anytime you view some "large" profit made in the MARKET as unfair, you think as a socialist. If you'd like to learn some basics about distribution channels, P. Kotler's "Marketing Management" (preferably 5th edition) is a good readable source.
Thank you for wishing me well.
This remark shows you being not only ignorant (you clearly understood not a word of what I said) but also nasty. You have nothing to say about the issue but prefer to attack me personally.
Sorry, I will no longer reply to you on this thread: I don't wrestle with pigs and children.
Have a good day.
Unfortunately, allowing globalism while forcing your own companies to meet high standards will kill American business. You can not have fair, free trade with people who use slave, child labor.
Total BS...the only reason for guest workers is to reduce salaries and benefits.
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