The industry lobbyists like to say that foreign tech workers can’t be underpaid, because employers bid against each other to be able to hire the person. But I’ve pointed out many times that this flies in the face of economic principles. One of those principles involves nonmonetary compensation.
An American worker might go with Company A instead of a higher-paying Company B if A has onsite childcare services, or if the commute to A is much shorter, and so on. In the case of the foreign worker, a huge source of nonmonetary compensation is green card sponsorship.
This is vividly illustrated in an article in today’s San Francisco Chronicle. There is more than a little irony here, in that the article is clearly intended to present pro-H-1B arguments. Various pro-H-1B individuals and organizations are cited, with no material at all on the other side. Or so the reporter thinks…
The reporter, apparently unwittingly, shows exactly how the foreign workers can be underpaid:
“If they have three offers, and one says, ‘We’ll process your green card in the first 90 days,’ they’ll pick that company 9 times out of 10,” [tech recruiter Jason] Stomel said.
“If people are in a reasonably good place and at a job they like and are feeling reasonably secure, why would they put themselves at risk by chasing an extra $25,000 in salary?” said Andy McLoughlin, a partner at SoftTech VC, a venture capital firm with offices in Palo Alto and San Francisco.
Many Americans (including former H-1Bs) who feel harmed by the H-1B program complain to me that the press is highly biased in favor of the industry. I usually reply that most journalists want to write the truth but are easily duped by the industry CEOs and their lobbyists. These days I am less convinced that most journalists are unbiased, but I must say that the industry is finding it easier and easier to fool them.
Case in point: This op-ed by GoDaddy CEO Blake Irving. Every argument he makes is based on analyses from “researchers” who take money from the industry. Sadly, Fortune never chose to question him about sources. And what he writes in his piece is what the lobbyists are telling Congress and the President.
And sure enough, Irving promotes the Intels Good, Infosyses bad approach to H-1B reform, a deception that would be disastrous to American workers if adopted. And keep in mind, President Trump has stated his support for that approach many times. On the other hand, he has asked AG Sessions to investigate the entire foreign tech worker issue, and hopefully he will make use of data and analysis that isn’t tainted like Irving’s are.