Saturday, November 26, 2005

H1-B Aliens and the Myth of Free Labor Markets

A wonderful constant in this valley of innovation, is the amazing contribution of immigrants to our economy.

In my daily meetings with founding teams and start-ups, there is not a single company that does not have an emigre as a key member. The contribution of Indian, Chinese, Russian, and other nationals to our economy is beyond question and a vital source of our success. From professors, to engineers, senior managers, company founders, and venture capitalists, our current success and prosperity is very positively influenced by our ability to attract the best and brightest to work and study in our country.

Unfortunately, America, while often a champion of free trade, is not a practioner of free labor markets. While technology talent is perhaps the most important input in Silicon Valley's decades of innovation, the US government artificially caps and limits the number of ambitious immigrants to our economy. This year, the H1-B Alien visa program is limited to 65,000. Moreover, since 9/11 the US government has clamped down on graduate student visas; current visa application security checks take 67 days and the total process takes over 3 months . The pernicious effect red-tape is that gifted students are less likely to bother applying, thereby greatly weakening our future prosperity and welfare.

A recent GOA study found that:

  • "Lengthy waits to obtain a visa might lead Chinese students and scholars to pursue studies or research in countries where it is easier to obtain a visa. A consular chief in Chennai, India, agreed, saying that lengthy waits are also causing Indian students to decide to study in countries where it is easier to get a visa and, therefore, the United States could lose out on intellectual knowledge these visa applicants bring to our country"
  • "Many officials with whom we spoke cited specific examples where scientific research and collaboration was delayed or prevented due to delays in obtaining a visa. NASA officials at post also noted that up to 20% of their time is spent dealing with visa issues when they should be focusing on program issues."
  • "According to several surveys, scientific research was postponed, jobs were left unstaffed, and conferences and meetings were missed as a result of the delays."

True globalization requires the seamless flow of ideas, products, and talent. While the world is moving in the right direction, the future of the Valley requires that we make it easy for the world's best to study, work, and contribute to our economy.


  1. Anonymous8:10 PM

    agree with you . you also need to add your thoughts on the other side of coin . What is you idea about giving 13 mln illegal workers guest worker visas and and not let the really talented folks into the country ?

  2. Anonymous1:21 PM

    Immigration along with energy are the two most flawed policies in the US. There are 20 million illegal workers in the US and nobody talks about them. The borders with Mexico are more or less open. H1-B program is flawed and is undermined by tech companies to get cheap programmers from India/Russia/China. All the while making it harder for foreign graduate students to come, study and work in this country. The current immigration policy favors people who you do not want in the country and works against people who are desirable immigrants.

  3. Anonymous8:49 AM

    I do not disagree with the fact many foreign nationals have contributed to our country's economic growth; however, I believe it more prudent to concentrate our resources, both human and monetary, on the development of a stronger educational system whereby our own citizens can better contribute to our nation's growth vs. partially relying on the importation of talent.

  4. Anonymous8:31 PM

    From yet another Anoonymous:

    More H-1B visas will undermine the free market in other ways.

    H-1B visas are tied to a specific employer. This means that the hiring company has a captive employee for 6 years. The employee cannot sell his services in the free market, so he cannot demand market salary.

    This manipulation of the labor market hurts the citizens and green card holders in the same field, too. If a company can buy your services at reduced prices by making you into an indentured servant, it pushes down my salary.

    When you can demand full price for your services, so can I.

    If H-1B holders are so important to business, they should be given green cards. The H-1B program should be abolished, not expanded, and the employment-based green cards should be expanded.

  5. Anonymous6:26 PM

    I am on a H1-B visa and have been in the US for 5 years now. With the current Immigration controversy raging, here are my 2 cents...

    H1-B definitely is a kind of 'slave' program. As someone correctly pointed out earlier, the person on H1-B is bound to a single employer. And in most cases, that employer is an Indian technology (Read Body Shop) firm who provides consulting services to US companies. The H1-B Visa holder is usually paid only the minimum (or slightly higher) wages as deemed necessary by the INS.

    To top it, he/she is shuttled from project to project - state to state at the slightest notice - or rather to whichever US company throwing a few dollars for IT upgrades after the budget announcements.

    I, myself, worked in 6 states in the past year !! After 5 years of being in the US I have no place to call home. And still I consider myself to be in a better situation cause atleast I now have my own car, credit card and other such essentials.

    The visa holder if fired, loses his H1-B status within days and has to find another sponsorer within a very short frame. This fear, keeps all H1-B holders from asking raises or doing anything against their bosses. Ask me...I worked previously for a firm who gave me a raise of $20 a month after four years !!

    Many Americans look at us - as if we are stealing their jobs and having a nice lifestyle. The fact is, we are doing jobs which most Americans don't consider as a career. The demand for Law and 'non-programming' courses proves it.

    Also, it is the US companies who due to budget priorities and 'competitive spirit' create our market.

    And we (I speak for Indians, as I am an Indian) are not illiterate, border crossers.

    We speak good English, our Education system back in India is very competitive and covers not just technology but also a lot about the World. Many Americans may have difficulty in even pointing out where India is on the world map (No offense meant) but Indians are even taught about the American Civil War as part of our school education.

    And we are also very law abiding people in the US. Take a look at the school districts in the US where Indian and Chinese students are in abundance (Fremont, Sunnyvale - CA etc). They are considered to be amongst the best in the US. Ever heard of 'Indian' gangsters in the US ?

    Despite having helped the US economy and society in so many ways, we are still shackled by the H1-B program which instead of making things easier for us is getting more difficult. The Green Card Process which is the next step towards Citizenship is more tougher. The wait period for getting a Green Card is almost 6 years !!

    Hence a sizable chunk of a H1-B holders life is spent before he/she - a law abiding, tax paying person, can even start thinking about the 'American Dream'.

    And mind you, not every H1-B holder thinks about settling here. And those who do, make enormous sacrifices back home to be part of this American Dream.

    And what adds to the problem, is the related H-4 program which is the visa given to the spouse of an H1-B worker. She is NOT allowed to work in the US. So while her hubby struggles to get their green card and 'slaves' for his employers, all that she can do is sit and watch. I've seen innumerable examples of highly educated spouses in this state of affairs.

    The US Government should look at the H1-B & Green Card program under the microscope and remedy the situation at the earliest.



  6. Michelle De Souza11:14 AM

    I could not agree with you more. This is the best stated, and truthful argument for us Indians.
    I am a from India as well and have gone to college here in the US. I have been here past my graduation on an H1 B visa for over 2 years now. That makes it 6 years already so far, and now I am in the process of getting my green card. Its going to be 2011 before they reach my priority date. It seems to me that the US immigration needs to take into consideration law abiding individuals who get the green card through employer based systems versus through marraige, and give us a break for doing it "the right way". We work hard to contribute to the society. We pay taxes and there is less chance of it being in a "fake marriage" between the employer and the employee. Look at how the PERM/Labor Cert process is designed!!! Taking all of this into consideration therehas to be some sort of break for employer based greencards!

  7. I agree with Sailesh and Michelle completely, and I'm not Indian (I'm a native-born American).

    I think we should be doing everything possible to woo educated, talented people to this country. There is no "either/or" issue like the Anonymous at 8:49AM posted. You *can* do both (increase immigration for talented people AND invest in making our internal educational system better).

  8. Here are my two cents/paisa/fils (whatever):

    Will, good observation... USA was/is the best place to live, because it had the best talent from various countries flowing in and helping the country develop. End of Story.

    New Story: Indians are doing a reverse brain-drain also due to the fact that India is one of the fastest growing economies... if my numbers are correct, we just clocked 9.12% growth. Not bad eh!

    What will happen... and you can probably see it happening already... Indians will prefer to work/study in India... who loses? Countries like America.

    BTW, this reverse-brain drain is not happening in just America, its happening everywhere... including the Middle East (where I've been living)

    Here's some more which I blogged about (Found on Time)