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Greg Siskind on Immigration Law and Policy

WADHWA: FREE H-1B WORKERS

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Vivek Wadhwa always has interesting things to say about skilled immigrants. Here is a snippet from his recent Business Week commentary:

I have a suggestion for Grassley and Durbin.
Pass a bill to deregulate the H-1B visa program, and eliminate the
restrictions that make it difficult for H-1B holders to travel,
switch jobs, or get promoted. Create a fast-track status to U.S.
citizenship for H-1B holders providing they launch a company that
employs more than 10 American workers within three years. And grant
residency to the nearly 1 million H-1B holders and their families
waiting in limbo to obtain permanent residency. Under the current
system, that wait can last a decade -- with no guaranteed outcome.

By eliminating
the more onerous characteristics of the H-1B program, such a bill would
probably diminish abuses. If H-1B workers could accept a job from a
competitor for a higher wage, it's likely their real wages would match
market rates. Critics might argue that an influx of workers would
depress wages, but that seems to espouse the notion that IT workers are
no better than factory employees, subject to strict laws of supply and
demand. I don't think that's the case, and I believe that more smart
people in the U.S. will actually create jobs and therefore benefit all
U.S. tech workers by growing the total knowledge-employment pie.

Here are four
reasons I believe this: Immigrant workers are significantly more likely
to launch new companies. Immigrant workers are also far more likely to
launch technology companies. Technology companies have accounted for a
disproportionate percentage of economic growth in the U.S. in the past
four decades. And new companies hire far more new employees than old
companies. In fact, companies less than five years old accounted for
nearly all of the net jobs growth in the U.S. over the past two
decades. Add those four facts together and it's easy to conclude that
what the U.S. needs are more immigrant technology workers rather than
fewer.

He also has some interesting comments about immigrants and the housing market.

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  1. Don's Avatar
    Thanks for posting this. Vivek has reasoned out the case of skilled immigrants well and hope it has the desired effect .
  2. Hugo Homenow's Avatar
    Vivek has come out against the H-1B visa program because he said it is rife with fraud and Indian-on-Indian exploitation.
  3. Lucha Vavoom's Avatar
    Vivek Wadhwa has long been a pioneer of change and innovation in the technology industry, and has founded 2 software companies, Seer Technologies and Relativity Technologies.

    A check of the Dept. of Labor's H-1B Web page shows that Wahdwa's firm, Relativity Technologies, hired an H-1B Software Engineer for $44,144, and a Computer Programmer for $31,933.

    Wahdwa believes that his hiring of the two H-1B programmers was justified on the grounds that they are brilliant people.

    There is, however, the issue of how much to pay them. The one making $44K had a Master's degree and had been working part-time for Wadhwa in Russia for the previous three years. Moreover, at the time Wadhwa hired this worker, the guy had been working for a Russian government joint venture company in Russia, developing telephone and networking systems, which is sophisticated work. And yet as an H-1B he was being paid less than a Bachelor's graduate with no experience.

    The reader's reaction to all this is probably, "Well, THAT must be illegal. The salary Wadhwa paid this H-1B didn't take into account the worker's Master's degree and his work experience." But that is a perfect example of the myriad loopholes in the law.

    The key point is that under the law, prevailing wage is defined by the JOB, not by the WORKER. If the job just requires a Bachelor's degree, then an H-1B with a Master's can legally be paid a Bachelor's-level wage. What about this worker's experience? Doesn't that have to be taken into account? Well, first of all, the experience level DOL used at the time lumped everyone with 0-2 years of experience into one category, and this worker with three years of part-time and one year of full-time experience might fall into that category. But beyond that, again, keep in mind the prevailing wage is defined by the JOB, not by the WORKER. If this was an entry-level job, then the guy could legally be paid an entry-level salary.

    Last but not least, what about the fact that the guy is supposedly brilliant? The guy got his Master's degree at the age of 16! (He was only 17 at the time Wahdwa hired him.) On the open market, that would command a premium salary. But remember, this ain't the open market. And there is nothing in the prevailing wage law about factoring in brilliance.

    So, the bottom line is that Wadhwa got a brilliant worker with a Master's degree and the equivalent of something like two years of experience for the price of a Bachelor's graduate of average talent and no experience. And don't forget, that isn't even accounting wage savings an employer accrues by hiring H-1Bs--by hiring young H-1Bs, he avoids hiring the older, thus more expensive, Americans.

    In other words, any way you slice it, Wadhwa got a great bargain--one that would have been impossible on the open market.
  4. gg's Avatar
    Thanks for posting this article ..

    This is a common loophole that employers exploit. I have come across many cases where an H1B worker with more than 5yrs experience is paid at the level of a worker at 1yr experience. I have seen 1 case where an H1B worker with 10yrs of experience got his H1B approved when he moved to another employer for a job that required 2yrs experience. (Now dont ask me how someone can get a H1 transfer after 10yrs .. talk to a good attorney instead )
  5. rr20's Avatar
    Hi,
    I was on a H4 visa and had applied for H1 through a consultancy. I got my H1 approved in 2008 and was hence eligible to start work for the employer from Oct 1. I got my SSN number also. But, I did not get a suitable project till April 2009 and hence do not have any pay stubs. I do not have H1 stamp on my passport. I am back in india since April 1st week of 2009. They asked me to provide them letter saying that I am not available for relocation and hence am not being paid during the period i am in US. Below are my queries:
    1) Can I go back to US on H1?
    2) Can I get H1 transfer? Should I ask my employer to cancel my H1?
    3) Was my stay at US illegal? I had givenm my employer a letter for a long personal leave.
    4) Can I go to US on a B1? I have a Business visa too.
    5) Can I do a B1 to H1 transfer?
  6. Kumar's Avatar
    "In other words, any way you slice it, Wadhwa got a great bargain--one that would have been impossible on the open market."

    Wadhwa want slave labor. That is all.
  7. George Chell's Avatar
    "Wadhwa want slave labor. That is all."

    Wadhawa wants slave labor here rather than slave labor back home in India where the jobs will pay even less! And you are not Kumar...

  8. Lucha Vavoom's Avatar
    George, by mocking Kumar, you seem to think that all Indians in America would support unlimited H-1Bs and L-1s, just because they are primarily coming from India.

    Did it ever occur to you that Indians that are U.S. citizens or GC holders may also want a chance to compete for American jobs? The law as it is now stands that a company can go straight to the bargain basement (bodyshops, etc.) and not even consider locals.
  9. Legal and no longer waiting's Avatar
    It is a very paternalistic approach to tell people who needs to hire whom and at what salary. You cannot possibly claim that you know the value of someone's labor better then that person him/herself and the person hiring him/her. Don't even start there - you will always be wrong. Marian Hosa signed with Detroit Red Wings last year for a lot (millions!) less than he was offered by Penguins and Canucks - would you like to make an argument about him, too? Now, if you want to help people (in general, not in a particular case), all you need to do is not to put restraint on their ability to choose employers. That's exactly what Wadhwa is arguing. It would be illogical for him to pay steep fees of hire an H1 person under market value, and then argue that this person should get a free pick at the employers in the market. Wadhwa's argument itself is the testament to the fact that he is not afraid of his workers shopping around.
  10. Greg Siskind's Avatar
    Lucha - As you are not a long time reader, I will tell you that anti-immigrants regularly post here under names made to make them sound Indian. Just the other day, we saw that when one poster was kicked off the site for posting extremely racist remarks, he attempted to post immediately afterwards under an Indian-sounding name. I have more identifying information on posters than you see here so I am not guessing (though I have an absolute policy of preserving a person's anonymity and would never reveal identifying information). So George is not really off base to make that suggestion.

    But I also can tell you that it is extremely rare for a former H-1B to take an anti-H-1B position and that's because there is a big difference in the mindset of a successful immigrant and the typical protectionist programmer trolling around on a pro-immigration blog.

    The H-1Bs I've met over the years are typically over-achievers who have a global mindset and come to the US because they believe in the American Dream that is predicated on our having an open economy. There's a reason many H-1Bs go on to start their own companies - they tend to be entrepreneurial, a characteristic that is common in many immigrants. And as a business owner, the last thing you want is the government telling you who you have to hire, particularly if it means either doing without a needed individual or hiring someone less qualified than your overseas competitors get to hire.

    I'm sure there are many Indians who don't want to compete for their jobs. They just tend to be in India.
  11. George Chell's Avatar
    "Did it ever occur to you that Indians that are U.S. citizens or GC holders may also want a chance to compete for American jobs? The law as it is now stands that a company can go straight to the bargain basement (bodyshops, etc.) and not even consider locals."

    It is a global economy according to treaties we have signed. Would you prefer bodyshops here or bodyshops with even lower wages in India? Define American jobs. If you are concerned about American jobs why are Americans stealing Japanese and German jobs (Honda, etc.)...I believe we are selfish. Why are Americans working abroad and taking jobs away from Singaporeans and others? Is it a two way street..or is it ok for Americans to work abroad while not ok for foreigners to work in this country? Typical colonial mindset?

  12. Greg Siskind's Avatar
    To echo George, there are six million Americans living overseas and far more of them are working overseas than H-1Bs are working in the US. Those workers are vital to helping American companies compete and a lot of Americans owe their jobs to them. I'd be a lot more worried about foreign countries kicking those workers out in retaliation for our own protectionist measures.
  13. Greg Siskind's Avatar
    GoHome - Without addressing the substance of your arguments, my initial reaction is that if you are going to comment about American programmers having sufficient education to compete, it helps to use proper grammar and spelling. Your comment is riddled with errors.
  14. Greg Siskind's Avatar
    Folks - Mr. GoHome has now been barred from the site along with "Samir" because they are attempting to post under multiple names and also trying to pose as immigrants when they are not. In fact, GoHome posted five separate comments in less than an hour each under a different name. While I do not mind opposing viewpoints, I expect participants in the discussion to behave in a civil manner and also not attempt to be deceptive. Individuals that do not wish to be respectful of the community, can post somewhere that doesn't care.
  15. Greg Siskind's Avatar
    Kumar, my fake Indian friend. I have no problem with loads of H-1B competitors becoming immigration lawyers. I know several superb lawyers who came on Hs and who are a great credit to the profession. I have a lot of confidence in my skills and reputation so I have no worries. The bad lawyers out there are the ones that would be concerned.
  16. D's Avatar
    "I'm sure there are many Indians who don't want to compete for their jobs. They just tend to be in India. "

    Just to make a point , Protectionist left and Extreme right have lost miserably in recent elections in India.
  17. gg's Avatar
    I forgot to point one more thing in my last posting. The current rules only require the employer to pass the LCA wage test. Meaning a employer is pretty much in the green as long as he is passing the LCA wage test ; If the LCA wage is say 40,000 dollars for a particular job its not illegal for the employer to pay the H1B worker the same wage regardless how many years he is working for the same company.

    Again some employers are more daring where they dont pay the H1B worker salary monthly or every two weeks as long as they have passed the LCA wage test; meaning the H1B worker can be working at a client and billing hourly but may not be seeing the money that he is entitled for.

  18. gg's Avatar
    There is another side of this loophole too.

    This is especially true when the H1B is used for subcontracting the H1 worker. While the LCA may claim the fictitious job requires 2yrs experience the employer will not use that experience when the H1 worker is being marketed for potential jobs; instead the employer will be more than happy to show the real experience of the H1 worker.

    In a way the H1 worker with a 6yrs experience is paid at the rate of a 2yrs experience worker but he is asked to perform the work of a 6yr experience worker. This way the employer is indirectly providing the services of a H1B worker with 6yrs of experience to his client while paying the worker the salary of a 2yrs experience. Thought the final client might be paying the actual hourly wage for that particular profile most of the money gets into the pockets of greedy H1B employers.

  19. D's Avatar
    "pockets of greedy H1B employers"

    Greed , that is the foundation of this country and capitalism as a whole.
  20. JoeF's Avatar
    "I have seen 1 case where an H1B worker with 10yrs of experience got his H1B approved when he moved to another employer for a job that required 2yrs experience. (Now dont ask me how someone can get a H1 transfer after 10yrs .. talk to a good attorney instead )"

    gg, you show once again that you are prone to draw wrong conclusions.
    First, the 10 years experience does not necessarily equate to 10 years on H1.
    Second, while the H1 is limited to 6 years, a person who has used the 6 years can get another H1 if the person has spent a year abroad.
    And third, a person who has a Greencard application pending can have his H1 extended past the 6 years. With the current GC quota backlogs for some countries, such a person can very well end up with double-digit years on H1.
    So, once again, educate yourself about these things before making a fool of yourself.
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