Fed finally cracking down on H-1B Abuse
It’s reassuring to hear some progress is being made in way of monitoring and cracking down on those who abuse their outsourcing laws and rights to provide truly equal opportunity employment.
http://arstechnica.com/tech-policy/news/2009/02/feds-finally-cracking-down-on-h-1b-abuses.ars
Let’s say that an H-1B-free labor market has set a price on a year’s worth of work from a programmer with a bachelors degree and two years experience at US$35,000 + $12,000 (benefits like health insurance for a family of four) = $47,000. Now let’s say that companies acquire the ability, via the introduction of the H-1B program, to import foreign labor of comparable quality. The average imported worker is willing provide the same work for $35,000, but instead of benefits she wants health insurance for herself only ($3,000/year) plus a green card. Thus the promise of a green card to the H-1B worker is valued by the market at $9,000/year, and you can and must factor this in to account for the H-1B employee’s total compensation.
The cost of the green card to the employer is much less than the cost of the American worker’s insurance coverage, plus the foreign worker is obligated to work for the employer for a set period if she wants to get the promised green card. This is a win-win for the employer and the H-1B worker, but not for the American employee, to whom the green card is worth exactly US$0. The American has been priced out of the market because the H-1B will sell her labor at what amounts to a steep discount in exchange for a green card.
Tags: internet, Law, outsourcing
