undefined | Better HN

0 pointsyazaddaruvala9y ago0 comments

By definition, increasing barriers to entry, drives supply down. Holding demand constant, and assuming price elasticity: Lowering supply, increases "prices" (in this case salaries).

Assumption, demand is constant: I'm talking about demand in the economic sense, i.e. The demand curve. The demand curve is left unchanged by this bill. i.e. We still need the same number of software developers, and for any $X/person companies are willing to hire Y number of people.

Assumption, Price Elasticity: For the most part this assumption holds because, fortunately, software companies do seem to be making profits. Implying, they have the means to increase wages.

All in all, this is in the best interest of any person in a profession where many H1-Bs currently hold a position, and whose company is currently profitable.

0 comments

dragonwriter9y ago

> The demand curve is left unchanged by this bill

Globally, sure, but the global supply of labor in any field isn't changed, only the US supply. In many cases, H-1B work isn't extremely location-sensitive, and foreign suppliers are acceptable substitutes to local suppliers.

To the extent this is true in any field, the effect of restricting visa supply is to offshore more work.

yazaddaruvalaOP9y ago

Great point! I did not address the global talent pool, I only considered the US as a closed system.

That is because I disagree with: "In many cases, H-1B work isn't extremely location-sensitive, and foreign suppliers are acceptable substitutes to local suppliers"

For an H-1B, US companies go out of their way to recruit remote talent, pay legal fees, take on risk, to get a talented worker to come work in the US.

For a significantly reduced cost to employer, they could have recruited that same worker in their country of origin, and pay them for working in their country of origin.

If H-1B work is location in-sensitive as you suggest, why do for-profit companies, take on additional costs, risks, and pay higher wages for the same talent?

ganeshkrishnan9y ago

This. Outsourcing to India had slowed down in the last few years because wages in India shot up and it didn't make sense to outsource.

See: http://www.forbes.com/2008/02/29/mitra-india-outsourcing-tec...

The wages for IT workers rose insanely in India. In places like Salt Lake (where IBM, CTS and other bigwigs are established) they drove the real estate prices by more than 10x in few years.

The decline started few years back when the cost to outsource was nearly equal to paying an H1b person or hiring a local.

Most tech companies including Apple & Google hardly pay any tax, would you really expect them to pay artificial rates for labor?

Gargoyle9y ago

Sounds like no one is hurt by this then. Let's do it.

j / k navigate · click thread line to collapse