Views from Phanfare CEO and Co-founder Andrew Erlichson

Link Why there should be no limit on the H1B visas allowed

Only last year, all the H1B visa slots available to hire foreigners to work in the US were snapped up in a single day. We hired someone through the program a few years back when tech hiring was tight. It seemed ridiculous that more slots were not made available. The fear in Washington is that tech companies like us were hiring foreigners over US citizens. This could not be further from the truth.

We went looking for someone abroad because we could not find someone qualified here. We prefer to hire US citizens. There are no language or cultural barriers to overcome and it does not require an immigration lawyer.

Fast forward to today and we find out that the H1B program is now undersubscribed, according to the WSJ. Interesting, now that unemployment in the US is above 9% and there are good engineers looking for jobs, companies are once again hiring US citizens and passing over the non US citizens.

To me, this is just more evidence that there should be no limit on the number of H1B visas we allow. The cost to hire an H1B is lots of paperwork and at least $5000 in legal bills. That tax alone guarantees preference for US workers. Beyond that, limits only make US tech companies less competitive in boom times.

Truth be told, I am pretty pro free market. I think the market allocates resources somewhat efficiently and when we tinker, we always create some secondary effect that may or may not be desirable. Rather than prop up dying industries with stimulus money or try to pick winners in new industries, I would have sent the millions of unemployed workers back to school to retrain them in industries that are expanding. Ultimately, our prosperity will be related to our individual productivity multiplied by the number of people working.

Disclaimer: this is my blog and these are my opinions. They don’t necessarily represent the views of every Phanfare employee. I have been scolded by readers for talking politics on this blog before, but I have a right to my opinion just like everyone else. That is what makes this America.

  • tslow

    Why aren't tech companies paying up-front for the skills they need via education?

    Perhaps the point of restricting work visa's is to force private sector companies to volunteer their resources towards educating its workforce rather than turning to government to do it for them. Or to student loans. In Europe, many large companies pay for their worker's education. You complain about paying $5,000 for a lawyer! Yet the whole American education system is largely based on student loan debt.

    Debt is a 4-letter word now, and what largely caused the current financial mess.

    I want a $2/hour nanny for my kids and can get one from Guadeloupe tomorrow. I'm free market, why shouldn't I be allowed to do that?

    Just being contrarian.

  • erlichson

    I know you were being facetious, but let me answer: You are really posing two questions: why can't you hire an illegal immigrant and why can't you pay below minimum wage?

    We are a nation of immigrants. I am all for allowing more immigrants. need to make sure they pay taxes, don't burden the system, etc.

    Greenspan said in an interview that the overall price of housing is dependent on demand and if we want more demand for housng, we need to allow in more people. interesting point. I know Greenspan is out of favor, but the man has a point.

    Minimum wage laws, which do mess up the bottom of the market, are a compromise between our desire to make sure people earn enough to live and wanting a market system. no perfect answer there.

    government is well suited to do things that benefit everyone, such as education, basic research and infrastructure. especially with basic research, it is difficult for private companies to make the investment because everyone benefits, but one company pays.

    with education, why should a company pay for the education of a person when they will then leave right after and go to a different company. and yet it is beneficial to society that we be educated. hence its a good government function.

  • tslow

    Yes, I was being partially facetious.

    Greenspan has no point. Overbuilt housing is a symptom of leveraged excess. It does not mean that there are too few people. Follow his logic and every time there is a overcapacity we can simply solve it by importing more consumers? The fact supply and demand got out of wonk is a direct result of positioning housing as an investment, not shelter for the population. Money should follow function. Change that dynamic and the market will rebalance. Proper economic allocation of income, and the hordes of homeless will have a place to live! It's an obscene lack of redistribution and income disparities in the face of excess housing supply that is immoral (and un-American). By building housing as a investment based on debt (securitized, tranched mortgages) the disconnect between a declining ability to pay (stagnant wages) and the real cost of housing was made up by debt. Forget giving people wage raises; just load them up with debt. People were “paid” by getting a third or fourth credit card, with some vague future promise that they could pay it off by selling their house at obscene profit, not a raise. Sad, but true.

    Same for education. By making it so costly we've undercut the supply. Hence you are surrounded by unemployment and still want immigrants. Of course the H1B program is undersubscribed. Who want to come to America and be paid in debt rather than wage gains?

    The economic problems right now are deeply structural, not financial. The poor allocation of labor resources and terrible income structures have come home to roost with a vengeance.

    I like this guy, not Greenspan:…

  • credit cards

    Interesting!!..Is this the real reason?..I often think about these questions but i can get cleared from your artilcle..As you told the cost to hire an H1B is lots of paperwork and at least $5000 in legal bills…Yeah its true..

  • edinburgh dentist

    The economic problems right now are deeply structural, not financial. The poor allocation of labor resources and terrible income structures have come home to roost with a vengeance.

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