Monday, August 17, 2015

America needs more H1B visas, but (probably) won't get them

The current US political climate is increasingly anti-immigration, including high-skilled immigration. This not only makes much-needed reforms of the H1B visa system increasingly unlikely, but suggests the program might be considerably scaled back. Unfortunately, I've been dealing with H1B-induced annoyances my entire career so far, and it looks to continue. The latest: my attempt to hire an internal transfer at Microsoft was stymied because the change in position would reset their H1B visa application. Note this is someone who already is in the United States and already works at Microsoft.

So clearly immigration laws are not designed to optimize either allocation efficiency or human welfare. However, perhaps there is a more cold-hearted calculation in favor of the current regime? I don't think so.

Economic Nationalism. If the point of immigration laws is to make America richer, it's a fail. With technology, a laborer can create value anywhere with (intermittent!) electricity and internet. All the immigration restrictions have done is teach companies how to acquire talent in their home markets. Not only does America lose out on the direct tax revenue, but also secondary economic activity such as demand for housing, infrastructure, transportation, education, entertainment, child care, etc. Case in point: check out Microsoft's increasing footprint in Vancouver, where immigration laws are more sane. Funny side note: collaboration with employees in the Vancouver office is made more complicated by immigration laws, e.g., they cannot visit on-site in Redmond too frequently. Three (Bronx) cheers for regulation.

Protecting American Workers. Ok, maybe these regulations don't help America at large, but do benefit domestic technology workers. I don't buy it, because the resulting reduction in labor's bargaining power degrades the quality of the workplace. Let me explain. Technology workers who have not obtained a green card have two very strange properties: first, they have a large amount of non-monetary compensation (in the form of legal assistance with the green card process); and second, they have limited freedom to change their job during the visa process. These two effects combine to greatly reduce the bargaining power of foreign technology workers, who in turn are willing to accept less money and worse working conditions. Consequently, domestic workers have their collective leverage over employers reduced because part of the labor pool is unable to negotiate effectively. If visa restrictions were relaxed, labor conditions for domestic and foreign employees would both improve.

Promoting Innovation. Another fail for our current policies. I spent the first half of my career in startups, where everyone has at least a green card if not a passport. No one in the visa process can afford the inherent volatility of a startup (side note: kudos to Halt and Catch Fire for converting “missing payroll” into great television). The net result is that startups are starved for human capital disproportionately to large firms, as the latter have the capital and expertise to both navigate the legal process and engage directly in overseas labor markets. Favoring incumbents over insurgents? Not exactly a formula for creative destruction.

To summarize: I'm very unhappy with the current mood of the American electorate. It's not just mean, it's also bad for the country.

By the way, if you are looking for a job, please contact me as indicated in the top-right position of my blog. My blog has been continuously advertising open positions where I work since I started it, because my entire career I have always worked on teams with open positions that go unfilled. Funny that.