Thursday, April 30, 2015

The Magic Kingdom In Peril

Disney CEO Bob Iger is one of eight co-chairs of the Partnership for a New American Economy, a leading group advocating for an increase in the H-1B visa cap. Last Friday, this partnership was a sponsor of an H-1B briefing at the U.S. Capitol for congressional staffers. The briefing was closed to the press.
Looking back through the comments on posts tagged H-1B visas, I can tell that the topic is contentious here at Lem's, with most people falling on the side of "we need more H-1B visas because it displaces all the lazy overpaid people. The logic is that it's purely market correction.

OK then. Consider the world to be at disequilibrium (look up that term if it befuddles you) with US borders being an artificial barrier. A much greater concentration of skilled workers exists outside the borders of the US and they are being kept out, artificially. Why not let those barriers down more uniformly so that foreign capital and influence can flow freely here too so that Bob Iger can feel a little anxious about his job too?

Retired people and people employed by government tend to be immune to the effects of H-1B visas. The former group because their income is often tied to retirement stock portfolios which benefit from open doors policies and the latter group because government work at all levels is a great guild which up until now, mostly excludes H-1B workers. Yet these two groups seem to populate comment forums on the internet.

[UPDATE]  America, you have been warned: link

58 comments:

Eric the Fruit Bat said...

I wonder how many adults have ever explained to a young child: (1) there's no such thing as magic; and (2) kingdoms are anti-American.

chickelit said...

Nice dodge, fruitbat!

I'm Full of Soup said...

I oppose the subterfuge of the H1B programs just like I oppose the visa programs that give green cards to rich foreigners who invest $500K here. I also doubt the majority of Lem's readers favor these types of programs. I don't know how you have concluded that CL.

bagoh20 said...

If you have jobs for people and the people here won't or can't do them, then what? You will still have to pay for them anyway through social services and taxes. Should you import the product and leave the jobs overseas? Even services are now being outsourced overseas. All things being equal, any employer would rather hire American citizens, but if they can't compete, then what? It's not the employer's fault that American's often don't want to compete on the world's field. That's where companies have to play today.

bagoh20 said...

I was talking to a neighboring business owner the other day. He's a German immigrant who came to California with absolutely nothing and built a one-man garage shop into a very successful business that now employs hundreds of people. We were sharing our frustration over the byzantine regulations we both struggle with daily. He told me that one thing better about the U.S. is that separate agencies agencies don't talk to each other and are kind of lazy, which at least makes them a little less dangerous to us business people. He said that agencies in his country cooperate and work together, so that if you get pulled over in Germany and don't have proper documents, the cops call immigration and they arrest and deport you immediately. That's not what I expected of a European system, but he said they were very organized and efficient compared to here, which can be good or bad depending on what they are up to and what you want from them.

Rabel said...

"If you have jobs for people and the people here won't or can't do them, then what?"

That's the main question, isn't it? Is the business community pushing for more H1B's because US labor isn't available or because the H1B's are cheaper?

No doubt you could find better, less expensive talent selecting from a worldwide pool but is that in the overall best interests of the US?

ricpic said...

I can understand corp[orations wanting to lower their labor costs but how does a government justify importing workers when the economy is dead in the water?

Trooper York said...

I think this a very sore subject for people what had their jobs taken over by low cost foreign labor.

I have a friend who was a big time computer guy in the 1980's. He worked on big projects for places like Goldman Sachs and the stock exchange. They farmed out that work to India and now he has to comute to Memphis to have a job.

He is pretty pissed as you can imagine.

Rabel said...

Speaking of outsourcing corporations, here's my favorite story today.

It sort of brings together the last two posts.

bagoh20 said...

"No doubt you could find better, less expensive talent selecting from a worldwide pool but is that in the overall best interests of the US?"

"I think this a very sore subject for people what had their jobs taken over by low cost foreign labor."


Of course people on the losing end don't like it. How could you?

But, you can't really protect pay that is far above what others will accept unless it's government work where the customers (taxpayers) can be forced to pay it.

If you overpay, then other companies, usually foreign, will take those jobs anyway, by taking your customers who want lower prices. It may take a long time, and maybe you will retire before it happens, but it will happen. The only alternative is forcing people to pay too much for things by trade restrictions, licensing, regulation, etc. The end result is people pay too much so your pay is protected. Is that fair to them. Is it fair to the people willing to work for less?

Your pay comes from other people buying what you make. If they can get it done elsewhere for less, why shouldn't they? It's your pocket or theirs - your family or theirs. You are asking them to sacrifice so you won't have to, and with the force of government. This just seems like cold hard fact to me. I wish we could live fat and happy without any competition, but that would probably have dire consequences in the long run. Americans have had a long run of protected jobs, but they were only really protected by the poor quality of foreign workers, and that's over now due to our incredibly awful government run education industry and an overbearing, incompetent, and greedy government with ITS protected employees. We need more competition, not less, and we need it in government more than anywhere.

Rabel said...

Reasonable points, bago, but if we eliminate all protections for US workers isn't it inevitable that our standard of living will ultimately equalize with that of the world at large?

That prospect doesn't appeal to me and I'm OK with some degree of protectionism in American policy. The case in point is how many H1B's are enough to keep us competitive without pauperizing the US hi-tech workforce.

Trooper York said...

There is a difference between paying out over priced wages and actively seeking out an inferior labor force to maximize profits at the sacrifice of quality.

I manufacture womens clothing in California and Brooklyn. I have been approach aggressively from Chinese sources to do my production there. I pay more for domestic production and proudly state that my clothing is made in the USA. It adds to the cost. Unfortunately most people don't care. They want the cheapest possible price not matter what. That is what mass market is all about. It is why they wear cheap shit that falls apart. Until we start a Nativity racist campaign to drive out foreign goods we will never turn it around.

Trooper York said...

Of course I say that because I am a racist nativist but you get the idea.

Trooper York said...

When I call the help line for my computer or whatever I ask if I am talking to India. They always lie and say their name is Chuck or Brad when they sound like Slum Dog millionaire.

I often demand to talk to an American. That doesn't always work out too well. Just sayn'

bagoh20 said...

"...if we eliminate all protections for US workers isn't it inevitable that our standard of living will ultimately equalize with that of the world at large?"

Protection will not protect us if our people are less educated, and more burdened by taxes, regulation, and corruption, than other nations. We will eventually be less than equal. We're quickly heading that way as the U.S. precipitously slides down the scales of global competitiveness, education, economic freedom, etc, etc. We are on our way down, and we don't have what used to keep us ahead of the game.

We weren't the world's leader in opportunity and prosperity because of protection. We had the goods of freedom, education, and low corruption. Protection will not protect us from losing that. We have been spoiled, and we think that where we have been is somehow genetic and guaranteed. It was neither. We had values and a system that excelled. It's not even average anymore. We are just living off the scraps of our ancestors' success - coasting on momentum.

bagoh20 said...

Do we really want to lock in where we are now? Do we think the rest of the world has to buy our stuff forever? That's suicidal in a free market, and even with all the unfree crap gumming up the works, the world market is - in aggregate and in the end - free to choose sooner or later where to send it's money and jobs.

Trooper York said...
This comment has been removed by the author.
Trooper York said...

If Jefferson Davis were alive even he would say that is racist.

ricpic said...

"...a Nativity racist campaign to drive out foreign goods..."

Does bringing the Nativity into it mean that XXX Flour Bag type clothing will be an exclusively domestic operation? I mean that coarse burlap type stuff is all you ever see being worn in Nativity scenes.

ricpic said...

"...I ask if I am talking to India."

You've got to curry favor to get results when you call the computer help line. Get it?...curry?...sorry...or sari.

Methadras said...

I am not in the H1-B visa camp and here is why. It's a lose lose for this country and for those that come here and for those workers it displaces. H1-B's are paid less, far less. That is depressing to an economy overall. Those displaced by H1-B's will find it harder to penetrate back into a market that is dominated by H1-B's altogether. Big business is for it because of the cheaper labor pool and it skirts the legality of immigration question always hovering over the heads of these companies like the Sword of Damocles. With H1-B's all the workers are legal (allegedly), they all have to fill out the appropriate H1-B Visa paperwork (alledgedly) and company can contract with an H1-B recruiting contractor to bring these people in and displace legitimate workforces. It's a loser all the way around.

Chip Ahoy said...

Are you trying to start a fight or what?

You know the Libertarian canon is free flow of capital and free flow of labor so the question answers itself from the Libertarian point of view.

But we live in a ♬ material world. Oh shit, now I have the image of Bottle Shop Lurch singing Material Girl.

That whole bit about jobs Americans won't do is tosh and not just regular tosh either, pish tosh, that worst kind of tosh, the seriously silly kind.

4UC, what they mean is jobs Americans won't do at that pay. But others will. Others who live in a fucked up political system. If they come here then they bring their political fucked upness with them. They don't usually say, I'm going to the place with improved political system, rather they say, something else, I don't know what. I don't speak all their languages and I'm not privy to their conversations. So what do I know why and how they make their decisions, how do I know how much is pull and how much is push?

You're talking about people coming here and I ask, at this late juncture, what's wrong with where you're at? Is is so bad you must leave? Cannot anything be done about that?

But you said economic upheaval, disruption, or something like that.

Let's change it to climate upheaval, disruption, or something like that, some real natural thing that causes a huge population shift, in that case I say, bring it. And likewise we'll go when we must.

But when the upheaval, disruption or whatever is political, a really truly man-made disruption, then that is entirely different and can be sorted right there without moving.



Trooper York said...

I call up all the time to complain that the computer makes all these spelling errors when I comment. The fooks!

Anne in Rockwall, TX said...

Thank you Chip!! I am a data analyst, so you can imagine how many IT people I deal with daily. They are hired from India because they will work for a LOT less and live 10 people to a room. Meanwhile, they have no more skills than anyone else, they are just cheaper.

The fact that they have horrible communication abilities and they impose a major burden on HR with their caste system is immaterial apparently. The fact that they are incapable of reacting quickly to issues and bog down the entire process is immaterial apparently. They will still work for ten dollars an hour and the customer be damned.

It is not that Americans will not do the job, it's that Americans will not do the job for ten bucks.

You have all seen a enough launches crash and burn. You have all seen our technology lag behind. HB-1 visas is why. As Trooper notes, made in America does make a difference.

Dammit, I am sick of the hard work I do being ruined by less qualilified, less talented individuals with lower standards that were hired because they worked for half the price. And I am DAMN sick of trying to explain to my stakeholders that I cannot deliver to their requirements because this one cannot interact with that one as they are of a different caste.

You think Baltimore and Ferguson are trouble? Pfffttt. That ain't nothin'.

Crap, I'm so sorry for the rant. I apologize.

edutcher said...

Let's get that workforce participation thing down before any visas get charged.

All they're talking about is slavery.

Wage slavery, but slavery, nonetheless.

bagoh20 said...

Everyone wants a government solution to THEIR problem, and so we get a lot of government "solutions". Like most problems, that's how this one started too.

chickelit said...

bagoh20 wrote: We weren't the world's leader in opportunity and prosperity because of protection.

An easy counter argument is that in fact we were protected in our heyday. That's why huge new treaties had to be passed--because those sorts of arrangements were illegal in the past.

chickelit said...

The argument against protectionism is that it keeps markets inefficient by not allowing perfect mixing of talents and compensations. But if this true, why not go whole hog and allow even more mixing? Do the people who laud open borders accept that there might be pragmatic limits to mixing?

chickelit said...

It seems like no-brainer that if the goal is to acquire the best talent, then labor pool mixing must freely exchange the "best." That is a qualitative argument.

What we're pushing now is a quantitative argument for mixing--that cheaper is always better. The end result of this quantitative thinking must be a cheapening on labor value.

As Rabel pointed out above, a free mixing may well lower the living standards of most Americans if true equilibration were reached. Of course the lucky few 1-5% will be much better off.

Another point I wanted to make was that the fix we're in is a bipartisan thing. Mainstream Republicans and Democrats both favor easing limits on immigration but for different reasons. To oppose any of it is to be labelled a nativist which is akin to being a bigot.

I'm Full of Soup said...

Edutcher wrote:

"Let's get that workforce participation thing down before any visas get charged."

This is the answer in a nutshell. Tale care of Americans first just like we take care of our families first. I am sick of hearing Americans won't do the work- then raise their wages instead of paying illegals peanuts off the books which costs all of us money!

I'm Full of Soup said...

One correction I would make re Edutcher's recommendation- we actually want to get the workforce participation rate up not down.

bagoh20 said...

Americans are the most expensive employees on the planet. Are they the best? The best educated? The most motivated? The more important question for me is why is it so expensive to hire people?

What we need is to get more of what the employer is putting out for us? To keep more of what we produce? Much of the reason the participation rate is low is because the ones working are forced to provide so much for those less motivated that many simply take the easier route. Early retirement with near full pay and benefits for life, years of unemployment benefits, unlimited EBT payments, subsidised housing, healthy people on permanent disability, fake worker's comp claims, and all the rest. These didn't used to be added to the cost of employing someone. Now they are. Many people don't work simply because they don't need to. I know far more people who could work, but don't than people who want to work but can't find it. They simply can't find a job they will take that's worth giving up the freebies. That's not the same as can't find work. The job market is most suppressed by the cost of hiring people over and above what you pay them. All jobs could pay more if the cost of employing people wasn't already a multiple of their direct wages.

The 47% is where the blame lies, not the hard working 16% who are immigrants, most of whom do low wage hard work that nobody else wants. I know it's true, because I have these kind of jobs open almost continuously, and I know who applies for them: 10 to 1 immigrants to citizens. What is now becoming really irritating is that even immigrants don't want to work with all the other alternatives available. We encourage and pay royally for our low participation rate. We get what we pay for, and we mostly don't pay for results.

rcocean said...

I always love how the "Free market" works. If there's a shortage of something then the corporations just jack up the price. Free Market they yell. Supply and Demand! You cant' stop it.

But when it comes to labor - its different. f there's a shortage, well we need to get more supply, cause otherwise profits will be hurt. No magic free market there.

rcocean said...

Its kinda like the Big Banks. If their risky loans pan out, its their money baby - profit - the free market.

But if the risky loans fail on a big enough scale - oops - we can't allow them to fail! Must bail them out. No free market then.

rcocean said...

Its like all this talk of the "free market" is just propaganda to help the Rich.

Nah, that's impossible.

Icepick said...

AJ, it's easy to conclude that the majority of people on this board are in favor of both open borders and crushing the wages of their fellow citizens because that's what they vote for every single election.

Icepick said...

There was a time not that long ago when Americans were proud of the fact that American labor got paid well. Now it's supposed to be a source of shame. Just another indicator that our elites what to turn this country into just another Third World shit-hole.

Icepick said...

I'll note that bagoh is still spouting the same bullshit. Yeah, I'm not participating in the labor market because I'm getting paid so well to sit on my ass.

Oh, wait a minute. I'm not getting a goddamn thing. Hey, I'm out over half a million dollars and counting! Hey, I hear gunshots in my neighborhood every single night, because that's the only kind of neighborhood I can afford! Yeah, those gubmint handouts which I'm not getting are making my life so fucking cushy.

I told you all last summer that you were voting for more of the same, and by God you did. Some of you may finally be realizing it, and some of you knew it all along but were quite happy to Fuck over your fellow citizens because you were lining your own pockets.

The rest of you are just too goddamn clueless to realize you're being used like a cheap who're.

bagoh20 said...

Icepick, do plan on doing this the rest of your life? If not, then it's time to do something different. I know hundreds of people living a life, raising families and progressing in a far more expensive location with a fraction of your education and skills, some with substantial handicaps. How is that possible?

chickelit said...

Hey Icepick! Good to see you back.

chickelit said...

@Icepick:

I'm nowhere as bitter as you. The key to survival for many people like us will be to keep working even if it's at a fraction of what you used to earn.

I've had two careers and am trying to build a third in online teaching.

That being said, I still do believe that both parties have lied to the American people. Imagine my dismay when I found out that hardline Darrell Issa is H1B positive.

bagoh20 said...

As for gunshots, I spend 6 days a week in Compton, CA, and my business has been robbed 3 times in 3 months. Why do I stay? Not because I prefer that, but because that's where I get what I want.

My 50 year old sister lives in Melbourne, FL with no college education, no skills other than being a waitress her whole life. She works 6 days a week and runs her own business. It ain't easy. In fact, it's exhausting, and she probably makes minimum wage for the number of hours she works, but she is thankful to have it. She has never stopped working her whole life. She makes sure she gets what she needs. Why does she do that?

chickelit said...

Why does she do that?

Probably for generational and cultural reasons.

chickelit said...

Again, for those in favor of free markets (but perhaps not commenting), I ask: why not truly free them? Is there a limit to how much mixing should occur?

chickelit said...
This comment has been removed by the author.
chickelit said...

Here's a song for the prodigal Icepick: Dust Devil. Song should be played as loud as possible, preferably with earbuds.

I'm Full of Soup said...

I agree with Icepick that both parties seem to support open borders which hurts our collective standard of living. And that pisses me off since I did not vote for that.

bagoh20 said...

"... why not truly free them (markets)? Is there a limit to how much mixing should occur?"

And then ask the reverse: Is there a limit to how little should be allowed?

In almost all things balance is preferable, and so I suspect here as well.

The way I look at immigration questions is to reduce it to a smaller analogy where the nation is represented as a home. So I find that I disagree with open borders as I would open doors to my home allowing anyone to enter and enjoy the fruits of my labors without permission or contribution. But, I also would not refuse to allow in a plumber, or electrician to help fix or improve the place if I didn't have the skills or time myself. I might even allow a destitute person with no skills to live there if they tried to contribute and avoided taking advantage or harming my family.

It needs to be regulated, modulated, and done with intelligence and an eye to what is best and just; first for the host nation and then for the immigrants. Some are needed, some are worthy, and some are best kept out.

As for businesses wanting them: I wouldn't let my daughter bring in some drunken bum just because she likes what he does for her. He would need to be a good fit for the whole family, or at least not a drain, and if he can do some of my work so I can pursue other better things, it might make sense. The problem is politics with its corruption, lies and incompetence. We just make some simple rules and then enforce them. If you're not invited, you get squat, and you leave.

chickelit said...

And then ask the reverse: Is there a limit to how little should be allowed?

Fair question, but we're not at or approaching that extreme, are we?

chickelit said...

Chip Ahoy said...
Are you trying to start a fight or what?

You think this blog post is provocative? Wait until you see what I've got planned in response to Time Magazine's cover story: "1968 vs 2015." I think I know what the problem is. You just have to go back to 1968 and read something to see it.

rcommal said...

!

I'm Full of Soup said...

CL:

Re 1968 vs 2015.

In 1968, the news [mostly] covered stories that were not made up.

In 2015, made-up-bogus issues become the hot story [i.e. Michael Brown, Trayvon Martin and now perhaps this Freddy guy].

The Ferguson riots were sparked by lies and falsehoods. Baltimore's may have also.

Joe Biden, America's Putin said...

I'm not happy with our open borders. & yes - both parties are to blame. It's a race to see who can pander to people who come here illegally.

Steg said...

USA has the highest corporate tax rate in the world. Our federal debt is staggering. Our federal government has grown to monstrous size outside of it's clearly defined limits.
-
If we reformed the tax code to a fair Flat tax rate, or something like that, corporations would not need to bend over backward to hire cheap labor.

Reciprocate trade deals with countries. We should tax Chinese imports like they tax ours. It is a one way street ATM. Then maybe we could also start paying down that debt!
-
To change three terms in the second paragraph, "Consider the world to be at disequilibrium (look up that term if it befuddles you) with US TAX CODE being an artificial barrier. A much greater concentration of skilled workers exists INSIDE the borders of the US and they are being kept out, artificially. Why not let those barriers down more uniformly so that LOCAL capital and influence can flow freely here too so that Bob Iger can feel a little anxious about his job too?"

If the government reduced red tape, more startups would happen. If the government reduced tax rates, companies would operate more efficiently and with better service as a whole.

The H1B topic seems like another symptom of the greater problem. Too much government.

rcommal said...

Too many ifs. Too few backbones.

rcommal said...

Too many deniers. Too few thinkers.

rcommal said...

I can understand corp[orations wanting to lower their labor costs but how does a government justify importing workers when the economy is dead in the water?

Oh, for fuck's sake: because corporations want to lower their labor costs.

rcommal said...

Corporations small and large, business small and large: all exist, and all need things. < That's true.

Some get to demand things. Others don't.

^That's true, too.