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How to Balance the Benefits of Foreign Workers and the Potential Damage to Citizen’s Job Prospects

There have been quite a few complaints about companies hiring foreign nationals to work in the USA to save money (and costing citizens jobs or reducing their pay). The way the laws are now, companies are only suppose to hire people to work in the USA that can’t be met with USA workers. The whole process is filled with unclear borders however – it is a grey world, not black and white.

I think one of the things I would do is to make it cost more to hire foreigners. Just slap on a tax of something like $10,000 per year for a visa. If what I decided was actually going to adopted I would need to do a lot more study, but I think something like that would help (maybe weight it by median pay – multiple that by 2, or something, for software developers…).

It is a complex issue. In general I think reducing barriers to economic competition is good. But I do agree some make sense in the context we have. Given the way things are it may well make sense to take measures that maybe could be avoided with a completely overhauled economic and political system.

I believe there are many good things to having highly skilled workers in your country. So if the problem was in recruiting them (which isn’t a problem in the USA right now) then a tax on the each visa wouldn’t be wise, but I think it might make sense now for the USA.

I think overall the USA benefits tremendously from all the workers attracted from elsewhere. We are much better off leaving things as they are than overreacting the other way (and being too restrictive) – but I do believe it could be tweaked in ways that could help.

Outsourcing Made by India Seen Hit by Immigration Law

In June the U.S. Senate passed an immigration bill that allows more H-1Bs while also increasing their cost and barring some companies from placing holders of the visa with customers.
…
Indians received more than half the 106,445 first-time H-1Bs issued in the year ending September 2011, according to a U.S. Department of Homeland Security report. The second-biggest recipient was China with 9.5 percent.
…
While the legislation raises the annual H-1B cap to as much as 180,000 from 65,000, it increases visa costs five-fold for some companies to $10,000. It also bans larger employers with 15 percent or more of their U.S. workforce on such permits from sending H-1B staff to client’s sites.

The aim is to balance the U.S. economy’s need to fill genuine skills gaps with protection for U.S. citizens from businesses that may use the guest-worker program to bring in cheaper labor

Related: Relocating to Another Country – Working as a Software Developer – Science PhD Job Market in 2012 – Career Prospect for Engineers Continues to Look Positive

July 24th, 2013 John Hunter | 5 Comments | Tags: Economics, quote

Comments

5 Comments so far

  1. Simon on July 28, 2013 11:19 am

    I think with the trends towards more globalisation, your idea of taxing companies when hiring foreigners might not hold water for long and whats stopping those companies from setting up say departments in foreign countries and hiring on the “cheap” there and thereby not only robbing the nation of those jobs but also of revenues.

    But as you point out, its a very grey area and there are many factors to be weighed. On one hand companies need to be wary of the bottom line, they need talent, on the other we have to think of the wider implications for the country, unemployment rates etc.

  2. John Hunter on July 28, 2013 6:34 pm

    The idea of taxing companies for hiring foreign workers is only done AFTER the country decides it wants to discourage this practice and the other methods are not being effective enough. That seems to be the case in the USA now (though certainly some people want to discourage foreign hiring less than we are now – but overall the view seems to be we have hired too many foreign workers).

    There is a great deal of work moved out of the USA to save money. But the reason the companies want to hire for jobs in the USA is those doing the hiring want them based in the USA. Often this is big global USA company want more IT people in their Ohio office and they are hiring some overseas consulting firm who want to bring in people from India or wherever. Pretty much the companies have already moved as much out of the USA as they are comfortable with due to the current difficulty hiring foreign workers in the USA – though my guess is this would also increase to some extent with a tax.

  3. Steven Fromm on August 11, 2013 1:42 pm

    You raise some interesting methods to address the problem. The Senate has also approved some of these measures. But this is a tough problem and we as a country should not deter the entry of talented to people from other countries. We have always stood for our freedoms and it should continue that way without harming our people. Tough balancing act to be sure.

  4. Ketley on August 20, 2013 8:01 pm

    Having lived and worked in two foreign countries – and immigrated to both, and recruited from overseas for both, I find this topic rather interesting both personally and theoretically. In general I would say that companies only import talent as a last resort – it’s expensive, can be slow, and risky. The need for such imports probably indicates a problem with the training and educational history of the nation concerned, and such problems cannot be fixed overnight. MThere is much to say on such a complex subject!

  5. Global Workplace at Curious Cat Investing and Economics Blog on December 2, 2013 8:35 am

    […] How to Balance the Benefits of Foreign Workers and the Potential Damage to Citizen’s Job Prospects – Leading Economic Freedom: Hong Kong, Singapore, New Zealand, Switzerland […]

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