Party of the Rich

I did not watch the debate. I chose to go to my aerial silks lesson instead.

When I got home, the debate was half over. I turned it on for about a minute, during which Marco Rubio managed to turn my stomach to the point where I just couldn’t go on.

Apparently he’s all worried about American tech companies “taking advantage” of relaxed immigration laws to hire foreigners who can work more efficiently than Americans. Any firm that does this should be subjected to strict regulations on who they can hire going forward, etc. etc. And there should be a 180 day waiting period before they can hire that foreigner in the first place, etc. etc.

So let’s be clear about this: Rubio cares enormously more about American engineers than about American consumers, American investors, and low-skilled American workers, all of whom benefit from more efficient engineering. Who do you suppose is richer to begin with — the average engineer, or the average consumer/investor/low-skilled worker?

I cannot stand this stuff.

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28 Responses to “Party of the Rich”

  1. 1 1 Tom Limoncelli

    Is that posturing or would he actually put that into law? Maybe I’m naive but I look at that as posturing.

  2. 2 2 Steve S. from CT

    I didn’t watch the debate, but restricting H1B visas doesn’t “protect American jobs.” I work in a technology field, and it’s much easier and cheaper to hire an American citizen over someone who needs a visa. We don’t go through the hassle because the foreign worker is cheaper – we do it because it’s so difficult to recruit qualified candidates. Further, once we do hire them we don’t pay less than we’d have paid to the citizen – in fact the H1B holders are probably paid more on average than American citizens, because on average they have more experience / stronger credentials – otherwise we wouldn’t have hired them in the first place. Finally, once they’re hired, they’re living here – paying taxes here and spending money here.

  3. 3 3 Doctor Memory

    I’ll also note in passing that Rubio is proposing bringing massive regulation to bear on what is presently a strong candidate for the slackets labor market in the world. While it’s certainly true that the major Silicon Valley players (google, apple, facebook et al) have a noted preference for fresh-faced 20-something college grads, the idea that some notable percentage of older American software engineers are sitting idle due to competition from H1B visa holders is… well, it certainly doesn’t pass my personal laugh test, but my personal instincts have been wrong before so I’ll just say: citation needed.

    (There’s a different and more interesting question about whether tech companies’ current hiring practices are actually netting them productive employees, and whether they should be more open to hiring and training non-traditional candidates — but that’s entirely orthogonal to the immigration question: they’re hiring foreign degreed engineers and scientists not garment workers.)

  4. 4 4 John Hall

    I feel like any proponent of immigration needs some kind of convincing response to this type of behavior:

    I’m all for immigration of highly technical foreigners. And I’m for the H1-B visa program. However, I do think it’s a problem when companies use these programs for cost cutting instead of hiring people that they couldn’t otherwise hire.

  5. 5 5 Ricardo Cruz

    John, why is it a problem for companies to cut cost by hiring us poorer foreigners? Do you also go buy your groceries from the most expensive supermarket?

  6. 6 6 Johnson85


    the problem is that HB1 visas are used to keep market forces from bringing wages up.

    Change HB1 visas so that recipients simply enter the labor force and are not tied to a particular employer, and there’s not really a basis for complaining except for self-interest.

    But giving companies access to a supply of labor that is prevented from participating freely in the labor market introduces an unnecessary distortion and multiplies the downward pressure on wages.

  7. 7 7 Johnson85

    I should add that I’m not sure if HB1s are really common enough to meaningfully move wages, but I have trouble seeing a justification for tying HB1 visa holders to a particular company regardless. If their skills are needed in the U.S., they should be allowed to work in the U.S., for whatever company values them the most.

  8. 8 8 Roger

    Steve and commenter Steve have fallen for some H-1B propaganda from the super-rich. If you want documentation on how damaging the H-1B visas are, see Norm Matloff’s page.

    Do you really think that American consumers are getting better products from Facebook and Google because they can import low-wage foreigners instead of Americans?

    No, the H-1B visas are almost entirely promoted by the super-rich like Zuckerberg, and they are mostly Democrats. It allows them to hire cheap labor to improve their stock market value. If anything, this is evidence that the Democrat is the party of the rich.

  9. 9 9 Daniel
  10. 10 10 Roger

    Daniel, that article describes $176M in donations, with almost all of it going to pro-immigration candidates. Meanwhile, Hillary Clinton is raising $2.5 billion. Super-rich campaign donors want more immigration, and middle class voters want less.

  11. 11 11 David Wallin

    It is amazing to me that we teach millions of foreign-born individuals at our universities in high-tech areas, and then make it nearly impossible for them to stay here and let us take advantage of their education. For a discussion on this, I recommend a read of the Ted presentation recommending by Steve previously: Alex Tabarrok’s Launching The Innovation Renaissance.

  12. 12 12 Floccina

    @Raoger but doesn’t this make the USA Citizen programmers available for the next productive use? BTW Zuckerberg does not consume so much. Also other sock holder benefit.

  13. 13 13 John Hall

    @Ricardo Johnson85 gives a better response than I think I ever could have. I’m all for more immigration, particularly skilled immigration. I wouldn’t say that abuses of H1-B are widespread, but I have heard about some. In the link I posted, Disney had basically fired all the U.S. workers and replaced them with foreign H1-B workers. Now, there isn’t anything inherently wrong with hiring cheaper workers. The problem is that the point of the H1-B program is that it’s supposed to fill a void. They’re only supposed to use the program to hire workers when they can’t find people to do a job. The fact that people were already doing the job, meant that it was total BS.

  14. 14 14 Roger

    Floccina, yes, those 450k fired Americans are free to pursue other activities, now that they lost their jobs to foreigners in 2014.

    Some 450,000 Americans were fired by the big capitalist corporations in 2014—while at the same time, almost every one of those companies applied for H1-B visas to employ foreign nationals — mostly from the Third World.

    The three largest offenders — Hewlett Packard, Microsoft, and Cisco Systems Inc., have together axed more than 45,000 American workers, while at the same time applying for thousands of H1-B visas, which are designed to allow foreign nationals the right to work and settle in the US.

  15. 15 15 Scott H.

    It’s our turn to live, baby!

    The Engineers

  16. 16 16 john barry

    Two Irish immigrants were digging ditches in Boston in the early 1900s.

    Paddy: “So tell me Michael, who do you like in this upcoming big election?”

    Michael: “Well I like what I hear from this Republican party”

    Paddy (drops his shovel, dumbfounded)) “The REPUBLICAN party?! Why that’s the party of the rich!”

    Michael. Aye. That’s for me.

  17. 17 17 Ken B

    I think Steve needs to address a point raised above. An H1-B is not a simple work permit, nor is a TN visa for Canadians. It is tied to a particular company and it gives the company leverage it would not have in a true market. Facebook would have to pay more if the visa worker were freer to change employers.

  18. 18 18 Roger

    Johnson, John Hall, KenB: The whole point of the H-1B program is to provide cheap indentured labor. It is not to fill a void. The foreign worker always replaces an American worker.

  19. 19 19 Joel

    Speaking of Rubio, I would be interested to get your take, Professor Landsburg, on the exchange between Harwood and Rubio about the rich seeing the largest gain under his tax plan. Rubio noted that this is true on a numerical basis, but on a percentage basis, those with lower income will gain more. Based on Harwood’s reasoning, even a tiny reduction in taxes for the rich along with a large reduction on the poor would still be regressive, because it benefits the rich more than the poor. Based on this, there is only one way for tax policy to go.

  20. 20 20 Matthew


  21. 21 21 Steve S. from CT

    Roger, you’re absolutely correct, except for the fact that H-1B candidates aren’t cheap, they aren’t indentured, and they aren’t labor.

    “Labor” suggests an interchangeable part on the factory floor, a human machine to operate the mechanical machine – a “cost” that needs to be minimized. In my field, skilled people aren’t “costs” they’re assets – they don’t displace each other, to the contrary the more I have the more work I can take on and the more success / profits I can generate.

    My challenge is it’s extremely difficult to attract and retain qualified, experienced people. It’s not a question of pay – that’s not really what drives these folks. They want to get paid, sure – but it’s more about the type of work you can offer. I don’t work for one of the “glamorous” firms like Google – so even garnering interest is a huge problem.

    I can find qualified entry level people – and I would love to bring them on and train them, but I can’t do that without having experienced folks in place to provide that support and training. That’s why I even consider candidates who require visas, despite the considerable increase in complexity and cost to bring them on board. I just need the help.

    So in my experience the H1-B candidates aren’t replacing Americans, to the contrary in fact – for each experienced team leader I hire, I could potentially hire 3 or 4 entry-level candidates who would almost certainly be US citizens.

    Regarding cost savings, the easiest way to do that is to outsource. Software firms tend to be international anyway – so it’s often easier to just build a team in Prague, say, or Bratislava, lots of very qualified folks in eastern Europe in particular, but there are advantages to having a local team. Cost savings, however, isn’t one of them.

  22. 22 22 Ken B

    I am not disagreeing with you. I think Steve needs to address the points you raise. His standard argumentin such cases is that it’s a free market. The market is not so free in this case. The INS is enforcing lower wages for facebook and google. Just citing the workings of a market won’t cut it as an argument.

  23. 23 23 Ken B

    Steve S. from CT:
    Or maybe you just need to offer more. You can’t find good people? Did you offer twice the going rate? I’m guessing you did not. Although if your employees are assets not costs it really shouldn’t be a problem.

  24. 24 24 Roger

    Steve S., hiring cheap indentured labor is the only reason H-1B visas are ever given. See Matloff for details.

    Lots of employers complain that they would like to hire better employees. If letting in more foreigners increases the labor pool, then they like it, especially if the foreigners are indentured. No one disputes that. The question is whether the policy is damaging to Americans.

  25. 25 25 Freelancelot


    “…fired by the big capitalist corporations…”

    Let me get this straight: you believe that capitalism is evil. You also believe that Democrasses are more-capitalist-than-thou. Is that about right?

    And how much crack have you been smoking lately?

  26. 26 26 zchen

    To be a little more precise, the question is whether the policy is more damaging than its alternatives. If there really are millions of foreign-born young people graduate from American universities with advanced degrees, who are more competitive than Americans but mandated to leave the country, I guess the industry that would have hired them might move to where they end up anyway at the end of the day.

  27. 27 27 Ben

    Many people who are not engineers have family members of friends who are engineers.

    If they see the utility of the people they care about as at least partially an extension of their own – and if they don’t they are poor family and aren’t really friends – they may still consider a benefit to an engineer a net gain, even at a (smaller) cost to themselves, without being irrational.

    If that’s the case, then Rubio may be caring equally about engineers and consumers, and simply reflecting their preferences.

    This is essentially the same answer I gave in my comment (51) on “What’s fair is fair” here:

    (Note: Generally I am in favour of free movement, so this is not an argument for the policy. I’m just pointing out something I don’t think you have given due consideration to.)

  28. 28 28 Ken B

    To Roger you said “Let me get this straight: you believe that capitalism is evil. ”

    I am willing to bet a large sum Roger believes no such thing. Are you willing to bet he does? Your comment annoys me because I see this kind of deliberate distortion crap all the time.

    Roger can believe companies try to manipulate laws and regulations (google “regulatory capture public choice theory”) without hating capitalism.

    We are seeing a similar thing now in Ohio’s pot referendum: crony legalization. I oppose that law but I am both pro-capitalism and in favor of ending drug laws.

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