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Comment by ryzvonusef | Hacker News Reader

    > ABSTRACT

    > We study the effects of H-1B immigration on U.S. industries that employ H-1B workers and their trading partners. Using a novel cross-industry design and the 1999–2003 expansion of the H-1B visa cap for identification, we find that H-1B exposure raised incomes for natives and pre-existing immigrants, with gains concentrated in non-STEM occupations. Income gains propagate forward through supply chains to downstream industries but not backward to upstream industries, consistent with a productivity shock rather than a labor supply shock. We find no direct effect on patenting, suggesting that productivity gains arise from better task execution rather than patentable invention.

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I suspect this topic is too complicated to be truly captured by one such study. But I'll add that the observation of increased income is in line with the predictions of classical economists (e.g Adam Smith) in the case of a growing population. Classical economics says that population growth leads to increased productivity (efficiencies of scale, division of labor) and increased competition for scarce resources (in particular land) and hence that workers typically end up with an absolutely larger but proportionally smaller slice of the growing pie - house and land prices, commercial rents, etc increase at a faster rate than wages (therefore banks, landlords, etc benefit to a much larger extent than workers).

The other conclusions (patents, upstream/downstream) sound more tenuous and subjective. Supply vs productivity shock is also something of a niche/pedantic technical distinction in macroeconomic modelling - in wholistic terms, labor supply and productivity are inherently coupled via the market (a sudden supply of new laborers will lead to a sudden increase in absolute and per-worker productivity - think partial vs total derivatives).

I doubt the study can quantify labor costs artificially being bid down, lack of job security in seemingly fungible roles, or the relatively lower income for contract indentured desperate workers.

No one questions outsourcing likely generated lower-costs for shareholders or labor with stock options. However, did the policy improve productivity measured by revenue or in-house innovation... than probably not, as most of the IT industry retired... they left folks to fend for themselves on a rented cloud with a 43% staff incompetency rate.

Managers often get a percentage of the unspent division budget as a year end bonus as well. So the stats and incentives will skew even if 43% of the workforce is functionally irrelevant to a business. =3

Not only can't they quantify them, but classical economics would argue that they are all intrinsically coupled via the market.

As an example of how these variables are all entangled, say that your job pays 150k a year - you spend 50% of your time on a high value task and 50% on a low value task. The company values these at 50k and 100k each. The work force grows due to some policy change or market conditions, etc. Wages fall ~10% but the business is expanding and a new junior worker is found to do the low value task. The company now pays them 90k to do this task fulltime while you are paid 180k to do the high value task fulltime.

In this case wages have been bid down, income has gone up, the work force is less skilled on average, and productivity has increased in aggregate, per-dollar, and per-worker (no task switching)!

I don't buy the increased productivity argument either, for the same reason we don't skew opportunity cost for doctors to come and scrub our restaurant toilet stalls.

However, I do agree if you convince people they are worthless... one can likely underpay them more easily. Note, $150k is already a low living standard in places like silicon valley. =3

You may be conflating income/productivity with living standard. $150k is a high salary - but cost of living can be even higher. Note that cost of living is primarily a euphemism for rent. So you may be working in a highly productive / useful field and earning a high salary, while your actual standard of living has reduced because you pay more for housing, land, your local restaurant pays higher rent and therefore charges you more for meals, ditto for all other services, etc. This is in fact what Adam Smith would predict as a natural consequence of population increase.

> $150k is a high salary

Maybe in a 3rd world country, but that is borderline poverty living in silicon valley.

I think my anecdote of importing doctors to get paid scrubbing toilets is a fairly solid augment against artificial income suppression in any field of practice. Adam would likely be horrified modern indentured servitude proponents still exist. =3

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