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Comment by rgovind | Hacker News Reader

I am not sure if H1's are paid any lesser than locals...Do you have data points to prove otherwise?

Economically increased supply will decrease the price. Supply & demand. Another way to increase supply and thus save money is to hire remotely, and not restrict yourself to a small geographic area. If you can hire a guy in upstate new york where a house costs $40k all in, that $1000-$2000/month saved in after-tax rent costs (~$17-34k/yr pre tax) alone will significantly decrease their required wage.

If the supply of labor is reduced, the price of labor will rise until demand falls to match supply. That means that some positions will go unfilled; positions whose returns don't exceed the cost of the labor. But we don't know the total value of that labor. The community could be worse off altogether with those positions unfilled, because price doesn't capture all the information - we don't use money for every social exchange, and nor can we reliably estimate the present value of future contributions.

For example, many US companies are created by immigrants (18% of Fortune 500, or 40% if you include children of immigrants). Steve Jobs was the child of an immigrant. Hiring a guy who is so enthusiastic about getting a job that he wants to live in a rural area and live on a pittance, vs hiring someone who's ambitious and hungry - who's going to create the most value?

If you're paying H1s less than locals you're violating immigration law. The idea behind the H1 program is to help you when you cannot find local expertise in your specialty and need to recruit globally. It's a very sensitive issue in the USA if you are bringing in less expensive foreigners to "steal" jobs from locals.

That said, it's prone to abuse and I have seen some H1s with really poor compensation due to a weak negotiating position (the difficulty of switching jobs while in-country, sponsored adjustment of status, etc.).

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