Trump to impose $100k fee for H-1B worker visas, White House says

Once you are breaking the $100k mark and want to only save costs, you are better off opening a GCC in Eastern Europe, Israel, or India, which is what most companies started doing once remote work became normalized in the early 2020s.

All this did is make a free "Thousand Talents" program for India, especially in chemical, petroleum, biopharma, and biochemical engineering - industries where the delta between US and India salaries aren't significant but the talent gap in the US is real.

There are much smarter ways to crack down on H1B abuse by consultancies - this ain't it.

Edit: can't reply, but here's why this is dumb

Assuming I am in Dallas (a fairly prominent domestic IT services hub) and hiring an H1B employee.

In Dallas, a wage around $95k base is fairly standard based on JPMC, DXC, and C1's salaries in the area.

That $95k an employee is has an additional 18% in employer required taxes and withholdings. Add to that an additional 5-10% for retirement account and insurance plans. That $95k employee became around $115k-125k.

Once salaries start breaking into the 6 figure mark, that 23-35% in overhead starts adding up very fast. On top of that visa processing before this rule costed around $15-20k in additional legal fees on the employer's side.

If I'm at the point where I'm paying a low six figure salary, I'm better off opening an office in Warsaw or Praha or Hyderabad where I can safely pay $50k-60k in base to get top 10% talent while getting a $10k-20k per head tax credit over a 3-5 year period depending on the amount I invest building a GCC because my after tax cost at that point becomes $50-60k per employee. These credits tend to require a $1M investment, and with the proposed H1B fee, this made that kind of FDI much easier to justify than it was before.

At least with the current status quo, if I was hiring an ML Engineer at MS or an SRE at Google (a large number of whom are H1Bs as well), I could justify hiring within the US, but adding an additional $100K filing fee just gives me no incentive at all to expand headcount domestically.

You don't use the stick if you also don't have the carrot.

> You are not taking into account section 174, It takes you 15 years to depreciate foreign salary vs first year

That's a rounding error now that it costs $100K to renew or apply for an H1B visa. And for larger organizations breaking the mid-8 figures in revenue mark, section 174 changes never had an impact one way or the other - it was mostly local dev shops and MSPs that faced the brunt of the section 174 onslaught.

> Honestly, even Germany is probably better bang-for-the-buck than Hyderabad

Germany needs to severely reduce employer contributions and taxes to become cost competitive against Warsaw, Praha, or Hyd for software and chip design jobs.

That said, this is a net positive for Germany's biotech, mechanical, biopharma, and other engineering industries that aren't software or chip design related.

An H1b software engineer median is ~$120k.

Using other official sources, the median pay for US software engineers overall is... ~$120k.

> you'd have to do a study to show that the talent couldn't have been trained in the US, and that an increased supply of workers didn't drag down salaries, either short or long-term.

If the median H1B for software is exactly the same as the overall median, it makes you wonder if the median would be different if the H1B was not an option available to employers.

Base salary, not total comp, the first year

> Using other official sources, the median pay for US software engineers overall is... ~$120k.

So, it seems that if we remove H1b workers and assume that the demand would have stayed the same, then domestic salaries should have been higher. Assuming, of course, that companies won’t simply offshore.

Lower supply tends to drive the price up.

Companies already do a lot of offshoring - you think any rational actor in this space that was hiring H1Bs isn't going to simply relocate them to more friendly jurisdictions for immigration?

On top of this, these are workers who would have otherwise paid tax in the US!

The flipside is that every american industry becomes less competitive globally without the H1b guys.

This is a pet peeve of mine, but there is an english name for that city and it's Prague.

There is no point in using the local spelling because it adds no clarity, is less obvious to pronounce for any reader and the locals are not really gonna thank you for doing this either. Just seems like a form of light cultural white-knighting to me.

You are not even consistent because Warsaw is not how locals spell that.

This was true before and after today.

Put another way, if all the H-1B jobs really can be offshored quickly and easily the way so many Indians and anti-Trump people here and elsewhere confidently predict, *that would have happened already*.

It did seem in the past that there was much more of an all-hands-on-deck attitude towards education throughout US corporate activities, more broadly focused on the general fields the various companies valued the most. I suspect this fall off is very real, but don't actually know if that is just my impression or if there is a concrete effect from modern economic structures.

It's an important enough question it should definitely be studied and taken into account in policy.

However I can't agree with your conclusion that "Immigration helps the countries [sic] top-line metrics, but it rarely helps the citizens inside the country". That requires meta studies that I have never seen to prove it is so. I could cautiously accept that "some types of immigration rarely help corresponding sections of the local population" much more than such a blanket judgement. Overall, it is just not true that economics is zero sum. It doesn't have to be. An entire people can in fact flourish.

The whole premise of your original contention was that we should measure like-profession salaries to see whether or not there is an effect. Then when no effect was shown, you switched it up in favor of an argument that (again, incorrectly) predicts that such an effect can't be shown at all. That's not good faith discussion.

[1] Immigrant labor is arriving, by definition, in a pre-existing market. If immigrants can't be hired more cheaply than existing labor, by definition they can't be pulling wages down.

Honestly, even Germany is probably better bang-for-the-buck than Hyderabad, but Hyderabad has the volume and the offices.

Then that $120,000 salary median can still represent a 50% undercut of similar Urban salaries for a profession.

I'm going to contend that that is the case. But I don't have time to chase down the statistics

Now you can argue you would prefer that those 200,000 jobs go to Americans, but on the scale of the overall economy, it really doesn’t matter. What’s far more important is the massive impact those 800,000 software engineers have on the rest of the economy. Four million IT jobs, the entire finance and healthcare and retail industries that are propped up on technology built by those people; whole technology companies like Uber or doordash that create entirely new labor markets.

Risk 25% of that capacity on the idea that we would rather have those industries built solely on domestically-grown engineering talent? Why would that be a good tradeoff?

But yes, if that path doesn't exist, I don't think that global companies are going to start hiring American, they're going to continue hiring globally but take the path of least resistance towards bringing this talent onboard.

It's not just a supply and demand equation; it's a fundamentally different environment that changes the social payoff for mentoring, networking, and building a reputation.

Ultimately despite all the propaganda trying to convince us that diversity is inherently beneficial, we are trading economic benefits for social costs. So we need to carefully restrict migration to make sure the economic benefits are actually there.

What study does one "have to do" to support _this_ claim?

Maybe at FAANGs what you say is true. But at every place I've been when H1Bs ended up added (normally via consultancy or outsourcing) it was always to cut costs. And the only costs we were cutting was staff.

Funny things is the agencies/consultancies/outsource companies all solds us on it would cut costs when the only thing changed was labor. But apparently they could cut costs without cutting labor costs? How does that work?

You can't really expect a company hiring PhD's in a niche field to show that they couldn't have spent 7 years training an American for the work.

The prospect of a $100k/year/employee visa tax makes opening an office in Europe so much more compelling.

I guess the people who can't be offshored will see their salaries go up so that's cool?

This is if you believe that lower wages for high skill work is not an issue.

However high migration rates lower social trust, this is well studied.

If you take a smaller example, hiring internationally vs domestically. If you have to go domestic then you might have to settle for a less ideal qualification, requiring more training.

This is repeated everywhere, so companies that train better are more likely to succeed. Leading to conditions that encourage upskilling for locals overall.

Importing people short circuits that idea.

The admin has been cutting billions in funding to universities which makes this argument easier.

Need an expert in arithmetic combinatorics? Well Terry Tao lost his grants so now you've got to look elsewhere.

https://www.newsweek.com/computer-science-popular-college-ma...

Obviously there is not going to be a drop of 200k overnight, but I think the graduates of CS will be thankful there are more opportunities for them. These opportunities will drive more students to take CS classes in the US.

Sure it's sound to argue that wages would be higher with more constraint supply.

BUT: The network effect of all SWE talent from across the globe moving to the US is also huge.

Probably, you'd have a smaller overall tax base without H1B. Make no mistake most countries would like to keep their H1B expats :)

If you really wanted to grow US supply of engineers, you'd have to start by fixing the education system, making it cheaper, and then wait 5 years.

I don't believe for even an instant that there is a significant amount of immigration happening to bring in people who are that specialized

Some, maybe. But not the vast majority of it

If you don't fix the supply constraints, you'll depress growth.

You could fix the education system - good luck - and then wait 5 years before you cut H1B.

But yes, obviously it depressed wages, which at a certain point is probably a good thing.

Immigrants make up 14% of the population but make up over 20% of entrepreneurs. 44% of fortune 500 company founders were either born outside US or to immigrant parents in the US.

They seem roughly correct

The most prominent exonyms are of cities like Paris, London, Moscow or Beijing.

I.e., places culturally and historically significant enough that older historical pronunciations have become ossified in foreign languages.

English having a "Prague" spelling means the name of the city was important enough to have entered the English language back in the day when English was still borrowing heavily from French.

You can see this in BLS data.

Is there a good resource for data on wages in Poland? I mean, I am going to look, but I thought I'd ask.

Except the Heritage Foundation, er, I mean, Trump Administration controls all 3 branches of government and has all the freedom in the world to power a resuscitation of public education in America, except they're not interested in that at all; quite the opposite, they want to further fragment education baselines and make secondary education less desirable.

I don't doubt there may be people who would be fine with that, but I guess no one who values their own skills would go for it if there are plenty of East/West Coast companies hiring remotely.

> Is there a good resource for data on wages in Poland? I mean, I am going to look, but I thought I'd ask.

I think you can start from looking at the local job offers, e.g. https://justjoin.it. Just remember there are a couple of nuances:

- most developers in Poland don't want to be FTEs, because the tax burden on that type of employment is at least 2 times higher than on B2B contracts; effectively, we ended up having a market where everyone is hired B2B, but with all the usual FT benefits (paid vacations and sick days, equipment, private insurance, gym memberships, free food and whatnot) - it's sort of a gray area, but the related law is not really enforced; thus as a foreign company you compete with the local B2B rates + benefits

- people are aware that US is a different market generating more revenue

- the work-life balance may be quite different, so they expect to be paid accordingly

- Warsaw is generally more expensive than other cities in Poland, so you don't need to limit yourself to one city in your search, the same way as you wouldn't hire remote developers from the Bay Area only

- there's a reason these offers are hanging in there :)

Edit: formatting.

All I have is anecdotal conversations of people avoiding tech under the assumption that writing code would be off-shored.

We'd be paying that for Early career base (think L3). Mid-career you'd see people breaking the $80-110k base range.

I don't like giving "TC" simply because RSUs are very dependent on a number of outside variables.

And my example was for why a JPMC opens an offshore office abroad, or why a company hires an EPAM type.

For product companies who actually care about work quality, you won't too see much difference between salary abroad and a US salary from 10 years ago. I'd recommend using a fork of the old GitLab comp calculator - it's fairly accurate.

Yep! Krakow, Lodz, and the other various cities have become cost effective and built hiring pipelines as well.

You see this all over the CEE and India as well, such as Czechia (Brno, Ostrava), Romania (Cluj thanks to the Transylvanian government, Timisoara) and India (BLR/Pune/Hyd/Gurgaon to Tier 2/3 cities)

you're pointing out facts - yet people deny. most software jobs listings are either in eastern europe or india these days. that's the "A.I" eating software jobs.

yeah some companies might list U.S jobs - but they're only seriously hiring for Staff roles. the rest offshored.

And it is the 10 times more competitive economy compared to non H1B importing nations.

You know what would provide job growth in high tech? Economic growth and expanding prosperity in the economy overall.

But it was so hard to get the visas (and so much uncertainty in whether or not they'd be able to secure a visa for any particular worker) that they opened up a European and Canadian offices.

The nativism and rejection makes sense with that regards - it's an almost religious hope that stuff will get better.

I just believe in being brutally honest - especially on HN, where I can vent or shine a light on decisions.