[vsskanth]

Staffing companies are extremely profitable and mostly operate on the edge of the law, exploiting visa workers for maximum profit. Any attempt by USCIS to regulate staffing agencies use of H1B has been fought tooth and nail by armies of lawyers.

With the fall of Chevron, I don't think there is a way out of this without legislative changes.

The other side of the coin is the extremely arbitrary and capricious nature of the US employment based visa and immigration system. This naturally leads to middlemen who can navigate the system exploit it.

[eru]

> Staffing companies are extremely profitable and mostly operate on the edge of the law, exploiting visa workers for maximum profit. Any attempt by USCIS to regulate staffing agencies use of H1B has been fought tooth and nail by armies of lawyers.

That seems weird. Why would they be extremely profitable? Are there big barriers to entry?

Without barriers to entry, you would expect the profits of staffing companies to be competed away. (Just to be clear: you wouldn't expect workers to be less exploited. That's a feature of the visa system and their relative lack of other opportunities, not a function of the staffing companies.)

If there are so profitable, why isn't everyone and their mom starting staffing companies?

[cool_dude85]

It seems like a strange position to take. Real life is not like the econ 101 course I took in college years ago? Must be that real life is not true.

[eru]

We would still have to explain, why all those greedy private equity companies and billionaires and VCs etc aren't starting staffing companies left and right, if they are so profitable?

Physics can tell you how frictionless, spherical cows behave in a vacuum. When you see real cows behave differently, you can investigate which of your violations are violated (and by how much, and which assumptions are still ok to make; eg air resistance is seldom a factor in the movement of real cows). The spherical cows are still a good starting point.

Economics can be similar. First, I doubt that staffing companies are actually all that profitable across the board. Yes, the difference between what they charge and what they pay out might be big, but they have plenty of overheads. Do we have any sources for their supposed extreme profitability?

Second, I suspect that any remaining excess profitability can probably be explained by barriers to entry.

Though some quick googling really makes me lean very much towards the first: staffing companies are by and large not more profitable than companies in other sectors.

[bsder]

The simplest solution is to automatically give an H1-B a green card in 12 months--24 at the longest. Force the sponsoring company to pay for and complete all of the required background and security checks. Make failure to complete or shitty completion of those checks criminal liability directly on the CEO.

This would immediately deprive these kinds of staffing companies of the economic incentive as they would have to pay for the legal costs of an H1-B every 12 months. This would remove the depressive impact that H1-Bs have on salaries as they would be free to compete in the market at large after 12 months.

And the H1-B pipeline would be free to bring in people that we actually want.

This could be done tomorrow. But it won't be.

[vsskanth]

This requires Congress to pass legislation, so cannot be done tomorrow. Legal immigration isn't a high priority in general and Congress hasn't moved on immigration in decades.

[bsder]

I might stand corrected shortly.

However, I was under the impression that almost all of this is directly under the purview of the Executive Branch (with the possible exception of the criminality).

Apparently one of the bottlenecks is the total number of visas per country. Demonstrating that you're unblocking the H1-B to Green Card pipeline by fast-tracking those from countries that don't have a big backlog should send the body shops running for the hills and unblock the ones with a big backlog as well. Or shutting down any new H1-Bs from countries until their backlog is gone would also accomplish the same thing.

The problem is that US companies like the multi-year indentured servitude of the H1-B program as it depresses salaries.

[vsskanth]

The executive branch cannot make laws. The H1B program and green card numerical limits came to be from Congress passing laws and can only be changed by them passing new laws.

[rawgabbit]

Or we could simply end the H1-B lottery scam.

And go with the naked truth of what it is, patronage. Let each Senator/Representative be responsible for giving out a certain number of visas each year and let them auction it off to the highest bidder.

[eru]

The auction is an excellent idea, but you don't need to tie it to representatives. Just make the proceeds go to general revenue, and tout it as making those pesky foreigners pay and how much it benefits the tax payer.

[listenallyall]

Huh? How could passing multiple new laws (anti-business laws at that), including fundamental changes to legal residency (especially in the current political environment) be done quickly (tomorrow according to you)?

[shiroiushi]

What he meant is that it could be done quickly if there were political will for it. Obviously, there's no political will for this, so it won't be done.

[listenallyall]

But this is an example of the most ridiculous ideas floated on HN. Even if every politician agreed there was a problem with the H1-B system, the proposed solution is far from agreeable to everyone. Adding criminal liability? Increasing labor costs ("remove the depressive impacts on salaries")? Making it easier to obtain permanent residency?

One of the reasons HN gets mocked is how dismissive many commenters are about the real-world complexities of various domains. Someone thinking that some wacky proposal he just made up 5 minutes ago is the ultimate solution to longstanding labor constraints and that everyone would automatically agree to it within 24 hours, makes it a joke rather than a basic idea that might have some merit if explored further.

[bubblethink]

I think the parent's point is to move to a free market/merits based system rather than whatever insane lottery system they have. Almost every other country has some type of points/skill/wages type system.

[listenallyall]

And my point is, whatever he was trying to say doesn't matter. When you assume the problem is so simple that it could all be fixed tomorrow, you expose yourself as someone who actually doesn't understand the problem.

[shiroiushi]

>Even if every politician agreed there was a problem with the H1-B system, the proposed solution is far from agreeable to everyone. Adding criminal liability? Increasing labor costs ("remove the depressive impacts on salaries")? Making it easier to obtain permanent residency?

What's wrong with these ideas? 1. Criminal liability - this sounds a bit harsh, but some people are concerned about making sure "bad people" don't get in, so making the completion of proper background checks a hard requirement seems reasonable to allay their concerns. But then they might be concerned the background checks are bogus, so adding criminal liability helps with these concerns too. But granted, this is probably the most extreme part of that post.

2. Increasing labor costs - why is this bad for anyone except employers trying to use H1B as a way of keeping costs down? It's claimed to be a system for letting employers get skilled help where there's a labor shortage, so it's supposed to cost them more.

3. Easier to obtain PR: what the heck is wrong with this? If these immigrants are highly skilled, aren't causing any problems, and want to stay, why would you want to make it difficult for them to stay in your country and help your economy?

[listenallyall]

I'm not here arguing for or against any proposal, or claiming any moral approval or disapproval. I'm just stating that they would face serious resistance and therefore would be extremely difficult to pass, directly contradicting the OP's implication that they are simple and easy.

1. and 2. are anti-business. Just like raising the minimum wage, passing anti-business legislation is very, very difficult. 3. well, if there aren't any negatives, why is there currently a limit on the number of visas?