"But America has an obligation to protect American workers"
Classic make-work fallacy. American interests are best served when corporations (Microsoft in this case) are as efficient as possible. If that means immigrant workers, then so be it. If MS (and other corps) are forced to hire less-qualified or more expensive American workers then the cost of these measures is paid by their customers who are ... Americans and in lost market share which results in a cost to MS' investors who are ... Americans. The difference is that the plight of the unemployed programmers is obvious and easy to see while the plight of the customer and investors is obscured but that does not change the loss that they experience.
Lets imagine for a moment we throw open the borders and allow the domestic labor market to reach equilibrium with the the world market, will we not have a lot of new Americans? and will we all not be much poorer in the near future?
Lets imagine for a moment we allow the free trade phenomenon of American exogenously financed consumerism to continue to global equilibrium, how much wealth will the country have left?
Many prominent American investors; notably Warren Buffet, George Soros, and Jim Rogers; vocally oppose these ideas.
Academic theories are good fun, but we ought to slow down and act pragmatically. A perfectly free market is just too ugly.
One wise measure of pragmatism may be to adjust the H-1B quota downward as the domestic labor market contracts to maintain the status quo (as far as I can tell this is what the discussion is really about.)
edit: Also, I feel the immigration question is more nuanced than the "classic make-work fallacy," which is a lot closer to breaking something with a hammer and feeling good about creating a job for the guy who glues it back together.
Another classic fallacy: trade is not zero-sum. Will we have a lot of new Americans? Probably.
Is that necessarily a bad thing? Probably not. More Americans means more workers to produce and thus, more to go around.
Also, adjusting the H1B quota downwards is a luaghable proposition. As it is, the quota runs out in less than 3 months. Your suggestion would just lead to more outsourcing (which is often not as efficient as immigration) and higher prices.
Globalization will make America more like the rest of the world -- with a very wealthy elite and terminally poor servant class with low class mobility. I appreciate economic freedom within the borders, but only because of the safeguards and investments we have made and will continue to make.
I'd say we're already there, and have never really left it. In my opinion. the noble/serf arrangement has always been in place in America.
I did a bike ride across the country about 10 years ago, and it was eye opening. Much different than what I saw everyday in Orange County, CA. It's easy to keep the blinders on in our everyday lives.
No slums like bombay or Sao Palo or mexico city. Thankfully, our poor (even our rural poor) are spared the intense and catastrophic destitution of such places. America is not a classless society, but we have maintained a large and healthy middl class (that is less true now than it once was,) and as previously mentioned, our poor are better off than their counterparts around the world.
Another classic fallacy: trade is more complicated than the basic picture of comparative advantage you got in Econ 101. If America had kept pursuing its comparative advantage, we would still be trading beaver skins to the British for manufactured goods. Instead we took a protectionist stance and allowed our fledging industry a shield from foreign competition so that it could develop. This is what every industrialized nation has done, even all of the "Asian Tigers." The only places that haven't done so have been forced into "free-trade" under colonialism or quasi-colonialism, where they get to do great things like send all of the countries bananas out to another power in exchange for a few luxury cars for the elite ruling few. Back when Ireland was in a colonial type situation, it had the distinction of being a net exporter of food during The Great Potato Famine.
This is a tiresome argument, but more people = viewer resources per person. And, if history is a guide, different people = political squabbling, and sometimes political disaster.
The US could support a far higher number of people with the resources it has. This is just more incorrect zero sum thinking. Which is why, by and large, the population of the planet now is better off or at least as well off as it was 2000 years ago, when there were vastly fewer people.
" American interests are best served when corporations (Microsoft in this case) are as efficient as possible."
That simply doesn't pan out. It is in the capital-owner's best interest when their holdings operate as efficiently as possible. Most americans are not capital-holders.
Look again at how your pension fund is invested. Most americans have an interest in the stock market (Exxon, GE, Walmart, and index funds are particularly polular among large pension funds like CALPERS). Furthermore, all Americans are capital holders in the sense that they own (some) US dollars which can be used to buy from the US economy. If the economy becomes more efficient, they can buy more and therefore, are aided by the increased efficiency. That is, until the dollar is devalued even more.
Since (I imagine) that you advocate free movement of capital & free trade, it really doesn't make sense to point to Americans making up losses as consumers and/or investors. Unless the 'loss' is pretty negligible, which I don't think you can really argue.
The theoretical replaced workers themselves are worse off. They are in less demand & lost their theoretical job. If you assumed they made the best decision for themselves & that was MS, then taking that option off the table disadvantages them.
Since trade & investment are relatively free while immigration is relatively restricted, investors & consumers are international citizens while employees are Americans. The US is huge, so that's obscured. But try to think of this from the perspective of a European mid-size State.
*Anyway, I agree with your overall point. Economic arguments against immigration are equivalent to economic arguments against trade or investment. The losses are local & very visible. The gains while greater, are international & often hidden. There is a net gain & it is spread around by reciprocation.
Since immigration is so restricted today, the greatest 'free' market gains to be made are through freeing immigration, not investment or trade.
I don't have a pension and I don't invest all that much money in the US stock market. I am perfectly happy to invest in other countries and changes to US corporate law would have little impact on my finances.
So Americans enjoy no better standing than Canadians, whose pensions funds such as CPP also invest heavily in the US stock market, and Salvadorans, who run their economy in US dollars?
Pension fund? Oh, you mean that ponzi scheme of Social Security?
Also, most Americans are in more debt than they have assets. They are not capital holders. Don't conflate holding some currency with controlling the means of production.
If every sector of the economy were equally unregulated, this might work. But the problem is that as a programmer
...when I send my kid to school, I have to deal with a member of the teacher's union
...when I need a prescription, I have to deal with a member of the AMA
...when I get sued, I have to hire a member of the State Bar
...when I want a drink served to me on the plane, I have to deal with a member of a flight attendants union
...when I pay my taxes, I don't get to use the most efficient system - I am obligated to use the 50K+ page US tax code
...but when any of these people want to hire a programmer, they can bring someone in on an H1B
If you can find me a free market, let me know, because I would genuinely love to participate. But until then, if the US subjects Americans who become engineers to much more intense competition from foreign workers than they'd experience in other fields, we must not be surprised when young Americans prefer to become lawyers or mortgage brokers.
This seems to be the choice we've made as a nation. However, I see this as an (unintended?) consequence of government policy, rather than a natural occurrence in free labor markets.
Err... services are localized, other professions aren't, at least to the same degree. That's part and parcel of the job one chooses to do. If people aim to become lawyers because they don't think they can compete, that's their business. Maybe some bright American engineer will find a way to outsource lawyering to India:-)
<If people aim to become lawyers because they don't think they can compete, that's their business.>
That's the problem - it isn't their business. It's the ABA's business. You could be one of the great legal minds in India, but unless you have an ABA accredited degree, it doesn't matter (edit - I think a few states might allow such a person to practice provided he/she passes the bar). And US law schools definitely act as gatekeepers (check out the admissions pages for law schools - you will often find an explicit statement that they greatly limit the percentage of international students). US Engineering grad programs, on the other hand, tend to act as gateways rather than gatekeepers.
Some people want to see an ABA or AMA style organization for software engineers... personally, I'd hate to see this. I like the open nature of software, and I definitely don't think we'd see more innovation if the sort of people responsible for EJB gained control over licensing.
But regardless of how you feel about it, the dynamic is pretty indisputable: if the US uses the force of government and law to keep foreign lawyers out and bring foreign engineers in, then you should expect to see US citizens favor law degrees and foreign nationals (who would like to come to the US) to favor engineering degrees.
The part that frustrates me is when our wise leaders get on the soapbox and start preaching about how we need to encourage more Americans to get graduate degrees in science and engineering. If we've decided to staff our science and engineering workforce with guest workers, fine, but please stop acting like it's a big mystery when Americans respond to the market imbalance it creates.
Small problem with your theory: over the past 20 years of H1B hiring at Microsoft, the price of their software hasn't gone down, but their market share has.
So tell me again how corporate "efficiency" means a good customer experience. Make sure to include some details.
Somewhere along the lines you got really confused about what the unit of selection in free market economics is. In a theoretically free market, the market doesn't make individual companies better. It makes the bad ones die and get replaced by good ones. The fact that their market share has tracked with their customer experience is proof of the theory.
Could you be a little more condescending? It's possible to state your opinion without questioning the competence of the person with the opposing view.
If you're going to claim that H1B employees are critical for making companies better at producing their products, it would be nice if you were to back up that assertion with something other than ideology and theory. I used only one counter-example (one of the largest H1B employers in the nation, not to mention the subject of the article), but it directly refutes the theory that cheap employees make products cheaper and better.
We don't live in a free market. Any theory predicated on that assumption is wrong.
First, I've reread both your and my posts and I have absolutely no earthly idea how you decided _I_ was the one with the condescending tone.
Second, you've created a "counter-point" which doesn't even prove what you claim. You think your Microsoft example is "proof" of something and you are indignantly stamping your feet around making demands of others on some self-appointed perch of the intellectual high ground. Companies, markets, and economics are gigantically complicated things and trying to "prove" that H1B employees don't make better or worse companies by using a single example over some non-trivial period of time is ridiculous. Completely ridiculous. Absurd, even.
Maybe the reason none of us are citing examples is because examples are altogether meaningless. Unless you want to actually do the statistical analysis, control for all the proper variables, and try to make a statistically significant statement at the end, all you'd be doing is talking out of your ass. So, to that end, for the purposes of internet discussion between anonymous people, -theory- is about as good as we are going to do.
So excuse me for trying to correct your theoretical mistake while altogether ignoring your anecdotal evidence.
"Unless you want to actually do the statistical analysis, control for all the proper variables, and try to make a statistically significant statement at the end, all you'd be doing is talking out of your ass."
I've never claimed a proof -- just a counter-example. But more importantly, I stop trying to have civilized discussions with people when they can't summon the maturity to avoid profanity.
Classic make-work fallacy. American interests are best served when corporations (Microsoft in this case) are as efficient as possible. If that means immigrant workers, then so be it. If MS (and other corps) are forced to hire less-qualified or more expensive American workers then the cost of these measures is paid by their customers who are ... Americans and in lost market share which results in a cost to MS' investors who are ... Americans. The difference is that the plight of the unemployed programmers is obvious and easy to see while the plight of the customer and investors is obscured but that does not change the loss that they experience.