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Well, in this recent article, the WSJ seems to think so. There is the usual fluff about how visa holders are highly skilled, productive, etc. – the sort of people who make good homebuyers because they make their companies profitable, and as a result, make good salaries.

CNBC has some additional commentary:





Leaving aside (for now) my objections about the need for additional visas, in light of current (un)employment conditions, I still think this is a bad idea. Why not just let the markets work? It's simple Economics 101. Excess supply, drop in demand, prices fall. People will buy homes when the prices fall to reasonable levels. We have now in the works a golden opportunity for first home buyers to get in on extremely good deals without having to take on excessive debt.

Getting back to my own qualms about the need for additional visas, people are losing their jobs, and thus, their confidence about their ability to afford homes. At least as far as people who are qualified to do their jobs but asked to train their visa-holding replacements are concerned, they're being forced into (at least temporary) unemployment, which hurts their ability to pay off their loans, and acts as a disincentive to buying a home.

Comments

( 9 comments — Leave a comment )
jessiehl
Mar. 18th, 2009 01:10 pm (UTC)
Why not just let the markets work?

Yes, that has worked so well recently. I mean, I agree with your point that home prices are too high, but I'm not a big fan of laissez-faire econ.

I find it rather ironic that the usually-conservative WSJ editorial page is all rah rah pro-immigration in this (not that I don't understand why they are, in this case). I'm fairly pro-immigration myself (not in a way that is specifically tied to H-1B visas, just in general), but they only are when they're dealing with relatively wealthy immigrants.
gregbo
Mar. 19th, 2009 09:41 pm (UTC)
I'm not a big fan of laissez-faire econ either, but I don't see what harm there is in allowing home prices to fall to the point where people who've carefully planned through modest living, savings, etc. can afford them.

If we look at this proposal from a couple of angles, there are flaws. Assuming these people are the students who are either hoping to work in the US after graduating from schools (inside or outside of the US), they generally don't have much money – either they've incurred debt from school, needed scholarships, or had to pay for their education themselves. So they'll have to do what other people in similar situations do – borrow more money. Perhaps the thinking is that if they work for tech companies whose valuations are battered, they'll make these companies more profitable, and thus the money they make from their stock options will pay off the debt. But this hasn't worked in the past – all the people who came in on H-1B visas during the dotcom boom could not prop up the valuations of the companies enough to avoid the bust. If they took out home loans, they were just as likely to default on them as anyone else who took out a loan and overextended themselves. But financially, as a country, we're no better off than we were before because we still have massive housing debt on our hands.

OTOH, if you assume the people have money, why would they come to the US in great numbers? It's not as if countries like India, China, Russia, etc. are horrible, awful places to live for people who are (at least) middle class. Furthermore, they'll get burned by the exchange rate, so their money won't go as far in the purchase of a US home as it would in their native country.

Also keep in mind that they're still not being guaranteed citizenship. The economy might not turn around so quickly, and they might lose their jobs in the US. They'll have to leave and be forced to sell their homes on the cheap – in other words, what's happening now.

I guess one thing I don't understand is the mindset that a house cannot fall in value, or that it might not even be worth the price the homebuilders spent on building it. There is no precedent for this. But for some reason, some people in the US government want to somehow prop up the values of houses (like they are doing with banks, etc.).

You could make an argument that it would benefit the visa holders more if home prices continued to fall, so they would minimize their risk of being stuck with overvalued investments.

Anyway, there is more about this in a recent TechTicker interview. That this idea is being taken seriously scares me. It's as if the US government has given up on the idea of US citizens coming together and rebuilding our country (even if we have to scale back our standard of living).

Edited at 2009-03-19 09:56 pm (UTC)
nsingman
Mar. 19th, 2009 11:59 pm (UTC)
I'm a huge fan of laissez-faire (I'm an anarcho-capitalist type of radical libertarian), though sadly we have nothing approaching it in the United States (most other nations are even worse). Financial markets are one of my areas of expertise, and blaming the economic crisis on laissez-faire (or a "lack of regulation") is like blaming a shooting victim's death on steak knives.

However, your point is well taken. Those bemoaning the fall in housing prices never consider the future home buyers, for whom a fall in prices means an increase in affordability. Prices have been artificially inflated by easy money most recently (the Greenspan/Bernanke bubble), and by substantial subsidies (especially in the suburbs) from the government for decades, such as mortgage interest deductions from one's taxes. I feel no sympathy for someone whose home price, after running up 150-200%, has fallen from its high by 30%-50%.

That said, supply and demand laws apply to labor markets, too. Immigration restrictions to prop up the cost of local labor are exactly analogous to other forms of economic protectionism.
gregbo
Mar. 20th, 2009 02:33 am (UTC)
Actually, I think that wages should be allowed to rise and fall with market demand as well. If tech workers' salaries fall to levels that their counterparts are being paid in other countries, and the cost of living falls proportionately, those who live within their means are no worse off. It's when the tech workers are forced out of the workforce, e.g. because they've had to train their visa-holding replacements to do work they were getting done, or because they aren't given an opportunity to compete for the work, that I object.
(Anonymous)
Mar. 20th, 2009 01:36 pm (UTC)
It's not as if countries like India, China, Russia, etc. are horrible, awful places to live for people who are (at least) middle class.

I would dispute that for at least some people. To take a particularly glaring example, look at female Russian workers. In Russia, women earn 40% of what men do on average, and according to surveys, 100% of female professionals in Russia claim to have experienced sexual harassment by their bosses (and only two women have ever successfully brought sexual harassment cases in Russia, because judges just throw them out), and 32% said that this sexual harassment included sexual intercourse. Women also frequently report that job interviewers expect them to have sex in order to get a favorable interview assessment. So I would certainly not be surprised that female Russian workers would want to move to the US. They are not the only example I could use, but they are an obvious one.

I think the idea of using H-1B visa workers to prop up home values is just weird, but I think I'm more amenable than you are to giving them paths to permanent residence and citizenship if they want them.

I guess one thing I don't understand is the mindset that a house cannot fall in value, or that it might not even be worth the price the homebuilders spent on building it. There is no precedent for this.

Yeah, I don't get this either.
jessiehl
Mar. 20th, 2009 01:37 pm (UTC)
Crap, I didn't log in before...trying again now.

It's not as if countries like India, China, Russia, etc. are horrible, awful places to live for people who are (at least) middle class.

I would dispute that for at least some people. To take a particularly glaring example, look at female Russian workers. In Russia, women earn 40% of what men do on average, and according to surveys, 100% of female professionals in Russia claim to have experienced sexual harassment by their bosses (and only two women have ever successfully brought sexual harassment cases in Russia, because judges just throw them out), and 32% said that this sexual harassment included sexual intercourse. Women also frequently report that job interviewers expect them to have sex in order to get a favorable interview assessment. So I would certainly not be surprised that female Russian workers would want to move to the US. They are not the only example I could use, but they are an obvious one.

I think the idea of using H-1B visa workers to prop up home values is just weird, but I think I'm more amenable than you are to giving them paths to permanent residence and citizenship if they want them.

I guess one thing I don't understand is the mindset that a house cannot fall in value, or that it might not even be worth the price the homebuilders spent on building it. There is no precedent for this.

Yeah, I don't get this either.
gregbo
Mar. 20th, 2009 10:23 pm (UTC)
So I would certainly not be surprised that female Russian workers would want to move to the US.

I should clarify my previous statement. What I meant by these countries not being horrible places to live for middle class folk is that they're not war-torn, sickness-plagued areas. In many ways, they are like the US. People live in relatively safe domiciles, are free to move about using reasonable precautions, etc. This is not to say that everything is perfect, and that no one might feel oppressed. But given the lack of guarantees that anything would be better in the US (because they're not being granted full citizenship), it's not obvious that they would move.

But let's say there are people who would move for such reasons. Aren't there people in the US who suffer similar circumstances? Aren't there people who are out of work, trying to find work, who've experienced discrimination, racism, sexual harassment, etc.? For example, I have a good friend who has a CS degree from CMU. She has over 20 years of experience, mostly in research-based CS, not so much as a software engineer, but enough that given some time, she could learn how to do a variety of jobs. She was unemployed for over two years, and had to take on unpaid or poorly-paid positions just to keep a visible profile in the industry. And she's told me countless times about being discriminated against – passed up for promotions, research grants, etc. The last time we discussed this, she was in tears.

I'm not saying she, or people like her, should automatically be chosen for hire over their non-citizen counterparts, but shouldn't they at least be given the chance to compete fairly for the jobs? Shouldn't they at least, when it's determined that they can do what the employer needs, based on some consensus about what constitute qualifiedness to do such a job, get hired? Or at least, if we say we don't want to force companies to hire people they absolutely don't want, they should at least not just be able to arbitrarily hire someone else who is not legally allowed to work here because there was at least one other qualified person? Ironically, in the countries we get most of our visa-issued tech workers from, there is no reciprocal agreement for hiring US citizens. A US citizen cannot legally work in any of these countries unless there is no other individual who is qualified to do the job.

Maybe it's just me ... I guess I have seen enough of the harm done by the issuance of these visas that I feel compelled to speak out about it. I wish I had more time to write about this.
jessiehl
Mar. 21st, 2009 03:32 pm (UTC)
Aren't there people in the US who suffer similar circumstances?

Yes indeed, but, to go with my Russian women example again, not at the rate of 100%, and not to such a degree that they're regularly forced into sex during job interviews, and people actually win sexual harassment cases here sometimes. To address the more general case, people may feel that at least in the US they will experience less of what they are trying to leave behind.

...but shouldn't they at least be given the chance to compete fairly for the jobs?

Of course. I would be happier to see the visa workers have the opportunity to immigrate, rather than using temporary worker visa programs. Since that's not the case, I would like to see some sort of path to citizenship available to them. I don't want the situation of temporary visa workers being hired over qualified US workers, I just don't want to leave them out in the cold.

I think one of the real villains here is current hiring practice in many large tech companies (and some small ones), where resumes are vetted by non-technical HR people who look for buzzwords, or even vetted by a computer program that looks for buzzwords. If standard practice were a holistic reading of each resume by someone with technical clue, it might be harder to claim that there were no qualified people in the US who wanted a particular job.
gregbo
Mar. 21st, 2009 04:10 pm (UTC)
I don't want the situation of temporary visa workers being hired over qualified US workers, I just don't want to leave them out in the cold.

I don't want them to be left out in the cold either. It would be good if we could provide some sort of path to citzenship for non-US citizens who are suffering and need aid. But once these people come to the US, they need to be able to provide for themselves. They need food, clothing, etc., so they have to work. But we have a problem in the US now, exacerbated by the recession, that the number of jobs is shrinking, while the population increases. As US citizens see their standard of living continue to lower, they are not going to vote in favor of policies that they feel (despite being well-meaning), pose a threat to their standard of living.

If standard practice were a holistic reading of each resume by someone with technical clue, it might be harder to claim that there were no qualified people in the US who wanted a particular job.

People complain that there are too many résumés, and that they can't read them all carefully, so they have to automate the process somehow. But the fact that there are so many applicants per job should be taken as a sign of the increasing competition for jobs.
( 9 comments — Leave a comment )

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