Tuesday, December 8, 2009

Programmers Guild response to the guy who calls us "Xenophobes Who Need To Go Back Into Their Caves"

On December 5, 2009 Vivek Wadhwa posted "The Startup Visa And Why The Xenophobes Need To Go Back Into Their Caves."

The new “Startup visa” is sketched out here: http://startupvisa.com/about/ .

Vivek claims that this Startup visa "is about creating American jobs and moving innovation here which would otherwise happen in other countries. We can boost the economy without any cost to taxpayers. It’s not about admitting H-1B visa holders who sometimes make Americans compete for high-paying jobs, but bringing in entrepreneurs who expand the pie for everyone."

Vivek believes that everyone should see the benefit of his idea - and those who don't are "xenophobes": “I was convinced that my last BusinessWeek column on the Startup visa presented such a compelling argument that even these poor souls [aka American tech workers] would support it.”

He refers back to his December 2, 2009 commentary in BusinessWeek, where he makes the case:

"Here's how it would work. Suppose a talented engineer who is not a U.S. citizen has a great idea for a new type of search engine and wants to start a company. This entrepreneur wants to start that company in the U.S., where venture capital markets are the most mature, intellectual property laws are strong, and the talent level is high. It turns out that the would-be founder's search engine idea is actually very good. So a qualified U.S. investor decides to put real money—say, $250,000 to $500,000—into the startup. That investor could nominate the potential founder for a Founders Visa while also making a formal commitment to fund his or her company."

“The idea and the founder's résumé would then need to pass muster with a government or industry-appointed board of venture capitalists, financiers, or technology experts. After passing, the founder would be granted a permanent resident visa.”

“To open up visa slots, Ries, Feld and others propose altering an existing visa known as the EB-5, now for immigrant investors.”

Why Programmers Guild opposes the Startup Visa

1) The new visa category is not necessary. A startup company can already hire foreign talent to their venture via the H-1b and other visa categories. U.S. investors could form Yeehaw Search Engine venture and sponsor the “talented engineer who has the great idea.” (Programmers Guild opposes the H-1b lottery. Instead we advocate that priority be given to the highest skilled workers – with salary being the best proxy for skill.) Currently the H-1b cap has not been reached, so nothing is stopping a startup from using the H-1b to accomplish the intent of Vivek’s proposal.

2) The vast majority of start-ups fail. "A new type of search engine" is a great example - what are the odds that would succeed against the current search engine leaders? Most likely they would burn through the capital within a year. Then what? Vivek grants him a “permanent resident visa” – a green card. So, in spite of being an entrepreneurial failure, he will remain in the U.S. and search for a day-job, competing with 12 percent unemployed Americans.

3) Often founders of ventures prefer to hire people that they already know. A "Founder" from another country is likely to want to bring over his buddies from the homeland. Currently there is no provision that any of the workers hired must be Americans. We already see thousands of cases of Indians starting companies and hiring exclusively Indian immigrants – from Infosys down to the smallest bodyshop.

4) The Programmers Guild does not trust “government or industry-appointed board of venture capitalists, financiers, or technology experts.” We don’t want “unlimited H-1b” Bill Gates or “send the work offshore” http://www.carlyforcalifornia.info/ making immigration decisions. It’s unclear whether the public would be allowed to review and comment on the actions of this board – or whether U.S. immigration decisions would be done by secret panels.

5) The EB-5 Visa has been discredited as full of fraud and abuse, as reported by The Baltimore Sun “INS insiders profit on immigrant dreams,” February 20, 2000. At least the EB-5 required the person obtaining the visa to put up the funds. Under the Startup Visa the sponsored parties would have nothing vested. We believe that fraud and "shell ventures" would be rampant.

6 comments:

MikeFrizzi said...

While there will always be people trying to take some crumbs from a well populated table, I don't think they should taint the eb5 investor visa on the whole. The visa is helping many investors gain citizenship and is creating well over 25,000 jobs annually. How can a visa that facilitates that kind of growth be anything but positive?

Daniel said...

I want to address each of Mr. Berry's reasons for oppossing the bill and why they are flawed:
1) The new visa category is not necessary. A startup company can already hire foreign talent to their venture via the H-1b and other visa categories. U.S. investors could form Yeehaw Search Engine venture and sponsor the “talented engineer who has the great idea.” (Programmers Guild opposes the H-1b lottery. Instead we advocate that priority be given to the highest skilled workers – with salary being the best proxy for skill.) Currently the H-1b cap has not been reached, so nothing is stopping a startup from using the H-1b to accomplish the intent of Vivek’s proposal.
- the visa is not for employees, it is for employers. the visa goes to an entrepreneur who unlike an h1b worker is not dependent on an employer for his right to be here.

2) The vast majority of start-ups fail. "A new type of search engine" is a great example - what are the odds that would succeed against the current search engine leaders? Most likely they would burn through the capital within a year. Then what? Vivek grants him a “permanent resident visa” – a green card. So, in spite of being an entrepreneurial failure, he will remain in the U.S. and search for a day-job, competing with 12 percent unemployed Americans.
-- the bill clearly states that you have to still be in business and employing people 2 years after the initial visa is given so the scenario described here is not possible.

3) Often founders of ventures prefer to hire people that they already know. A "Founder" from another country is likely to want to bring over his buddies from the homeland. Currently there is no provision that any of the workers hired must be Americans. We already see thousands of cases of Indians starting companies and hiring exclusively Indian immigrants – from Infosys down to the smallest bodyshop.
- Money is free to flow abroad now for these startups to occur over there. Would you not prefer they occur here and create jobs here? Would a provision stating that a minimum number of workers hired be American win your support for the bill?

4) The Programmers Guild does not trust “government or industry-appointed board of venture capitalists, financiers, or technology experts.” We don’t want “unlimited H-1b” Bill Gates or “send the work offshore” http://www.carlyforcalifornia.info/ making immigration decisions. It’s unclear whether the public would be allowed to review and comment on the actions of this board – or whether U.S. immigration decisions would be done by secret panels.
- The bill creates no secret board or panel. This is a disengeous criticism.

5) The EB-5 Visa has been discredited as full of fraud and abuse, as reported by The Baltimore Sun “INS insiders profit on immigrant dreams,” February 20, 2000. At least the EB-5 required the person obtaining the visa to put up the funds. Under the Startup Visa the sponsored parties would have nothing vested. We believe that fraud and "shell ventures" would be rampant.
-- the sponsored parties would have their right to stay here as immense skin in the game. the prerequisites for ensuring that the venture funding comes from people with track records of success would make "shell ventures" highly unlikely if not impossible.

This bill is a good idea, both for immigrants and Americans. To oppose this is to oppose anything.

Anonymous said...

Kim, would you be surprised to know that not everyone subscribes to your narrow-minded and bigoted views. You have a right to propagate them but don't claim that you are talking for all of us.

I am talking about the part where you conveniently equated poor souls to "American tech workers". Vivek was clearly referring about people such as yourself. Please Mr. Berry, speak for yourself.

Also as Daniel above clearly posted, all of your reasons amount to nothing.

Hamilton said...

Do you intend to support the "E2 for Innovation Act" S. 3043? It was recently introduced and calls for money to support engineering education initiatives in K-12.

Anonymous said...

It became clear to me during my career that supply and demand has a huge effect on software engineering employment and wage rates. My salary could have easily doubled if the foreign workers were sent home.

The result would be more college graduates with software degrees, and way lower unemployment until Americans filled the ranks.

Outsourcing Programmers said...

This post could also be titled “How to advance from a junior software developer to a senior software developer”, because no one should be promoted without mastering these simple techniques. Great post!