Milton Friedman on H-1B Visas
By David Henderson
The Nobel Prize-winning economist Milton Friedman characterized the H-1B visa as a government subsidy program the year before. Socialism for the rich.
So writes Pedro Gonzalez, “Don’t Bother Learning Code,” American Mind, May 27.
The first sentence quoted above shocked me. Surely, Mr. Gonzalez must be taking the claim out of context. But follow his link and you get to this:
Take the Cato Institute, supposedly a small-government, antiregulation, free-market advocate, which for 10 years has opposed deregulating employment-based immigration. Buying green cards for new hires is a “tax,” it argues, so Cato wants a permanent, massive, overregulated subsidy instead.
Meanwhile, IT employers explain that H-1B holders are a “minor league,” in ITAA President Harris Miller’s words – a try-before-you-buy approach, like Major League Baseball’s farm teams. But Nobel economist Milton Friedman scoffs at the idea of the government stocking a farm system for the likes of Microsoft and Intel. “There is no doubt,” he says, “that the [H-1B] program is a benefit to their employers, enabling them to get workers at a lower wage, and to that extent, it is a subsidy.”
This is from Paul Donnelly, “H-1B Is Just Another Government Subsidy,” Computerworld, July 22.
It’s possible that Donnelly misunderstood Friedman. If so, end of story. But if not, what would Friedman have had in mind? I don’t know of any other lightening of regulation that Friedman would have called a subsidy. Why would he call this a subsidy?
Here’s the bio of Friedman in The Concise Encyclopedia of Economics.