Over the years I've gotten the impression from the comments (particularly on audience participation-type posts) that a good number of regular readers work in what I'll inadequately and generically call "tech" – IT, electrical engineering, programming, and the like.
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Having zero experience in your field I need to rely on your guidance here, even though it may be anecdotal.
There are some points of debate on which I do not know the facts and therefore have no confidence in my opinion, yet one side of the argument so strongly reeks of bullshit that I become certain that I am right. And every time I hear someone argue that we need to let in more foreign workers on H1B visas to do Tech Stuff because there are not enough American workers who can do it, without seeing any data my immediate reaction is to call BS. "There are not enough Americans with the necessary skills" sounds to me like "There are not enough American workers willing to live five to an apartment and do this job for $22,000/year."
It's not as though American universities have a shortage of people in the STEM fields, and the quality of American education in these areas is supported by the fact that foreign – Russian, Indian, Chinese, etc. – students come to the US in droves to get college degrees. If people travel halfway around the world to go to Stanford and Harvard and Michigan and Georgia Tech, I find it really hard to believe that those universities produce Highly Skilled non-U.
S. Citizen graduates but insufficiently skilled U.S. Citizen graduates. That makes…no sense. None.
I'm certainly not on some xenophobic soapbox here, upon which I am fighting to keep the foreign hordes away from our precious jobs.
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However, the basic argument parroted by the lobbyist tool CNN asked to write that column is illogical and implausible. He bandies about words like "innovation" as if the reason tech companies hire from Pakistan and China is that all of the world's best minds are there. It sounds a lot more like the industry's interest is in expanding the quasi-indentured servitude system that is the H1B program, which imports cheap foreign workers and works them like the rented mules that, contractually speaking, they are.
SeaTea says:
I'm gonna guess it's because IT is one of the few remaining fields where people actually can make some money if they have excellent skills. You can work where you want… pretty much how you want. And if you don't like some asshole manager, you can just go elsewhere to find a better place where they'll offer you a better situation.
The elite fucking HATE that shit. They want us all replaceable and under their boot-heels. So they do what management assholes have been doing since days of yore… bring in someone who will do the work for half the price and use that as leverage to take away your pay and benefits.
Just a guess.
JoyfulA says:
I am not a techie. But a friend is working as a tester on a way-behind project that had H1B Indian programmers. Because the project is years behind, a group of H1B Chinese programmers was added. Now there is a problem in that the Indians and the Chinese cannot communicate across nationalities. They all can speak US English well enough to deal with Americans, but not Indian to Chinese and vice versa.
So now my friend finds herself the interpreter conveying meaning among the various programmers. Which is not so bad for her, because the project is so far behind that there really isn't much testing that can be done at this point. But this seems like a bizarre way of functioning to me.
BTW, this overdue project doesn't seem to relate to the competence of the programmers, according to my friend. The clients wanted state of the art, to which they attached every bell and whistle they could dream up, and the contractor with the winning bid assured them the project could be done almost instantly. Now it looks like the project will be obsolete before it's finished, should that ever happen.
I have little doubt that U.S. citizens could be found to do this work, but I have no knowledge of how staffing was done, other than the company seemed to order a dozen programmers from China, the way one might order a quantity of components.
Leading Edge Boomer says:
You're right to call BS, but things, as usual, are more complicated than that.
At the graduate level in computer science, I have seen this phenomenon. Students are admitted, usually with some kind of financial support. An MS generally takes 4 semesters if they are also employed. During that time non-citizen students look furiously for employment that will enable them to stay in the US. If they succeed, they depart with an MS (sometimes before), just when they would be qualified to begin to work at the PhD student level. Real research suffers, even if faculty members have plenty of funding for it.
Graduate school applicants who are citizens are always outnumbered–by a lot–by non-citizens (this varies: recessions increase grad school enrollment; perceptions of future wealth and difficulty in achieving a degrees change over time; etc.), but the salaries available with an MS causes many citizens to disappear as well. If citizens do not apply they cannot be admitted. Incentives for citizens can lead to places where most academics would not like to go.
That said, there are unemployed computing professionals at all degree levels who cannot match their former salaries. After a certain age (maybe mid-thirties), many companies prefer to hire cheaper talent, regardless of citizenship status. Young talent is seen as energetic, and wisdom from older employees does not matter.
Your local school board does the same thing in teacher hiring.
Earl says:
I work, and have worked, for a series of startups in the bay area, both in San Francisco and the peninsula. I have a bunch of friends who work in the valley proper, ie palo alto / menlo park / san jose.
So here's the thing: there is no engineer shortage. What there is a shortage of is people who want to live in the sfbay area on an engineer's salary. For background: I moved here from Manhattan. It is currently cheaper to live in Manhattan than in this area. Welcome to the land of $800k 2 bedroom starter homes. That's a condo, not a detached home btw. A good friend just bid $1.2M for a home in Menlo; there was a bidding war and the winner paid $1.3M. In *cash*. We used to live in the mission in sf and the rent for our apartment went up $800/mo in a little under two years. If you live in SF the public schools are generally bad enough that you almost need to send your children to private school; hence people move to the peninsula and pay $1MM plus for 3 bedroom homes. There is a nasty cycle where the schools suck so everyone who can leaves or sends their kids to private schools, so the public schools in sf get worse, etc.
We have some of the worst public transport and land use policies in the USA. Thus you will need one car per adult and will still spend a lot of time in traffic. If you want to live in affordable — well, more affordable; decent homes for only $600k — you'll spend an hour each way traveling 30 miles to and from east bay. I briefly lived in east bay and it was amazing: a road that was 7 lanes *each way* and still so trafficked that you drove 25mph. I don't know if this is fucking rocket science or not, but I'm pretty sure that if building fourteen lanes didn't solve your traffic problem, another couple lanes ain't gonna help.
So yes, I make $130k and I know many people would kill for that income. We also paid $2700/mo in rent in sf for a medium sized one bedroom. And still needed a car. As a couple you can make $300k and still have problems affording a home. And let's not discuss taxes; not only does CA enjoy some of the highest state income taxes but a bunch of republican fuckwits convinced the state that you can have nice things without anyone paying for them. Hence prop 13 — ie virtually no property tax increases while you own your home, plus a 2/3 majority in the legislature to raise taxes. So every year there are financial crises and games galore.
The upshot is simple: until companies start offering telecommuting or paying enough — ie a $40-$50k raise — that it isn't a financial nightmare to live in this area and afford a home, an engineering shortage is complete bullshit. I live here because I love the weather and love snowboarding, but if I were willing to live in Michigan or nearly anywhere in the US, I could take a 30% pay cut and a 50% cost of living cut and come out way way ahead. So the only sense in which there is an engineering shortage is there's a shortage of bmw 3 series because I can't buy a new one for $25k.
Da Moose says:
Holy Smokes! I've been discussing this topic on numerous occasions over the past few months. I work in tech in DC. I have much to say on this topic but will be adding more later as I am too late for bed…
Will says:
Last year, as a consultant, I researched and wrote a report for a company that was wondering if it could cut costs by increasing the amount of H1Bs it hired.
We discovered that, yes, there was potentially money to be made, but a lot of it would be lost to immigration attorneys to supervise the interviewing and hiring- i.e. its important to NOT find a US citizen, so you have to find places where you can advertise the job (to meet legal requirements) where you aren't likely to find a qualified applicant. i.e. advertise tech jobs in a non-internet forum, that sort of thing.
There is no shortage, but there is a ready supply of cheap talent available overseas.
FMguru says:
It is complete and total bullshit. Google and Microsoft famously hire only a tiny percentage of the people who they interview – so, what, 96% of American CS grads are unfit to roam the corridors of Renton and Mountain View, compared to the output of Indian universities and technical schools? No, it's about driving wages down and creating a exploitable gastarbeiter class of quasi-slaves. All that boo-hoo-hooing about how US schools can't create the programmers and network administrators that our economic growth counts on is pure hogwash. It's about commoditizing one of the few fields that offers workers a glimmer of a middle-class existence, and nothing else.
Radical Scientist says:
It's not that US schools produce insufficiently talented grads, it's that some of those grads are shoved straight back out of the domestic labor pool, only allowed to return under second-class status.
I'm in the biosciences, but we have a related problem stemming from fuckwitted immigration policies: Schools admit a good many talented foreign students. But after graduation, their student visas run out. Those who might want to stay and settle in the US have an obvious problem–unless they have a job lined up immediately (and sometimes even if they do, if the paperwork doesn't go through fast enough), they have to return to their country of origin and start applying for H1B jobs.
All of which has the convenient effect of tying their residency to a particular job, rather than acknowledging that someone who's spent 7 years in a Ph.D program and moved on to a full-time job here is not just passing through, and might want the option of citizenship or permanent residency. Tying someone's visa to their continued employment at a given job happens to make it difficult to complain, and all the moreso when that person has built a life here.
mwbugg says:
Not an IT techie, but I retired from a research position at an Agriculture Multinational a few years ago and it was not unusual that many of the best candidates for a starting PhD position were not U.S. citizens. It was much more an issue of hiring the
mwbugg says:
oops…continued… best candidates, not the cheapest. And we could be strong advocates for citizenship.
wetcasements says:
"Tying someone's visa to their continued employment at a given job happens to make it difficult to complain, and all the moreso when that person has built a life here."
Not disagreeing, but that's the norm globally. Here in lovely South Korea you can be on the higher end of the employment food chain but if you don't marry a Korean you are SOL the second you get fired or quit.
Nunya says:
I'll give you my experience in this matter. I started in the tech world in 1995 when the internet was largely only known to academics and a few geeky types. I was finishing an undergrad degree in liberal arts and, through a friend, was offered an interview that promised to double my pay overnight. I studies my ass off for a week before the interview and prepared to demonstrate my (in retrospect) absolutely hideous graphic and coding abilities.
It turned out that it didn't matter. I was offered the job and I applied myself diligently to learning my adopted craft. The boom years started a few years later and I watched people from all walks of life start at one startup internet company or another. Some of them failed but the most unlikely of candidates did exactly as I had done and figured the whole thing out. Many became very, very good at their jobs without having any formal training in the field but a decent intellectual ability and the ability to learn on their own.
Around 1999, when the market was really heated up, there was a genuine shortage of workers, or at least skilled workers willing to work on the cheap. At the time, congress was intensely lobbied to increase the previously very small number of H1B workers to allow for growth. As I recall, it went from 15,000 visas per year to 100,000. A year later, the bottom dropped out of the tech world and myself, and most of my colleagues, found themselves scrambling for short term gigs, contract work and whatever else they could scrape together. Logically, the H1B program would have been scaled back at that time. It turns out that it was actually accelerated and has continued on that path ever since.
Up until the dot com crash, there was a large contingent of IT guys that maintained servers, kept desktops and laptops humming, and did the grunt work to make developers lives possible. This used to be the domain of American workers but during the peak boom years, this group was almost entirely replaced by H1B workers. Productivity and service levels decreased but turnover became tiny. I looked a little deeper into the situation and realized that despite the alleged wage protections, these guys were bussed to their jobs in old Ford vans and all lived together. Their staffing agency was pocketing most of the money and putting them in dormitory type living situations.
A few years later, the influx of developers started en masse. These were all smart people with impressive resumes but they were no brighter than the people they replaced. Again, turnover was very low. After befriending several new developers from India and the Ukraine, I discovered the dark secret. When you are hired with an H1B visa, you simply cannot quit your job. Your only options are to find another employer to sponsor you or go back home. That's it.
There is absolutely no shortage of talent in America. There is, however, a shortage of brilliant, highly educated, highly motivated people who are willing to work for peanuts. The expansion of the H1B program is nothing but a thinly veiled attack at labor and wages. It is, really, an attack on capitalism. When a person's skills warrant a high salary, business decides to change the rules and flood the market with low wage alternatives.
I like the vast majority of H1B folks I work with. They're smart, they work hard and they do their best to fit in in America. What they aren't is overwhelmingly brilliant. They do not have some intellectual muscle that we simply cannot produce in this country, and they still require training. The advantage to business lies in their inability to make more money elsewhere when they discover that their talents and their pay are nowhere nearly aligned.
I'm all for H1B visas when the minimum salary is $400,000. I'm pretty sure American business just might find some qualified Americans willing to do the same job for a lot less.
A.B.A.B.D. says:
@ Earl:
I've lived in SF for almost 20 years, and agree with nearly everything you say—public transportation is terrible (and it certainly isn't helped by the Google/Apple/etc buses picking up their employees at public bus stops without paying a dime to the city for the privilege of doing it), rents and mortgages are absurdly high, California tax policy is absolutely nuts.
The one claim I'd take issue with is the quality of the public schools. I only have personal experience at the elementary level, and while the school selection process is something out of Kafka and there are certainly schools that are poor and mediocre, many schools are excellent, and the overall quality of the schools is much higher than their reputation. Not only is it the top-performing large urban school district in the state and one of the the tops in the country, but their increased success has taken place as white flight from the public schools (either to private schools or to the burbs) has increased. I can name at least a dozen elementary schools that provide equivalent or better educations to those of private schools that cost more than $30K per year. There should certainly be a more equitable distribution of educational resources and opportunities but given the fucked up cards they've been dealt I think they're playing them about as well as can be expected.
I must admit, however, that I imagine I did benefit from the misperception of the quality of the public schools, because if more upper middle class white people had an accurate picture of things more of them would try to send their kids to public school and it would have been harder to get into a good one..
Xynzee says:
You're wrong to call BS. Because BS is not a strong enough sentiment to cover what an H1B and the Australian equivalent are.
A friend in IT has been encountering some strange shenanigans in her area around these visas. Aus was sold out by Labor in this regard. So we can't claim "evil conservative" party here.
There's a stink starting to be raised by the Unions over the use of these visas. Especially in the mining sector. Which is part of the appeal. Not only cheaper, but non-union. Less likely to complain about conditions. Which are currently heavily monitored by the Govt. for now at least.
A guy I'm working w and I were bitching about how design is even being pushed downwards. We were thinking that we should start forming a union. Perhaps IT should start thinking this way too.
Make it so that a job and its description is sent before a committee of professionals who know what a job should pay. If they're offering below "market rate" and/or tried advertising in non-reasonable way as mentioned up thread. Then the company would be fined a hefty percentage of profit, and the CEOs and legal teams can look down the barrel of a long jail sentence. If you know what you're doing is underhanded, bad and unethical. You deserve a kick in the nuts.
I can dream can't I?
The Sculpin says:
Twenty-one year programmer here who has seen many facets of the business. This is actually a very interesting question.
You are right and wrong, at least in the case of software. There is not a shortage of engineers, there is a shortage of talent.
I'll come at the problem in two different ways.
First, there is the stark fact, first elucidate by Fred Brooks in 'The Mythical Man Month', that the overhead of adding programmers to a project eventually outweighs the benefit of the marginal programmer (marginal in the sense of last added, not in the sense of marginal ability). Microsoft in particular has poured immense wealth into building operating systems with always-ballooning teams, and with less and less to show for it.
Second, talent is distributed incredibly unevenly among programmers. The majority of us are ordinary and there are of course abundant underperformers. But the top programmers are dramatically different. They write far more code, with far fewer bugs, and with better design. The only other places you see such uneven distribution of talent is the non-performing arts and the sciences and maybe philosophy. Not even Ussain Bolt and Wayne Gretzky cast such long shadows as do the best intellectuals.
Famously, we differ from the chimpanzee by only a small bit of DNA. This bit is utterly significant of course, and determines the difference between visiting the moon and using a straw to unearth ants from a mound. It follows that the biggest variation between individual humans is intellectual, which is precisely what we see.
Say one sets out to write a fictional romance, or a fugue, or a piano sonata. Sure, go ahead, give it your best, these are honorable endeavors all. But we can only pretend to have forgotten Juliet's self-possession and ripeness, and how Romeo impresses even the Capulets, and the balcony scene. We can only pretend your are not composing a pallid restatement of Bach or Beethoven.
Bill Joy, Dennis Ritchie, and Richard Stallman are examples of elite programmers. All three literally outgunned teams of professional programmers singlehandedly. I won't assert that any of them compares to the greatest artists, but doubtless programmers of that stature will come along in time.
Put together the Mythical Man Month and the lopsidedness of programming talent, and you quickly realize that hiring the best programmers is a matter of life and death for software companies. In the startup world we are now seeing many startups purchased solely for the engineering talent. The rate at which software business models are morphing is astounding. Read about Stripe for instance, a company that virtualizes credit card payments for websites. Everything about it would have been unheard of ten or even five years ago. Read their blog; they don't use private email internally; everything is designed from scratch. It was literally started by teenagers. It resembles nothing seen before. It will dominate. That is talent.
On the other end of the spectrum is the 'glue' programmers. This is all the database, business logic, human resources, integration stuff that makes the great bulk of software projects. The idea here is usually to ensure that programmers are expendable. This software is utterly bland. Any job you see that requires something like "five years of Java" will either fall into this category or be misguided. For all I know Linus Torvalds doesn't know the Java programming language, and yet I'd bet on him over most any team to solve a hard problem in Java.
Business or glue programming clearly exploits those on immigrant visas. They are second class citizens who are often strung along via their hope to naturalize. The best companies, on the other hand, are insatiable for talent, and obviously this often comes from India and China. So to answer the original question: it's some of both.
Sean says:
Yep, I'm one of your IT Guy readers/posters, I actually changed careers from production art to IT once I saw software about to replace me. That was in 1995. I can affirm everything you brought up, Ed, plus a resounding "YES!" to SeaTea, JoyfulA, and everyone else hit on some good points as well. My main focus in IT has been Help Desk, Network Support mainly, and you can be damn sure that what has helped me keep my head above water are my people skills. I know my shit, too, don't get me wrong, but being able to handle end-users well is something that most foreign techs can't duplicate.
Middle Seaman says:
There are enough talented Americans, but way too many of them tend to go to business/law/medical school. Foreign students were and are part of American colleges for at least 50 years. Many of them stay and become Americans. Me included.
The exploitation by owners is totally orthogonal to IT. Owners always try to shortchange foreign and American workers. They are much more successful in non-IT areas. After the fall of the Soviet block, Russian programmers especially were dirt cheap and tended to be employed in their own countries. Russian programmers are more expensive today.
Bottom line. Abuse of foreign IT workers exists. Yet, good foreign workers catch up with the Jones quite fast. Furthermore, the problem, as far as I can see it from faculty perspective, is not extreme in particular in IT.
LK says:
Disclaimer: I have two down points going for me in this discussion- I'm in hardware, not software (a marginal, and marginalized, field, especially analog which is my forte), and I don't live or work in the US (though I work for a US company, and work with our US teams a lot).
In my experience, there is some truth and some BS in the "no talent" claim. One side of the truth is that the good schools are full of foreign students, because in too many cases there are too few candidates who are both citizens and good enough. This gets worse the more obscure the field is (how many people have a passion for mm-wave silicon design?), partly because the employment prospects are perceived as less rosy. While it's true that if your chosen field only employs a few thousand people around the country, your chances to find a job can be much better (assuming there's no over-supply); but you won't be able to choose your location, or the company you work for, or have a shot at lining more than one job offer at a time to increase your bargaining skills. While all of these arguments are mostly BS themselves, the students-to-be can't know that, and make career choices going into grad school (or even choosing undergrad majors) based on lines of thinking like these. The net effect is that some programs release very few US citizen graduates a year, only because so few or going in. This is starting to become true for top schools in Europe as well, BTW.
Another issue (tying into what Earl said) is that those H1B and student-visa grads have different life plans compared to most US citizens- they don't have families, or have them at a later age, they often have less demanding social lives, and are thankful for the opportunity of employment, so are thus able (and willing) to live more cheaply. This could mean longer commute (think living in one state and working in another, commuting home for weekends only, sleeping in dirt-cheap accommodations during the week), living in a worse neighborhood or in a smaller home closer to work, or several other choices. So yes, it means they are willing to do the same job for less. If the difference is small (as it might be in some more out-of-the-way tech areas, like Portland, Austin or even Atlanta) you will see less pressure on the H1B button, and more willingness to take on the US citizen. But when the difference in pay expectations reaches 20~30% of the salary, you'd be hard pressed to justify it, especially when you're hiring people with "proven" track records (not first job in the US, studied in the US, worked for your company in a different country etc). Is this a problem? Sure it is. It's driving wages down for some of the highest-paid sectors in the country, which is good for corporations' profits and bad for everyone else. But you can't blame them for having trouble hiring Mr. Smith for 150$k when Ms. Li is asking 110$k for the same job, when they both have the same qualifications.
Problem is, the companies know that those cheap workers cost a lot more, both in tangible and intangible ways. But the financiers force the hiring managers to keep some degree of "flexibility" in the workforce, which means you must have some proportion of sub-contractors, or outsourced work, or H1B people on your team. Because "real" people are harder to fire, and might fight you in court if you misbehave, and having the "alternative model" in front of their eyes makes it both easier (and faster) to respond to changing economic conditions, and make the "silent majority" more silent.
And all of this only pertains to the top-of-the-ladder jobs. The "hordes" of IT infrastructure, testers, "menial" programmers etc. are being outsourced faster than they can be H1B'd, and offshored faster than they can be outsourced. And that's where the majority of H1B "complaints" are coming from- they just can't get enough of the really cheap, dirty labor for really cheap, dirty wages to compete with the finances of cutting the entire department and paying some Chinese outfit to do it for them.
Elle says:
This weekend we waved another couple of friends off to San Francisco, both with H1B visas to take up tech jobs. This is their second stint in the US, but they've also lived in a bunch of European and APEC countries. It's a bit more awkward for them, being a dual career couple who generally work for different companies by preference, but they've never had particular problems with immigration anywhere.
My husband and I have considered a move to the Bay Area. He's a senior tech for a large company based in the valley, and there have been a few enticing projects that he's been offered at HQ. The reports back from other couples that have moved haven't been that favourable, though. Even assuming that I could get a similarly recompensed and interesting job (which is a massive, massive assumption), I think that our quality of life would be worse. We've blanched at some of the sprawling suburbs that would be nearest his office, and I don't think we could give up where we live to move anywhere else in the area that wasn't SF. That leaves him with a truly horrific commute.
I think that the H1Bs may be a product of the attempt to drive down the price of labour, but not exactly in the way that is described. US tech companies have sites around the world, which are the recipients of direct public investment. Labour is subsidised directly by economic development spend per job created, indirectly in spend on facilities and infrastructure, and also in the form of lower wage and benefits rates. Internal global recruitment brings some of those who work for satellite offices into the US itself. I'm assuming that the argument is that a US worker wouldn't replicate their skillset because of their specific product / dev framework knowledge.
Anonymouse says:
Like DaMoose, I'm in IT in the Washington area. However, I live and work outisde of DC, which means there is zero public transportation. None. Zilch. You must have a car to get around, and your spouse also needs a car to get around, because the area is so sprawling that the odds that you will have jobs within an hour of each other are also zilch. I typically roll into the office around 6 am, because any later and my six-mile commute goes from a half-hour to an hour to 90 minutes. I would love to ride my bike to work (the distance is great and the route is absolutely flat) but the narrow, congested one-lane road I must travel means certain death from a cellphone-addled texter (my spouse's car was totalled by just one such fool who slammed into him at a stoplight; my husband survived but a person on a bike would not have). Leaving the house five minutes later can tack a half-hour on my day. Rush hour starts here around 2pm and goes until 7 pm or so because the roads simply have not kept up with the amount of traffic on them, and again, there is *no* public transportation.
Like Nunya, I entered the IT field in the early 1990s. Nobody is born knowing IT; everyone had to learn it somewhere. There is no lack of American-born talent, but what I am seeing in the job market is that jobs that paid $100k five years ago now want to pay $70k. Meanwhile housing prices have doubled and gasoline costs have not gone down as you spend ever more time in your car.
c u n d gulag says:
Yeah, it's BS!
Even if we did use "Guest Workers" to win WWII and the Cold War, and go to the Moon: Fermi, Einstein, Von Braun, etc.
But those folks weren't just really skilled "Guest Workers" – they were geniuses escaping tyranical Fascism and Totalitarianism.
Make it a requirement that every "Guest Worker" today has to join a Union to protect their rights, and we'll end this "problem" pronto.
This is all an attempt to "Insource" cheap labor.
Like Big Agra uses "Wetback's" to harvest our crops, Big Computer wants it own version:
"Wet-bit's," to harvest the zero's and one's.
c u n d gulag says:
Btw – my apologies for using a derogatory term, above.
PGE says:
Yeah, it's BS. If you have an eye for it, it's easy to recognize job descriptions that are designed so no one will match the requirements and the company can use that as a justification for hiring an H1B. I once saw an ad requiring X years of Java experience, when Java was X-3 years old. And I've seen many requiring experience in small, obscure utilities that would only take an hour to learn thoroughly. The whole point of these ads is to exclude applicants.
Xynzee says:
@CU: what derogatory comment? Genius? Don't worry so much. We know that back in your day it didn't mean the same thing. Heck back then didn't you need to hire 15-20 geniuses to do the same amount of work it takes two of 'em to do today?
Major Kong says:
There are not enough Americans under age 35 with 3-5 years of experience (but no more than that! we don't want to pay for it) of coding the latest language that's only been around for 2 years.
cat says:
I've been a Programmer/Software Engineer for 20 years and I have to agree with most everything said above.
One thing not mentioned is H1B visas are used by staffing firms as well. I have many contractors at my current employers and they are all not US citizens. We have a ridiculous policy of no increased headcount but can spend 100k's on contractors to our hearts content. We have to train new comers and I believe break the law as we keep them around for years.
cat says:
I also forgot to mention we are located in an area where there is no pool of talent and very little motivation to draw talent to our location.
Recruiting is done by recruiters who aren't specialized in Tech recruiting so we can hire candidates in the fraction of the time as contractors.
Elle says:
The market gives you cookies for moving from a fixed cost model to a variable cost model, even if it costs you more. I think that season 6 of The Wire should have been about that.
Rory says:
See http://www.cringely.com/2012/10/23/what-americans-dont-know-about-h-1b-visas-could-hurt-us-all/
tybee says:
"There are not enough American workers willing to live five to an apartment and do this job for $22,000/year."
this.
tybee says:
(a 30 year veteran of the IT wars)
Aaron says:
The H1B program, like the guest-worker programs that tie immigration status to a specific job, is screwy. More people ought to be able to immigrate and compete on the level.
Immigration on the whole is good– it's the second-class worker problem that's bad for everyone. (Even for employers, frankly – since they spend as much on immigration lawyers as they would on just straight-up hiring).
Elle says:
I agree. Many European countries have fucked this up completely in their ludicrous bid to design an immigration system that waves in appropriate qualified Americans, Australians, Canadians, and New Zealanders, and keeps out black people. Even more problematic is the attempt to keep out European citizens from newly acceded states, which is theoretically impossible. Still, now capital controls have been introduced to Cyprus I daresay that controlling the flow of labour shouldn't be a lack of principle too far.
N says:
It's simple economics. If there were a shortage of skilled workers, employers would pay more to attract those available. Wages would rise. That is not reflected in BLS stats, thus it is BS.
Also, see high unemployment rate. Also, see ratio of job openings to positions (still well below pre-recession level).
(All factors indicating economic issues are due to demand–not supply–issues, in general a subject the media constantly gets wrong, and why austerity will only worsen the situation–but that's a topic for another day.)
So yes, this is clearly a ploy to lower wages. There are undoubtedly hidden legal immigration costs which negate the benefit as others have pointed out, but the employer won't be revealing those when negotiating Mr./Ms. US Citizen's offer, and it's unlikely the US citizen will think (or even know when) to include those opportunity costs in their salary request.
Interesting how this "import more skilled workers" argument never applies to doctors, which would lower health care costs.
Entomologista says:
I live outside of DC and the public transit is great. I bike to work and don't own a car. You guys must live way the hell out by Frederick or something because I've never had a problem.
But on topic – H1B visas are in fact BS. I work in the biological sciences. It's not necessarily the large influx of foreign workers, but the entire academic system that keeps wages low. At current funding levels, science couldn't get done at universities if post-docs and grad students were actually getting paid a living wage.
mother earth says:
I have not been following the H1B issue. This post and these comments have been fascinating and more insightful than most of what I will read in conventional media. I would just add, follow the money. Whichever politician is leading the legislation on this, check campaign contributions. If it's just policy, check the decision makers background. Convoluted policy usually means major but conflicting donors. Of course, this smart community already knows that.
Living in Arkansas under our first Republican majority House and Senate, I am totally shut down by the onslaught of abortion and guns bills that have been passed here. The session is almost over so they are busy finishing up with voter ID bills, reducing environment laws, school vouchers, etc. to catch us up with our neighboring red states.
I may have to go on anti depressants.
SamInMpls says:
I'll tell you how it works at my shop and leave it there.
Our IT department in the US is comprised almost entirely of white males from North America. After the stock options dried up a lot of their best talent has moved on to start ups or to very large non-tech companies. Big box stores need IT too.
Development is a whole different thing. US born developers are a tiny minority and most of them came to the company as part of an acquisition. There are teams in SE Asia, India, Europe and the US. The US team members are mostly H1Bs from India but there is also a Russian contingent.
My impression is that US born developers are much more likely to do the start up thing and aren't interested in working at a break neck pace on stuff that no one is allowed to own. The H1Bs are not on the whole more talented than the US born developers but they are a lot less likely to leave so in the end all but one of our most talented developers is from India.
All of our low level development positions are outsourced to India and the leap from working there are coming to the US is huge. It really is like getting called up from AAA to big leagues even if you are still a contractor. Once someone is hired on permanently and brings their family over they are going to make good money, about twice what a public school teacher makes, and there is a much lower chance they will leave their position than would a US citizen. Even going back to India for a vacation has its risks as getting a return visa can be tricky.
John says:
As a software developer myself, I can say with complete confidence that it's a bunch of BS. H1B hires are entirely about having your development done by what are effectively serfs in a medieval fiefdom. I have a lot of very good friends that are working under H1B, and they all have the same story: Getting citizenship is a giant, decade-long pain in the ass, and until then they are entirely at the mercy of the company for their continued ability to remain in this country.
American tech companies use H1B workers for the same reason they make extensive use of contractors rather than Full-Time Employees: To reduce their necessary commitment to their workers to as low a level as possible.
David says:
I have worked fifteen years now on the networking side of IT so I have a slightly different experience. In the mid to late 90s the field was booming and pay plus benefits were awesome. The company I worked for (MCI) was bought by WorldCom and the dot-com bubble burst and WorldCom went bankrupt. This started a long spiral of downsizing reducing the company's workforce by about 100,000. Meanwhile other companies were doing this with the net result being many unemployed technicians and engineers vying for fewer and fewer jobs placing downward pressure on pay and benefits for existing IT workers. Then things got worse. Previously high-end network connectivity was limited to the First World nations but then companies began installing high speed connections (fiber) to various countries in Asia and that opened the flood gates to outsourcing. Why pay someone in Raleigh $80,000 when you could pay someone in Manilla $10,000 to do the same job? Unless you were actually needed on-site your job was outsourced. This placed even more pressure on the remaining IT jobs in the US so now I make 30% less than I did 5 years ago. Also it has become increasingly difficult to actually get hired by a company you work for. Most positions are contracted out or even subcontracted so you work for company X who contracts you to company Y who subcontracts you to company Z – each company taking their cut from the productivity of your labor. This not only suppresses wages but also creates a caste system in the workplace. It's all about screwing the workers – that's all it has ever been about for centuries.
argleblargle says:
I'm starting to think that the H1B visa situation might be a case of what Krugman calls "the cult of the insider". That is, you've got a small group of insider elites who only listen to each other, and tune out anyone who isn't a member of that group. Like many people here have noticed,the H1B often *increases* costs, because it leads to bugs, language barriers, and legal issues. But all the CEOs just *know* in their gut that outsourcing saves money, so that's what they do, automatically. Add to that, I think, a healthy amount of racial prejudice that Asian workers are better than Americans at low-level technical work.
Jane says:
I'm in the IT sector – as an employer – in Europe. Sweden and Switzerland. I'd like to second The Sculpin; we seem to agree on how the programming job market works.
I tend to want to find very good people and give them a very good deal so they'll work with me.
– work from anywhere? sure.
– large ownership stake? sure
– work any hours you like? sure
– decide what is the next feature with input from sales? sure
– Have lots of input on the next product? sure
– minimal meetings – less than an hour a week, total, and over Skype so you really can work from anywhere? sure.
If I know the person is extraordinary, I am willing to pay for him to stay in Sweden, South Africa, Finland, Switzerland, Australia … where ever the €%&/()!!! he wants to live. ( So far, it's only been men, and that list of countries represents actual people I've employed remotely)
Why do I do this? To attract very good programmers. A company doesn't need many of them; two or three is awesome. One is not enough, not because he couldn't do the work, but because he needs others to actually communicate with. I'm not smart enough to be stimulating.
When the company grows, it is no longer possible to recruit those people, and it isn't uncommon to lose the geniuses I had. At that point, I have to recruit other people, who need actual managing and who are not extraordinarily productive, and whose ideas aren't always *much better* than anyone else's.
So then we get into normal hiring practices. So far, neither I nor my employees have had trouble with stupid visa rules, but then I'm not in the USA.
__________________
I haven't noticed this group thinking hard about the impact of oDesk.
oDesk opens up the developed world's job market to anyone from anywhere with an Internet connection. The billions of underemployed people globally are now competing for at least some of those developed country middle class jobs, those that can be done remotely. With the addition of another billion or two underemployed people to our job markets, we are all a *very*long way from full employment, which does seem to be necessary for employees to have bargaining power.
If I contract people to work via oDesk, then I know they're working on my stuff when I'm paying them to work. oDesk takes a screen shot every few minutes, no change = no pay. I know they're good workers from previous reviews, and know they are interested in good reviews from me, so they probably won't screw me over. They live where ever and ask for salaries that are probably good in local terms, but not at all what the same work costs to get done where the company is headquartered. The pay is deducted weekly from my credit card. oDesk takes a 10% cut.
From an employer's perspective, it's wonderful. From an employee's perspective, not so great, except you have to consider that person's available alternatives. Then, it turns into a very good deal indeed.
I recently hired a bookkeeper, a CPA who emigrated to Costa Rica to help save the rain forest. She does oDesk work to support herself and, it seems, a good part of her village. I pay her 6 times what oDesk people from Pakistan or the Philippines request for doing the same work, and it is still 1/8 what the same work costs to have done in Sweden. The differential is even larger in Switzerland; Switzerland is expensive.
There are lots of people with a large variety of skills available for inexpensive hire on oDesk. Many of them are good at what they do, but had the bad judgement to chose parents in the wrong country.
Think about it; oDesk and its competitors could have a very big impact on all of our lives.
/Jane
Graham says:
Well you hit a nerve with me: here in Australia we are told exactly the same thing by employers. Canadians are told exactly the same thing by employers there.
By no means is this limited to IT.
Here we have 457 visas, which are only supposed to be provided to those with desperately needed skills unable to be found in Australia. But oh, by the way, these people can each bring a spouse who can work at any damn thing they like.
The Government list of skills that can be applied for on these visas is enormous and defies logic: Florists? Hairdressers? And this list is fluid, changing daily the categories allowed to be applied for.
http://www.liveinaustralia.com/457/eligible_occupations.asp
(I'm trusting y'all don't use this list to flock down here)
I believe the positions do not have to advertised in Australia, to Australians first.
It seems all Governments are at this. The goal, it seems to me, is to form a highly mobile population of workers who will gradually get used to the idea that they have no country and that they may be required to move to any country that has work, just like Capital does.
The end result of all these temporary work visas is to keep wages down in the host countries. In Australia since 1985 the share of national income going to company profits has risen 30%, while the share going to wages and salaries has declined. This will probably be true of a neighborhood near you.
It's a Capitalist's wet dream. Globalisation is being used against those who have only their labour to sell.
Jane says:
Kaufman Foundation says 25.3 percent of technology and engineering companies started in the United States from 1995 to 2005 had at least one foreign-born key founder. Nationwide, these immigrant-founded companies produced $52 billion in sales and employed 450,000 workers in 2005. The majority of these immigrant entrepreneurs came from India, United Kingdom, China, Taiwan, Japan and Germany.
It's not entirely a bad thing to let these people in.
/Jane
Jane says:
and yes, Graham, the share of productivity gains going to employees has declined a LOT, even when one includes CEOs and other overpaid people in the employees category.
In the USA as well. Sweden is holding up pretty well still.
/Jane
Tim H. says:
One could get the impression that some management teams feel their primary mission is dominating labor, rather than superior product/service.
Southern Beale says:
This might answer your question:
STARTUP CEO: Here's Why I'm Moving My Company From A State With Low Taxes To California
Last month, Las Vegas-based robotics company Romotive announced it was picking up stakes to move somewhere in Silicon Valley (they haven't narrowed down exactly where yet).
Keller Rinaudo, the company's founder, spoke to us via Skype late last week to explain the decision to move from a low-tax state to a back to California.
He said he actually agreed with the criticisms that folks like Perry have made, to a point.
"It was not a short-term economic decision," he said. "California is one of the most friendly and unfriendly business environments in the world."
The company anticipates more taxes and a higher cost of living, he said.
But to achieve their goal of building the world's first affordable personal robot, they had to be on the West Coast.
"We have to find experienced roboticists, and that really only exists in a few places in the world, and California is one of them."
The California advantage is not limited to robots. Many startups crave the engineering talent pool coming out of places like Stanford, he said.
And for tech, the Valley is still where the money is.
"I know lots of other tech companies that end up moving to the Bay Area, I think in a lot of cases though it has to do with needing investment. We're backed by a lot of really strong investors, and then finding proximity to a research center…We're building robots, not building an e-commerce store."
MIT and Carnegie Mellon have the talent, he said, but Boston and Pittsburgh lack the startup community that's flowered in and around San Francisco.
——————————————————————
This is the dirty secret that the economic development people all know and that Republicans are in deep denial about. Rick Perry is wasting his money advertising that Texas is a "low tax state" to locate a business. It's not all about taxes. Republicans have tax blinders on. It's about an educated work force and a vast oceans of start-up capital. So yes, maybe Texas needs more of those H1B visas but the tech companies are still going to be located in California.
I have to say, this is one key point that Nashville's city leaders understand. Our mayor, CVB and Chamber have been working for the past few years trying to position Nashville as a creative center — not just for music but for all types of creative fields. They're thinking long, long term. Get the young creative people to move to Nashville, and you are planting seeds that will yield a tremendous harvest in the future.
Monkey Business says:
There's a reason I got out of software development. Mainly because I was a mediocre programmer, but also because I saw the writing on the wall when my coworkers at my first post-college job were mostly foreign.
Instead, I moved over to the wonderful world of audit, security, and compliance, where they literally can't outsource me, because finding someone from Mumbai or Shanghai or Minsk who is willing to work for peanuts and has a working knowledge of US-specific regulations and how they apply to American information infrastructure is approximately the same as finding a unicorn who has twenty years of experience programming Ruby On Rails.
Elle says:
I just looked up oDesk, and now feel faintly nauseous. Race-to-the-bottom rates of pay, antediluvian command-and-control management mechanisms, and zero employment rights. Hideous.
John says:
@Elle: Welcome to the endgame of American Capitalism.
It's been a race to the bottom since the 70s. Look at any graph of what's been going on RE: productivity and corporate profits vs. wage distribution, and you'll get the same story. Workers getting screwed, execs getting fat checks, higher productivity increasing the company's bankroll but doing exactly jack shit for the people actually doing the work. America's set up now to have a ruling class of people that don't actually do any work, but find new and exciting ways to steal all the gains from actual workers and then consider themselves "the great producers".
xynzee says:
Thanks Jane.
You're exactly what's wrong with the world.
I wouldn't mind so much *if* I was competing against someone who had the same living expenses as I do.
Aus, Canukia, EU, NZ, US cost of living is mostly on par.
Someone living in Shitwalistan, with 1/5 the living expenses, earning 1/3 of my wage can more than live the dream that I had. Well good luck getting me to buy your product. 'Cause quite frankly all I can just afford is food. Fortunately, I live in a country so that my health care is covered.
So how to level the playing field?
Want to move manufacturing to a place where wages are pennies on the dollar? Okay we'll tax you to make up that difference.
Want to move jobs to where they can pollute at will? Go ahead, we'll add transferred pollution tax. Local companies need to put in expensive scrubbers, so they cannot compete.
So yes Jane, for *now* Sweden has not been screwed. But *you* are the one who's going to bring your country to its knees. High taxes, high social services. Require *high* wages/productivity to sustain. Well…? You're going to gut your middle class and then where will you be?
Note to self, if I ever find a job that will enable me to buy a car, don't let it be a Volvo.
xynzee says:
Just a little aside as to what is happening in design:
http://www.youtube.com/watch?v=DsstOs-K7gk
@Tom H:
"One could get the impression that some management teams feel their primary mission is dominating labor, rather than superior product/service."
It's far easier to squeeze the stone than to come up with a superior product. One is constantly having to strive and strive and strive… It's a young person's game. Most upper management types are Chads. Not a creative cell in their body. Their contribution is, "We'll make it blue! And then have half-naked dancing girls prance around with the product!"
I knew that the Palm Pilots were not long for this world when these were their ads:
http://autumnwinds.ecrater.com.au/p/6013335/simply-palm-pilot-nude-kate#
Yup. Can't think of anything to say, get a naked chick.
Besides. Chad will get a big bonus this year because he has a great way to spike the profit margins and generate a heck of a lot of black ink for the company.
He's talked the Board into cutting that expensive R&D division.
Then ol' Chad will parlay this success and get himself a job in another company where he will pander the same solution.
Leaving behind a wreckage of companies in his wake.
Because this level of stupidity is like asbestosis, it doesn't kill straight away. It will be years before people make the connection that it was Chad's ass-hattery that has brought these companies down.
Elle says:
@John
I think that's an excellent summary.
The Sculpin says:
Jane — glad you liked it! Very cool about oDesk, hadn't seen that before. I haven't run across anyone with your job description here in the US. Here we have tech recruiters, who are typically not technical, and of course startup founders, who generally are. You appear to be a hybrid.
David says:
xynzee & John – both well said and completely agree.
The goal of today's elite is to return us to our "natural" state which is akin of feudalism. They know the current system is not sustainable so their end game is to make sure when the chips fall like they did with the Roman Empire they'll be in a position to become the new aristocracy in a new feudal society. One way to tell the difference between the elite and the elite-wannabees is the elite know this is happening while the wannabees believe the Ayn Rand b.s. in its entirety. They believe in globalization and believe growth can continue indefinitely without negative social or environmental consequences. The term useful idiot comes to mind.
Really? says:
I am an Electrical Engineer, I got my degree from a university in the midwest. A good university with no chance at all of ever losing its ABET accredition. This was not in a state that was attractive to foriegn students for any kind of partying, or school status. An electrical engineering B.S. degree is usually pretty general and so the schools specialty is not vital so choosing to go to that school for undergrad as a foreign student is not something that I think would have lots of encentive.
However, my engineering school class was HALF foreign students. This is a situation that is not uncommon. In the sciences and math fields but even more so in engineering, American Universities are not filling up with American High School grads.
Many of these students do stay in the U.S. – and that means to get hired by U.S. firms we need H1B visas. And I think that your point about wanting to use foreign workes in high skill jobs is way off. Usually you have to OVERPAY a foreign applicant to get them into the U.S.
The issue here is once again how poorly we school our kids. The moon landing happened because the Eisenhower adminstration made schools really teach math and science and they also made being a scientist or engineer or mathematician a profession that lots of people felt capable of aspiring to.
Now we have bitter fights over the conent of our science classes, and the far right has implied that every scientist who doesn't use a biblical correction factor is a liar and crook.
Additionally, university classes in engineering and sciences often have an additional cost per credit hour over liberal arts classes [this practice is used at every university in my state and all surrounding states]. At many universities the engineering, physics, and math undergraduate degrees are being pushed to a 5 year format.
This means that many american high schoolers are not intrested in engineering, that the cost of engineering school is now higher than other degrees at the same university, the time it takes to get a degree is longer than other degrees at the same university, and at the end of it you are part of a profession that is not trusted or admired.
Clearly, this makes STEM areas very attrictive.
Anecdotally, I also think that many people who are first generation college students basically all see themselves as being doctors or lawyers or wallstreet business tycoons. All of those professions make more money than engineers with comparable education and so I think that many people reject engineering because the family helping pay for the education only sees colleges degrees as a means to being a doctor/lawyer/banker.
Andrew Laurence says:
My company hires H1-B workers and, as is required by law (or regulation), posts the job description and the salary on offer where existing employees can see it. The salaries listed are always six figures. Not sure whether this is typical.
As for the high cost of living in the Bay Area, there are plenty of two-bedroom condos that are affordable on an engineer's salary, but you'll live in a small unit in a shabby neighborhood. My wife and I are both IT professionals and have no children (two cats), and we are paying off (on a 15-year note) a three-bedroom detached house in a nice neighborhood a reasonable commute from my office (she works at home daily, I work at home one week in four and carpool when I can), dine out regularly, and vacation in Europe and Hawaii every 2-3 years, with less ambitious side trips several times per year. We own two modest Japanese cars but could probably share one if we had to.
If you're trying to support a family of four on a single engineer's salary, that's another story entirely. Good luck with that.
Earl says:
Andrew: I'm doing something similar. The xfactor is kids. They're basically incompatible with my 60+ hour / week job unless I get a nanny. Plus then I need to be in a good school district, etc.
The point is there's plenty of software engineers, and a ton available in the midwest if they could move here and not take a massive lifestyle hit. But my friends in the midwest have eg a husband that earns $90 and a wife that earns $70 for a net income of $160 with a $350 home. If they come out here and even live in a much much smaller home but still with 3 bedrooms so their two kids have their own room, they'd be looking at a $900k house. To maintain the same ratio of housing price to income they'd need
$350k / $160k = $900k / $411k
which simply isn't on offer.
Jerry Vinokurov says:
Lots of good points already being made which I won't repeat, but just to put the thing in some historical context, this argument has been going for a while: http://heather.cs.ucdavis.edu/h1b.html
Charles Bird says:
Yeah, it's about following the money. What blows my mind is the Chamber of Commerce working with the unions to deliver this noxious package. Its like our president dining with the Republicans to find better ways to screw the poor and middle class. What is happening to this country?
justventing says:
So sorry (er, not really) for you techies finally getting a big ol' dose of free trade awesomeness. I don't mean sound petty or bitter (ok, guilty on both counts) but when we opened up the border to fill all the low wage jobs that Americans were too "lazy" to do I didn't hear many complaints. Same thing when NAFTA passed and the wholesale destruction of American manufacturing commenced in earnest.
All I remember hearing was a bunch of fatuous bullshit about this being "the end of History," and that we were all in a new paradigm now. Us worker schlubs only needed to start thinking outside the box to make up for our disappeared jobs. And who the hell needs a pension anyway, what with the Dow heading up to 36,000?
So pardon me please for for not being too sympathetic to your woes, fellas. if it turns out that the same guy who moved blue collar America's cheese is about to move yours.
David says:
justventing , you have heard of the phrase "divide and conquer"? Save your venom for the elite not those who deserve your empathy.
Da Moose says:
Wow. There are some really outstanding posts on this subject today. There are clearly some intellectual heavy hitters who post here. Can I have a job?
I clearly see in DC an inordinate amount of immigrants from Pakistan and India working in cleared jobs for the Feds behind the scenes. You would think that in jobs demanding high clearance levels such as Top Secret, Top Secret/SCI and Top Secret/SCI with polygraph that it would be mostly white folks. However, this is not the case. For me, as frustrating as it can be to work with some of these folks due to cultural issues, it makes me quite proud to know that my government is willing to bring immigrants in to work public trust jobs of this type.
Could other more native Americans do these jobs? Ten years ago, no. Now, yes. Some of the articles I've been reading about the professional transition towards computer science related fields indicates that the domestic American workforce has gotten the message loud and clear. IT is the place to be. An interesting side note: another group that I see in the IT rank-n-file in DC that might surprise those not affiliated with this industry are American blacks. Say what you will about the American military. I probably agree with most of it. One good thing it has done is to educate a whole cohort of American blacks in IT fields. DC metro has one of the largest, if not the largest, middle class American black neighborhoods in the country. This is obviously a good thing.
One unfortunate situation that poses an obstacle to domestic Americans obtaining cleared federal contract jobs that is not an obstacle, ironically, faced by many immigrants from Asia is the financial or legal situation. I know of a handful of non-immigrant Americans who were unable to obtain cleared IT jobs because of past debt issues, minor legal troubles, or minor drug use. This occurs because the Feds go back as far as they can into your history to reveal any detrimental issues that may exist. With an immigrant from Pakistan or India, home country records simply may not exist, not allowing the Feds to get a full picture of some one's character. In which case, they default to clearing the immigrant based solely on the brief domestic record here in the US. In my opinion, this is fundamentally unfair to those who are wholly sufficient, credible and able to obtain cleared positions despite minor "character" flaws demonstrated by unfortuante past choices. The American government, if it exists for any reason, should certainly seek to employ domestically raised Americans not to find reason to unemploy them.
NYD3030 says:
I'm in a very hot area of IT right now, "Business Analytics" and "Big Data" (Think IBM Cognos, SAS, SPSS, SAP Business Objects, etc), so this topic is near and dear to my wallet, as I can command a ludicrous salary as long as the gravy train keeps rolling.
The arguments you see for adding H1-Bs by the hundreds of thousands per year, as has been proposed, are top to bottom BS. We are not hiring the brightest and best genius programmers in the H1-B program. Many of these positions are entry level and filled by people fresh out of tech school… the idea that we need to import, or that India can somehow provide, 300K world class developers per year is foolish.
Additionally the program is rife with fraud. I read recently that something like 30% of credentials for H1-B holders are fraudulent or forged, which in my experience is likely true. A significant portion of the H1-B contractors that I have dealt with over the years are Cognos "experts" who spend the first three weeks on site desperately pouring through their pirated IBM training books trying to learn on the fly. Add to that the abuse the workers face by the contractors who control their VISA – huge wage capture, constant threat of deportation, etc.
I do not blame these guys for doing whatever they can to get a job here, and I enjoy working with them. This whole thing makes me very angry with management and the contractors who exploit them to lower my wages.
Earl says:
@justventing:
I agree with you about NAFTA, but in my defense, I was 12.
Jane says:
Xynbee,
I'm worried too. That's one reason I'm a regular on this blog.
I brought up my perspective on the globalization and visa BS for a little variety here :)
With oDesk, 99designs and 3D printing, it seems as if our advantage from being born in the right countries is decreasing rapidly. That's scary. It will be hard to maintain our way of life.
On the other hand, people in Costa Rica and the Philippines and Uzbekistan get better and better paying jobs than they would ever have a chance of otherwise. The opportunities and their costs are worth discussing, and thinking through.
I do live in Sweden, pay Swedish taxes, build companies in Sweden and Switzerland, employ people at Swedish/Stockholm or Swiss/Zurich salaries, etc.
My taxes are reasonably high, higher than they would be in the States. They're not deadly by any means. I snort when people say that entrepreneurs need lots of huge incentives. It just ain't so. We're addicted to building companies. The kick of building something that lives is … a lot of fun.
I did hire a bookkeeper for a Swiss company over oDesk, yes. Scary.
You know what is most scary about oDesk? It was the fastest and best way of finding the right person; a global search with tens of thousands of possible employees took about three hours total. We narrowed it down by specifying fluent German and English, computerized bookkeeping skills and looking for an assertive personality. We interviewed two people. The one we hired was best. I don't feel we're exploiting her. She's gotten the pay she asked for, a 10% raise so far plus two weeks worth of salary as a bonus. Still, the salary we pay would not pay for a middle class life in SF, or in Austin, and not at all in Zurich.
It's difficult to find a coherent moral way through the thicket while building companies that will last. At least, I'm not sure what is the right thing to do.
Sculpin, yes, I'm a former techie groupie I tried to be a techie myself, but spent too much time with the excellent people and realized I wasn't one of them. I do have a useful skill set in building companies and selling deep techie things. So I do that *with* the techies. I enjoy it and so do they. It works a charm, mostly :)
NYD3030 says:
One thing I'll say – this process would be a net positive if not for the fact that, currently, it's used to move money up the income ladder. If it were simply a flow of wages from the first to second and third world that would be one thing, but it's more like taking wage, sending 85% of it up to the owner and then 15% to the second or third world, and pretending you've done a generous thing.
In the long run this will be good for mankind, as there will eventually be no cheap "third world" to exploit. But I worry that the intermediary period is going to be calamitous.
newsouthzach says:
@Graham
I went to Australia on a 457 to work for a large university. Would have stayed if I could, but, as you say, the Skilled Occupation List left me SOL. If I had been a qualified hairdresser, I could have applied for residency. Ph.D. in physics, expert in nanotech? See you later. Had to move back to the States when the funding for my project ran out. Ah well. It was fun while it lasted.
Elle says:
I'm sure this exact rationalisation was used by the fifth-level subcontractors who first tooled the factories for Nike product lines in export processing zones. It's a decade and a half after No Logo was published, and the concerned activists of the world are reading about coltan and Foxconn suicide nets on their iPads. Globalisation and development offer us some wicked problems, but cherry-picking skilled labour from a less developed country on an insecure basis is exploitation.
LK says:
@NYD3030: Cheap labor is only a stop-gap solution until they can automate us all out. Look at the auto industry- they are building factories in China not because Chinese labor is cheap, but because the Chinese buy cars. Cost of transport and raw materials is more important to that industry today than cost of labor, where 40 years ago labor was a major auto industry issue, both because of the proportion of the costs, and because of the required skills. Once they finish with Africa (which should take several decades anyway) they will be well on the way to automate many things we consider as "obligatory human" today.
Glenn says:
I can only speak from experience.
I am a tech guy. I've been so for my lifetime, professionally for over 10 years.
I've seen it over and over. You nailed it:
""There are not enough Americans with the necessary skills" sounds to me like "There are not enough American workers willing to live five to an apartment and do this job for $22,000/year.""
If either the profit-oriented businessperson or any corporation has some modicum of trust to outsource abroad to save costs, they will. At least, this is my observation from a series of jobs over the past 10 years.
Or they'll hire unpaid interns.
ADHDJ says:
My experience is if you are a halfway decent software developer, right now you are getting several unsolicited contacts from recruiters a week about jobs because there is such a demand for talent. If you live in the Bay Area and have some hot skills, more like several times a day. Recruiters bugging you or your friends on facebook, digging up your private email or phone number, cornering you at tech meetups, shit like that.
I don't know anybody who's working at a software company that isn't hiring devs right now. The company I work for offers a $5000 referral bonus for developers. Several other companies here in Seattle offer $10-15,000 bonuses. If there's no shortage, why would they be doing that?
I don't disagree that H1B's are motivated by companies wanting to get more and pay less, but there is a severe shortage of talent right now that's hard to appreciate if you're not in the industry.
http://www.fastcompany.com/3007649/how-win-bloodthirsty-battle-tech-talent
"If there were a shortage of skilled workers, employers would pay more to attract those available. Wages would rise. That is not reflected in BLS stats, thus it is BS."
Bullshit, dude. Wages have risen. See: http://media.dice.com/report/2013-2012-dice-salary-survey/
"It's not as though American universities have a shortage of people in the STEM fields"
It's a mistake to conflate IT jobs with "STEM". Physics or oceanography or theoretical mathematics or whatever, I'm sure we have a surplus. But there is definitely a severe shortage of people in the computer science field. (Degree or not. You definitely don't need a CS degree to get a good job in IT. You just need to be able to do the work.)
Phoenix_rising says:
Ed, it really is that simple.
Some of you aren't old enough to remember before the dot-com bust, but the previous decade was a mix of high-unemployment in IT and what now appears to be overspending on Y2K upgrades, with experienced programmers being vastly overpaid compared to what business can support over the longer haul between longterm gaps in work history.
As to the 'how dare you use foreign talent' dudgeon: Wow, some of you are pissed that there is no practical alternative to using globalized contract services for certain jobs.
I'm sorry that you think I should close the doors of my business, which supports 5 US families, rather than outsource certain activities that no US worker WILL do reliably for a reasonable sum…but what have you done lately about my two biggest problems?
-My business needs projects done in IT, but can't support an IT manager as an FTE plus health insurance. My staff in Mexico have affordable state-supported access to pretty good health care. Remains to be seen when WV will be able to say the same.
-We need reliable people who will complete tasks on time, consistently, at any price. The US staff we use are mostly over 50, with some older than retirement age, making good hourly wages for 10-20 hours a week on specific tasks. I can't get anyone younger, who needs full time, to accept the mix of tasks I need completed each week. Money is no object, they just won't accept a job that has crap as well as fun in it. Our higher ed system, which Ed reports on the sausage making from 5 days most weeks, isn't teaching our youth that work can be fun but mostly sucks.
I can't speak for other mean greedy capitalists who can barely afford to put braces on their own kids, but I refuse to spend my limited time on earth being the bad news. Life is too short to put up with 24 year old college grads who think work is supposed to be fulfilling, on the principle that my business ought to be able to support local FTEs or something is wrong with our society. Yep, something is wrong.
Phoenix_rising says:
…cherry-picking skilled labour from a less developed country on an insecure basis is exploitation.
That's mighty white of you, Elle, and I'll be sure to mention it next time I Skype with Monterrey. Please share your ideas for developing those less-developed countries, without forcing families apart or destroying regional ecologies with natural resource extraction, that do not meet your definition of exploitation. Show your work, and remember that tourism only functions as a development engine when there is excess cash for me to shift out of my business to fund that trip to Cancun.
Will says:
Phoenix Rising- I've spent time hooking companies who want to outsource up with lawyers who will teach them how to NOT find US applicants. These law firms wouldn't make 6-figure contracting salaries if it were actually that hard to find US talent.
Maybe for this discussion we should break STEM into science, tech, engineering and mathematics. You can hire a recent US phd in most science or math for ~40k a year. Thats an oversupply not a shortage.
Now in tech (IT, programming) maybe there IS a talent shortage, however, from your description, it sounds like what you have run into is a shortage of skilled workers willing to work cheap. You said yourself you can't afford a full-time IT manager, so instead you are making due with cheap contract labor- either 50+ year olds (many older IT workers with outdated skillsets end up taking contract labor like what you described).
The reason you can't find younger people is that you don't want to pay more. And thats fine- but thats not a shortage of workers, its a shortage of workers WHO WILL WORK CHEAP.
Nathan says:
There's a lot of misconception and, in my mind, a lot of misplaced angst over foreign workers in general due to the H1B program. But this is a complicated topic and very few people understand how the H1B program ties into the larger cluster f*** that is US immigration policy and how companies (large and small) are utilizing the broken system to their advantage – so whoever commented earlier that "the H1B program is an attack on capitalism" has it completely in reverse! The 'lower wage H1B' worker situation that exists today is directly a result of capitalist forces.
There are many facets to this problem and to really understand and solve this problem you need to take a step back and look at several things
First and foremost, there exists a complete disconnect between foreign student intake at Universities, direct foreign worker intake (directly from overseas not foreign students who graduate at a US university) and current immigration policy which, the way it's designed currently, is completely out of touch with reality.
These two segments – foreign students who graduate at a US university and direct foreign worker hires are the two main feeders in to what is called the 'employment based green card' line. But H1B visas, the way it is defined today, are 'non immigrant visas' that employers can use to fill shortages in skilled professions. This defintion doesn't really take into consideration the foreign student who graduates from a US university. On the other hand, the only immigration path availbale to a foreign student graduating from a US university today is to go through the H1B process. Being on an H1B then allows that person to apply for an employment based greencard. But the employment based greencard process is so outdated (the current rules were written in the 60's!!) that over the years its created a huge stagnant pool of people backlogged and waiting for 15 years or more for their greencards. As a result, this backlog has become prime feeding grounds for companies to hire more foriegn workers directly from overseas, put them in the Greencard queue by sponsoring their application and because they know that it will be years before the foreign worker can get his or her greencard and due to the fact that current H1B rules don't allow for job mobility, they can get away with abusing the system and foreign worker.
Then you have the issue that most Universities intake several thousands of foreign students every year because this segment of students provide revenue in the billions of dollars yearly. And because the foreign student segment provides this big a chunk, the admissions standards have fallen by the wayside over the years. And because this intake is not in any way synchronous with available annual H1B visas or availbale annual green cards, this innudates the backlog pool even more. So basically you have this big pool of people – comprised of a lot of very talented foreign students, a lot more sub-par foreign students, a lot of very good direct foreign worker hires and a lot more sub-par foreign worker hires! This pool has now grown to more than a million people. And here's the most disgusting thing of all – several companies and attorney groups have constantly lobbied congress to thwart any attempt to reform these rules because it is in their interest to keep as many people in this stagnant pool as possible so they can continue to abuse these workers with lower wages, no promotion etc.
So to fix this mess, you really need to fix current immigration policy….
Johnny Spenard says:
I don't know about computers and "tech" but getting an ABET accredited bachelor's degree in engineering requires you to live like an indentured servant. It makes sense to me why a lot of the domestic students would transfer out of that into something like Construction Management and make room for foreign students who have already left their families, friends, and entire lives behind.
Elle says:
@Phoenix_Rising
You're not wrong; the global South is underrepresented in the Gin and Tacos commentariat. I don't think you'd have to read very widely, though, to bump up against the idea that becoming the Land of Offshored Scutwork is not the vision that anyone has for their community.
The notion that economic rights, including labour rights, are a bourgeois abstraction that interest only those in the global North, is patronising and silly. A glance at something like the Earth Charter, which was produced through a pretty decently participatory process, or NGO submissions to the UN's ESCR committee, or ILO discussion papers on the South, should provide some evidence of that.
Sustainable development that facilitates the enjoyment of rights is hard, and runs against the grain of much of what is described as 'globalisation', but that's a problem and not an argument against it.
Tim H. says:
H1B & a stagnant minimum wage are great ways to help out folks who almost have a business plan. Not to mention efficient ways to discourage Americans from science education, why the hell should a young person do a comp-sci major, when the .1%"Just knows" an Asian will do it better & cheaper. 70 years seems to be the time required for a society to escape a destructive meme in the ruling class, so I won't see it, good luck to you younger folks.
Anonymouse says:
@entomolgista: "I live outside of DC and the public transit is great. I bike to work and don't own a car. You guys must live way the hell out by Frederick or something because I've never had a problem. "
I live 18 miles from DC. It's 12 miles to the nearest Metro station, which can take an hour to get to in rush hour traffic, then I pay $5 to park and another $9 for rount-trip Metro fare for the hour-long commute into DC…if the trains are actually running (they stall if it's hot or if it's raining or snowing or really cold). Ride a bike? Down the Parkway? Not only is that illegal, but I pass by numerous car crashes daily; I'd be dead on a bike. Therefore I don't work in DC.
Meanwhile, locally, the nearest bus is in Annapolis, which is also 18 miles away, so to get there, one must take a car or be run over dead on the congested super-highway that is Rte 50. I quit an otherwise-good job in Annapolis because the company stopped funding parking, insisting we take the bus in. There's nowhere at the bus stop to park my car that I need to get to the bus.
Uncle Dumb Bum says:
I may also be talking out of my ass. That doesn't sound too dissimilar from the same arguments that makes a lot of conservatives love guest worker programs and hate the idea of "amnesty": we want to squeeze a permanent underclass for all it can give us, without having to give anything back or have any kind of cultural exchange. Why not just make it easy to become a citizen if you've studied at an American university?
beergoggles says:
I was one of those H1b people about 20 years ago. I came to the US for college and as part of my college years I worked in the college CS department administering Banyan directory services. Out of college I went into research making 39k a year on an H1b visa. The research fields had pretty much devolved into serf labor by this point, fully utilizing foreign labor to drive down labor costs and contracts that denied patents to foreign lab workers. I happened to see a job posting on the company bulletin board for a Banyan VINES admin and I applied for the job. Not only did they give me the job and take over my H1b, but I got me a 90k salary in the deal considering I was the only person who applied for the job with prior experience.
A few years later I got my permanent residency and was able to market myself out for an even higher salary because there was an emerging tech boom and a huge number of people entering the tech field had no prior technology experience. I considered myself lucky to get in on the game before the game even really began.
What is plain to see with the IT sector now is what I saw in the research fields 20 years ago. Using foreign and newly graduated labor to drive down salaries and benefits. The IT field is still about 5 to 10 years away from what the research field used to be because it's still possible to get hired based on experience and proficiency and still contract on the side. Just wait for even the lowest level of IT employment contracts to contain clauses requiring 'sole employment' and no rights to new ideas that you might have while under contract and the most meager of benefits. The golden age of IT employment is behind us. No matter what we do, this is a cycle that will repeat with every single profession – time to find and jump on the next bandwagon.
Phoenix_rising says:
@Elle,
You seem to be missing my point. I'm aware of the philosophical musing that suggests I should pay more than I have for the tasks I need done at my shop, because fairness and equality for developing country workers.
My kid needs braces this year, and the kids of the guys who handle our networking and internal DB work in Monterrey need school uniforms. Who's "labour" in that transaction? How are those roles like and unlike the garment workers that the ILO organizes to demand working conditions that they can survive?
Knowledge work doesn't fit into the development divide. No one is losing in the transaction I'm describing–aside from my neighborhood managed IT guys. They're overpriced, take a lot of my time in exchange for their hourly entitlement, and don't have any skills or abilities that my guys in Monterrey aren't willing to learn. They're losing badly.
I wish this problem were amenable to a "workers' rights" lens. My alternatives are: Use skilled workers in countries with lower COL, lower my own pay, or raise rates. The market will not support a fee hike, and my kid needs braces this year. "Workers' rights" and "sustainable development" are in direct conflict here, and I've picked the one that lets me pay the orthodontist.
Phoenix_rising says:
@Will, No.
Let me be clear: I don't have time to teach a new grad how to be valuable to a small enterprise by finding and doing IT tasks. Therefore I use a variety of contractors who accomplish specific IT tasks on a schedule.
They are located around the world because I cannot provide FT hours plus health care to a new grad in WV, and manage her to effectiveness, without spending more time at work than I want to.
New grads don't add value for the first year, and that's why they need to do whatever I put in front of them. They won't do whatever I put in front of them for any wage I've tried, because some of it is boring scut work that gets pushed around the desk until it's no longer relevant.
So you're right, you caught me being cheap: I'm not paying a new grad more than I make, on behalf of the principle that labor deserves bread. But that's not the main reason I use contractors.
What I'm disputing is the assertion that I owe it to the world, US workers, the labor movement, the economy or G-d to structure my enterprise so that 5 full-time on-site Americans do these tasks. Not that I have to pay too much to do it that way, that the combination of labor costs and my time is not appealing to me.
The reason this topic lurch is worth pursuing IMO: I expect that H1B workers do a lot of work that Americans won't do in businesses 100x the size of mine. And it's not "won't do for X a year", it's "won't do" for any wage I can pay.
I would have to experiment with paying someone under 35 more than I take out of the business, while taking 100 percent of the real risks associated with running my own shop, to test my assumption that wage is not a factor further than I have to date. No matter what we pay, so far, they push the things they don't like around on the desk or "don't understand" the task well enough or "forget" that part of the job. There may be an upper limit beyond which this phenomenon evaporates, but who cares? My kid needs braces, so it's not a test I can afford to run.
This connects to Ed's previous contention that we're abusing our youth by teaching them to expect work to be fulfilling. It's not. That's why it's called "work", not "hobby" or "pleasure".
Elle says:
I understand your point perfectly. Your kid deserves orthodontia more than the kids in Monterrey deserve the types of sustainable employment that doesn't flow from picking up crumbs from the global table because of Reasons. If I had any kids, I would find it hard to make a different choice. Let's not kid ourselves that it's an optimal solution, though.
Nunya says:
@ Phoenix Rising – The question I have to ask is just where do your clients live? Where does your business get its income? I'm reasonably sure that your bread and butter comes from your local area and you rely on people with US salaries to keep your business afloat.
Your neighbor's spending is your income and your spending is theirs. When you refuse to train a new worker because they're not productive for the first year, you have only yourself to blame when your neighbor's kid has no skills with which to earn a living and no money to hire your company in the future.
The business community has become the most entitled class in America. They expect highly trained people to flock to their company for the chance to work for peanuts, refuse to train anyone, and then complain if anyone leaves when they discover they're being exploited by their current employer.
In short – yes, you may have to raise your prices to employ Americans but if your competition is legally required to do the same, it works out. You kids' braces and your profit margin don't justify the kind of behavior you think is acceptable to American society. Yes, you do owe this country something.
Elle says:
That was beautifully put, Nunya.
Will says:
@Phoenix Rising- there is usually a very high availability of high-skill US citizen IT available. Its hard enough to avoid finding US citizen workers that a very lucrative consulting business can be built on teaching companies how to NOT find US labor so that they can legally search for H1Bs.
Your idea that American citizen's "won't" do IT work is silly. Sure, a contractor will always be more effective than someone with 0 experience (that is the whole point of hiring a contractor), but there are plenty of US citizens with a few years of experience who are effective IT workers. They just cost 80k a year.
Also, I'm not saying you shouldn't have the right to chase cheap labor. In particular, I hold no grudge against immigrants or people who grab outsourced work. Its a pretty effective method of fighting global poverty. But we should be honest- its about driving down costs, not a shortage of US workers.
Andrew Laurence says:
Earl: I still don't know where you're shopping that three-bedroom houses cost $900K. You must have some very expensive tastes. Three-bedroom houses in my very nice neighorhood go for under $700K. And two kids can share a room. My wife shared a room with her two sisters, and her two brothers shared a room, until they moved out.
Andrew Laurence says:
Entomologist: DC has good public transit if you live in the suburbs and work a day shift in the District. If you work nights, or commute in the other direction, or (worst) if you commute from one suburb to another, public transit stinks. This is true most anywhere. It's certainly true in the Bay Area. I live in Alameda and work in Foster City. My choices for public transit are:
1. Drive 1.9 miles to a BART station in a dodgy neighborhood, arriving by 6:55am, and park my car in the garage at a cost of $1.
2. Board a train to Hayward (20 minutes, $2.65).
3. Board an AC Transit M bus (30-40 minutes depending on traffic, $4.20).
4. Get off the bus a mile from work and walk the rest of the way.
OR
1. Drive 1.9 miles to a BART station in a dodgy neighborhood, arriving by 6:30am, and park my car in the garage at a cost of $1.
2. Board a train to Millbrae (1 hour, $4.80, one same-platform transfer, probably standing for half the journey).
3. Take a free shuttle to my office (30 minutes, lots of stops).
Getting home is easier, as the shuttle takes only 15 minutes, but I still have to change trains and it takes an hour. I often ride BART home when my carpool-mate can drive in the morning but can't drive in the evening, but I take public transit TO work very rarely. I do try to carpool when I can, splitting the driving and the expenses with (so far) one other person.
Andrew Laurence says:
Economists know there's no such thing as a shortage, just a mismatch of supply and demand. While there's a shortage of many workers at the prices employers are willing to pay, there'd probably be a glut at double those wages.
Also, why does everyone think there are only H1B workers and Americans? What about immigrants? What about green-card holders?
Phoenix_rising says:
@Nunya-
"Your neighbor's spending is your income and your spending is theirs. When you refuse to train a new worker because they're not productive for the first year"
I'm out of time for this because my business does not in fact run itself, but, wrong about everything.
My customers are around the world, and around the US. But that's irrelevant to the suggestion you're making.
Again, it's not me refusing to train. It's local hires preferring to make 2/3 of what I can spend, literally working at the neighborhood dog wash, over doing the boring, annoying and repetitive scut work that are some of the tasks my business needs done.
You're wrong about the facts, so that puts you in a position in which your suggestions and ideals are useless. It's possible that under some other set of facts you'd be right.
But the reality is that a kid who kept 'forgetting' to do the parts of the full time job I created for her, in an attempt to build my local economy, that she disdained, recently greeted me when I stopped in at the pet store to get the dog a haircut. She prefers to express anal glands over talking to strangers on the phone. I don't believe that this is related to her marginal wage, and I cannot afford to experiment with your ideals, because my customers around the world will not pay me to do so.
It must be nice to have all the answers simply laid out, though. What do you do to support your family?
@Elle, What makes you so sure that kids in Monterrey are getting crumbs? and Compared to what alternatives that are actually available to their parents? Again, your frame doesn't fit.
Elle says:
You show no sign of having understood my point. But best of fortune in your attempt to give "I'm greedy" the gloss of nuanced analysis.
Barry says:
Phoenix_Rising: "Again, it's not me refusing to train. It's local hires preferring to make 2/3 of what I can spend, literally working at the neighborhood dog wash, over doing the boring, annoying and repetitive scut work that are some of the tasks my business needs done."
Somebody working at the 'neighborhood dog wash' is pulling down ~$10/hr (if it's not in NYC or SF, and possibly even then).
Phoenix_rising says:
This stopped being fun when we got to the name-calling, so I'm done, but I hope I've made your day more complicated.
tl;dr: Paying more, within the limits of what I can pay, doesn't get me people who will do the scut work in my neighborhood. That's one issue.
Paying triple, for as-needed technical work, to support my neighborhood's only IT shop would put me out of business–because my competitors won't. That's another issue.
Each of these could possibly be regulated and/or addressed with policy in a way that would solve something, but no one has been able to explain to me what it is we're solving with any clarity.
But there's no need to listen to an actual business owner who uses contractors around the world and the nation about why I would do that…and by extension why larger employers might use H1B contractors to get shit done that no one wants to do.
I'm greedy, entitled and exploitative…because I want my kid's teeth not to hurt. And that's just an excuse to exploit the global underclass, of which graduates of Indian and Mexican IT institutes are members due to their latitudes of birth.
No wonder we can't attack global development's problems (which are real and pressing) effectively, if this is the quality of the debate.
hackenbush says:
A lot of the commenters are making really great, valid points. The crux of the problem is that companies want every one of their programmers, engineers, etc, to be of the Superman variety, but be willing to work for Bangladesh dressworker wages. Ed, you had written about this effect a few posts ago, explaining how Wal-mart had been normalizing the process of jamming costs down so far that quality suffered — and eventually there's a good chance that their customer base will look elsewhere.
There's another ancillary effect of all of this outsourcing/H1B stuff; we're not training up effective mid-level IT staff. CSE programs are, to put it lightly, a bunch of bullshit. Recent graduates from these programs tend to be horrible, but, by grace of being told what a stellar education they're receiving, all believe that they are god's gift to the world of computers. The reality is that there's a pretty steep learning curve for any non-menial technology out there, and there's going to be a fair amount of "working up" to any high level job. (Usually any job with "Senior" or "Principal" before the job title.) The problem starts when we hire "first A then B" type people from outsourced labor, and we end up with a situation where those same pointless CSE graduates *can't* get the low-to-mid-level-wage positions which they need to properly develop their skills. In a few years, there's going to be a huge skill gap between the guys who got in before the outsourcing, and the guys who are stuck at the bottom.
So, you're going to end up either having to hire those H1B workers in perpetuity, or hire locally and deal with sub-standard work until those same workers can get enough experience to "graduate" to senior skill level positions. The companies who are doing this now are being "penny wise and pound foolish", as they're going to have a greatly contracted local talent pool in a few years, if the current situation continues.
(I'm aware that this is *not* a uniform situation, nor are *all* CSE graduates useless. I'm sure whichever CSE graduate is reading this, shaking his/her head in marked disapproval, is a highly skilled, highly motivated individual, who *so* deserves that 100k$ a year position fresh out of school. Yup, that's the ticket.)
LK says:
…and congrats to Ed for breaking the 2013 record for Most Commented Post twice within the span of a week!
Southern Beale says:
Maybe Ed is onto something with this science & math education stuff:
"DJs Suspended Indefinitely Over Chemistry Joke Florida Didn’t Understand"
We probably don’t have to tell Geekosystem readers this, but water is made up of two hydrogen atoms and one oxygen atom. It can be written as H2O, or as dihydrogen monoxide which means literally “Two hydrogen one oxygen.” When two Florida radio DJs announced that dihydrogen monoxide was coming out of their faucets, the Fort Myers area went bananas. The DJs have been suspended indefinitely and could face felony charges.
WWGR “The Gator” morning show hosts Val St. John and Scott Fish have been off the air since Monday morning over the April Fools’ Day incident, and a poll on the station’s page about when they should return has 78% of people voting “never.” That’s a harsh response to a joke that high school chemistry teachers have been making for decades.
Fake Name says:
NPR just did a piece on precisely Ed's point:
http://www.npr.org/blogs/alltechconsidered/2013/04/03/176134694/Whos-Hiring-H1-B-Visa-Workers-Its-Not-Who-You-Might-Think
It's a pretty solid piece, as far as I can tell.
Anonymouse says:
@SouthernBeale; I would accuse you of making that story up, but I've seen it on the national news. Sadly, it's no joke. An entire population of adults too stupid to realize "dihydrogen monoxide" is water, and the poor DJs who now face felony charges for…being as smart as a 9th grader?
Anonymouse says:
Phoenix: "I'm greedy, entitled and exploitative…because I want my kid's teeth not to hurt. "
And because you deny the right of the people who work for you to have children whose teeth don't hurt.
Jane says:
As far as I can tell, the issue at hand is not really exploitation of workers.
The issue is that the same work can be done by people in wildly varying locations, and with widely varying costs of living.The cost and trouble of finding someone to employ outside the expensive countries is going down dramatically. oDesk is just one instance of the trend.
Sweden, Switzerland, and the States have high costs of living, and if qualified work is spread more evenly globally, it will be difficult for all of us developed country citizens to maintain our way of life.
It really doesn't look like the next couple of decades will be pretty; we already have high unemployment in most of the high cost countries and we are now adding a couple of billion un- and underemployed workers to the paid global economy. The global economy will have to grow a lot to absorb all those people; unemployment globally is likely to remain high for a long time.
Yes, Elle. High unemployment does tempt employers to pay not so much and provide not so many benefits. In circumstances of high unemployment, the power relationship is uneven; employers have many to chose from while employees have few alternatives. Governments can regulate working conditions and allow unions and such to level the playing field somewhat. That helps nationally.
If jobs go global, we need global regulation. It won't be easy. In the microcosm of the EU, there's been a brouhaha in the UK over ratifying the social contract bits of EU regulations. The UK has baulked and the rest of EU has insisted that if the UK doesn't ratify, they're just stealing jobs from the more regulated countries. They're not wrong.
Full employment can give employees good bargaining power. Switzerland has low employment. Two recent data points on salaries there:
* I was unable to match a salary offer and lost our former bookkeeper/finance person to another firm. I was paying him almost 200 000 dollars a year plus benefits.
* We need a project leader with some tolerance for technical stuff, persistence, an eye for detail, and charm. One candidate has been earning 25000 dollars …a month. She wants a raise in order to switch jobs. It will be difficult to make a return on investment calculation for my company to profitably hire her.
Some of you believe that Phoenix is exploiting the workers he's employing in Mexico. I doubt it. He's probably paying them the going rate for their kind of work in their general location, or more, since he may not get the very best deal because he's not local.
As a matter of fact, he does seem to pay a decent wage, since he's also mentioned that his employees have school aged children. Several other commenters here have noted that they can't afford children on their current salaries in their current locations, which means their salaries are worse in local terms than Phoenix's Mexican salaries are in their location.
The fact that one can live well in Mexico and raise a family on a salary that would not pay for a similar life style in Silicon Valley does not mean that the Mexican is exploited. It does mean that Silicon Valley is very productive, as another commenter noted.
My bookkeeper is not exploited either. She gets a decent job at a high IN HER LOCATION salary. She lives in and contributes to her community. She does a lot for the rainforest, promotes eco tourism to her location and witnesses repeatedly against domestic abusers. In addition, she has now been elected treasurer of her municipality.
So why is it better NOT to employ her? Would it be better for her not to have a job and a decent income? Would it be better to force her out of her community and force her to migrate to a developed country? Would it be better for her community not to have her?
And yes, her salary is less than 200 000 USD/year. Do you,Elle, believe that the only way I can hire a bookkeeper without exploitation is to pay them the same salary they would get in Zurich? I don't agree.
Elle says:
They're not wrong, and nor were those within the EU who objected to the idea of contractors delivering services while complying with the labour laws of the member state in which they were headquartered, rather than the member state(s) in which they were delivering services. I'm confused as to why you can't extrapolate this understanding of the spillover effects of regional pay differentials to the circumstance you describe.
As we do not live in a black and white world, it's always possible to find some sliver of justification for exploitation. Women who work in the formal labour market may be able to justify their own decision to use a cleaning service that pays terrible wages and doesn't contribute to workers' state pensions. (I have to work to pay for my kid's health needs. I can't afford childcare if I have to pay more to a cleaner. My partner already works 60 hours a week and he can't do more in the house.) The aggregate effect of all of those individual decisions, most of which are made in the context of spillover effects from other policy decisions (not to invest in state provided childcare; not to offer universal healthcare; not to prevent employers from mandating working hours inimical to reproductive labour) pull women from the South, scrubbing brush in hand, into the bathrooms and kitchens of the North.
If you've failed to price in the cost of labour to your projections for your enterprise or project, whether because you didn't know the market rate for bookkeepers, or because there has been some extraordinary and unpredictable uplift in the pay rates for bookkeepers that isn't restrained by skyrocketing European unemployment, then this may seem like a good reason to bypass your local labour market. You may feel that the protection of your profit margin is a good reason to offshore your bookkeeping. The aggregate effects of a billion such decisions is, as you have described, the chipping away of social protections, and the depletion of local economies.
She sounds terrific. What makes you think that a bookkeeper hired at the market rate in Switzerland wouldn't use her agency in a similar way? Economic independence isn't only a positive for women in LDCs. In Europe, it reduces the chance of experiencing domestic abuse, stimulates local economic growth (women are more likely to spend money in local economies, creating jobs) and enables women to participate in their communities and in public life.
My point is not that bookkeeping should not be done in LDCs. My point is that the people of LDCs should not be endlessly flexible reserve labour for Northerners seeking to protect their profit margins. As multiudinous explications of the spillover effects of migrant labour will tell you, these casualised relationships exploit assets within spaces that need them to develop their own economies, on the most precarious basis. If the bottom falls out of the bookkeeping market in Switzerland, will you not go back to someone you can talk to across the table? What will most people do?
I'm a non-executive director on the board of three NGOs. Two operate nationally, and one is regional. One of the national organisations and the regional organisation deliver specialist services. Other services in the same broad range of operations are delivered by statutory services. (Apologies for the lack of detail here, but I'm trying not to identify myself on G+T.) I have strategic oversight of workforce issues in all three organisations. All three are experiencing downward pressure on budgets, and particularly on the proportion of public funding that meets part of the cost of service delivery. In some geographical areas we are monopsony employers of a particularly niche type of labour. In other geographical areas, we have market-moving influence. It wouldn't be hard to justify chipping away at terms and conditions for the apparent immediate sake of service users. We could reduce maternity pay, pay our most junior staff below the living wage, and force people to accept awkward working patterns that made them easy to manage (if you are into command-and-control, line-of-sight management) but would be hard to reconcile with having caring responsibilities. We could chip away at our pension fund, and we could reduce wages. All of this would be lawful, even justifiable, and all of it would be wrong. We would be sending a market-wide signal about the value of the work that the women (it's a predominantly female workforce, carrying out an emotionally laborious job) do, and making women's labour market participation more difficult. We would be reducing their economic independence, and making their lives harder. We would be allowing the true cost of providing the specific service to be hidden from the stage agencies who fund it, and provide similar services. We would be undermining our attempts to get statutory agencies to pay higher salaries for technical staff in the same field (their low rates of pay mean that many specific posts we see as needed are unfilled). We would be allowing the burdens of deficit fetishism to rest more firmly on the shoulders of women. These things sound airy, but they are the stuff of everyday living.
Jane says:
Elle, I really don't understand, and I am trying to, hard. Guess I'm dense.
It seems to me that moving money to LDCs to the hands of local people in return for their work is a good thing, better than uprooting people to migrate north and better than if the jobs available there are all under the control and tithing of the local drug dealer or thug.
It's also definitely better than NOT moving work there; people need the chance to earn a living. (and yes, there will be problems as work moves south, lots and lots of them. I'm worried.)
But did I understand you to say those people should be in their communities and invent their own jobs? It's not all that easy to build your own company from scratch without experience, and people who have been employed in positions of responsibility for international companies will have more knowledge of how to organize a company. Having savings helps a LOT as well.
Oh well. explanations welcome. I'm jane at walerud dot com if you want to explain offline.
Elle says:
Nope.
You'll forgive me if I don't take you up on that, I hope. Many more eloquent people have written far more succinctly on the topic of globalisation. I'm sure you can find much more cogent explanations with a quick google.
Anonymous says:
I work at a NYC tech-startup. We've had posting for Backend Developers as well as iOS and Android Deverlopers up for 2 weeks now. We have received about 30 applicants in total, of which 2 were American citizens. The rest were Indian and Chinese students currently getting graduate level degrees in comp sci or electrical engineering at local universities. I'm sorry, but it truly seems to be the case that there is a shortage of Americans with the proper skills to fill these positions.
anon says:
From Beryl Benderley's article "The Real Science Gap" published in Miller-McCune, June 14, 2010:
"Harvard economist George Borjas has documented that an influx of Ph.D.s from abroad reduces incomes of all comparable doctorates. Although some people argue that advanced education assures good career prospects,
anon says:
From Beryl Benderley's article "The Real Science Gap" published in Miller-McCune, June 14, 2010:
"Harvard economist George Borjas has documented* that an influx of Ph.D.s from abroad reduces incomes of all comparable doctorates. Although some people argue that advanced education assures good career prospects, “the supply-demand textbook model is correct after all,” Borjas says. It turns out to work as powerfully on molecular biologists and computer programmers as on gardeners and baby sitters.
The director of postdoctoral affairs at one stellar university, who requested anonymity to avoid career repercussions, puts it more acidly. The main difference between postdocs and migrant agricultural laborers, he jokes, is that the Ph.D.s don’t pick fruit."
anon says:
The Impact of Foreign Students on the Earnings of Doctorates George J. Borjas is the Robert W. Scrivner Professor of Economics and Social Policy at the John F. Kennedy School of Government, Harvard University, and a research associate of the National Bureau of Economic Research. From the Summary section:
"For example, the wage that could be earned by native postdoctoral workers employed in research biology labs is much lower than it would have been in the absence of the immigrant influx, perhaps motivating bright U.S.-born undergraduates to pursue professional occupations that have not been targeted by immigration. The low wage paid to postdoctoral workers in these biology labs, however, still offers a very attractive opportunity when contrasted to the compensation available in other countries, so that the incentives for even more foreign students to enter the United States are not greatly reduced. In a sense, there is a potential vicious cycle where the incentives of research labs to offer low wages to their workers barely affect the supply of foreign doctorates, but have a substantial impact on the career decisions of native workers. In the resulting equilibrium, research labs find that they must keep recruiting from abroad because of the assumption that natives do not want to do the type of work that immigrants do. Although we do not yet know the magnitude of the supply elas- ticities that determine inter-field migration flows, the wage effects of large- scale immigration into some doctoral fields are very large and would be expected to be a crucial factor in labor supply decisions."
BruceFromOhio says:
@justventing:
So pardon me please for for not being too sympathetic to your woes, fellas. if it turns out that the same guy who moved blue collar America's cheese is about to move yours.
This is 100% ruthlessly accurate. Worker class, meet the oligarchy.
Rodrigo says:
@Elle:
Forgive me, but how do those budget pressures impact the NGOs you work for if they're not allowed to impact labor costs? Do you have to degrade delivery or quality of services? Do you make up the difference with private fundraising?
Kaleberg says:
H1Bs are the worst solution.
The best solution would be to make it easier for foreign students to become citizens. They've already passed the TOEFL and figured out how to deal with language. They're smart enough to do the coursework and graduate. Make them take a civics course and get them on citizenship track. Having them as citizens would be a plus for the US.
If we have to have H1Bs, we should charge for them, maybe $10K or $20K a year. If you can't find local talent, this is a good way to fill your roster at a modest price. If your business model really, really relies on cheap labor, you should just shut down and let your competitors who offer better pay expand to fill the vacuum. Sure, I could make a fortune selling $1/gallon gas if I could buy it at 50 cents/gallon, but I don't insist on a government subsidy which is all an H1B visa is.
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