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Australian IT Workers Concerned About Migrants

Posted by ScuttleMonkey on from the same-story-the-world-over dept.

sien writes "In Australia it is being asserted that Australia's intake of migrants skilled in IT is taking jobs and lowering wages for Australian citizens. It appears that in all developed countries, not just the US, the case that immigrants are lowering wages for IT workers is being made. Would programmers in the developed world be better off without immigration that favors IT or is there an overall benefit for the industry with skilled workers going to the developed world and thus making the industry larger?"

18 of 406 comments (clear)

  1. A perfect world by Da3vid · · Score: 5, Interesting

    If this were a perfect world, maybe the competition would be welcome, where the most skilled would still get their high paying jobs. The problem really is in figuring out who is the most skilled. I see no reason why the most skilled shouldn't have the best jobs, and if you're the best man for the job, then more competition is no sweat, right?

    -Da3vid-

    1. Re:A perfect world by umbrellasd · · Score: 3, Interesting
      Sometimes for whatever reason, a nation might produce fewer skilled workers per capita in an industry than another nation does. But the fact is that a nation does need to protect its citizens, and an unmitigated deluge of skilled workers in an area from a nation with great capacity to produce them (perhaps they have a population that is 30 times larger) can be devastating to the local economy.

      This would be a very terrible thing, and the reason it can happen is simply that some nations have far greater populations than others. Understand that, India, as an example, would have it well in its power to produce sufficient people in certain technical areas to supply the entire world with all the needed labor in that area. Checks and balances in work visas for foreign nationals is one of the ways to provide sanity.

      So no, it would not be a perfect world if competition were welcome because the playing field is not at all level when the two nations in question have a great disparity in ability to produce a particular industry's per capita workforce.

    2. Re:A perfect world by Fulcrum+of+Evil · · Score: 3, Interesting

      Labor is the same way, and in many industries (IT being a perfect example) labor costs are almost the entire cost of production. Sure, there are servers and ethernet cables to buy, but commodity hardware has made it so that the vast majority of IT costs are in terms of actual dollars paid for salaries, benefits, etc. to the people that run the servers, write the code, make it all happen.

      So if the market for IT jobs is suddenly or gradually flooded with people who are willing and able to work for lower wages, the costs of IT services will tend to go down, too (assuming there's some competition in the market, of course). You can buy hosted web services from lots of competiting companies, so the price of web hosting will go down. Outsourced helpdesk support will also get cheaper. The price of Windows won't necessarily go down, but that's because they have a pretty effective monopoly on desktop OS software (slightly different rules apply).

      The problem here is that you're conflating IT and tech workers with fungible assets (webhosting). We aren't fungible. You're also assuming that companies are rational when all available evidence points to the opposite. The presence of a large influx of cheap labor allows companies to lower salaries, true, but it also can limit the output of those workers, as talent is no longer paid what it is worth - you can hire a kid to run a bunch of servers for $12/hr and he'll do ok for normal stuff. You can hire another kid to build webapps for accounting firms (slightly higher rate here). What you can't do is build something truly innovative like google or the first browser or really reliable clustering, just to name a few things.

      Of course, the response by talent is to go found a company and try to get big or bought before some large corp crushes them with money (this is one of those nasty departures from theory), thus countering the idiots who think that all tech workers are fungible and pay accordingly.

      And it's not a zero-sum game, either--after people do adjust and retrain back to their original salary levels, they're by definition working in fields where the "home" economy has more competitive advantage, so the net economic effect is positive. Everybody gets lower prices, and (assuming people retrain to original salaries), everybody is making as much as they were before. It doesn't work out perfectly, but that's the general idea.

      What do you say to Henry Ford? He trained his workers and paid them outrageous salaries (got rich doing it, too). Fact is, a race to the bottom is generally destructive, as people don't like to change too much. You may berate them for it, but you have to deal with the realities of the situation.

      Job protectionism works out to be the same moral give-and-take as any other kind of trade protectionism: if you protect the current salaries of IT workers, everybody else in the economy (including a lot of other poor, working stiffs) pays for it with higher prices.

      I think you exaggerate too much. GM should be a shining example of what you speak, but all analysis points to shoddy management and poor quality as the cause of their problems. Overpaid workers are certainly a problem, but I think you overstate their impact.

      Now for a personal example: I build software. Working normally, my productivity can be as high as $250,000/year. In fact, it's likely within 20% of that, as that covers my salary + benefits + profit to the company. The flip side is that I could work harder and longer and double or triple my productivity. Hell, I'm pretty good - I may be able to do even more. Problem is, this would eat up all my free time and wreck my health if I did it for too long. I could also work harder and still have time for other pursuits, such as investing and ski trips. If my work figured out how to get that out of me (by measuring and rewarding), they could also make some good money. The people you describe won't do this - they want to take the whole pie and view salaries as overhead and

      --
      "We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
  2. I don't know what they're talking about by MadLep · · Score: 5, Interesting

    I work at a software development firm in Melbourne, Australia. We've had a lot of new work recently and have had to recruit extra developers. It has been very hard to find competant staff. Sure, there are a lot of wannabe grads and deadwood who have drifted through a few years experience, but it's slim pickings in general.

    1. Re:I don't know what they're talking about by pookemon · · Score: 4, Interesting

      We recently advertised for a graduate developer through a very well known Job Search website at a very well known University (and hospital...). Of the 2 dozen or so replys we got we binned close to half almost immediately simply based on the terrible cover letters (Eg. I would like to work for your Origination). 2 of the applications were Aussies, the rest were foreign students. Out of the dozen or so left (the ones we read past the front cover) only 3 could actually string a sentence together (the 2 Aussies and one Chinese guy on a student visa).

      When we interviewed the 3 the Chinese guy had obviously copied his resume from someone else as he hardly spoke a word of English. The other two we pretty much ended up flipping a coin to pick our new employee.

      I used to work for the parent company of an IT Employment Agency that organises the immigration of significant numbers of people from India. When their Candidates couldn't find work they'd "organise" a contract with us. Whilst their resumes often looked good (Gee I wonder why) they generally didn't have anywhere near the skills claimed.

      I have also worked with alot of the Deadwood (having worked for Aus' biggest Telco and with a few ppl from Big Blue). IMO alot of the dead wood in the market is their because they were released into the market by the transfer from the Telco to the Big Blue.

      That being said you hire Graduates because they are cheap - and you train them. If you want someone with experience you go to one of the many Employment Agencies and they'll find more than enough candidates for you.

      my 2c

      --
      dnuof eruc rof aixelsid
    2. Re:I don't know what they're talking about by Itchy+Rich · · Score: 3, Interesting

      It has been very hard to find competant staff. Sure, there are a lot of wannabe grads and deadwood who have drifted through a few years experience, but it's slim pickings in general.

      I lived in Melbourne for 6 months (2002-2003) and was looking for work in IT. I didn't get a single interview until I removed any mention of my nationality from my CV.

  3. Experience tells Otherwise by femto · · Score: 4, Interesting
    The IT immigrants I know in Australia are getting paid more than the locally produced talent!

    In my experience the immigrants aren't coming from third world contries and being used to force down Australia's wages. Rather they are from other countries with major (well paid) IT industries and Australia is poaching hard to get talent from these contries.

    Hence the higher wages for the off shore talent. They are commanding higher wages as there is hardly any competition for the job from within Australia.

    Others may have different experiences, but I can only comment on what I have observed. The people I know aren't 'entry level', though not all of them have a degree (lots of experience though).

  4. Spinning out of Control or Spiralling Upward by Quirk · · Score: 4, Interesting
    An introductory Economics text will speak to the need for labour to be willing to move to where there is work. Whether as individuals or as groups, those who battle the idea of economic globalization are irrelevant in the face of the movement toward freetrade zones and trade agreements. The current troubles arising from the implementation of globalization is causing friction and will for some time to come.

    It's unlikely that isolationist nations can survive because trade secrets and laws protecting IP aren't sufficient to stop the flow of knowledge. The requirement is to stay competitive. Staying competitive requires a series of tradeoffs including bringing in cheaper labour.

    Bite the bullet, it's better than the alternative of isolationist states at a constant threat of war.

    --
    "Academicians are more likely to share each other's toothbrush than each other's nomenclature."
    Cohen
  5. Re:how much more of this crap by Mateito · · Score: 4, Interesting
    willing to work long hours for what we'd consider a shitty salary

    C'mon. Everybody I know (including myself) in this industry in Australia work shitty hours. Programming deadlines, upgrade windows, tender responses, support calls. Even just the reading to stay on top of the technology. We get paid well because we know stuff and we put in the hard yards.

    Looking around my office, if there are "foreigners" taking Australian jobs, then those foreigners all come from NZ (Out of 18 people I can see from my cube, 4 are kiwis). Kiwis don't even need a Visa to come work in Aus.

    As far as these "unemployable" grads, I'd like to see their profiles. I still get people turning up with a three-year CS degree from a non-brand university, a CCNA and an expectation of a six-figure salary. Sorry guys, not going to happen when I can get somebody (either Aussie or Foreign) with a hell of a lot of experience for that money.

    We don't discrimiate on race or background, but nor do we import people to work for us. Actually, I can't think of any reason to import "cheap" foreign workers: The hoops you have to jump through to get the Visa are still pretty stiff, they have no knowledge of the local market and if I just want to use them for programming, why not leave them where they are and send the work over?

    No. I think at least a decent proportion of these grads don't have work because they don't have the skills or experience to land the jobs, nor the nouse to go out and get the requisites.

    --
    Norman Cook's Ode to Sl
  6. Aussie IT aint what you think boys.. by ministerofsickeningr · · Score: 3, Interesting

    I have been going there on and off for the last 4 years, and every time i go, i pick up industry rags, employment papers and all that lot, and check out the local IT scene there for software/IT work. let me tell you, its damn thin on the ground there, wages are laughable, and australia has a ton of overqualified people that cannot get a job. the worst problem is, not once did i see any evidence of an environment that fostered a silicon valley or whatever type of rampant innovation and development. maybe there is some geographic area that i am missing there, but if there is a bay area, or redmond, or boston there, i couldnt find it. it made me sad, cos i love the country, the people, and most everything else, but after 15 years in the IT industry in most of the hottest markets in the US, i'm fully accepting of the fact that i *will* have to change industries radically in order to keep my head afloat, should i decide to relocate.

  7. Humbug ! by Anonymous Coward · · Score: 3, Interesting

    >> Australian IT Workers Concerned About Migrants

    That's a deliberately misleading headline. Read the article or don't waste your time, here's a summary

    Australian IT workers haven't made any comment.
    The comment was made by a consultant longing for long-past Y2K golden days.

    "Bob Kinnaird, of labour market consultants Kinnaird and Associates, said ........ "

    I can't blame The Age for publishing it.

    After all, if it bleeds, it leads :-)

  8. History repeats by VincenzoRomano · · Score: 2, Interesting

    There's no way to stop history.
    This already happened several times in the Human history. One of the most kown case the "Fall of Roman Empire".
    People coming from the borders substituted the Romans in almost all the "lower" layers of the society, thus actually changing the Roman Empire itself. Soldiers were not Roman at all, later officers and generals and finally even the Emperors themselves.
    The same happened with economy. First the farmers and the goods traders, later the manufacturers. In the end of the Empire all the stuff needed to keep Rome alive came from abroad, even the wheat.
    And Rome ended to be nothing more than a village from a big city it used to be.
    The "empire" people concentrate into consuming resources instead of producing them and into looking at the world instead of taking care of it. The people from the borders try to exploit this by providing those goods, thus dumping the market and killing the "local" manufacturers and traders with lower costs and prices.
    Most part of the western society will be replaced in a near future by "border" people. And there is no way to stop this.

    --
    Maybe Computers will never be as intelligent as Humans.
    For sure they won't ever become so stupid. [VR-1988]
  9. Sensational Bullocks by gregoryl · · Score: 2, Interesting

    I work in Australian IT and this topic never comes up.
    I look around and yes, I'm one of two people in my team of 10 that are Australian, but who cares?
    Like most others we are more concerned with our roles being outsourced off shore.
    It's kind of cool being surrounded by different people for different backgrounds - I'm proud of the lack of discrimination and mixed culture that is in my industry.

    This topic has never been a concern in any Australian workplace I've worked in. It is sensationalistic journalism. What next? Are our IT workers getting fat? Women vs. Man ratios. The dateless many at Star Trek conventions. *sigh* Next!

  10. Aus has too few IT jobs anyway... by linuxlover · · Score: 4, Interesting

    I attended a major Austalian University majoring in Comp Eng. Now I work in Silicon Valley. So I can talk about both worlds on a personal test.

    Australia is a country with small population (20 mil) compared to US (~300 mil). There isn't a robust IT job market. This has lead to a massive 'IT recruiting' industry. These are the people who advertise with ludicrous(sp?) terms like
                    5years + Java experience is a must (this was when Java was publicly available for only 3 years)!
    Also the recruiter guy interviews you has very little knowledge of Tech field and will throw some standard tech questions
          - why virtual destructiors for C++ ..etc

    Also other useless crap like
          - where do you see yourself in 3yrs, 5yrs, 10 yrs (do I really want to tell the guy, that I will start my own company in 5 yrs!)
          - what is your weakness, how do you over come it

    Also there is no shortage of other 'BS' like
                - writing a good cover letter, cover letter?!
                - going to interview with full suit & tie

    When I came to Silicon valley (during the dotcom bubble), I went to a career fair, aced 3 interviews on the spot, went to the company for more interviews. Had another 5 interviews with Eng team and got a job offer, all within days. All interview questions were spot on, trying to figure out if I had really done the things I have mentioned in my resume. I was interviewed by geeks and architects who knew their deal. All the while wearing jeans & t-shirt!

    When I went back to Aus (my wife is Aus) a recruiter tried to set me up for an interview. He said 'wear a business suit with a tie'. After working in Silicon Valley culture for years, I didn't have the stomach to go through the BS again. So I declined.

    thanks for reading.

  11. "bloody immigrants took our jobs" topic by l3v1 · · Score: 2, Interesting

    Ok, so I'll have to start with telling that I'm also something like an immigrant where I live now (no, not in the US or Australia), meaning I have the nationality of this country but I was born in another country and then later immigrated here, and I'm doubly involved in anything IT-related, having both IT and EE degrees, and working in the field.

    What I can tell from my experience and from knowing _a lot_ of what you'd call immigrant IT workers - not just who came here, but who went into western Europe and/or US - so what I can tell is that they didn't go because they want to live there forever, or because they didn't have or couldn't have got good jobs here, or because they wanted to take US jobs from US people, but because the money. Nothing else, but the money. Working a few years in the US can really mean a _very_ large boost financially for very many people from very many countries.

    And thing is, IT/CS/EE-related people usually are a bit more "brave" in going in other countries to work, since if you're skilled, there are _very_ many opportunities, positions and jobs that you can get.

    And added to the above, I don't think that the ever larger global flow of "work force", talent and skilled people is a bad thing. In fact I think just the opposite of that, and if I were in the position I'd very much encourage that.

    Even I would have had some opportunities to go and work in some other countries, but I prefer being and licing where I am now, so I didn't go. But today I would go, since e.g. in my current job I'd only be able to buy a 40-50m^2 flat in about 20-25 years (I'm just getting 27 now). Now think about that for a minute.

    By stopping foreign workers from getting into one's country to live and/or work one can only achieve one thing: hate.
     

    --
    I am putting myself to the fullest possible use, which is all I can think that any conscious entity can ever hope to do.
  12. Wanted: Immigrants --or anyone-- with PHP skills. by kale77in · · Score: 4, Interesting

    I work for a Gov't dept in Australia -- web stuff mainly, a large system using PHP, Linux, database. We've been trying to hire new people for weeks (we're advertising in Sydney).

    We use an interview plus a timed skills test which all current employees have passed -- it differentiates the sheep and goats better than anything else we've tried. Even (?) after being referred by a HR company, and having a sufficiently interesting C.V. to make an interview, most applicants have been very seriously underskilled, and at least a few have seemed dangerously incompetent.

    All of which means (1) Our current staff are feeling pretty good about their job security, and (2) we really do not care where applicants come from. We just want to find them.

  13. Re:boom bust cycle by Rocketship+Underpant · · Score: 2, Interesting

    You've just illustrated the cycle by which the market corrects itself, wage prices being the usual economic signal (Adam Smith's "invisible hand"). It's not really a boom-bust cycle, though, since the market tends to make corrections quickly.

    However, market interference tends to send the wrong signals to market participants, resulting in booms and busts. Here's a typical boom-bust cycle:

    1. New Industry (IT, dot-com, whatever) emerges with strong growth potential.

    2. Government creates below-market interest rates and expands money supply to "encourage growth".

    3. Cheap credit causes over-investment and excess demand in new Industry.

    4. Labour market mistakes over-investment for real potential, and labour supply (graduates, immigrants) expands. This is the boom period.

    5. Over-investment (see 3) results in over-supply and poor profits. Businesses contract and the market rate for labour decreases as the economy seeks equilibrium.

    6. Market equilibrium is denied, as the government legislates anti-immigration laws, tariffs, and possibly even wage protection laws.

    7. High operating costs force many otherwise solvent businesses in the Industry to fold. Derivative industries also fold or contract because tariffs are keeping prices artificially high.

    8. Government lowers artificial interest rate further to keep money flowing into the Industry. Over-supply situation persists.

    9. When rates can go no lower, the majority of businesses in the Industry consolidate or go bankrupt. High frictional unemployment results because of workers who mistook over-capitalization for true market demand and learned the wrong skills. This is the bust period, which lasts until the misallocation of capital (investment, labour, etc) is remedied.

    --
    He who lights his taper at mine, receives light without darkening me.
  14. Re:Oh geez.... by ThePhilips · · Score: 2, Interesting

    Why people in wealthy countries never think of moving into developing countries?

    Thou I haven't tried that by myself ;-)

    Freinds of mine - married couple of Uni teachers - were working in North Africa (Marocco & Alger) for about 10 years. When they came back I only hear them complaining how much they earn here but can buy literally nothing. Situation in Africa was different: they were earning little, but most of things costed next to nothing. In Africa they were top - here they are just average. (They came back because both wanted to have children in homeland.)

    What just reminds me about how overvalued, overpriced developed countries became with time.

    --
    All hope abandon ye who enter here.