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UC Davis Study Concludes H-1B Workers Neither Best Nor Brightest
CowboyRobot writes "American companies are demanding more H-1B visas to ensure access to the best and brightest workforce, and outside the U.S. are similar claims of an IT worker shortage. Last month, European Commission VP Neelie Kroes bemoaned the growing digital skills gap that threatens European competitiveness. But a new study finds that imported IT talent is often less talented than U.S. workers. Critics of the H-1B program see it as a way for companies to keep IT wages low, to discriminate against experienced U.S. workers, and to avoid labor law obligations. In his examination of the presumed correlation between talent and salary, researcher Norman Matloff observes that Microsoft has been exaggerating how much it pays foreign workers. Citing past claims by the company that it pays foreign workers '$100,000 a year to start,' Matloff says the data shows that only 18% of workers with software engineering titles sponsored for green cards by Microsoft between 2006 and 2011 had salaries at or above $100,000."
What else is new?
So when nerd inventions blast away other people's jobs, most of the people around here start screaming about buggy whip manufacturers and the need for a rapidly adjusting workforce. When US companies go outside the priesthood and get overseas IT people because the locals don't meet their needs, then suddenly protectionism is awesome. The rest of the country has zero sympathy here. Nerds have constantly pushed technology that has cost people jobs. From replacing checkout operators, to devastating travel agencies, to Google self driving cars getting rid of taxis to "disrupting education" so you can fire a lot of university staff. When a nerd looks at someone with a job who isn't in IT, all they seem to be thinking is "how can I automate it so that this sack of meat is no longer in the equation"
You increase supply, and demand price drops. Train them up, after 5 years they have to leave (H1B is time limited), so they return home, rehire in their home country at a discount, (well after all living costs are cheaper). Then you've cut your costs.
What's good for American business is good for America, well the business part of it anyway.
Just think, if demand was high, Americans would be trying to get good University degrees and filling those jobs. Instead, USA has become a net importer of IT goods and services.
Critics of the H-1B program see it as a way for companies to keep IT wages low, to discriminate against experienced U.S. workers, and to avoid labor law obligations.
Also, H-1B employees cannot easily go to another company if they are abused at their current job.
If invited H-1B workers were able to jump ship for better conditions, the market would reassert itself soon enough.
Amazing how even though lower-skilled people, even considering savings in labor, are often less profitable to the company than higher-skilled, competent people, many companies still prefer the former.... My guess is a lot of it has to do with how managers are paid at big companies. Obviously every company is different but at the few I've been to a manager's salary is primarily determined by:
a) headcount
b) labor costs
Obviously the 2 seem a bit contradictory, but doing a little linear programming yields that for the manager to maximize his profits, a large # of low-wage workers is preferable to a smaller # of high-wage ones, even if the costs are the same and even if the output of the latter is better. If we want to change the environment first thing we have to do is get rid of the perverse incentives.
Please do the needful - I need this asap.
If you have an industry who is trying to compete solely on cost then the work is going to be done by the lowest bidder via H1B or outsourcing, take your pick. The tiny advantage of H1B being slightly more jobs and dollars manage to stay in the US. Unfortunately software companies have demonstrated that if they can't bring the workers to them then they have already demonstrated they are willing to send the whole kit and caboodle overseas. The US software industry can only compete with this by competing on quality and the ability to understand a client's needs and write software for it rapidly, on time and to budget. You've got a cultural advantage in that a US based employee is more likely to understand how a US business process works than someone used to a different business environment but it seems few companies are setup to take advantage of that. The other problem being that management culture needs to be encouraged to reward look at long term balance sheet rather than saving a few bucks on buying rubbish software and paying hundreds of bucks to make it work for you.
First thing - the Economic Policy Institute is clearly a political think tank rather than a pure research institution. Biased.
I was wondering how would you evaluate the skill of IT workers on a large scale so I looked at the actual article. These are their metrics:
- salary
- rate of patent production
- Ph.D. dissertation awards
- alma mater university rank
- employment in R&D
The data then comes from surveys.
I call BS on this study!
Moreover, once a crop of H1Bs have done their 5 years, gained their experience, and returned to their home country, they become a pool of trained employees who can be hired to work from their home country at wages that are suitable to that country and substantially cheaper than those paid to an American employee - even a new hire in all likelihood. Thus the pool of overseas low-cost employees builds while the number of positions that *have to go* to US Citizens decreases. The former H1Bs are familiar with the working environment and business routines of the US companies after 5 years as well, and so potentially need less training in that regard. This will likely continue to spiral until the majority of US IT jobs are actually being done outside the country wherever possible. I am Canadian, and the same applies here of course after its own fashion. Not all jobs can disappear this way of course but anything that can be done over the internet can - and thats an increasing number of jobs.
When the technology for remote controlled robots being developed in the military spills over to civilian life more completely, you may even see those jobs that require a physical presence here in North America, disappear as well. Right now someone has to physically carry a new system or printer from the loading doc to the office to install it, but when that can be done cheaper by someone operating a robot in Bangladesh, even that might be gone.
Time to learn how to repair robots perhaps (although eventually it will be cheaper to just unpack a new one from China than it is to repair a broken one).
What is in the interest of Big Business, is manifestly NOT in the interest of their employees a lot of the time.
"The first time I got drunk, I got married. The second time I bought a chimpanzee, after that I stayed sober" Arian Seid
Supply and demand right? The "Free Market" right? Once again, brainwashed Corporatists who believe they are Free Market Capitalists think it is OK for corporations to simply manipulate the supply through H-1B visa abuse rather than pay the free market rate. These are the very same boobs who squawk that CEO pay is based on "talent" and the great scarcity of ex-football players with big egos who want to make 50 million a year. Tell me Corporatists, why is CEO pay OK, but programmer pay gets under your skin so much? Ah, because you believe that if you suck up to Big Daddy he will take care of you. Infants.
Now that thousands of DOD/NASA/NOAA/FAA/ect technical contractors are going to be looking for work.
I am very small, utmostly microscopic.
By the time remote controlled robots would be usable enough to carry around and install office equipment it won't be long before we have robots that can do it without any remote control.
And I doubt there will be a significant time span where robot-maintainer is a useful job; we'll have robots for that too.
There needs to be a serious discussion on what kind of society we are going to have when human labour is obsolete. The current system will start seriously breaking down when capacity outstrips demand by a significant degree and any increase in demand will be met by further automation.
The standard procedure for companies when they want to do this is to first post a job opening with outrageously high skill and experience requirements, and a sub par salary.
Any American workers who are qualified for the position are generally already employed at the same or better wages, in positions with lower requirements - so few if any apply. If a qualified worker does apply, it is a win for the company - they've just hired an overqualified worker for 1/2 to 2/3 of the salary such a position should command.
In the more common case that no workers apply who meet the qualifications set, the company applies for an L1 or H1B visa on the basis that it "cannot find qualified American workers". They then bring in foreign workers who do not meet the original requirements, for even lower salaries.
This is a very insightful post. Wish I had mod points; instead I replied to another reply below.
http://slashdot.org/comments.pl?sid=3515549&cid=43077499
The only thing that will stop the outsourcing economically from places like the USA or Canada (short of political change, but the money is against it) will be when global wages equilibrate as relative currency values change. But by then, in a couple decades, AI and robotics will be doing most things people are paid for now, and it will be hard for most people to compete in a race-to-the-bottom with machines that work ever-more-cheaply 24X7 for most jobs. Even if some people can compete, a lot of people like doing things like being outdoors growing plants, or making stuff with their hands, or building big things, so I can't see how most people are going to be happy spending huge amounts of time stuck doing whatever is left after all those things are mostly automated (robot management -- except won't AIs do that?).
Still, while doing meaningful work (which includes child care) is essential to human health, having a paid job is only essential in a certain kind of economic system (like without a basic income). Canada has pioneered in that area:
http://www.dominionpaper.ca/articles/4100
http://en.wikipedia.org/wiki/Social_Credit#Canada
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
It's not surprising US PhD's are more focused on the higher ranked schools. The premium, over an MS, for PhDs, is small relative to the cost so there is little incentive to earn one; and if you do the opportunities are far greater from a top school. For foreign students, a PhD has far more prestige and value and hence higher demand. lesser schools can use that demand to generate cash and fill programs.
Why not make H1B's more mobile - after six months or a year in the US allow them to freely change jobs. That's enough time for them to prove their skills and get an idea of their true worth in the job markets. Companies would need to be meet real market values for talent and would be more selective on who they hire and what they pay to avoid losing real talent while paying to get them here.
I can understand why people who are have the talents for STEM leave the field. I make far more in a non-STEM field than I ever made in engineering and haven't hit a plateau as many of my friends still in engineering. I remember when I first got my degree being shown a graph that showed salaries peaking and then real income declining as you gained experience since at some point it was cheaper to hire someone with less experience than pay you. The advcie I got was get some experience and then bolt - either to management or another field where your skills are rarer and experience is valuable.
I'm a consultant - I convert gibberish into cash-flow.
The whole point is H-1Bs are cheap and *compliant* - being nothing more than indentured servants and all. Please, please also ignore the massive percentage of industrial espionage against US companies that is conducted by recent or 1st gen emigres.
You know, these brilliant "free market" gurus are right, so let's go all the way with this idea. Whatever your job is, be it in accounting, sales, plumbing, whatever ... let's allow every foreigner who wants your job into the United States and let them work at whatever pay they will accept. Come on, after all you are SO DAMN GOOD that it wouldn't effect YOUR job, right? In fact, let's just open the borders. Anyone can come to the United States without restriction, except that if they choose to take your job at a lower wage, your ex-employer can also threaten them with deportation to keep them in line. Oh, that's right. You are SOOOO SMART and just SO DARN GOOD that nobody could replace you! You are mommy's special little boy, aren't you?
Yes, but a U.S. citizen does not risk being deported and if they believe that all companies are screwing them they can attempt to start their own business. An H1B visa holder must find a job with a company that can sponsor their visa in order to stay in the country and they must do so within a time frame that is well-known to all such potential employers. If you are a U.S. citizen it is unlikely that your potential employer knows how much longer you can afford to be unemployed and thus has less negotiating leverage than they do with someone with an H1B visa.
The truth is that all men having power ought to be mistrusted. James Madison
The argument about H1B is completely stupid and misses the point.
The reality is that the US is one of the biggest markets in the world and products are developed for that market all around the world.
I live in an emergent economy (South America) and 90% of the companies that develop software or expot other kind of product/services have the US or Europe as target.
The main difference between here and the US is that, even though people does not earn as much in the US, talented or experienced employees are much, much cheaper.
And about the saying that American companies will always prefer to deal with other American companies, it's really easy to set up a company in America even if your workforce is somewhere else.
My point is, it doesn't really matter where the brightest people is, but that it's much easier to "steal" American jobs by not being in America than being there, and this is not even about outsourcing. At least with H1B, the worker will pay taxes in America and will help create jobs, as they will be a part of a team.
Other countries, like Canada or Germany, understand this much better than America and welcome reasonably talented people and gives them citizenship very easily, because they understand it's much more benefical to have them inside the country than outside.
That is why, the fact that H1B itself exists is proof of American arrogange and stupidity. It's the old xenophobic political fallacy of blaming those outside for the problems inside, and by judging the arguments of most posting in this article, it is really working.
Government thinks it's a great idea to allow companies to cut IT expenses by importing cheap foreign workers. I think it would be a great idea to import a bunch of people to take over government jobs. I'm sure we could find plenty of TSA workers who could do a better job at half the cost.
We should also fill up the financial regulatory agencies (OTS, CFTC, SEC, FDIC, OCC) with H1B candidates. Nobody could possibly do a worse job than the employees of these agencies. I'd rather have incompetent people working there than the current people who are either past or future employees of the companies they're supposed to regulate.
Let the mass layoffs of federal workers begin. Welcome H1B replacements.
Not to be crass about it, but these H1-B workers are the high tech equivalent of the guys who hang out outside your local Home Depot and wait for someone to pick them up for a day job.
Business likes them because they're cheap, coming from countries where the cost of living is much lower and so our salaries here seem magical, and they're also obedient, which means that they do whatever management says and do not criticize it.
It's not about them doing a better job. It's about them being better cogs and, when their usefulness is done at age 40, business can spit them out into society at large and externalize the costs of their living, medical care, etc. to social costs.
The H-1b program is a program to support ethnic nepotism in hiring. That's what's really going on. If it were actually about substituting equal or better quality labor while lowering labor costs -- which is, of course, an illegal use of the H-1b program -- the companies engaging in the most H-1b fraud would be more viable than their competition. So what happened to Sun? What is happening to HP and MIcrosoft?
Seastead this.
Yes, but a U.S. citizen does not risk being deported and if they believe that all companies are screwing them they can attempt to start their own business. An H1B visa holder must find a job with a company that can sponsor their visa in order to stay in the country and they must do so within a time frame that is well-known to all such potential employers. If you are a U.S. citizen it is unlikely that your potential employer knows how much longer you can afford to be unemployed and thus has less negotiating leverage than they do with someone with an H1B visa.
This is why the companies are able to screw two people at once. They screw the H1B by paying them less than they could make elsewhere, knowing that the H1B has no choice AND they screw the local employee who would have had gotten that job if they hadn't hired an H1B instead.
If you are not allowed to question your government then the government has answered your question.
There's some disturbing news trickling around the employment process market that you have better chance to get a new job *if you already have one*. If you quit, you risk screwing yourself because then if you don't land one you often don't get unemployment benefits either, and then if your resume goes stale then you're shunned. Scary.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Practically all US tech companies are hiring as many visa workers as they possibly can. Keeps the remaining American workers in line.
IMO: it's way past time for US tech workers to organize, and stand up for themselves. If not a union, then a worthwhile professional organization, like the AMA.
IT unemployment is at 3.5%, for highly skilled workers (what H1B's are supposed to be) it's even lower. If you're begging for a job and making major concessions you're negotiating from a position of ignorance.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
IT unemployment is at 3.5%, for highly skilled workers (what H1B's are supposed to be) it's even lower. If you're begging for a job and making major concessions you're negotiating from a position of ignorance.
Wages have been flat or declining for a decade though, which has discouraged our 'best and brightest' from entering the field. If we didn't artificially lower the value of developers and IT, it would be a much more attractive field for Americans.
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I'm already organized, and standing up for myself.
Oh, you mean give over my personal sovereignty to leftist union thugs, giving me another faction to struggle against to try to retain my earnings. No thanks.
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You're living in the past.
Today, if you want to start a business, you have to get multiple licenses and permits, make all kinds of protection payments to the local government thugs, beg for zoning "variances".
Merely conceiving of, designing and developing a great software product is the least of your problems... unless it's a new scheme to help the government thugs violate more people's privacy; then the skids are well-greased.
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You're incorrect, both in particulars and in context.
BLS said that the unemployment rate for computer science and math workers (not "IT") was 3.6%. In times of full employment, the comparable unemployment rate was between 1.1% and 1.8%. So, we're a long way from full employment.
Further, multiple studies over the last decade by Hal Salzman, B. Lindsay Lowell, and Michael Teitelbaum concluded that only between a third and half of new US citizen STEM grads have gained STEM employment. Matloff's (and others') earlier examinations of BLS data suggested that as time passes after graduation, that figure drops.
The H-1B visa has nothing to do with "highly skilled workers" as is shown by Matloff's study under discussion as well as the fact that neither the statutes nor regulations have any skill level requirements at all.
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My father was in unions. I've read UE's _Labor's Untold Story_. I've known former Teamsters shop stewards (one of whom re-tooled to become a mechanical engineer), and dock-workers. We've all seen the thuggery of the SEIU.
The problem is that they are thugs -- quick to initiate force and fraud, quick to drain dues and other "contributions" into enriching and empowering themselves, and quick to work against the better interests of individual members.
We've seen how ACM and IEEE keep on stabbing US STEM workers in the back, including in today's congressional hearings.
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The San Diego/Los Angeles area business/financial reporters used to talk a lot about Qualcomm, BAE, BEA, SAIC, special effects houses, and the biotechs along Mira Mesa and Sorrento Valley. Digital Domain and Rhythm & Hues are dead.
None of them will deign to interview a US citizen STEM worker. We have US citizen Mensa members with multiple graduate degrees right there within a block or so, who can't get the time of day from STEM recruiters. Some have been mostly or totally unemployed for the last decade. The fortunate ones get survival gigs from time to time, teaching the cheap, young, pliant guest-workers with flexible ethics how to program.
The guest-workers have not only "put a dent in the demand" for US STEM talent but have totally undermined it.
We have over 1.8 million US STEM professionals who are either unemployed or involuntarily out of STEM. Employment of production workers in app development (what BLS calls "software publishing") has been flat at a mere 220K for the last decade. Employers no longer fly US candidates in for interviews (though before H-1B they used to do so). Employers no longer offer to relocate US STEM talent (though before H-1B they did). Employers invest much less in new-hire and retained employee training (which used to run 2-12 weeks for new hires and 2-4 weeks for retained employees).
Since 1970, based on US Dept. of Education and NSF statistics, we've added about 12 million US citizen STEM workers to the talent pool.
All we get from reporters is, "Well, I talked with a couple executives with a vested interest in cheap, pliant labor and he said he just couldn't find *anyone* with degrees in math and physics and mechanical engineering and computer science and graphic arts and PR and at least 5 years but no more than 10 years of professional experience in each within a few surrounding blocks who was willing to work for $20-$30/hour on a temporary/contingent basis. And they tried soooo hard. Why they put 2 ads in the BackCreek WV Gazette and the Boondocks Diner, once a month for 6 months and got no 'qualified' applicants, so there must be a terrrrribbbbble talent shortage."
There is plenty of evidence of an on-going STEM talent glut. No evidence of STEM talent shortage has ever been presented. Ever. Not in the 1980s. Not in the 1990s. Not since 2000.
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I think you got it wrong. University degrees are beside the point. Some universities are much better than others. Good students can do well even at a poor university. Poor students can get through the best programs and learn little. Autodidacts sometimes outshine them all.
Are you honest? Are you intelligent? Do you have the knowledge? Do you have the experience? Are you diligent? Are you creative? Are you industrious? Are you conscientious?
In academic year 2003-2004, US citizens earned over 66K CS degrees, and over 270K STEM degrees. In AY2009-2010 this was down to between 48K and 49K CS degrees, and 310K and 311K STEM degrees. Since 1970 US citizens have earned over 1.3M CS degrees, and over 9.1M STEM degrees.
And, once again, in the last decade or so, only about a third of new STEM grads are landing STEM work, so we have a surplus of both new US citizen STEM workers and experienced US citizen STEM workers, and a huge untapped pool of US citizen STEM talent that needs to be brought back to full employment.
Even former cross-border bodyshopper Vivek Wadhwa has admitted that, by every measure, US STEM workers are the best. He also admitted that the core issue is that the guest-workers are cheap... plus, he has a certain understandable sympathy and solidarity with those from the land of his birth.
Yes, American STEM professionals have degrees, intelligence, knowledge, experience, industriousness, creativity, honesty, and conscientiousness. Yes, we always did engage in continuous learning. The only thing we no longer have is STEM employment.
If demand for STEM talent were high, even more US students would be investing more money, time and effort to get STEM degrees, compensation (not just hourly wages, but salaries, sabbaticals, travel, employer contributions to pensions, etc., would be increasing), employers would be trying harder to recruit, they'd be putting their own e-mail addresses and telephone numbers in job ads, they'd be offering more training (not less), retention bonuses...