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Gates Warns of Software Replacing People; Greenspan Says H-1Bs Fix Inequity
dcblogs writes "Bill Gates and Alan Greenspan, in separate forums, offered outlooks and prescriptions for fixing jobs and income. Gates is concerned that graduates of U.S. secondary schools may not be able stay ahead of software automation. 'These things are coming fast,' said Gates, in an interview with the American Enterprise Institute 'Twenty years from now labor demand for a lots of skill sets will be substantially lower, and I don't think people have that in their mental model.' Meanwhile, former Federal Reserve Chair Alan Greenspan believes one way to attack income inequity is to raise the H-1B cap. If the program were expanded, income wouldn't necessarily go down much, but it would go down enough to make an impact. Income inequality is a relative concept, he argued. People who are absolutely at the top of the scale in 1925, for instance, would be getting food stamps today, said Greenspan. 'You don't have to necessarily bring up the bottom if you bring the top down.'"
And that Greenspan and Gates are telling you about H1-B's is only half the story.
The other half of the story is that there aren't enough Green cards to give out for the H1-B's that are in line for them. So you end up with H1-B workers in essentially indentured servitude to their employer with no bargaining power driving down wages for everyone else.
Increasing Green cards for existing H1-B workers currently in the US will help the US economy a lot more than creating more indentured servitude.
A little background: The number of Green cards is set by Congress. In 1999 congress increased the number of H1-B's to 190,000 but left the number of employment based Green cards at 135,000. The rule of thumb is that you need 2.2 Green cards for every H1-B issued to satisfy demand (because H1-B workers normally come with spouses and kids). To satisfy demand, they should have increased Green cards to 400,000 when they increased the H1-B numbers to 190,000 - but they didn't.
This created a huge backlog of people waiting for their Green cards - including me. I am 31 years old, I did some math, I will be 62 by the time I get mine at the current rate.
The corporations LOVE the idea of creating more H1-B's but you don't hear a peep about increasing the number of Green Cards. They claim that increasing H1-B's will increase innovation and so on - but without a commensurate increase in Green cards, that is complete nonsense. Someone who has been stuck at the same job for decades can hardly innovate.
FYI: Congress is trying to increase the number of H1-B's without increasing the number again (to the magic 195,000 again) http://beta.congress.gov/bill/113th-congress/house-bill/2131 . Call your Congressman/Senator and tell him/her to vote against the bill unless it includes a commensurate increase in H1-B's. The Bill is HR-2131. http://beta.congress.gov/bill/113th-congress/house-bill/2131
I guess you haven’t looked anywhere in the direction of Rincon Hill in the past few years. Or been to South Beach, or Mission Bay, or looked at Lennar’s plans for the Candlestick area. I look forward to all this luxury development increasing the housing supply and driving down rents. I’ll just be over here not holding my breath.
You can read a transcript of Greenspan's comments (with obvious errors) here:
The relevant portion starts at 00:39:11 and it's just a hot mess.
So my view is to recognize that what is causing this low rate of growth in average hourly earnings is basically so proud of -- slow productivity.
This is, quite frankly, shocking for him to say.
Wage growth has only slightly outpaced inflation despite decades of massive productivity increases.
He comes back to immigration at 00:47:53
I thought maybe TFS and TFA mischaracterized Greenspan's comments.
Nope. He's advocating depressing wages for white collar workers instead of raising wages for low income earners.
The only redeeming quality of Greenspan's testimony is it shows that the housing crisis shined a spotlight into his ideological blind spot.
Now he's advocating for stronger fraud controls and higher capital reserves/better collateral requirements in the banking system.
So in his ideal world, the banks won't screw you, but you'll have no money to put in the bank because your wages are depressed by H1B workers.
[Fuck Beta]
o0t!
The rich earned 25% more in 2013 than 2012. Can you imagine if middle-class workers took home 25% more pay one year over another instead?
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