Thread: Wages show claims of tech labor shortage are false

Should the U.S. increase its H-1B visa program?
CON: Wages belie claims of a labor shortage

http://www.sfgate.com/cgi-bin/article.c ... 01&sc=1000

Norman Matloff

Thursday, December 7, 2006

Once again, the tech industry is putting heavy pressure on Congress to expand the H-1B visa program. Though the industry says the foreign workers are needed to remedy a tech labor shortage, for most employers the attraction of H-1Bs visa holders is simply cheap labor. The H-1B visa program allows skilled immigrants to work in the United States on a temporary basis.

The program's scope is far more general than just the tech industry. For example, the San Francisco Unified School District has hired a number of H-1B visa-holding school psychologists, elementary school teachers and so on. But the most common field in which employers hire H-1B visa holders is software development. The visas granted in computer-related fields are 10 times more numerous than in the next most common tech field, electrical engineering.

The industry claims that it needs to import workers to remedy a severe labor shortage. Yet this flies in the face of the economic data.

A Business Week article has pointed out that starting salaries for new bachelor's degree graduates in computer science and electrical engineering, adjusted for inflation, have been flat or falling in recent years. This belies the industry's claim of a labor shortage. Additional analysis at the master's degree level shows the same trend, flat wages -- contradicting the industry's claim that workers at the postgraduate level are in especially short supply.

Microsoft founder Bill Gates is personally leading the industry's charge for more H-1B visas. Yet Microsoft asked its contract software developers earlier this year to take a seven-day furlough, to save money. And the firm admits that its salaries are not keeping up with inflation. Again, none of this squares with Microsoft's claims of a labor shortage.

The hidden agenda here is industry access to cheap labor. Several university studies and two congressionally commissioned reports have shown that H-1B visa holders are paid less than Americans. Though the law requires H-1B holders to be paid the "prevailing wage," the definition of that term is filled with numerous gaping loopholes, as a 2002 congressional report showed. Yet Congress added even further loopholes in legislation in 2004. Just think tax code, and you'll understand what I mean.

The H-1B program does not require most employers to give hiring priority to qualified U.S. citizens and permanent residents. If the employer is also sponsoring the foreign worker for a green card, there is such a requirement, but again loopholes render the rule meaningless. As prominent immigration attorney Joel Stewart has said, "Employers who favor aliens have an arsenal of legal means to reject all U.S. workers who apply."

The industry says the H-1B holders are needed to maintain its level of innovation. I, too, support facilitating the immigration of "the best and the brightest," but very few H-1B holders in the tech field are in that league. Government data show that the vast majority make, at most, in the $60,000 range (Intel's median is $65,000). Yet even non-techies know that the top talents in this field make more than $100,000. And the vast majority of awards for innovation in the field have gone to U.S.-born workers.

The industry lobbyists highlight some of the famous immigrant entrepreneurs in the industry, such as Jerry Yang and Sergey Brin, co-founders of Yahoo and Google. Yet neither of them immigrated to the United States as an H-1B visa holder; both came to the United States as minors with their parents. Thus they are irrelevant to the H-1B issue. The lobbyists also like to cite Andy Grove, an early Intel employee, yet he came to the United States as a refugee, not under employer sponsorship.

More important, none of these firms has been pivotal to the industry technologically. There are lots of good Web search programs. In fact, Yahoo bought the one it uses, rather than developing its own. Rest assured, we would all still be surfing the Web without Yahoo and Google. And we would have the hardware to do it too, without Intel; IBM could have chosen from many good chip vendors when it introduced the PC in 1981. Indeed, no one firm has been crucial to the tech industry in general.

Why, then, is Congress now poised to accede to the industry's demands on H-1B visa quotas? As the saying goes, "Follow the money." As Sen. Bob Bennett, R-Utah, said after Congress enacted the H-1B program expansion in 2000, "There were, in fact, a whole lot of [members of Congress] against it, but because they are tapping the high-tech community for campaign contributions, they don't want to admit that in public." Meanwhile, a reasonable H-1B reform bill by New Jersey Rep. Bill Pascrell is being ignored, not only by the Republicans but also by his fellow Democrats.

You may have thought that November's election changed things, but they aren't changing that much after all.

Norman Matloff is a professor of computer science at UC Davis.

Microsoft recruits heavily from my the university in my home town in Canada. The University of Waterloo in Waterloo, Ontario is Canada's equivalent to MIT. It is the place to be for engineering and computer degrees. Bill Gates actually shows up there to woo potential employees. I don't mind if Canadians get a few work visa if they truly need the employees but then is Microsoft paying them the same wages as Americans? If they are being used to save costs then it should not be allowed as it is unfair to the Americans who won't get the jobs.
Another interesting fact is that there have been so many layoffs in high tech companies in Canada that many grads would probably take a job at Microsoft even if it didn't pay that great as it is better than nothing.