To: H-1B/L-1/offshoring e-newsletter

Thu Aug 15 21:36:24 PDT 2013

Archived at http://heather.cs.ucdavis.edu/Archive/AnEngrDefendsH1B.txt


"X" is a software developer at "Y," one of the most famous tech firms in
the world (and one of the most strident advocates for H-1B).  He sent an
e-mail message to an academic colleague of mine, objecting to the
latter's statement that the tech labor shortage is "bogus."  I asked X
if I could post some of his comments, with my reactions, here to this
e-newsletter, and he gave me permission to do so.  (After I showed him a
draft of this posting, he did request a couple of changes in his
original message, which I incorporated, such as the $100 figure.)
Excerpts are enclosed below.

Even for those of you who feel well-informed on the H-1B issue, I think
that X, largely without realizing it, really puts some of the aspects in
much sharper focus.

The assertions of X's that I found most important were that (a) in
discussing possible tech labor shortages, one must consider the quality
of the workers, not just the quantity, (b) firm Y simply cannot find the
quality workers it needs, and (c) there is a shortage of tech workers at
a price many employers are willing to pay.

Some of you may say "Aha!" to (c), and of course I will join you.  It is
the same point that Professor Peter Cappelli of the Wharton School of
Business has often made, which is that qualified workers ARE available,
but employers don't want to pay the price that those workers command in
the marketplace.  

X's comment (c) is a perfect example of the fact many employers who
emphatically deny they use the H-1B program as a source of cheap labor,
actually are doing exactly that.  Remember, X started this conversation
by insisting that we do have a tech labor shortage.

But there is much more to it, with (b) meeting up with (c).  What X may
not realize is that Y actually does have applicants who are qualified
for X's project but who are rejected out of hand by Y's HR department,
due to being over the age of 35 or so.  Those applicants would come at a
price that Y is not willing to pay, even though it's typically
considerably less than the $100/hr figure X cites.  (Note by the way
that that figure would also be lower for salaried workers with
benefits.)

Upon reading the above remark in my draft, X sternly admonished me that
age discrimination is illegal, and that his employer Y would never
engage in such shenanigans.  I replied that Y does advertise jobs open
only to new or recent graduates, which he conceded is true.  I then
explained to him that federal and state laws on age discrimination are
not nearly so protective to workers as he had thought.

Concerning (a), I fully agree, and have been saying this publicly for
years.  Here for instance is what I said in reviewing the excellent EPI
paper by Salzman, Kuehn and Lowell on April 25:

      "One thing I should mention about this new EPI study is that it
      does not seem to take into account the quality issue.  It is not
      the case that all STEM graduates should get STEM jobs.  In the
      software development case, for instance, I've stated many times
      that hiring a weak person is worse than not hiring anyone; they
      just mess things up.  But we do not have a shortage of high
      quality people either, and as I showed in my own EPI paper, the
      average quality of the H-1Bs (mainstream, not workers in the
      bodyshops) in computer science is weaker than that of the
      Americans."

I discussed the supreme importance of quality in detail in my University
of Michigan law journal article.

Again, one of the strongest and most easily understood arguments showing
lack of a tech labor shortage is that wages are pretty much flat.  The
same argument still applies after one factors in quality.

In a followup, X pointed me to the following excellent commentary:
https://medium.com/i-m-h-o/231d7499a75  The author, Tyr Chen, is running
a startup in Beijing.  He complains that he has interviewed a number of
job applicants with great paper credentials but who cannot answer a very
basic question he puts to them.

X's point was that Chen's comments show just how acute the quality
problem is.  Obviously I agree.  But given X's repeated putdown of
American engineers, it's interesting that this occurred in China (which
X hadn't noticed until I pointed it out).  So one might take it as yet
another illustration that the foreign engineers are not necessarily as
stellar as the industry lobbyists claim.  But the same thing can and
does occur in the U.S.

I personally know engineers who are struggling to find work but could
easily answer Chen's question correctly.

By the way, X later also said that the issue of specific technical
skills, say JavaScript or Hadoop programming, is way overblown, and
that a good engineer can pick up such skills quickly.  Of course, I have
been saying this for years too.  But the industry lobbyists say,
"Employers would love to hire older Americans, but they just don't have
the specialized skill sets we need."

Needless to say, I disagree with X's claim that the Indian bodyshops
abuse H-1B while the mainstream firms use it responsibly.  The abuse is
across the board.  The Indian firms abuse the program at the low end,
e.g. bachelor's degree holders, while the mainstream firms abuse the
program at the higher end, typically master's degree level.  Abuse is
abuse, folks (unless you feel that American jobs should be protected
only at the low end?).

X's comments follow below.  Remember, they were addressed originally to
another researcher, not me.

Norm

I'm writing to you of my own accord, as an engineer with a passion for
economics.

I work at firm Y as a software devleoper for [identity of project
deleted]...  H1-B Visa holders hired for their skills developing new
systems are irreplacable.

H1-B Visa holders hired for system maintenance directly tend to be
better educated, experienced, and productive than American counterparts.

H1-B Visa holders hired by consulting companies like Infosys, Wipro,
Tata Consulting, Cognizant, and Patni Consulting tend to be directly
recruited from overseas, have little hope of advancement in America as
temp consultants, and dramatically lower both training opportunities
and wages for maintenance jobs... 

1. Making new products: When you're innovating or developing a new
product, you need every single member of the team on the same high
level; a single unproductive engineer is just as bad in professional
software development as a single unproductive research assistant is to
academic research...

An employee with educational qualifications does not a quality employee
make.

We have seemingly continuous "open headcount" in my division, despite
our heavy recruiting and H1-B visa usage. But we turn away the vast
majority of Americans we interview. Why? They don't meet our high
minimum bar.

A great programmer is multiple times as productive as a
good programmer, who is multiple times as productive as an average
engineer; a mediocre programmer  is highly detrimental. Y
starts by hiring good engineers--people who are already many times more
productive than their peers--and tries to develop them into great
engineers...

Most [small firms] only have one or two "real" programmers on staff
currently...  Nor do they have the resources for a $100/hour engineer
consultant.