To: H-1B/L-1/offshoring e-newsletter Wed May 8 21:49:50 PDT 2013 As promised the other day, enclosed are my comments on the May 4 piece that ran in the Seattle Times titled "Do Visas for Skilled Foreigners Shut Out U.S. Tech Workers?", at http://seattletimes.com/html/localnews/2020924182_h1bworkersxml.html There is a lot of interesting material in this article. In commenting on it, among other things I will surprise some of you by strongly agreeing with one of the most active supporters of H-1B, and will tell a sadly ironic anecdote of the "what goes around, comes around" variety. People I've talked to about the article like the opening example the best: Mitchell Erickson decides to go back to school an earn a computer science degree in his 50s but then fails to find full-time work--right there in the Seattle region, where Microsoft is claiming a dire CS labor shortage. To me, there is a much more important example in the article, but before getting to it, I must note that I certainly don't wish to minimize Erickson's plight. On the contrary, I've been seeing this kind of thing for years. Even worse, in 1998 I made the acquaintance of a guy who had already been employed as a programmer but quit his programming job to get his master's degree. At age 31, HE couldn't find a job after finishing the degree--at the height of the Dot Com Boom. But I believe the unnamed person in the article is more important, for reasons that will be explained shortly. Here is the passage describing her. ************************************************************ A Microsoft product manager shares that suspicion. The manager was one of 1,400 people cut from the payroll in January 2009 as part of Microsoft’s first-ever companywide layoffs in the recession. The supervisors who eliminated her position were here on visas, as were two recent hires in her work group who dodged the downsizing. Three weeks later, Artech Information Systems, a staffing firm, offered the product manager a three-month contract at Microsoft for what was essentially the same job she had left. The pay was $32 an hour, half her old salary. The worker asked not to be named because she has found a new job and did not want to jeopardize it. ************************************************************ Let's call this woman Ms. X. [Added 5/10/13: Today I received an e-mail message from a woman who identified herself as Ms. X, which I confirmed from one of the authors of the article. Ms. X says that although Artech did contact her about the job, she did not actually apply for it, due to the low salary.] Ms. X's example is very important in light of another passage in the piece: ------------------------------------------------------------ Professor Ed Lazowska, associate chairman of the computer science and engineering department at the University of Washington, said competition is especially fierce for the most talented, with his students often fielding multiple job offers. Lazowska said the difference between a top software engineer and a middling one is enormous. That, he speculated, might be one explanation for why some job searches are difficult. Employers, Lazowska said, seek applicants with stellar grades from well-regarded computer-science programs. They also look for successful past internships and résumés showing ability to constantly update skills in a fast-changing industry. ------------------------------------------------------------ Professor Lazowska has been extremely outspoken over the years in support of H-1B, and he has an unusually good relation with industry. His bio notes that he "holds the Bill & Melinda Gates Chair in Computer Science & Engineering at the University of Washington...is a member of the Microsoft Research Technical Advisory Board, and serves as a board member or technical advisor to a number of high-tech companies and venture firms." Please note carefully, though, that I completely agree with Lazowska's remarks above about quality. As I've frequently noted, there is a huge range in talent among programmers (as anyone who has ever taught computer science students knows all too well). You may recall my often saying that hiring a weak programmer is worse than hiring no one at all, because the weak one will mess things up for everyone else. And BOTH the foreign and domestic workers include lots of weak programmers. Unfortunately, employers don't recruit on the basis of quality, at least in the first screening. As I've pointed out so many times, they focus on hiring the new and recent graduates, who are cheaper. By in essence automatically screening out any applicant over age 35, the employers are shooting themselves in the foot, because many of those applicants are of high quality. At any rate, I do agree with Lazowska that quality is key. That's why the example of Ms. X is so important. Here's the point: Ms. X presumably does meet Microsoft's quality standards. She was working at Microsoft, and though she was included in a round of layoffs there, she quickly was asked back to work at Microsoft via a contractor. Yet Microsoft had still laid her off (and 1400 others), and when she was rehired to work there, it was at half her old salary. THAT is apparently what happened--she "aged out" of Microsoft because her salary had gone up over the years. THAT is the reason for Microsoft's "shortage" claims. As Wharton's Peter Cappelli, also quoted in the article, has stated many times, what the employers mean by "shortage" is a shortage of people who will work at the low price the employers want to pay. Recall that Senior Vice-President and Chief Technical Officer David Vaskevitch has stated that the vast majority of Microsoft hires are young, and Microsoft's Brad Smith makes related statements in the article here about new grads, as does Lazowska. Remember, the rationale given by the industry is that only the new grads know the latest technologies, and recall too that my retort to that is, "Well, who did those new grads learn the latest technologies from? It's old guys like me!" Well, this time, I can point out that it's old guys like Lazowska! Lazowska got his bachelor's degree in 1972, which would make him about 63 years old. Yet this semester he's teaching an operating systems course using Linux, the modern system that runs Android. His course uses git, the currently fashionable version control and collaboration software, and he is assigning programming work using threads, the key technology to working on today's multicore machines. In other words, those new grads learned their "modern" skills from a 63-year-old. Lazowska implies in the article that older tech workers will be employed as long as they keep up with technology, but that is generally false, as even Vivek Wadhwa has pointed out, and as Ms. X's example shows. Again, the employers want the young'uns, as they are cheaper, both in salary and in benefits. I just received an employer request today for me to send some young people to their firm. UCSD economics professor Gordon Hanson, according to the article, "says his research shows that foreign and American high-tech workers have comparable wages." Actually, from what I can tell from Hanson's Web page, he himself hasn't done any research on the matter; he simply has written nontechnical papers that summarize what others have done, such as the paper at http://www.aei.org/files/2012/01/23/-immigration-productivity-and-competitiveness-in-american-industry_150136627858.pdf cited by a TIME article. And as I showed the other day, in http://heather.cs.ucdavis.edu/Archive/OvertNYT.txt that paper of his is extremely selective in its use of the existing research literature. There are NO papers cited in his bibliography that are critical of H-1B. On the contrary, Hanson himself admits that the H-1Bs (at least the ones being sponsored for green cards) are immobile. Basic economic theory, not to mention common sense, shows that immobile workers are generally underpaid, as they can't move around in the labor market to get the best salary deal. In other words, Hanson should know as an economist that his claim about wage parity can't be true. Last, a comment on Michelle Lim, the new graduate who toes the UW party line on H-1B and new-grad hiring in the article. She has a very impressive LinkedIn page, and I'm sure she deserves the attention employers gave her as a new grad. But, though I hate to "jinx" her, the odds are that 15 years from now, that employer attention will have evaporated. (Unless she switches to a nontechnical job, which her second major in Econ suggests.) Ms. Lim might benefit from reading a posting I made to this e-newsletter in 2009. I was reporting on a show CNN did at the time, in which it interviewed several students at Georgia Tech (a stone's throw from CNN headquarters), about their concerns regarding the job market. One of them, Christine Liu, talks about the plight of her engineer dad, an immigrant from China (emphasis added): %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Currently the job market with my dad, because he's an engineer, is hard, really hard, to stay up because we have all these Georgia Tech students who are up with the new information and stuff like that. THEY'RE COMING IN AND TAKING THE OLDER PEOPLE'S JOBS, so my dad doesn't have the opportunity to get a job. He's a really smart guy, so he's considering going back to China and starting a job there. That should never be an option!...It makes me angry. %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Indeed Ms. Liu SHOULD be angry. The irony, of course, is that most likely her dad started work in the U.S. as an H-1B, and employers hired HIM instead of older Americans. Now in 2009 HE was the American (I presume he naturalized) being shunned. Of course, Mr. Liu was also being shunned in 2009 in favor of new American grads too, not just H-1Bs. But as I keep harping, the employers use the H-1B program to swell the young labor pool, greatly exacerbating the age problem. And even worse, the Gof8 bill would in essence give automatic green cards to ALL the foreign STEM grad students. Almost all of them are young, so we will have an even greater age problem than we do now if Gof8 is enacted. Remember: Under Gof8, H-1B would move into the background; the primary problem would be all those STEM green cards. Norm Archived at http://heather.cs.ucdavis.edu/Archive/VisasShutOutAmericans.txt