Date: Mon, 2 Mar 2009 22:27:17 -0800 From: Norm Matloff To: Norm Matloff Subject: Wadhwa survey, titled "America's Loss Is the World's Gain" To: H-1B/L-1/offshoring e-newsletter I've written here often about studies conducted by Vivek Wadhwa with various coauthors. (Due to the fact that Vivek's coauthors change from study to study, and judging by statements he's made, many using the first-person singular, I believe most of the work is his, so I will refer simply to him and not the coauthors.) To review, here is where he and I agree and disagree (with some citations for each, possibly not the best ones, but good enough): A. He and I agree that the H-1B work visa problem is widely abused by tech employers. He even graciously admits that he himself drastically underpaid his H-1Bs during his tech CEO days. See http://www.google.com/url?sa=U&start=12&q=http://www.soc.duke.edu/GlobalEngineering/pdfs/media/GettingTheNumbers/science_feeling.pdf&ei=jr-sSaS0JYmQtQOs9u3IBA&usg=AFQjCNE1I2X0d5Aih-w5_tYXss2b5LlgDQ http://heather.cs.ucdavis.edu/Archive/CaseStudyH1BUnderpayment.txt http://www.informationweek.com/shared/printableArticleSrc.jhtml?articleID=201000479 B. He and I agree that there is no tech labor shortage. See http://heather.cs.ucdavis.edu/Archive/DukeOffshoringStudies.txt http://www.informationweek.com/shared/printableArticleSrc.jhtml?articleID=201000479 C. He and I agree that the vast majority of foreign workers in the U.S. tech industry are NOT "the best and the brightest." See http://www.google.com/url?sa=U&start=12&q=http://www.soc.duke.edu/GlobalEngineering/pdfs/media/GettingTheNumbers/science_feeling.pdf&ei=jr-sSaS0JYmQtQOs9u3IBA&usg=AFQjCNE1I2X0d5Aih-w5_tYXss2b5LlgDQ http://www.npr.org/templates/story/story.php?storyId=9910492 http://www.businessweek.com/smallbiz/content/feb2007/sb20070208_968450.htm http://heather.cs.ucdavis.edu/Archive/WadhwaIII.txt D. He and I agree that older engineers and programmers--this is age 35, not 55, mind you--have trouble getting work, and that the H-1B program, which consists overwhelmingly of young workers, is a major cause of the older Americans' difficulty. http://www.businessweek.com/technology/content/jan2008/tc20080115_576235.htm E. But he and I disagree on "fast track" green cards for foreign tech workers. He says we need them; I say see points B-D above, which show that we don't need them. I admire Vivek in many ways, e.g. for his versatility--CEO, journalist, researcher, and even financing (or some other involvement) Bollywood films. Thus it pleases me to know that he agree on five of six issues above. Hey, I wish my wife and daughter would agree with me so often. :-) But Issue E really does contradict A-D. Vivek's newest report, discussed in the NYT blog below, finds that many Chinese and Indian tech workers in the U.S. plan to return home, which he believes will be a huge loss to the U.S. Of course, this kind of message is something the press loves to pick up, and Vivek's gotten very broad media coverage on it. Though Vivek's numbers are skewed by the nature of his survey methods (e.g. most of his respondents are young and either childless and with very young children, thus more mobile) and thus are overstated, I do agree with his contention that a number of these workers, especially the Indians, will be going home soon. But Vivek's characterization of this exodus as "America's Loss," is quite baffling. Again, see points B-D above. He agrees that most are not the "best and the brightest"; he agrees that we don't have a tech labor shortage; and he agrees that the young foreign workers are crowding older American workers out of jobs. So where's the loss? The enclosed blog might seem to provide one answer: # Mr. Wadhwa and his associates found that immigrants were the chief # executives or chief technologists at one of every four technology and # engineering companies started in America from 1995 to 2005, and 52 # percent of Silicon Valley start-ups. But more than 50% of Silicon Valley engineers are immigrants, so on a per-capita basis they aren't any more entrepreneurial than the natives. If the natives hadn't been displaced, the natives would have founded about the same number of companies. So no loss there. What about patents? Same issue here. Vivek has stated that his research on patenting, though showing lots of immigrant patents, did not find that immigrants have higher per-capita rates of patenting than natives (Industry Centers discussion list, January 4, 2007; there is also relevant information in http://heather.cs.ucdavis.edu/Archive/WadhwaIV.txt (By the way, I still haven't found a block of time needed to go through Prof. Kerr's eight-page response to my critique of his study on immigrant patenting, but my university's quarter break is coming soon, and I plan to read it carefully then.) MOST IMPORTANTLY, Vivek is missing what should be the most salient point. He says that the biggest factor motivating people to return home is job opportunities, which they find better back home than in the U.S. This is absolutely correct. But the reason WHY they see bleak job prospects in the U.S. is ISSUE D ABOVE; ironically, the very H-1B program that they enjoyed early in their careers will IMPEDE their ability to find work after age 35. (Note the example of Mr. Liu, a Chinese-American engineer from China in my report of a few days ago, http://heather.cs.ucdavis.edu/Archive/AgeIsTheMainH1BIssue.txt) Finally, what I found most startling about the news reports on Vivek's survey today was his statement in the South Asian Journalists Forum, kindly brought to my attention by an Indian-American reader (www.sajaforum.org/2009/02/immigration-wadhwa-study.html; by the way, nice picture of you, Vivek): # Policies like those which the U.S. just enacted which prevents some # banks from hiring foreign workers will have the opposite effect from # what they intended -- they will send jobs abroad and scare away top # talent. The policy he's referring to is of course the one regarding H-1B hiring by TARP bailout recipients. Since this involves H-1B and not green cards, I wonder if Vivek is changing his mind on Issue A above. And his claim to SAJA that this policy will make the banks "send jobs abroad" contradicts his statement to the NYT in the enclosed blog that the banks don't have open jobs. Norm http://bits.blogs.nytimes.com/2009/03/02/the-real-high-tech-immigrant-problem-theyre-leaving/?emc=eta1 March 2, 2009, 12:01 am The Real High-Tech Immigrant Problem: They're Leaving By Steve Lohr The hiring of immigrant high-tech workers was a heated issue well before the economy went into a tailspin. So it's no real surprise that the bank bailout legislation includes language to discourage banks from recruiting skilled foreigners on work visas. It seems to be a political gesture, understandable and probably empty. "Citibank and the others aren't hiring, they're firing," Vivek Wadhwa, a former technology entrepreneur who is an adjunct professor at Duke University, said in an interview Sunday. "It has no practical effect, other than to make a couple of senators feel good. But it's a stupid message to send." The real worry should not be smart foreigners coming to take jobs in America, said Mr. Wadhwa, but all the bright, ambitious immigrants who are leaving the United States and returning home, especially to India and China. That is the topic of a report, "America's Loss Is the World's Gain," to be released Monday, with Mr. Wadhwa as its principal author and the Kauffman Foundation as the funder. In the last two decades, Mr. Wadhwa estimates, 50,000 immigrants left the United States and returned to India and China. In the next five years, he projects that 100,000 more will make the return trip. "A trickle is turning into a flood," he said. Economics, not visa headaches, is the main engine of the shift, according to the two-year research project, which surveyed 1,203 Indian and Chinese workers who had studied or worked in the United States for a year or more before returning home. Growing demand for their skills and shining career opportunities back home were cited by 87 percent of the Chinese and 79 percent of the Indians as the major professional reason for returning. Most also cited the lure of being close to family and friends. Most of the returnees were young -- in their early 30s -- and nearly 90 percent had master's or doctorate degrees. And 66 percent said that visa considerations were not a reason for returning home. "Addressing this issue is going to entail more than solving the visa problem," said Mr. Wadhwa, referring to the waiting list of 1 million H-1B visa holders and their families who are seeking longer-term work visas. Instead of permitting skilled immigrants to enter the United States, Mr. Wadhwa insisted, the country has to start wooing them by creating "fast-track" immigration policies and incentives to stay, as nations like Singapore and Australia have done. The United States, said Mr. Wadhwa, who is also a researcher at the Harvard Law School, has too often taken the immigrant high-tech dividend for granted. Previous research by Mr. Wadhwa and his associates found that immigrants were the chief executives or chief technologists at one of every four technology and engineering companies started in America from 1995 to 2005, and 52 percent of Silicon Valley start-ups. These immigrant-founded companies employed 450,000 workers in 2006.