A Blog by Jonathan Low


Aug 2, 2013

Data Challenge US Rationale for Expanding Tech Worker Guest Visas

The argument in Silicon Valley has long been that there are not enough qualified Americans to fill the industry's available jobs. This has mirrored a broader complaint by American  business covering other occupations, as well, especially in the skilled manufacturing sector.

Analysis of the broader data set covering the US workforce generally has consistently undercut that position. There appear to be plenty of skilled workers in the US, but companies either define their job specifications so tightly that few, if any, actual people qualify or it turns out there are plenty of 'good fit' candidates who could do the job but require some training or resettlement costs for which companies are loathe to pay.

The latest study suggests that the same thing is true in tech. There are more than enough qualified potential employees in the US in the vast majority of tech occupations. With some training, many could be converted to serve in the three categories where there may be actual demand.

The tech industry continues to maintain that it needs expanded numbers of so-called H-1B visas to remain 'competitive.' The use of that word is usually code for keeping costs down. This has raised concerns that the real impetus for the industry's demand is not worker shortages but a desire to keep programmers' and allied professionals' compensation from rising. Given the stubbornly high unemployment statistics and the increasing profitability of US business, especially in tech, there do appear to be valid questions about the efficacy of the demand for more visas. The larger issue is why an industry in which so many successful entrepreneurs are themselves immigrants does not perceive the advantages of strengthening the system which attracted them in the first place. JL

Quentin Hardy and Somini Sengupta report in the New York Times:

Although certain kinds of engineers are in short supply in the United States, plenty of potential candidates exist for thousands of positions for which companies want to import guest workers, according to an analysis of three million résumés of job seekers in the United States.
The numbers, prepared by a company called Bright, which collects résumés and uses big data tools to connect job seekers with openings, enter a contentious debate over whether tech companies should be allowed to expand their rolls of guest workers. In lobbying Congress for more of these temporary visas, called H-1B visas, the technology industry argues there are not enough qualified Americans. Its critics, including labor groups, say bringing in guest workers is a way to depress wages in the industry.
... “I didn’t expect this result,” said Steve Goodman, Bright’s chief executive.
Bright is based in San Francisco, and it makes money in part by placing qualified candidates with recruiters and, according to Mr. Goodman, employs workers using H-1B visas. “We’re Silicon Valley people, we just assumed the shortage was true,” Mr. Goodman said. “It turns out there is a little Silicon Valley groupthink going on about this, though it’s not comfortable to say that.” 
For a few job categories, like computer systems analysts, there are relatively few “good fits” among American applicants, Bright found. Computer systems analyst jobs, considered relatively low-skilled in the tech world, had four openings for every American candidate. For others, like high-skilled computer programmers, there were more than enough potential candidates in the United States, the company found. 
Bright’s study is unlikely to end the debate, partly because it rests on the company’s proprietary algorithm to determine who is a “good fit” for a particular job opening. Its algorithm uses a range of criteria, including work experience and education, but also work descriptions that indicated a high likelihood of other skills.  
For the study, Bright looked at the job categories for which firms applied for H-1B visas, and then, looked at résumés of job seekers in the United States whose résumés matched those same categories. 
Giovanni Peri, an economist at University of California, Davis, said that the Bright study was insufficient to determine whether there was a need for foreign engineers.
“It is the difference between job vacancies (demand) and unemployed with right qualifications (supply) that provides a measure of the excess (or not) of demand,” he said. “Knowing only the number of unemployed with right qualifications does not do it.” 
The Senate immigration bill, passed last month, nearly doubles the number of H-1B visas that companies can seek every year.
... Bright’s analysis suggests a hierarchy in the industry that mirrors what has long been said about jobs like low-skilled agricultural or restaurant work: Americans could do these jobs, but are unlikely to accept the pay or conditions. As a result, the jobs are taken by immigrants. 
The age of workers, which the study did not look at, may also play a role. Experienced American workers tend to be older in an industry that prizes youth. 
A study conducted by a Seattle-based company called Payscale found that among 32 technology companies surveyed, only six had a work force with a median age over 35. At Monster, the job search portal, the median age was 30; at Google, 29; and at Facebook, 28. The median age of American workers over all is 42.3 years old, according to the Bureau of Labor Statistics. 

Another reason for a youth bias is the cost of health insurance, which is immense these days. Peter Schaeffer's rough estimate is that health care (private and public) costs a staggering $12 per hour worked in the United States.

... Later that day, Bright was having a party, partly to attract new talent, he said, including foreign programmers here on H-1B visas.


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