Enterprise Software

Are corporations using foreign workers to depress U.S. wages?

According to Business Week, the median income for computer professionals has fallen by $800 since 2000, when adjusted for inflation, despite an unbelievable 1.8% unemployment rate in the sector. Generally, when unemployment falls so low, the market adjusts as companies try to outbid each other for the best workers, and salaries climb as they did so dramatically during the late 1990s. Today, despite historically low levels of unemployment, particularly in the tech sector, wages are stagnant and have been for several years.

According to Business Week, the median income for computer professionals has fallen by $800 since 2000, when adjusted for inflation, despite an unbelievable 1.8% unemployment rate in the sector. Generally, when unemployment falls so low, the market adjusts as companies try to outbid each other for the best workers, and salaries climb as they did so dramatically during the late 1990s. Today, despite historically low levels of unemployment, particularly in the tech sector, wages are stagnant and have been for several years. Some people blame this on the large number of H1-B visas that are given out by the government, purportedly to fill jobs that corporations say Americans aren't either interested in or qualified for.

The Great Tech Worker Divide (Business Week)

On the other side of the same coin, there are a lot of people who also bring up the problem of "brain drain" from too few visas being given out, leading foreigners with advanced degrees to return to their countries and add their technical know-how to an economy outside of the United States. Another problem is the desire that corporations have to keep costs down in order to maintain high-profitability marks, a desire that causes companies to do what is best for their interests rather than what is best for Americans. Politicians have also not done anything to address a decline in technology graduates that could be a result of a lack of interest, or it could also be an issue caused by the reluctance of corporations to pay market rates for qualified Americans.

U.S. Facing Tech Labor 'Brain Drain' Due To Immigration Law, Study Says (CNN Money)

Are America's software skills getting soft? (Wisconsin Technology Network)

There are obviously several ways of looking at this issue, but I am a proponent of doing what is best for Americans above most other considerations. I see a lot of utility in extending visas to highly-educated foreign nationals in order to keep them, and their research, in the United States. However, the companies that hire them should first make sure that there are no qualified Americans to take the job, and then they should have to pay the prevailing market wage to the foreigners in order to avoid depressing the market for Americans.

This is definitely a sticky issue with a lot of room on either side, but what would you do to encourage Americans to get into the technical fields, keep the best foreigners in America to help us stay the top technical innovator, and keep wages high enough that Americans will continue to choose technical work? Would you increase or decrease the number of temporary visas or permanent work cards given out? Would you force companies to hire Americans first and fill in their ranks when there aren't Americans left for the jobs? Would you regulate the wages that companies can pay? What would you do to address the needs of tech workers in America against the need to keep the best and brightest in America?

21 comments
fourcadm
fourcadm

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Tony Hopkinson
Tony Hopkinson

Let's ssay I run a buiness. Now I can pay the going rate to a national, or I can cherry pick people who could be at least as good potentially, for a much lower employment cost, and better still have them on indenture, so even when they know on a level playing field they could increase their salary by an order of magnitude they have no option but to take it up that ass and smile. Now which am I going to pick ? H1B might have been sold to the politicians as addressing the 'skills deficit' the corporation didn't buy it for that though. Low unemployment and stagnant salaries = crooked, bent broken, unfair, stupid, short sighted and par for the course.

bobzibub
bobzibub

The base year that is cited is 2000. Wages have dropped since the exuberance of the dot com boom. Should anyone be surprised by this? Why not use a moving average? To the extent that h1-bs limit wages, it is because there are so many restrictions placed upon them. There is no hard and fast rules about what percentage increase in salary is allowed. They can't easily switch to another company. The green card process is fraught with complexities and expenses and hence lawyers. It is not like taking out a fishing permit. If it screws up (and it does) people have to leave the country, including selling their house, car, take the kids out of school... People live in fear because of this. It is not companies alone that prevent a better system. It is because there is no political constituency to improve the lot of these people. Sure there are organizations like ImmigrationVoice, but they don't vote, they don't contribute to political coffers. Companies do like the current system. They can unload the costs for the permits on the employee. They can get indentured staff. But the US IT organizations want to worsen their plight, not better it because they think that the system will go away. IT organizations (Programmer's guild, IEEE-US comes to mind) and the bigots (numbersUSA) cause harm to the industry by pushing solutions that companies (the ones that finance the politicians) won't ever agree with. So the h1b people are left in the cold. And wages are not increasing for everyone. So the solution is to replace the h1b system with a pure green card-ish system. That way, people are not stuck in the same job for five years (IT career hell). They can start companies and hire others. It doesn't matter whether an h1b person is from Mars or Venus and they count their currency in clams. They are the same--they want a better paying job. Let them have it and they'll pull other's wages up with them. As a country, the US has the benefit of some of the most highly skilled, entrepreneurial people in the world. Other countries would kill for that resource. People in technology have to move beyond micro 101 and into the 400 level labour economics to see beyond simple supply and demand. Does a society want fewer skilled people or more skilled people? More of course. Chad might be a great place to visit......But you don't want to live there right? So educate your people, true. But don't blame h1-b people for your own society's ills.

Inkling
Inkling

I don't think anyone could make a case that companies are [b]NOT[/b] using H1Bs to depress wages. Not with a straight face anyway... Yes, I think that H1Bs should be limited. No, I don't want the government deciding what companies should be paying it's employees. That will only exacerbate the problem. The bottom line is, that unless the average American decides that American Idol isn't their highest priority of the week, it's only going to get worse. We are far too comfortable as a country. The average "poor" person in this country (as defined by our government) owns a car (often two), a cell phone, multiple TVs, has several credit cards, etc... People are comfortable and they are complacent. They want the government to take care of them (Social Security, Socialized Medicine, and on and on...). Far too few people want to take responsibility for anything any more. Your kid is acting up? Medicate her. You're too lazy to work? Sit at home and mass-procreate to get a bigger check from the government. Your child is not doing well in school? Petition the local government to "integrate" the schools (economically speaking) and have the tax payers foot the bill for the extra busing. Think the environment is in trouble? Blame big business and the government (don't adjust your personal habits). Businesses abusing the H1B program to depress wages? Have the government intercede and mandate wages!!! As long as we keep looking to the others, usually the government, to solve all of our problems, things will continue to get worse. Generally speaking, we have only ourselves to blame.

HypnoToad72
HypnoToad72

1. You say government shouldn't interfere, yet you want government to put a cap on H1Bs? Corporations won't do it, you can't do it, so who's left? The government. 2. Thanks to offshoring, which does include people who worked darn hard to get Masters and Doctorates degrees, the incentive to take out a 5 or 6 digit loan and be stuck with all those loans with no job. You might want to do a web search for the chap who committed suicide, having borrowed over $100k and not getting a job afterward! 3. American Idol... Hmmm, when I was in school (1980s), the kids who wanted to learn and know were called geeks, nerds, dweebs, et cetera... The situation is far worse today, but who runs our society? Kids, their peers who say "Get this cool thing!", or the media that tells everybody what they should get? 4. "Ease of use" - you claim Americans are complacent. Well, who keeps making software and harder easier to use? The same companies who later call their customers stupid, which includes some of the same people who made the applications, and go offshore! (Hint - it's about greed, and not concern for one's fellow countrymen.) Also, as more and more hardware and software applications are meant to consolidate rather than expand, it's inevitable that the field will be full of workers with no work to do. 5. Too lazy to work, therefore one merely procreates and collects welfare? Hmmm, US population: 300 million. You may want to look up population figures for other countries; we haven't devolved to the point of guppies just yet, despite what the media likes to show its audiences. Oh, incidentally, how about those executives who do nothing more but play golf all day? (forgive me, my generalizing...) Is that working? What defines work anymore? 6. Some school districts genuinely need money for proper equipment. Which might include metal detectors and security guards because the children are so unruly, the cause of which the parents (probably working 2 jobs each to stay afloat) let the TV be the nanny. How's that for a generalization? 7. I've been practicing green long before it became a fad; even when people said it cost too much, was geeky, whatever. All Al Gore has done is profit from telling people what to do and then not go do it. From his board status on Apple to his private jet and multiple home heating bills, and trying to slag it all off as "carbon credits" (think "credit cards"), he's a hypocrite. If one wants more proof, I'll be happy to cite any number of sources, including http://www.badapple.biz. 8. Which neighborhood do you live in if even the poorest have a cell phone, TV in every room, et cetera, et cetera? Not mine! Not in many. 9. Since the cost of living in those countries is much lower than in the US, even the wages we deem as a pittance is seen by those countries as a godsend. How else can they make big middle classes, pull their people out of poverty, open restaurants named "Hitler's Cross" (web search it), and so on? Generally speaking, the truth is in the middle and no one side should be left unanswered. (So feel free to correct me where I'm wrong.)

Inkling
Inkling

1. The government is there for a reason. Controlling immigration is one of the few things that it [b]should[/b] be doing in my opinion. Don't even get me started on how horribly they are botching that job. No, I take it back, botching implies they are trying... 2. I agree that off-shoring is harmful. You want to solve that problem, or at least alleviate it some? Pass the Fair Tax and turn the U.S. into the greatest tax shelter in the world overnight. As far as those with tens of thousands of college loan debt? I'm sorry, but I don't buy it. If I can get a job making $70k plus a year with no college degree and no certifications...they can survive. Killing yourself is a cop-out, any way you slice it. 3. The media. The thing is, almost the entire media (print, television and radio) is owned by a few, ultra-rich, ultra-privileged people. They care about one thing: making money. How do they make more money? Eliminate the middle class. The ultra-rich will become richer and more powerful and they will have a slave class. This sounds just dandy to our politicians by the way. Whom better to have as constituents then a slave class that is completely dependent on government, thereby making politicians more powerful? This combination of ultra-rich people owning the media having the same goals as politicians is a dangerous mix. 4. I agree. Big business cares about one thing: Money. Greed in it's purest form. I still don't want the government regulating wages. The way that American complacency comes into play here is this: use your wallet to make changes! The bottom line is that if people started caring about something other than American Idol and making responsible choices, big business would change. 5. I stand by my statement. Welfare is a horrible idea. All it does is create people dependent on the government. People that are allowed to vote for more government no less. It is this class of people (along with those that take advantage of them) that will cause the ruination of our grand experiment of government. Neal Boortz said it best in my opinion: Politicians like to harp on the fact that our "less privileged" individuals can not raise a family on minimum wage. Guess what? I can't own a yacht on MY wage. Guess what the solution for me is? I don't own a friggin yacht. Yes, it's harsh. That doesn't make it any less true. What do you think our crime rate would be if people who are unable to afford children made the responsible decision and didn't procreate? Yes, there are many, many execs guilty of abusing their office. At least they aren't using my money to do nothing. 6. Take a long hard look at the statistics. The amount of television a child watches has a negligible effect on how they do in school or whether or not they turn into productive adults. Socioeconomic status decides those things. I'm running short on time here, but see if you can find the numbers (one of the places I got the numbers is the book "Freakonomics"). If you compare a poor child that watches TV eight hours a day with a child from a wealthy home that watches eight hours of TV a day, there are [b]drastic[/b] differences in test scores and future prospects. The reason that TV gets blamed is that kids from poor families are more likely to watch more TV then kids from wealthy families (that and it just ain't "PC" to blame the "less fortunate"). It is a symptom of the problem, not the cause. 7. I agree completely. Al Gore is a fraud (albeit a smart one). I'm well aware of the carbon credit fraud. I'll give them this, they are making a lot of money off it. I've read a few articles from the garbage dumps that freely admit that the things the carbon credits are paying for are things that are done 99% of the time anyway. That money is pretty much going straight into their pockets and they look like the good guys. It's a great scam! 8. Again, look at the stats (I'm short on time or I would find them for you). The numbers don't lie. 9. I agree. Foreigners want to come here and take advantage of our abundance of wealth. As I said before, pass the Fair Tax, turn the U.S. into the largest tax shelter in the world and this would solve a LOT of the problem. The Fair Tax, by the way, is the only tax system that would almost completely alleviate the burden of taxation for the poor (that statement was made by a government funded study on taxation). You would think that this would mean politicians would want to pass it, right? Wrong. Not only does it make fiscal sense, but passing the Fair Tax would cause the single greatest swing in power in this country. It would take the power away from the politicians and put it in the hands of the people, where it truly belongs. Politicians, for the most part, are scared to death of it. I agree with much of what you said, but it doesn't invalidate what I have said. Yes, I've made generalizations. Life isn't one size fits all and I realize that. It still doesn't change the fact that those generalizations are, generally speaking, true. I think you and I more or less agree on these things. You are simply more cautious then I am in your statements. I'm thankful that some people are. Truth be told, I don't think the picture is quite as bleak as I have painted it. It is getting pretty bad though. Again, great post, I enjoyed reading it! P.S. Once again, the book "Freakonomics" got me interested enough to check into some of these things. I don't have time to list any of the other sources I've studied. Most of them I found on the internet. Trust me though, it isn't easy to find unbiased studies. The government uses grant money to encourage studies that say what they want and as I mentioned, they don't like studies that aren't politically correct. P.P.S. The reason I always use quotes when I say "less fortunate" is that the term is offensive to me. It implies that poor people are poor simply because they are unlucky. That implies that I am successful simply because I [b]am[/b] lucky...basically the term says the the hard work I did to get where I am today means nothing. It's one of those terms made up by the politicians to help their class warfare strategies. EDIT: I want to be clear here. I didn't blame my puppies for eating my wallet when I left it on the floor and I don't blame the sycophants in public office for abusing their power. I blame the apathetic and complacent average American that is too involved with American Idol to stand up and demand a change.

Inkling
Inkling

that life can be hard. I have been jaded by personal experiences: I owned a small construction company when I was in my late teens and early twenties. I lived near Detroit and often went downtown for shows and other things. Inevitably, I would have someone approach me asking for a handout. Each time this happened, I would give them my card and tell them that if they would catch a bus to the address on the card, I would be happy to give them work for as long as they wanted. Not once was I taken up on my offer and a few times I was nearly assaulted as thanks. I don't disagree that people willing to take personal responsibility should be given a second chance. A program like you have explained would be a great start in my opinion because it would force people to work to make themselves successful. It's the something for nothing that I have a problem with. Another benefit to killing welfare would be that many illegal immigrants would stop coming and many already here would probably leave. In many areas of the southwest, where a huge portion of the illegal immigrants live, 40-60% of illegals are on welfare!!! Most of that money is sent directly to Mexico and their families they left behind. I could rant and rant forever about the topic. The truth is, I'm an optimist and I believe that most people not only want to do good for themselves and others, but that if their excuses are taken away, they will. I believe in our system of government, but it's being horribly mismanaged.

shardeth-15902278
shardeth-15902278

But I do think a serious overhaul is in order. Instead of picking an income threshold and passing out money to those who are under it, they should instead create work and education programs, and pay them for their participation. Don't hand out money, but do make sure they have a job so they can make the money, and access to education (including finances and budgeting for starters) so they can obtain a job long-term. And in the case of shiny rims... That might also need to be part of the eligibility criteria, If you lost your job and need assistance, first you need to downsize; trade the Escalade in for a Taurus. People fall on hard-times, and most everyone needs a little help once in a while.

Inkling
Inkling

that in some (many?) cases this is something that happens. The problem is, welfare makes it possible for this to happen by removing personal responsibility and even giving people an incentive to have more children to get more money. No matter how good a program is though, there will be people that take advantage of it: When I joined the Marine Corps, I became involved with Toys for Tots. It was a great feeling walking kids down the aisles at the toy centers and letting them pick out their toys and stockings. Every once in a while, a family would pull up in a SUV with shiny new rims. This disgusted me and it took every ounce of self control to not physically attack these pigs. They have enough money for their toys, but their children have to depend on the good will of others to get theirs. That is just one example and, thankfully, these people were the exception rather than the rule. Again, life is not one size fits all and I realize that there are times in peoples' lives when they need a helping hand. I just don't believe that we should have a government sanctioned excuse for lazy people to be completely free of all responsibility for their actions. I personally don't believe that welfare can be fixed. It needs to go away altogether. I also believe that until it does go away, anyone depending on public assistance to live their lives, should have their right to vote taken away. Many people will argue that taking away welfare would cause crime rates to soar. I think that it would get worse in some places, and I think that abortions would go from 20% to 50%, but I think the benefits far outweigh the negatives.

shardeth-15902278
shardeth-15902278

While I agree the current approach to welfare is broken (I think primarily because it strips a person of pride by giving them money, rather than giving them an opportunity to fix their situation) - but a though occurred to me on the procreation point... Perhaps that many 'welfare families' keep having children is a symptom of the lack of educational opportunities, and limited access to contraception, rather than a cause. Does that make sense?

Inkling
Inkling

that some of that sounds a little too close to "conspiracy theory", but I would love for someone to give me a thoughtful, logical argument as to how I'm wrong (it [b]has[/b] happened before after all).

Grammyputer
Grammyputer

As a long-time veteran of computer programming, who recently was on the job market, I can identify several problems. - a biggie: Companies are unwilling to hire older workers, especially those with many years of experience. There are quite a few prejudices against older IT workers. - It is quite sad that the average benefit package for IT workers is less than that of a construction worker. Decent health care and retirement options would go a long way. When many of these foreign workers return to their native countries with their knowledge, they go secure in the belief that there will be health care for them if they need it

Inkling
Inkling

The prejudice against older workers doesn't exist only in the IT world. My father-in-law is fifty years old. He was an engineer at Ford for 28 years. He was recently forced to take a package (one year salary and benefits, etc.). He has gone on lots of interviews where he is over-qualified, makes a point of telling them that he doesn't expect a higher salary because of his age and he is still having lots of problems. I personally know ten other people experiencing this problem. I don't know which construction workers you are referring to (I owned a small construction company in my late teens/early twenties), but I think that is a gross overstatement. I can not think of a single company that has need of an IT staff that doesn't offer health insurance to it's employees.

Locrian_Lyric
Locrian_Lyric

If you look over fifty, forget it unless you're a consultant.

Inkling
Inkling

My point is just that it's bad everywhere, not just IT.

Dr Dij
Dr Dij

there should not be unrestricted h1-b in US. If corporations want foreign workers better if they setup sites overseas. This is seen in those countries as brain drain to the US. Even Castro commented about this but was pretty silly as a smart person in Cuba has few options besides being real good at running a pig farm :) If foreign phd students want to go back to help their own country that's great! That will mean their countries will develop better and their people will be less likely to see the US with $$ in their eyes. they are lured here generally and stay because of improved infrastructure, better money, more freedom of expression, lower cost goods. This will be the best of both worlds: wages will increase if the companies have to have people in the US, which will encourage students to take up these occupations again.

Andy Moon
Andy Moon

What do you think should be done to address the needs of both American workers, who want the market to cause their wages to rise, and the needs of companies, who need all the high tech workers they can get? What would you do to balance that with the need that America has to continue to attract and retain the best and brightest workers so that we can remain at the top of the tech food chain?

Tony Hopkinson
Tony Hopkinson

I mean obviously. Suggestion on next comment, Is water wet? Unless your employers are your customers, there's no point in paying them enough to purchase anything is there ? Sound business thinking 101...

-Q-240248
-Q-240248

As countries grow economically (India) we all benefit. The world economy is just going thru some transitions. I'm not worried about it.

HypnoToad72
HypnoToad72

I shouldn't feel worried. Yet I do. Though if it's true what's being said about the sinking dollar, things will turn around. Even more so once the cost of education goes down to affordable levels; levels which certainly aren't hurting India.

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