The myth of America's missing software engineers

http://management.fortune.cnn.com/2013/08/05/immigration-h1b-visas-tech-jobs/?iid=HP_Highlight

by DamnYuppie • 13 years ago

78 134 13 years ago

management.fortune.cnn.com

Interesting to see some mainstream media finally picking up on this.

wissler• 13 years ago

The trouble with this is that no centralized analysis can determine what "qualified" actually means; only an individual employer can determine that. So if they say there are no qualified engineers then that's the end of discussion.

Having more intelligent people in the US is a good thing.

dj_axl• 13 years ago

So if they say there are no qualified engineers then that's the end of discussion.

Actually my company (which hires tons of foreign developers) does have applicants rejected. They then hire some lawyers to help reword the application. I'm not sure these are all H1-B, there are other hiring visa designations, but it definitely is the case that the government can reject applications. Frankly the government should reject even more of them, and then also reject some of the resubmitted ones, however the government is easily fooled by clever wording.

npsimons• 13 years ago

So if they say there are no qualified engineers then that's the end of discussion.

You really believe that? You can't imagine that, hey maybe these companies gasp lie so they won't have to pay market wages? That some C?O somewhere cares more about the bottom line than hiring qualified local engineers that they can't threaten with deportation?

bskap• 13 years ago

From experience, it's not "the companies" that are saying there's no qualified people. It's the engineers on the teams trying to hire people that interview those "qualified" people that send in their resume and then can't write FizzBuzz to save their life, have no idea how to even approach a design problem, knows all the buzzwords but can't explain what they mean, and have no idea how the Internet works at even the highest levels.

mattdelhey• 13 years ago

Not true in the eyes of our government. The whole premise of anti discrimination laws is based on the fact that there is something absolute that can be said about job eligibility. Unless you reject the validity of these laws as well.

FedRegister4• 13 years ago

From the article:

To be sure, using data to argue about contentious policy issues should always prompt skepticism.

Death of journalism right there. Data be damned!

On a more serious note:

"There is, indeed, a shortage of tech workers in the Bay Area."

That's because it's so darn expensive to live in the Bay Area, and almost impossible at the wages that tech companies generally want to pay for talent. They're knotting their own noose and standing on the chair, screaming that they'll kick it out from under them, really, for serial this time guys!, if they can't have cheap, underpaid talent to exploit.

DrJokepu2• 13 years ago

You took that sentence out of context. This is the full paragraph:

To be sure, using data to argue about contentious policy issues should always prompt skepticism. It's too easy to focus on particular aspects of any data analysis to prove one's point and overlook those items that may raise more questions.

... which is a very valid point.

pekk3• 13 years ago

Since it's too easy to mess up, and all, the obvious solution is just not to use data.

It does literally say that using data "should always prompt skepticism" - not conditionally on whether it was done right or not.

FedRegister4• 13 years ago

It's a very valid point if you are not doing research but instead doing viewpoint validation.

Research is gathering all of the data you can in as much of an unbiased manner as you can and then asking what conclusions you can draw from that data. Viewpoint validation is starting from your conclusion and cherry picking data to support that conclusion. There is no evidence that viewpoint validation is what went on here, and in fact the article mentions later the rest of the data that was gathered and analysis of the points in the data that may contradict this conclusion.

However, the writer also spends most of his time saying, "Welp, there's all of this data, but can a brother get a programmer? Nope? INVALID CONCLUSION DOES NOT COMPUTE," which is a pretty shitty way to do journalism.

DamnYuppie2• 13 years ago

I had often said the same thing. Not everyone wants to live in the Valley and it is VERY costly to live there.

sanxiyn• 13 years ago

Yup, that quote striked me as ludicrous too. If using data to argue should always prompt skepticism, what do they recommend instead? Hearsay?

See also "Nate Silver didn't fit in at the New York Times because he believed in the real world": http://www.fair.org/blog/2013/07/24/nate-silver-didnt-fit-in...

geebee5• 13 years ago

That sentence was poorly written. What they mean, of course, is that you can't just blindly accept data, especially in a highly contentious debate.

The way they wrote it, yeah, it almost sounds like they think it's "bad" to rely on data in a policy issue. Kind of funny, but based on the rest of the paragraph, clearly not what they mean.

Kind of an aside here, but it drives me nuts when people quote "lies, damn lies, and statistics" or talk about "lying with statistics" as a way of dismissing data out of hand. Yes, anything that can be used to communicate can be used to lie. You can lie with words, that doesn't mean you should disregard any argument made with words! It just means you have to be careful - or, as this article put it, skeptical.

It is important to take a very careful look at data in a contentious argument. So I agree with them... sheesh, though, very badly phrased.

saraid216• 13 years ago

http://en.wikipedia.org/wiki/Lies,_damned_lies,_and_statisti...

jcnnghm7• 13 years ago

I posted this in response to a comment the last time this came up. That article was killed, so I'm reposting:

Whereas the reason there are open positions for programmers at high tech companies is that these companies want star programmers

Maybe they should try paying like stars. What percentage of engineers that aren't founders or within the first five employees make over $300,000 a year? The money is in Silicon Valley, Google's 2011 net income was $299,874/employee [1], but the vast majority of engineers aren't going to be the ones to get it. How about paying a market wage, instead of offering a "free lunch" to people that cannot negotiate. I am not interested in playing video games at work, I have a house for that. Last I looked at it, the difference in pay between finance and stem jobs is enough to hire a personal chef to deliver lunch to you at work every day, and cook for you at home, and buy all the games you want, with a bunch of money left over. Apple and Google are both posting ~25% net profits because engineers are willing to work for peanuts, and a free lunch. On top of that, cost of living in the bay area is outrageous, we're talking $35,000/year for housing, unless you want to live like a college student.

An average (median) engineer should be making $200,000 a year, and the "rockstar" (>80th percentile) engineers that everybody is trying to hire for $85,000 and 0.5% of equity, should be making $350,000+. These are hard jobs that few people can do at all, and fewer can do well. Great engineers can create millions of dollars of value a year.

It seems that the industry has shifted focus, now that the collusion agreements have been squashed, toward importing cheap labor. This problem has been solved in other industries through partnerships and professional societies (e.g. in the legal industry, with large partnership firms and bar associations). In the interim, it seems like the best way to capture value is to build companies to flip in talent acquisitions, while planning to leave to do it again as soon as you're vested.

[1] Goldman Sachs 2011 net income was $162,913 per employee. Average pay was $367,057. It's harder to get data on Google, but it looks like the mid-career median salary is $141,000.

Google's Gross Profit (Total Revenue less Cost of Revenue) was $24.7B in 2011, and GS's was $24.5B. At the same time, Google had 32,467 employees to GS's 35,700. Yet, the Google net income was $9.7B compared to $4.4B on the GS side. The difference seems to be made up entirely by the difference in employee compensation.

samspenc• 13 years ago

I've always wondered about this. Is the standard deviation of Google's salaries less than that of GS's? Does GS have more of a long-tail?

jcnnghm7• 13 years ago

That is an excellent question, and I wish I knew the answer. I have tried finding data on that before, but was unable to. My inclination is that GS has a much higher standard deviation than Google, with the data skewed right.

jbooth5• 13 years ago

How about paying a market wage, instead of offering a "free lunch" to people that cannot negotiate.

Who can't negotiate? It's your fault if you can't/won't negotiate.

I'd posit that the reason finance pays more for engineers than STEM is because most of us think that the atmosphere at a finance company will suck and as a result they have a smaller labor pool (I've literally never responded to a single financial recruiting email).

jcnnghm7• 13 years ago

Who can't negotiate? It's your fault if you can't/won't negotiate.

If there is a pool of labor willing to accept a free lunch and campus-like atmosphere, coupled with cheap imported labor, in lieu of perhaps $100,000 in pay, it depresses wages across the entire industry.

And this is the funny part. Do you really believe working somewhere like EA is different than working somewhere like Goldman Sachs?

jwoah12• 13 years ago

The data doesn't support the conclusion that they pay more for engineers, just that they pay more per employee. I've been an engineer in financial services in NYC for 3.5 years, and I can fairly confidently say that those large salaries are going to the senior salespeople and traders who pull in hundreds of thousands or millions per year in commission. Maybe I've just been at the wrong places (I don't think so), but unless you're some kind of phenom quant engineer or you are in a very profitable and very small hedge fund, the offers are better at the Googles, Microsofts, and Amazons of the world than the Goldmans, JPMorgans, and Citigroups.

gdilla• 13 years ago

And is GS average pay skewed by a 1% of employees who make globs of money into the 10s of millions in total comp? Do the majority of staffers make normalish wages? Admin assistants, IT, operations, etc?

jcnnghm7• 13 years ago

Do the majority of staffers make normalish wages?

Anecdotal, but I have had a few friends working in support roles at investment banks making about double what they would make elsewhere.

m_ke3• 13 years ago

Not only that, from what I've seen most investment bankers usually end up working 12+ hours a day.

aryastark2• 13 years ago

Yep. This is how backwards our industry is. It wants to pay peanuts for rockstar coders, but doesn't realize that no one is both dumb enough to work for snack food Tuesdays and smart enough to have a PhD in CS.

The problem is exasperated by these companies treating engineers like children. "Toss them another Mt. Dew, and they'll work another all-nighter."

With all the VC and buyout money out there, a true rockstar is going to be a founder or have serious equity in their company. They'd be an idiot for anything less.

jbooth5• 13 years ago

Well, don't work for those companies. There's plenty of companies around that actively discourage hero coding by anybody (aside from exceptional circumstances) because it illustrates a deeper flaw in their system.

snowwrestler2• 13 years ago

So what are these Ph.D. engineers doing, then? Sitting at home with their degrees waiting for a big enough offer? I think not. They are employed somewhere, which means that actually they are not counterproof of a shortage.

Raising salary always comes up as the "answer" to the talent shortage, but it's a highly localized answer. Sure a company can fill all their openings by raising their salaries--they'll do it by recruiting currently-employed engineers from another company.

That doesn't "fill a hole" industry-wide. It just moves it to another company. If there are more holes than qualified engineers, there's a shortage.

To make the case that talent shortages are caused by low salaries, you'd need to show me a lot of people who are qualifed but currently willfully unemployed, waiting for the right offer. I'm not aware of many engineers who fit that description.

bradleyjg10• 13 years ago

This is really a tough sell as a policy issue. I'm supposed to be all upset that wages are being depressed from $200,000 to $100,000 for people who happened to have fallen out of their mothers on one side of an invisible line even though it means opportunities for people to make $100,000 who would otherwise be making $25,000 but happened to be born on the other side of the world?

Sorry, far from being upset, that sounds to me like a great trade-off. Sure the companies aren't doing it out of altruism, but the net result is quite positive. All those 'underpaid' American born engineers working in silicon valley can comfort themselves knowing that they will still be among the 1% richest people in the entire world.

N.B. Look up PPP before objecting based on how much an apartment in SF costs.

rayiner9• 13 years ago

to have fallen out of their mothers on one side of an invisible line

It's not an invisible line. It's a line that was defended and delineated by the blood of people who wanted to establish and preserve a nation.

geebee5• 13 years ago

I don't think you're required to be upset about it. In fact, your honesty is very refreshing. No CEO lobbying for this bill would ever openly state that this program dramatically reduces wages for US citizens, but that they don't care because they view US citizenship as a meaningless invisible line.

rayiner9• 13 years ago

I should post for reference:

At Goldman/JPM/MS, the going rate (inclusive of bonus) right now seems to be:

100-150k for analysts (1-3 years out of undergraduate); 200-300k for associates (3-5 years out); 300-500k for VPs (6-8 years out); 500k+ for MDs (8+ years out)

And we're not talking about the guys bringing in a billion dollars as traders. This is for the rank-and-file.

c0ldfusion2• 13 years ago

There is no way an associate in operations makes 200k and frankly that seems a bit high for engineers as well. Are you speaking in general and is your source anecdotal?

Also _most_ people do not ever make MD, let alone in 9 years.

sutro• 13 years ago

Perhaps the tiny HR detective pictured should try searching for qualified workers around newer computers, ones without floppy drives perhaps? Or maybe just search online?

perlpimp2• 13 years ago

I think wrong question is being asked. I think there are enough engineers, it is the quality of product people that is suffering. That often leads to balooning of engineering teams to crush the code run and make the product. So lack of engineers is a symptom not a problem. Speaking from my varied experience , YMMV.

2c.

rhizome• 13 years ago

I'm interested to hear more of this perspective. Are you saying that imagination on the product side is creating insurmountable technical debt?

perlpimp2• 13 years ago

What I am saying is that few product people have the vision of what is needed - and have the right vision of the end result. Most product people more of iterative meandering tourists with vague idea of the end result rather than captains that have exact understanding where they ought to be in a week - as per having a useful and usable progress that moves everyone measurably closer to successful product.

Maybe I ask too much of my product people, but that's the reality - there are only so many steve jobses out there. People like to believe they have the traits but often lack similar "from the early years" experience of being in the whole basics of production to managing part that jobs had.

So to sum it up, too much of Wrong kind of technical debt. Sort of buying a ferrari when you need a house - because your wife will have a child soon ;)

dbecker• 13 years ago

As someone occasionally involved in hiring, the important question isn't whether we have "enough" software engineers.

It's easy to fill seats.

The question is whether we have "good enough" software engineers. And, as long as we're trying to improve as a company, we'll always want better engineers.

temuze• 13 years ago

You're 100% right. Why make it difficult for really smart people to immigrate to the US? Better engineers are always welcome at any company.

In any case, there's reason to believe many of educated immigrants will become entrepreneurs and create jobs themselves.

opendais2• 13 years ago

The article claimed that the logical reason for the company's actions [since they can't underpay] is that they are recruiting for junior / lower paying [e.g. system analyst instead of software engineer] positions when in reality they are getting something like a senior dev with 5-10 years experience.

Personally, I think anyone with a 4 year degree should be allowed to get a green card if they can show they have the $$ to live in the US for a year and agree to look for work. Because the way it works now, even if the article is bullshit, it is comically vulnerable to arbitrage [LOL yes, why we do indeed need a 'junior web developer' that knows C so he can understand how our api works...oh, well, we realized after he arrived we needed him to work on this C project that was critical to our infrastructure and is responsible for 100k+/day in revenue while we pay him half of that of the guy that quit] if you can pay a lawyer for an hour.

Just my two cents.

rayiner9• 13 years ago

The problem is that you have no way of letting in just the "really smart people" and end up letting in a whole bunch of people who aren't better than the ones you already have, who will have trouble finding work when the next tech bubble pops. Tech is a highly cyclical industry, and it's shortsighted to start letting a bunch of people immigrate on every bubble cycle.

JoeAltmaier• 13 years ago

"For higher paying jobs, like computer programmer, software developer, and electronics engineer, Bright found more than one domestic job candidate for every H-1B application."

Wow, so the author thinks you only have to interview 1 person for each job. That's a Polyanna view; reject that statistic and the entire article falls apart.

moocowduckquack3• 13 years ago

"Bright.com, a California-based company that uses big data analysis to pair jobseekers with employers, released a report last month that showed that the supposed dearth of high-skilled engineers in the United States may be fiction after all."

Which would presumably be a useful result for Bright's business, if it is true, as it would mean that companies simply are not looking hard enough, which is Bright's business.

"In fact, Bright's analysis reveals that for the top 10 jobs where H-1B visas are requested, only three do not currently have enough qualified American jobseekers to satisfy demand."

Ahh, so it isn't a fiction then. Hang on, just a minute ago they said it may be a fiction according to a report and now they say that nearly a third of those roles do not have enough people in the USA to fill them, according to the same report.

Hmmm. Could this possibly be an advert posing as an article? Is water wet? These and other exciting questions will be answered in a forthcoming study; "Look here's some numbers so give me all your money, you pitiful fools." Available soon for only $666.66. Reserve your copy now while stocks last.

donutdan4114• 13 years ago

Are you selling an Apple? http://www.macmothership.com/gallery/MiscAds/Apple1Ad.jpg

pekk3• 13 years ago

In the place of analysis you have put a lot of snark which seems to be analysis.

If another company with a different business had posted - one with an incentive to say there is a shortage of high-skilled engineers, like most big companies hiring engineers - would you be implying their claims are false too? If not, you are being partial; if so, your method is just to say that whatever anyone says must be wrong because it was in their interest.

3 out of the top 10 jobs where H-1B requested does not equal a third of employees, and it isn't clear that those 3 do see a shortage.

Also, in case of a shortage in a specialized area, why do we assume that companies cannot ever do anything to train employees in that specialization themselves? If you need piles of Java programmers who know SOAP, get some Java programmers and let them train on SOAP.

If you are in the business of producing (say) cars, you have to make capital investments, including investments in human capital - why should software be a special snowflake?

moocowduckquack3• 13 years ago

Ok, without the snark, I am specifically saying that this is not journalism. It is an advert with suspect claims.

bradleyjg10• 13 years ago

If you are in the business of producing (say) cars, you have to make capital investments, including investments in human capital - why should software be a special snowflake?

It's perfectly legal for a car company to import sub-assemblies from abroad. Why should we have free movement of capital and goods, but not labor?

shreeshga2• 13 years ago

Important factor is how many of the "qualified" candidates clear the interviews? The problem is not the lack of people to interview, it's the lack of people who clear interviews.

m_ke3• 13 years ago

A lot of people assume that learning Java makes you qualify for the title of software engineer. Every time one of these articles pop up it gets flooded with comments from upset ITT tech graduates who are pissed that H1-bs are stealing their jobs.

jnbiche• 13 years ago

If someone knows Java, and knows it well -- and all that that entails (good engineering practices like code organization, commenting, testing, optimizing if needed, security, corner cases) -- then why wouldn't they qualify for the title of software engineer?

Actually, my problem in this (non-Bay area) region of the country where I now live is that I don't have a ten-year Java history, and most managers here don't seem to believe that my background in C, Python, Lua, and JavaScript would allow me to pick it up in a very short period of time (and indeed, I've since picked it up for Android development, and it turned out that the Android API was harder for me to learn that Java itself).

DamnYuppie2• 13 years ago

Can you elaborate on this further? Are you implying that it is the quality of the candidates and not the number?

I can't say I disagree with that statement in and of itself. Yet I believe you are getting few qualified candidates because companies are asking for highly skilled people with a great deal of experience and then only, and my opinion is intentionally, offering well below market wages. This then allows them to scream "there are not enough developers". The whole shtick is just meant to repress wages..

shreeshga2• 13 years ago

From my experience most of the H1B candidates who might join a company with lower wage at first, can and will negotiate for higher pay when they change company. I think the days of hiring H1B candidates at lower wages and thinking of _retaining_ them are gone and the companies do realize that.

zeteo• 13 years ago

My company (which, according to Glassdoor, is paying above-average tech salaries) recently started offering ~$100 per lead for software engineering referrals. If the person ends up being hired, their referrer also gets a ~$2000 bonus. A recruiting firm that can truly locate these missing engineers would be making a killing in the marketplace right now.

w3pm2• 13 years ago

Plenty of companies I know pay $5-10k or more for a successful hire referral. Good engineers are in demand, foreign or not. It's way easier to get the interview and be hired if you're local, though -- can't beat skill + convenience.

Considering you pay 25-30% or more of first year salary for a hire by a recruiter and $10k is a complete bargain.

tootie• 13 years ago

Same here. Data notwithstanding, I've done a lot of job interviews for candidates with the right resume and most are not hirable. Software engineering is a field where quality is hugely important.

hga3• 13 years ago

We share this experience, or as I put it, a majority who "can't program their way out of a paper bag".

But that doesn't tell if there are enough candidates out there if the salaries and conditions of work were better. The latter is very possibly a big issue with H-1B employees, seeing as how they've a modern version of indentured servants.

FedRegister4• 13 years ago

Part of the problem is that the salaries are just too damn low right now. If you offer a competitive or even above-average salary that's _livable_ in the Bay Area then talent will beat a path to your door. Try to lowball or meet other offers and you'll be stuck without candidates.

dylangs10306• 13 years ago

I'm really interested in this. As a New Yorker, I don't find this principle. Is it superbly difficult to commute to the Bay Area from a less urban surrounding? In New York City, if you don't have the money to pay for an urban apartment you can live in the Bronx or Westchester and easily commute to the city.

krainboltgreene• 13 years ago

Even if they could "locate" the engineers, that doesn't mean the engineers will want to work for the companies paying.

snowwrestler2• 13 years ago

Who would rather stay unemployed than take an engineering job?

bicknergseng• 13 years ago

Seems like you could make some easy money by going to the nearest college and gathering engineering students email addresses.

dylangs10306• 13 years ago

That's a thing already. Related: It's really annoying. Nobody does it just to genuinely help you - you get spammed halfway to hell. Oh, and maybe a connection or two.

droithomme• 13 years ago

Please state the salary range you offer, your metro area, and whether you pay all interviewing expenses for the candidate (economy airfare and accommodation in your city), and full relocation expenses. Only then can we begin the process of evaluating whether your inability to hire is due to lack of talent availability, or if it is due to other factors.

bluedino• 13 years ago

"Qualified applicants" takes on a different meaning if you're looking for someone to crank out a CRUD app or write operating system kernels.

For example, we've been looking for an entry-level web developer for almost a year. They actually put "computer science degree" and "2 years experience" on the job ad. We found a pretty smart kid with an associates that blew the interview by mentioning he kept up with industry trends on Reddit - so our boss is afraid he's going to screw around online all day.

The sad part is, 3 of the other 4 developers in the department came from other areas in the same company, one in shipping and one in billing, and have almost no formal computer training and don't even know how to upgrade Firefox.

epoxyhockey3• 13 years ago

blew the interview by mentioning he kept up with industry trends on Reddit

..as opposed to not keeping up with industry trends at all? Sometimes, I feel like middle management in America is the problem.

riggins• 13 years ago

That's a comment that probably merited further delving into.

There are some decent sub-reddits.

It's a totally different thing if he's following the programming subreddit than say the gonewild subreddit.

BillyMaize2• 13 years ago

Entry level with two years of experience?? I'd hope that isn't very strict or basically no one would be able to apply for the job meeting the requirements unless internships count, and even then you usually get like 1.5 years of experience that way.

fader• 13 years ago

"Entry level" in the US now means 3-5 years of experience. You're expected to work those years for free (as an "intern") to get the experience.

ruswick• 13 years ago

Perhaps your company's issue is that it's hiring practices are so convoluted and absurd that they are driving away most of the prospective hires that possess brains?

dylangs10306• 13 years ago

I'm sorry...what? He blew an interview by mentioning he follows industry trends on reddit?

Okay, I can understand being disappointed in hearing that because you don't like reddit and would wish for a better source (opinion), but even then I can't imagine acting on something so...trivial.

That's like me mentioning to a company I'm interviewing with that I like to browse my smartphone to keep up with feeds. Whoops, no job for me, I might dick around on my phone instead of helping clients.

I mean seriously? Is that the real reason why he screwed up the interview? Holy hell...

seldo2• 13 years ago

"It would make sense that an employer would try to offer a lower salary to an employee it helped move to the United States since that employee also gains the benefit of getting sponsored, but the analysis found the opposite."

This makes me want to punch the screen. It is ILLEGAL to pay an engineer on an H-1B less than the median salary for that position, precisely because people were worried that foreign labour would be used to undercut wages.

isalmon• 13 years ago

There's a very easy work around. Tell the USCIS that you're bringing 'HTML guy' for $80K/year, but in reality it's a software engineer that would otherwise make $120K+ in the US.

arink• 13 years ago

One of the concerns I've seen mentioned is that while it is illegal to pay less than the median, that median can be shifted by changing the job title.

In the CNN article, it is mentioned that the most requested position is for "computer systems analyst" which "is also a lower-paying job compared to jobs like software engineer and requires only a two-year degree." It is quite possible that some of those analysts are over-qualified for their jobs and should be making software engineer or senior engineer money.

The Government Acountability Office wrote up a report about 2.5 years ago [1] that does mention limited oversight (page 3). The text:

  "Elements of the H-1B program that could serve as worker protections
  such as the requirement to pay prevailing wages, the visa’s
  temporary status, and the cap itself are weakened by
  several factors."

Just because it is illegal, doesn't mean it isn't happening.

[1] http://www.gao.gov/new.items/d1126.pdf

geebee5• 13 years ago

Keep in mind that preventing a wage increase is, over time, no different from undercutting wages. Typically, a shortage would spur an increase in wages - so allowing people to pay only the "prevailing" wage could still end up suppressing wage growth. One way around this would be to set a higher pay standard for H1B hires (perhaps requiring pay at the 90ile%+ level for the position, or creating a "prevailing wage + 25%").

bradleyjg10• 13 years ago

Employers have to pay the industry prevailing wage or the wage actually paid to comparable US national employees. So the law already does what you are suggesting.

pekk3• 13 years ago

No, it isn't illegal.

By 'that position' do you mean the position being replaced, or the new position created in order to hire the H1B? And are you taking account of the market price of the additional skills that employee brings, or is that not relevant?

So here's just one loophole: companies find a lower-paid title, and base the 'prevailing wage' on beginning level employees. Now that the 'prevailing wage' is set, try to hire young people with advanced education, special skills, etc. Congratulations, you now have a legal way of paying about half of what a comparably experienced citizen would cost. Bonus: sponsorship does provide good leverage.

Consider H1B employees getting paid the prevailing wage. Is this how you compensate the best talent during a talent shortage? No. It implies you'd pay less if you were confident you could get away with it.

You can't honestly dispute that the program is being used to undercut wages. Legally.

seldo2• 13 years ago

I absolutely can.

I arrived in this country on an H-1B, and then I co-founded a company where I repeatedly examined the option of hiring employees on H-1Bs. It never, ever made sense to hire a foreign employee if there was a local one available, even though I have absolutely no bias towards hiring American citizens.

The only reason you'd hire an H-1B is if you were out of qualified American engineers, because it is so much harder to hire foreigners.

The chief users of H-1Bs are big, boring companies that can't attract local talent at any price. And then they can't hang on to them, thanks to the American Competitiveness in the 21st Century act, which lets H-1B holders switch companies if they get a better offer. The purpose of the law was to prevent companies using immigration status to "trap" employees at lower wage. Because the immigration system thought of that problem.

The argument that for the same price, you get a more-qualified applicant for a given lower-skilled position doesn't fly, because

a) the cost of an H-1B is far more than their salary; the legal fees run into tens of thousands of dollars before you even consider relocation. Foreign workers are much more expensive.

b) the pool of people willing to up and relocate from a foreign country to the US just isn't that big; the same market that applies to American engineers applies to foreign ones, and they are just as demanding.

c) once in America, the H-1B holders don't need to stick around if their salary is crappy, and they don't. See above.

The fundamental misunderstanding that a lot of people have about talent immigration is that they think there are hordes of unwashed foreigners beating down the doors to get in. They're not. Most people stay where they are. That's why you have to make it easier for them to get in, because we need them more than they need us.

malandrew• 13 years ago

There probably should be some sort of requirement where the H1-B visa holder's peers are required to anonymously rate the abilities of the H1-B visa holder relative to themselves after something like 6 months of employment. This wouldn't prevent the hiring of workers at a lower rate but would provide a quick enough correction to such fraud. It would also make sure that H1-B visa holders are paid a fair wage relative to the value they bring.

Prior to getting an H1-B employee the employer would be required to register a minimum number of employees that will be a peer of the new employee (no bosses or anyone else that may be in cahoots). After 6 months, the government agency responsible for such visas would send a survey to those peers asking them for their title and salary and stating the title and salary of the H1-B employee. They are then asked to rank the title and salary of the employee against their own as well as the skills of the employee relative to their own.

cantankerous2• 13 years ago

I used to have dreams of moving out to the valley after I finished school, but after checking, rechecking, and then rechecking again the cost of living out there, I pretty much scrapped the idea. The Bay Area may be a cool place to live, but it's not a 250% housing-cost-increase cool to me. Moreover, the pay doesn't match that housing increase. Forget it. For that price I'll wait for somebody to offer a telecommuting position, move out to me (it's not SO BAD in Missouri), or move someplace less psycho crazy on the housing.

This story drives me crazy because the market is essentially in the favor of the engineers, but it feels to me like the big tech influencers are trying to tilt it back in their favor by shaping policy and changing the game.

Pro tip: If you bring in foreign engineers and pay them peanuts, they're not going to be able to live in the Bay Area much less want to.

evgen• 13 years ago

You will be renting, not buying. This means that they monthly housing cost differential will be more than made up for in the salary differential. The sad fact is that if you are not in the top slice of a particular subfield you are not going to be getting telecommuting options unless you get very lucky: by being in Missouri you both limit your opportunity to find the lucky break and limit your ability to get into the social/work networks that serve to bestow the "this guy rocks" credential. Your only option is probably to be a major contributor on a well-known open source project; this is not a bad thing to do in general, but you are limiting your options significantly. If you deign to lower your standard of living slightly for a short period of time you will be able to take a real chance at getting the opportunities you are looking for. You can always leave after doing a few years in the bay area.

You can't win if you don't play. If you are waiting on the sidelines for some magic opportunity to fall into your lap you are going to be waiting a very long time.

nobodysfool• 13 years ago

You will be renting, not buying.

Exactly why the OP won't choose to move there. Why should he have to pay someone the privilege of living, and get none of that money back when/if they decide to leave? At least when you buy you get some equity.

azakai• 13 years ago

Pro tip: If you bring in foreign engineers and pay them peanuts, they're not going to be able to live in the Bay Area much less want to.

The article said that they pay foreign engineers more on average than local ones.

acchow• 13 years ago

250% housing-cost-increase cool to me

250%? What city are you comparing to? Are you perhaps comparing to a large town?

w3pm2• 13 years ago

Here you go:

http://money.cnn.com/calculator/pf/cost-of-living/

Enter St. Louis, MO and San Francisco, CA. Housing is 276% more expensive. Columbia? 252%. Kansas City? 215%. You get the idea.

Also, just for fun, try some other "large towns":

Dallas, TX: 276% Columbus, OH: 268% Austin, TX: 245% Jacksonville, FL: 242% Phoenix, AZ: 225% Atlanta, GA: 217%

cmbaus• 13 years ago

As a hiring manager outside the Bay Area (Tahoe), I can say that the hiring situation is worse than I have ever seen it.

bayesianhorse3• 13 years ago

I always ask myself if the unemployed engineers are indeed employable. If so, then there is no shortage. If they just appear unemployable, then maybe. If they are not, then there is a shortage regardless of the simple numbers.

redblacktree• 13 years ago

Is an unemployable engineer really an engineer at all?

hga3• 13 years ago

Given that in this field of "engineering" you become unemployable for conventional salaried positions at around age 35-40, it's a less debatable point than you're positing, I think.

ricardobeat• 13 years ago

I've just watched the She++ documentary, literally 15 minutes ago. They say the US only graduates 30% of the IT workers needed every year, and even if a university like Stanford graduted all their students in CS, it wouldn't be enough. What gives?

epoxyhockey3• 13 years ago

It's always an eye opener to look up companies at http://www.h1bwage.com/ and compare their salaries. Plenty of SF companies hire 'senior software engineers' in the range of 78K.

nvarsj• 13 years ago

Base salary is almost meaningless, you have to consider total comp. You'll see the same seemingly low wages at finance firms that have h1b visa's, but in reality those people are making significantly more.

epoxyhockey3• 13 years ago

We're talking about software engineers here. Base salary is almost meaningless in most finance and some legal firms, but not at a 30-person software consulting firm.

I looked up companies that I once worked for on h1bwage and I know for a fact that my H1B co-workers were not enjoying large bonuses.

A visa application listing a bay area senior s/w engineer prevailing wage of 78K should be outright rejected. Yet, it was accepted.

dep_b• 13 years ago

I can not imagine anyone that's able to find a pinned shortcut to Visual Studio and double click it being without a job in the United States if I'm honest. It's hard for me to visualize what kind of total retards would get rejected on a regular basis. Could somebody find one of them for me? I would like to speak to somebody like that.

The only people I can imagine are PDP-11 assembly specialists nearing their 60s. And still I have a feeling there could just as well be even a screaming shortage for them.

CleanedStar2• 13 years ago

A century and a half ago, Karl Marx said the only force outside of nature which could create value was labor. This was not a new concept, but in line with what economists before such as Adam Smith had thought.

A counter-argument arose from what he may have called the "capitalist hegemons" that value arose through supply and demand and marginal utility. That if there was enough demand for something, prices would rise and a supply would come into being.

Yet nowadays these hegemons seem to be saying something different. There is a demand for IT talent. There are billions of people in the world, so it seems obvious that if you set hours at 40 a week and then raise the salary enough, eventually the demand will be filled.

The bottom line is they don't want to raise the salary.

It is possible other factors are in the way. If, to take one example, Pell Grants were higher and easier to get, maybe there would be more CS graduates. The opposite is happening with Pell Grants - they have been cut back, and are covering less college costs than they have in history.

This means less CS graduates. This means you'll have to pay more for the ones who come out, because less are coming out.

It's a strange contradictory thinking. Employers preach supply and demand, yet think it does not apply to their desire for engineers. Set hours at 40 a week and pay for them. If you want people to work more, you'll have to pay more.

There is not a shortage of engineers. There's just a flood of people who want a very accomplished, knowledgeable engineer, and want them to work on boring, brain-dead projects for 60 hours a week, and to pay them nothing and treat them like junk.

I have 10,000 jobs open right now. I need experts in Java, Python etc. I'll pay you minimum wage. You need to work 12 hours a day. See, I just added 10,000 new job openings to the shortage. How come I can't find anyone to fill these jobs?

ilaksh• 13 years ago

I think that engineers need to control enforcement of these policies and what the policies are automatically. Until law becomes an information technology you are not going to make any headway on everyone gaming the system and taking advantage of loopholes like hiring foreign workers because they are cheaper.

So we really need that but another aspect of this is just massive global inequality which to me is an amazing civil/humanitarian rights issue. Its amazing that everyone just accepts it.

I think when it comes down to it we should be bringing more brilliant people out of crappy oppressed resource starved countries into our wealth hogging country. But we shouldn't have to lie about the reasons for doing it or pay them less just because we can get away with it.

codex• 13 years ago

An argument I've never seen made regarding H1B software engineer hiring: is better for the entire county in the long term for the US to import as many good software engineers as it can, or is it better to restrict supply?

If any good software engineer were allowed carte blanche emigration to the US, the US would have more of the world's top engineering talent, which may be a good thing overall even if it depresses wages. On the other hand, high wages may encourage more young US citizens to go into computer science--assuming they can hack it.

I wonder if this is just another nature vs nurture debate. If you presume that the world's supply of "smart people" is fixed, you want to import all of them and get them to procreate in the US. If you assume intelligence is growable, you want to focus on growing it domestically.

The myth of America's missing software engineers

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