Wages or Shortage?

[Peter Suderman]

Dean Baker on tech employers who want to expand the number of H1B visas for high-skilled workers:

The argument from high-tech employers, that they simply can't get enough high tech workers in the United States is ridiculous on its face. If these jobs paid millions of dollars per year (like jobs at Wall Street investment banks), then highly skilled workers would leave other occupations and develop the skills necessary to work in high tech occupations. Obviously, Bill Gates and the other high tech employers cited in this article want to be able to employ high tech workers at lower wages. The issue is wages, not a shortage.

Dean Baker's a sharp guy, and he's not entirely out of touch here, but I think he vastly oversimplifies things. It's certainly true Microsoft could change education patterns and employment goals in the country if it dramatically boosted the salaries of certain positions. But it's not always that easy for employers to simply throw more money at salaries.

For example, I spoke to someone a few nights ago who owns and runs a successful coffee shop here in D.C. She said that one of the most difficult things about the business is retaining and managing staff. Finding employees who are reliable and qualified (whether those qualifications are as complicated as doctoral degrees or as simple as being able to work flexible hours) is tough in any business. Somehow I doubt this would be as much of a problem if she paid them all $50 or $100 an hour. That, however, is a plainly absurd idea.

Basically, though, that's what Baker's suggesting Microsoft do. While Microsoft obviously works on a vastly different financial scale, it still faces a similar difficulty: managing a finite amount of resources and trying to get the most return from them. Simply expecting the company to boost wages through the roof is unrealistic. But if those are the expectations, then advocates of keeping current restrictions are going to be disappointed when they see more and more companies following Microsoft's lead and opening up facilities like this.

Comments

There's another issue apart from pay: skills. Obviously, acquiring the skills and the knowledge, and also the interest in high tech, starts before you have any notion of providing for a family. It starts while at school. If your science education is no good, too few long to some day go to MIT, right?
It may all start with teaching creationism, if you ask me.

Posted by Ulla Lauridsen | April 1, 2008 11:07 AM

Just tossing out a hypothesis, but isn't it also possible that this "shortage" is more a reflection of America's poor educational performance (or lack of interest) in math and science? That topic is often discussed in light of comparative statistics across many countries. This could be a manifestation of that. If we're not growing or developing the talent over here, but other countries are, then either they come here to do the work, or we open our facilities over there to employ the talent.

It also seems that Baker's argument is frequently made by populists/protectionists as opposed to actual out of work engineers. On the face of it, it seems dubious that any significant portion of the unemployed in the US are trained engineers or computer scientists.

Posted by mike | April 1, 2008 11:11 AM

I don't think there would be a problem if American tech companies would be willing to offer better compensation to the A-grade American engineers while getting off of their high horses and being more open to considering B-grade and C-grade American engineers at all.

I've gotta run but this topic is near and dear to me. Looking forward to posting more when I get back if the discussion takes off.

Posted by STC | April 1, 2008 11:14 AM

That's a particularly interesting example, given that the Canadian dollar is so strong, and Vancouver is such an expensive city to live in.

Posted by Eriver | April 1, 2008 11:16 AM

"Somehow I doubt this would be as much of a problem if she paid them all $50 or $100 an hour. That, however, is a plainly absurd idea."

Absurd? It isn't unusual to have per employee overhead costs of $200+/hr in high tech industries. It is certainly not absurd to pay $50/hr to avoid having bozos wasting your facilities. Is it really absurd to have competent technicians with rare skills making $100,000 a year? They avoid destroying extremely expensive equipment. They keep expensive processes functioning. They are trusted with trade secrets. It would be absurd to pay this to every technician, but it would not be absurd to offer that salary as ssomething within reach of every technician if they do their job well.

What is going to help a company more, paying their CEO another $10 million, or 100 technicians making $100,000 each? Ten million dollars is noise in CEO pay.

Posted by Njorl | April 1, 2008 11:23 AM

Ten million dollars is noise in CEO pay.

This is probably only true for 10% or less of all companies. Granted it's certainly true for Microsoft, but that firm is hardly indicative of most firms in the industry.

Posted by mike | April 1, 2008 11:34 AM

I have a PhD from MIT in Chemistry, over half of my friends in a variety of disciplines left science for patent law, consulting, or finance because of the money. In my experience a rough average for my friends who stayed in their field was ~90-100K after 5-6 years of grad school. Patent Law (150K) and consulting (130K) start considerably higher. A career in medicine will generally have far better lifetime earnings, better geographic flexibility, and better job security as you age.

Perhaps, Baker didn't make his point clearly enough but the compensation is very important at the margins.

Posted by bp | April 1, 2008 11:37 AM

I love how people immediately blame this problem on creationists. Yes, because we're producing so many programmers/engineers/scientists from Kansas and Alabama.

Please. Kids don't want to study it (it's hard), and parents don't care (they seem to only care about arts, music and sports programs).

It's possible to get a half-decent-paying job out of college after spending 4 years of high school staring at the wall and 4 years of college drinking bong water and shotgunning six packs. Who would go through the relative hell of a science major when there are plenty of jobs for the reasonably intelligent yet unskilled?

Posted by Klug | April 1, 2008 11:46 AM

STC,

I think the point here is that it is massively less efficient to hire B and C students than the A students. Either they (probably) can't do the job, or they (probably) will do it much less efficiently than the A student would.

These are the kind of jobs you can't just train in-house. You need people with meaningful degrees in the subject.

Posted by Peter | April 1, 2008 11:48 AM

"Somehow I doubt this would be as much of a problem if she paid them all $50 or $100 an hour. That, however, is a plainly absurd idea."

Absurd?

Yes, it would be absurd to pay someone $50 to $100 per hour to work in a coffee shop.

Posted by huh | April 1, 2008 11:51 AM

Is it really absurd to have competent technicians with rare skills making $100,000 a year?

I think he was saying that it's absurd to pay employees of the coffee shop that much, not technicians.

Posted by trumwill | April 1, 2008 11:54 AM

The wouldn't be a 'shortage' of engineers if the companies would consider hiring people older than forty.

Posted by ZT | April 1, 2008 11:58 AM

First off, wages or shortages is a false dicotomy. Adding more compensation will on the margin move more people into the field and employeers can always keep paying more and getting less as long as there are people out there with the basic inherent abilities necessary to do the job, but as the wages go up to draw less-than-ideal developers in, you'll be paying more and getting less, since the best software potential developers have likely already been enticed by the high pay levels currently available to good developers.

The question that should be asked about immigration and tech jobs is why should we exclude well-educated people who want to come to the US from doing so. I don't see what possible argument would justify restricting the labor supply of an already well-compensated field, driving up the price of goods that pretty much everybody uses at least indirectly these days.

Posted by MattXIV | April 1, 2008 11:59 AM

I don't think there would be a problem if American tech companies would be willing to offer better compensation to the A-grade American engineers while getting off of their high horses and being more open to considering B-grade and C-grade American engineers at all.

C-grade engineers have significant negative value to any company unlucky enough to hire them. It's worth going to a substantial amount of weeding effort in hiring, simply to avoid them destroying your projects.

B-grade engineers do provide positive value to their companies, but it's a lot lower than A-grade engineers, sometimes by to a factor of 10-20x. Given that A-grade engineers don't get paid 10-20x what B-grade engineers do, you're better off not hiring B-grade engineers either, unless absolutely necessary. If you have to hire them, do so on contract, and dump them as quickly as you can. Most importantly, never let them anywhere near your hiring process, as they will inevitably greenlight C-grade engineers, who will destroy your company.

A-grade engineers are unfortunately similar to Welsh longbowmen: devastatingly potent compared to their peers, but you have to start their training at age 10 or so. Simply upping the salaries of A-grade engineers won't magically create more of them. We know this, as we tried exactly that experiment in the boom.

The vast majority of tech workers, foreign or domestic, are not worth hiring at any price, and more are worth a lot less than the going rates. Raising the compensation of tech workers in general is only going to increase the number for whom the supply and demand curves simply don't cross.

Posted by Dave | April 1, 2008 12:01 PM

The Container Store pays a large premium to its floor staff, and has built what it considers to be a very positive work environment--long term, focused on developing lifetime employees, etc. They're consistently rated one of the best employers in the U.S. (Fortune magazine consistently rates them #1), and they have an excellent retention rate. That all starts with a high starting salary that attracts the sort of people they select to exploit that environment to the fullest.

In their case, at least, throwing money at the problem definitely works; though it's the start of a virtuous cycle, not a solution in itself.

As someone who was just laid off amidst a massive offshoring effort at my tech employer, I can testify that a combination of mediocre starting salaries and an obvious lack of commitment on the part of the company to develop a strong local workforce has sent the skilled and talented employees looking outside the field for better careers.

Posted by Justin JJ | April 1, 2008 12:05 PM

As ZT indicates age discrimination is a big problem. There is no longevity in engineering or IT careers which is why many of my colleagues are also looking outside the field. An older doctor or attorney is viewed as a source experience, an older engineer is often considered obsolete whether they are or not.

Posted by mark | April 1, 2008 12:27 PM

B-grade engineers do provide positive value to their companies, but it's a lot lower than A-grade engineers, sometimes by to a factor of 10-20x. Given that A-grade engineers don't get paid 10-20x what B-grade engineers do, you're better off not hiring B-grade engineers either, unless absolutely necessary. If you have to hire them, do so on contract, and dump them as quickly as you can.

This is the basic problem in the tech industry, IMHO: the rockstar mindset, that programmers are innately either geniuses or cogs in the machine, and the cogs need to be sifted to find the geniuses. It ignores what other industries know: that you can develop good employees with a good environment, good policies, and good management.

The tech industry's fetishization of "A grade engineers" is holding them back. They build workplaces full of geek toys to attract the idiot savants, and offshore the rest. It also perpetuates the myth that good tech is developed mainly by brilliant minds working alone, rather than good engineers participating in a good process.

The 10-20x productivity differential is a suspiciously self-serving metric that rarely reflects business success, usually reducing productivity to some limited aspect of engineering.

Posted by Justin JJ | April 1, 2008 12:27 PM

As ZT indicates age discrimination is a big problem. There is no longevity in engineering or IT careers which is why many of my colleagues are also looking outside the field. An older doctor or attorney is viewed as a source experience, an older engineer is often considered obsolete whether they are or not.

I blame rockstar syndrome for this too: the stereotype to which tech employers try to hire is of the young, brilliant coder, not the steady, experienced, older engineer who's merely (demonstrably) good.

Posted by Justin JJ | April 1, 2008 12:31 PM

This is the basic problem in the tech industry, IMHO: the rockstar mindset, that programmers are innately either geniuses or cogs in the machine, and the cogs need to be sifted to find the geniuses. It ignores what other industries know: that you can develop good employees with a good environment, good policies, and good management.

Except that, in IT, no one has any idea how to make that work, and a lot of good places have gotten into serious trouble trying it. It's not as though there haven't been a huge number of organizations trying to make money with average IT developers. It's been tried repeatedly, and has failed repeatedly. There are billions of dollars on the table for anyone who figures out how to get average developers to ship successfully, reliably, and on schedule. The "mindset", as you call it, exists for a lot of very good reasons.

The 10-20x productivity differential is a suspiciously self-serving metric that rarely reflects business success, usually reducing productivity to some limited aspect of engineering.

The productivity differential in software development has been widely studied in many contexts, over many years, by many researchers. It's about as well established as a number can be in the exceptionally fuzzy field of human resources. You're correct that the 10-20x represents engineering productivity, rather than business value. The business value numbers are essentially impossible to quantify. As someone whose spent years as both a software developer and hiring manager, a 10-20x differential in business value among developers seems totally reasonable in my experience, even after removing the large percentage of IT hires who provide negative net business value.

I blame rockstar syndrome for this too: the stereotype to which tech employers try to hire is of the young, brilliant coder, not the steady, experienced, older engineer who's merely (demonstrably) good.

As a hiring manager, I'm more than willing to look at over-40 developers. By that point, there resume should show technical leadership on multiple successful 8-figure projects. At that point, I'll hire them in a second, and be thankful for it, because I know that my projects will be safe in their hands. An over-40 without that is most likely wasting their time and my money. 'Merely good' isn't good enough at any age.

Posted by Dave | April 1, 2008 1:26 PM

Simply expecting the company to boost wages through the roof is unrealistic. But if those are the expectations, then advocates of keeping current restrictions are going to be disappointed when they see more and more companies following Microsoft's lead and opening up facilities like this.

Studiously ignored in your analysis is the fact that tech companies have tremendous incentives to bring in foreign workers or simply offshore their workforce. Whining about the lack of high-tech workers is a smokescreen; there are plenty of high-tech workers available in the United States, just not at the reduced salary and benefit levels that similarly-skilled H1B workers will accept.

C-grade engineers have significant negative value to any company unlucky enough to hire them.

I guess I don't understand all this A/B/C-grade stuff. By C-grade engineer, do you mean someone who consistently designs bad widgets? Their bridges all fall down, their airplanes blow up on the runway, their microchips all melt or come up with 2+2=5? Or is it just that a C-grade engineer takes a week to design something an A-grade engineer can design in a day? I think either problem can be addressed, either through mentoring and review if they simply screw up all the time, or project management and appropriate expectations if they just work slowly.

In any case, even C-grade engineers need jobs. If companies are so hard-up for engineers maybe the investment in "fixing" "C-grade" engineers would be worthwhile, if they would just make it. The fact that they don't speaks directly to Justin JJ's "rockstar syndrome" mentality, as well as my theory that they are all about the most productivity for the lowest cost regardless of the effect on society (because pure laissez-faire capitalism could give a rip).

Posted by liberalrob | April 1, 2008 1:32 PM

It's been tried repeatedly, and has failed repeatedly. There are billions of dollars on the table for anyone who figures out how to get average developers to ship successfully, reliably, and on schedule. The "mindset", as you call it, exists for a lot of very good reasons.

Nonsense. Most tech companies get by without rockstars. At my last employer, I worked with three different engineering teams, all of whom had a very decent selection of good engineers with a couple of great ones sprinkled through. One team was exceptional, one was good, and one was awful. The differences between them were management and processes. The great engineers were indeed much more productive than others, but not to an irreplaceable degree. The good teams were consistently productive, and after my experience with the bad team, the obvious problem was that the bad team's management was floundering after having the team's role change significantly.

More generally, I worked with a wide variety of Fortune 500 IT teams among our customers. Some were great teams that did amazing things, and some were awful, but in no case did the difference come down to the presence or absence of rockstar engineers. I also witnessed some disasters that were obviously attributable to great engineers being left alone.

As The Mythical Man Month makes clear, the problem isn't that no one has figured out how to get good engineering out a team through management and process, it's that engineering projects scale very differently from other types of business units, and that's what IT struggles with understanding. A focus on mythical rockstar saviors just delays IT's development of best practices.

Posted by Justin JJ | April 1, 2008 1:46 PM

I guess I don't understand all this A/B/C-grade stuff. By C-grade engineer, do you mean someone who consistently designs bad widgets? Their bridges all fall down, their airplanes blow up on the runway, their microchips all melt or come up with 2+2=5? Or is it just that a C-grade engineer takes a week to design something an A-grade engineer can design in a day?

In software development, the usual results of C-grade engineers is work that is of low quality, poorly tested, doesn't meet specifications, and is so poorly estimated as to take many times longer than expected. Sometimes it's so bad that it actually makes the code around it worse, through mere proximity (no, that's not an exaggeration). It takes very little of that in a typical software project to drive total costs above expected value. Because of that, it is not uncommon for C-grade software developers never to have actually shipped a system, because their projects were all shut down as business failures long before they were ready for production, or (much worse) yanked shortly after shipping to production. Hence, negative business value, as their salaries, benefits, and hiring costs have to be written off, as well as a good portion of the time of their co-workers to fix their messes.

I think either problem can be addressed, either through mentoring and review if they simply screw up all the time, or project management and appropriate expectations if they just work slowly.

During which time your competitors will gleefully drive you out of business.

In any case, even C-grade engineers need jobs.

Sure, and we are fortunate enough to live in the sort of vibrant, low-unemployment economy that can provide them with jobs. However, they don't need jobs as engineers, any more than you need a job as a brain surgeon or I need a job as Scarlett Johannsen's masseur. They simply aren't good enough to be hired for engineering jobs by anyone who knows the business. Supply and demand curves really don't have to cross.

If companies are so hard-up for engineers maybe the investment in "fixing" "C-grade" engineers would be worthwhile, if they would just make it.

True, if anyone knew a reliable way of doing so. No one does, in spite of billions being spent on the problem.

Posted by Dave | April 1, 2008 1:54 PM

I'm with Dave. There really IS an order of magnitude gap between an engineer who lives his profession and the one who merely subsists by it. I do think though that Dave is a rare exception in the domain of hiring managers in recognizing it. The overwhelming majority of corporate hiring appears to be driven by [warm] body count in the office rather than actual output. Note how slowly is the telecommuting being accepted -- despite the ubiquity of broadband, including cable and fiber-to-the-premises.

To JustinJJ: IMNSHO the notion of "best practices" is widely misunderstood in IT. It is not organizational best practices that most improve the output, it's best engineering practices. And those are accepted first by the "rockstar" types and least understood, why, most often resisted, by the management and subsistence engineers. Where do you think that 10-20x gap comes from, lightning-fast typing skill? ;-)

The topic of "why H1Bs" has been done to death numerous times in forums beyond counting. I haven't yet seen a better explanation as that of ROI: becoming an A-type engineer as well as a hard scientist is a lifetime commitment. I like the Welsh longbowman analogy too; throw in Shao-Lin monks here as well. And what do you get out of this hard work, on average? A comfortable salary and engaging work, if you're lucky; engineers come out better on the salary front and scientists get more interesting work. Compare that with a career in sales or business management. Or, if you're not outgoing enough, in law. I'm sure the averages there look better and also there's a much likelier shot at real wealth. So why would someone -- who grew in this country, has a reasonably wide social network, speaks English natively -- invest more to get less?

On the other hand, foreign-born professionals, whether they studied in the US or abroad, tend to have a much better shot at a technical career. Which as far as I can tell benefits the majority of Americans.

Disclaimer: yes, I'm a former H1B, a former physics major and a software geek full of myself for the last 20-odd years ;-)

Posted by ...Max... | April 1, 2008 2:17 PM

To JustinJJ: IMNSHO the notion of "best practices" is widely misunderstood in IT. It is not organizational best practices that most improve the output, it's best engineering practices. And those are accepted first by the "rockstar" types and least understood, why, most often resisted, by the management and subsistence engineers. Where do you think that 10-20x gap comes from, lightning-fast typing skill? ;-)

I'll agree with this in general, that there are (or can be) best engineering practices for software development. I was fortunate to work at a company that gave more than lip service to them, and those engineering teams I mentioned, made up mostly of merely good developers, attributed a lot of their success to these. The heads of engineering at that employer, both at the team and at the business level, had a lot of power to approve or disapprove based on engineering concerns.

I'll also agree that the high end engineers are massively more productive than the midline engineers. I've seen it myself. However, my constant suspicion is that there really aren't that many rockstars around, and that a 10-20x productivity ratio is often illusory in practice--they might write code 20 times faster than anyone else, but they don't finish spec meetings 20 times faster (and they often complain about having to be in meetings when they could be coding).

What's irritating to me about Dave's perspective (and I'll admit here that I'm probably overstating his case) is that such practices often fall victim to the hero mentality that is the odious legacy of the dot-com boom. It basically says that for a tech company to do well, it has to find some rockstars, clear the decks for them, and sell the gold that trickles out of their foosball-table equipped office. It fosters a warlike mentality in the workplace and sacrifices long term growth for short term market share. It also happily sacrifices a vast middle ground of engineers who would improve and be profitably productive with a positive environment and some solid mentoring so it can lavish luxury on the super-productive who may not, as Dave seems to concede, necessarily add business value. Contrary to Dave's assertions, I've also seen good engineers get better in such an environment.

I suspect this will even itself out over time. Every new segment of the economy goes through a Wild West phase, and IT seems to be growing out of it in fits and starts.

Posted by Justin JJ | April 1, 2008 2:47 PM

The whole idea that restricting smart people from working in our country is somehow beneficial to us is absurd. What kind of morons would implement such restrictions on freedom, especially a freedom so obvious to our good as a nation, to begin with?

Posted by Nelson | April 1, 2008 3:05 PM

but they don't finish spec meetings 20 times faster (and they often complain about having to be in meetings when they could be coding)

Don't even get me started on the meetings :-) Yes, there's definitely a place for face-to-face and whiteboard. It is, however, much narrower than the corporate "wisdom" would admit. Spec issues, for example, belong at the bulletin board or the mailing list.

Oh, and very few things are as irritating as presenting a technical issue at a meeting where none of the participants have bothered to read the 10-page mailout describing the subject at hand. What, were they expecting a PowerPoint?

Grumble, grumble...

Posted by ...Max... | April 1, 2008 3:20 PM

As someone who spent 20 years as a software engineer and manager, I'll back Dave and Max above. The difference in quality between A, B, and C grade software engineers is amazingly large.

It's not just immediately measurable quality, either. A bad code design, even one that manages to meet performance and correctness metrics, can consume engineering time and effort for years after it's completed. Every feature enhancement takes longer than it should as the future engineer has to struggle to not break a convoluted architecture.

I don't think the performance gap is as large in other branches of engineering, largely because those branches have figured out what they're doing and formalized it, while software design is still a very young field and resembles an artisanal craft more than a mature discipline.

Lastly, I'll note that this is not a problem that companies can solve by raising pay. The money is there (how much are Microsoft and Google worth?), and top end engineers are already paid a lot. So much in fact, that raising pay can result in less output rather than more, as they're able to retire young or otherwise reduce their workload. I did.

Money and time are the two things that people never have enough of, but an employer can only pay in the first. To some extent you can trade one off against the other, but there are limits. Money, like everything else in a finite human lifetime, has a decreasing marginal value.

A shortage of scarce skills is not a problem that you can pay your way out of.

Posted by D | April 1, 2008 3:25 PM

By the way, Justin, I am well with you on the "warlike mentality". Living in the office is bad, so is "if you build it they will come" business model -- about the latter I can [unfortunately] speak from personal experience. Business should be run by entrepreneurs who are mostly sales types anyway. But it does not follow that productivity of engineering teams would respond to the methods that work with sales force.

Posted by ...Max... | April 1, 2008 3:29 PM

One other thing that should be noted is that the shortage of IT skill is not just a matter of concern for IT managers. IIRC, approximately 15% of the increase in inequality in the US over the last 30 years has been due to the dramatic rise in IT salaries and headcount. (Salaries in finance kick in another 15% or so. They make more but there are fewer of them.) If you're the sort who worries about that sort of thing (liberalrob?), and to the extent that those salaries represent monopoly rents on scarce skills, that might affect your view on H1Bs.

Posted by Dave | April 1, 2008 3:54 PM

The thing about tech companies is that often they are looking to recruit from a restricted global pool of candidates, because they are working in cutting-edge areas where what they basically want is someone who did a *good* phd in that area, and they want that person to be quite good in normal skills for that profession. Given these requirements, wage levels are not the primary driver of availability. This is why a friend of mine just went to california and got three good job offers. The H1-B programme is why he will not be taking any of them.

Posted by Marcin Tustin | April 1, 2008 6:23 PM

I'm really glad Dave is not my boss. He obviously has no respect for his employees but sees them as lifeless cogs in a machine.
Now, I've worked with a guy who did "negative work" (he screwed up everything he touched) and long after he was let go programmers cringed when assigned to fix a program he had touched. But such people are no where near as common as Dave suggests. They're (thankfully) rare.
What isn't rare, unfotunately, is terrible management in tech companies. Dilbert's boss is a caricature, but I think a lot us will recognize a grain of truth there.
The Peter Principle applies with a venegence in tech: people rise to their level of maximum incompetence. Meaning that those wonderous grade A engineers, programmers etc. end up getting promoted to management where their technical brillance is useless. Or worse than useless: many such people (yes, exceptions exist) have the interpersonal skills of a well-made doorknob and they end up being quietly hated by the employees they mismanage. Definitely, those employees are not motivated to work well, either with their bosses or with each other.
Whenever a company is in trouble always, always look first at management. Nine times out of ten that's where the problem lies.
Dave sounds really burned out and quiteover tech as an employment field. He could do himself and his employees a favor by seeking another line of work.

Posted by JonF | April 1, 2008 8:33 PM

It would be helpful in discussions about these visas if we could avoid mixing up the desire to obtain visas for "grade A" workers and the use of the H1-B program for the purpose of driving down wages. In the former case, as Marcin Tustin points out "wage levels are not the primary driver".

I realize that some companies (like Microsoft) want visas for both purposes, but I believe (unlike our hostess, I suspect) that the wants of Microsoft and the best interests of the nation in the long term are not necessarily congruent. I trust nobody believes that the majority of the thousands of American IT workers whose jobs were offshored or "H1_B'ed" in the last decade or so suffered that fate because they sucked and their replacements rocked.

I've also never figured out why the big "body shops" like Infosys and Wipro, which appear to eat up so much of the quota, are allowed access to visas at all. Yes, I know gaming the visa system is their raison d'etre, but why are they allowed to do it? Employers who wish to hire truly exceptional workers seem to get the scraps or have to go away empty-handed. Obviously, somebody hopes to benefit from keeping the wage-lowering effect of the H1-B muddled-up with uncontroversial permissions for exceptional workers.

Naturally, companies wish to "manag[e their] finite amount of resources and try[...] to get the most return from them". That doesn't mean that in pursuit of that end they should be granted exclusive control of immigration (or any) policy. Megan is being just a tad literal-minded if she really thinks Baker is arguing that Microsoft ought to pay outlandish salaries for American tech workers. The choice is not between getting a good return or paying "through the roof" salaries. (Any more than we ever see café owners operating in restricted labor markets having to choose between paying $50-100.00/hr for decent help or going out of business. Please.) If Microsoft had to hire Americans, they would end up having to pay higher but nowhere near outlandish salaries to all those fresh young lower-level IT employees they want to chew up and spit out after their sell-by date.

As for Gates taking his toys and moving to Vancouver: if the U.S. has nothing to offer as a place of doing business to companies who can't bring in all the immigrants and guest workers they desire, well, why shouldn't they skedaddle? If this country does offer benefits as a place to base a business beyond that, then those businesses ought to contribute something, in the way of helping to maintain and grow the civic, legal, and technical foundations they benefit from. Pursuing policies that result in citizens abandoning certain technical fields as unviable or dead-end career choices doesn't do that. It actively promotes the hollowing out of the technical skills base, something that is very easy to destroy but which is the work of generations to create.

Of course, if you're a good globalist, then simply counting on the endless importation of those lost skills is all for the best in the best of all possible worlds. Guess our children and grandchildren are gonna find out how that all works out.

Ulla Lauridsen: "It may all start with teaching creationism, if you ask me."

True, this country has always been infested with the fundie-er sorts of religious belief. That's why the U.S. has always been such a technical backwater.

Posted by Red Oak | April 1, 2008 10:19 PM

Pursuing policies that result in citizens abandoning certain technical fields as unviable or dead-end career choices doesn't do that.

Bull. Those citizens are not sitting under the bridge with a tin cup. They are selling the products the companies make or climbing the management/executive career ladder. Their competitive advantage is social, cultural and linguistical rather than technical, so they use it. You want to shift them into technical careers, you'll have to introduce five-year plans first. Been there, done that, had the T-shirt but commie products don't last ;-)

Posted by ...Max... | April 1, 2008 11:17 PM

@ Klug
What I mean is, if real science is disparaged, or science and math education is not very ambitious, the students will not get excited about it. That shrinks the talent base.
Obviously, there are other issues too, as the debate demonstrates.
Thanks for the support, Red Oak ;-)

Posted by Ulla Lauridsen | April 2, 2008 3:24 AM

"I think he was saying that it's absurd to pay employees of the coffee shop that much, not technicians."

Some of those modern coffee grinders and urns are very...

Oh hell, I just read it sloppily.

Posted by Njorl | April 2, 2008 9:14 AM

Either import people at competitive wages, or export jobs to places where people will work for competitive wages. Those are the only two choices.

If you want to limit the job types to those at risk from offshoring, you can push up wages for the others. However, we're seeing that even health care is becoming subject to offshoring, as the many people who get their knee surgery done in India for a fraction of the US cost can attest.

A better way to handle a fixed supply of work visas is to auction them instead of using a lottery. That would measure the demand and show its changes over time. It would provide revenue, and get rid of the "cheap worker" complaint. By the way, the current regs require you to pay the "market rate" for each job category.

On the A/B/C question, at least in software, C's are death to projects. If you can find them (see above) stick to A's.

Posted by Larry | April 2, 2008 9:17 AM

Dave Says:

As a hiring manager, I'm more than willing to look at over-40 developers. By that point, there resume should show technical leadership on multiple successful 8-figure projects.

So, in reality, you aren't interested in over-40 developers. You are interested in over-40 project leaders.

Not all good techies are good leaders.

Posted by SamChevre | April 2, 2008 9:52 AM

Protectionism is anti-freedom. Free people and free markets are the optimal path to global freedom and prosperity.

Everyone should be able to move where they can find work. Things will balance out over time. People can move state to state without much problem, and this has benefited the United States greatly. Now Europeans in the EU can do the same. Why not expand this proven method for increased freedom and prosperity to the entire world? The whole idea of nation states where one is born, lives and dies all in the same place is becoming outdated.

Posted by Nelson | April 2, 2008 10:22 AM

So, in reality, you aren't interested in over-40 developers. You are interested in over-40 project leaders.

No, technical leaders, by which I mean hands-on architecture, design and coding with overall system responsibility. It doesn't imply any interaction with project finance, stakeholder handholding, or management of direct reports, which I associate with project leadership. If you're over 40 and haven't done technical leadership, it speaks to a lack of ambition, flexibility, and growth potential that would make me reluctant to hire you. I've occasionally cut some slack for someone with extremely rare skillsets that I happen to need, but to be honest that has rarely worked out well.

Posted by Dave | April 2, 2008 11:01 AM

Not all good techies are good leaders.

Uh... where I come from, project leader is the guy who would [rather!] do the entire damn project with his own hands, if it wasn't for three other projects that he needs to handle :-)

Or, more seriously, project leader is the one who has in mind the entire picture. If you see project leaders devolving into managers, that's a sure sign your organization is employing too many [C-level, natch] developers for its own good.

Posted by ...Max... | April 2, 2008 1:44 PM

High-tech employers are not facing a labor shortage. The fact that powerful CEO's claim one exists doesn't make it so. Employers are motivated in the labor market to create an excess supply of workers to drive down the price. They want to have more control and give workers/employees less control. It is basic economics. Wages for technology workers as a whole have been flat. Jobs have been disappearing as they move overseas. No matter what happens on the ground for everyday workers the companies claim they can't find enough workers. It just doesn't add up. Expanding the H-1B visa cap will only increase more competition in the labor market for fewer and fewer good jobs. That might be great for Bill Gates and his bottom line but it is bad for workers trying in the industry and students thinking they should have a career in the industry.

Posted by Marcus Courtney | April 2, 2008 1:56 PM

According to a study done by the Center for Immigration studies the majority of H1-B visa holders are both low-skilled and make on average $16,000 less than US tech workers. Which would imply to me that they are being used to depress wages more than provide highly needed skills. The study is here:
http://www.cis.org/articles/2007/back407.html

Posted by Nick | April 2, 2008 2:38 PM

"According to a study done by the Center for Immigration studies..."

According to common sense, it's still better to have those workers here than move the operation out of country.

Posted by Nelson | April 2, 2008 3:21 PM

The tech industry's fetishization of "A grade engineers" is holding them back. They build workplaces full of geek toys to attract the idiot savants, and offshore the rest. It also perpetuates the myth that good tech is developed mainly by brilliant minds working alone, rather than good engineers participating in a good process.

Exactly so. Unfortunately, the myth remains an extremely strong one in the American psyche, and due to the dot-com boom, libertarianism seems to fester still in those types of environments, for all sorts of unsavory reasons.

More to the point, $50/hour is _not_ an absurd salary for a coffee shop employee if that is what it takes to hire and retain good workers. That's just 'the magic of the marketplace' in action, right?

And yet, from meatpacking to fruit-picking to software coders, the steady stream of complaints is that "We can't get good people." Stuff and nonsense. If you want 'good people', you've got to pay for them. If it takes a few years for the talent pipeline to fill up, so be it. If it takes aggressive going after, and mocking and ridiculing 'creationists', so bet it. If it takes actively promoting people who have to think quickly, clearly, logically as societal role models to be emulated rather than rock-stars or kung-fu cowboys or titans of finance, so be it.

But once again, as usual, these sorts of employees are treated as entirely fungible commodities. And then the people who employ them have the nerve to whine about the situation they've helped to create!

Posted by ScentOfViolets | April 2, 2008 11:44 PM

ScentOfViolets - $50/hour is _not_ an absurd salary for a coffee shop employee

... and $25 is not an absurd price for a latte.

Posted by Ryan W. | April 3, 2008 11:47 PM

The argument that immigration restrictions will cause software companies to move development offshore, begs the question, 'Why isn't the software subject to heavy import duties, to protect the jobs and standard of living of American engineers?' The average pay for computer programmers is now a third (accounting for inflation) of what it was 15 years ago. If there is a supposed lack of talent, then it is a result of companies deliberately depressing the wages for these jobs that has made high-tech jobs unattractive.

Posted by michael skramstad | August 12, 2008 3:48 AM