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Is H1B Policy to Blame for Shortage of U.S.-born Technology Graduates?

Ara Trembly
Insurance Experts' Forum, November 2, 2009

In a recent blog, I speculated on the reasons for the seeming lack of interest in computer science and engineering careers among our budding college graduates. I noted that many of the Millennial generation seem bored with the technology on which they were weaned, while others are too busy dreaming of becoming the next superstar (sports, entertainment) thanks to the well-meaning—but ultimately damaging—lie that “You can be anything you want to be.” 

One reader, however, took me to task for not mentioning what he believes is the real reason behind the lack of enthusiasm for technology among recent graduates. This reader pointed out that thanks to H1B, visas issued by the federal government, low-paid foreign IT workers are flooding the U.S. market and companies are snapping them up rather than pay more for homegrown workers. As a result, potential graduates see little future in an IT career—at least in the United States. 

According to Workpermit.com, a Web site devoted to “immigration advice,” an H1B visa is a non-immigrant visa, which allows a U.S. company to employ a foreign individual for up to six years. Individuals can’t just apply for an H1B visa to allow them to work here. The employer must petition for entry of the employee. H1B visas are also subject to annual numerical limits. 

When it comes to IT workers brought in under H1B visas, however, American companies get a whopping bonus, because they can pay such workers far below the standard wage paid in the United States for their work. The companies get cheap labor, but U.S. workers, as my reader suggests, get the shaft. I agree with my reader that the H1B program—ostensibly set up to fill a labor gap—has negatively affected the market for homegrown IT talent, and I have written as much on several occasions. 

On the other hand, the companies that ask for H1B workers claim they do so because there is a shortage of American workers who can perform the same tasks, and the rapidly declining numbers of computer science graduates seems to give credence to that claim. It seems legitimate for these companies to complain that there is insufficient U.S. IT talent out there to meet the immediate needs of our industries, including insurance. At the same time, however, there is little incentive for American students to pursue an IT career based on the potential job market, so the call for more foreign workers only increases. 

Is there a political angle to all this? You bet. At the recent SAS Premier Business Leadership Series conference in Las Vegas, SAS CEO Jim Goodnight said that for his company, “It has become more and more difficult to hire Ph.D.-level people interested in writing code, and we’re not producing homegrown people.” As a result, SAS is asking Congress to approve more H1B visas to fill the gap, but Goodnight says there is political resistance to that idea. 

“Nancy Pelosi refuses to give in on bringing smart people in until the 12 million people who are here illegally—most of whom will vote Democratic—are granted amnesty,” he stated. Interestingly, SAS is very active in funding computer education and literacy in U.S. schools, an effort for which they should be applauded. 

Is there an easy solution to this mess? Probably not. Perhaps the Obama administration, which seems fond of telling companies what they should pay their employees, should insist that any workers hired through the H1B system be paid the same as American workers in the same jobs. 

While that would seem to level the playing field, however, I would oppose it on the grounds that the government needs to keep its hands off what private industry pays its employees—although the trend now is disturbingly in the opposite direction. I would favor eliminating the H1B program as an incentive for companies to train up their own IT professionals, as Chubb once did. It seems clear at the moment that we cannot depend on our colleges and universities to supply these workers. 

The reader who took me to task has chosen to remain anonymous thus far, but perhaps he will now post a comment here. Or perhaps you will. 

Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at ara@aratremblytechnology.com.

The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.

Comments (8)

We Can Do More Than Blog, Boycott Microsoft

Let's face it, lots of smart people make amazing points about the discriminatory H-1B and L-1 programs. The problem? Greedy corporations and corrupt lawmakers won't do a damn thing about it.

The solution? Vote with your feet and scream with your wallet.

Boycott the world's most egregious guest worker employer - Microsoft. Protest Microsoft's actions, laying off Americans and hiring their replacements from India.

The reason Microsoft hires so many H-1 and L-1 from India has NOTHING to do with best and brightest... it's all about trade agreements and money. Microsoft knows the magnitude of the greenfield opportunity to sell millions of seats of Windows to people who do not yet own computers and willing to throw their family and friends off the ship to monopolize it. Trade Agreement Windows PC sales in India in exchange for Indian Workers

Posted by: BFJ D | November 6, 2009 12:52 AM

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Another question is WHY we are not "producing" native Ph.D.s. In the 1980s, there were plenty of Americans in grad school in stat, biostat, quant sociology, quant psych, and other disciplines relevant to the needs of SAS and other software houses. Since then, it's all chinese. Possibly they are better than us, but I sincerely doubt it. More likely, they are 1) debt-free since Chinese universities charge next to nothing for undergrad tuition or 2) faking credentials. Many Chinese applying to stat and biostat grad schools are "chinese doctors". Very impressive? No, not at all. It's simple to become a "chinese doctor". It's at the level of the Associate degree in the US. It is a low-level degree. However, it gives them a competitive advantage.

US grad schools should only require credentials at the level of undergraduates in that same program. That is, if you produce an undergraduate with Competence X, Y, and Z, that should be the ONLY thing required for grad school. Plus, state LAND-GRANT colleges should give a preference to INSTATE students. Land-grant colleges were founded to educate AMERICAN citizens.

Posted by: John M | November 3, 2009 6:55 PM

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I am a long time SAS user. Dr. Goodnight is talking through his hat. There are many people available to do the kind of specialized programming he is looking for, and he has over the years hired hundreds. Cary, NC, in the Research Triangle is convenient to Duke, UNC-CH, Wake Forest, and NC-State. Each of these schools have fine programs in statistics, biostatistics, and other disciplines, and many there are quite fervent SAS users. Of course, today, SAS is under assault from R, the free language of statistics. That's ol' Jimbo's real problem.

Whenever anyone who runs a software company complains about lack of talent, what they really want is the best in the world for $20/hour.

Posted by: John M | November 3, 2009 3:58 PM

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Interesting comments and some are right on target. They demonstrate my contention that the H1B program is fundamentally unfair and is counterproductive to employment for our nation's youth. That said, however, it still doesn't change the fact that many of our young people have a tragically naive view of life and their place in it. I wonder how many of them will be lamenting their "almost making it to the top" of the sports/entertainment ladder in 20 years.

Posted by: Ara T | November 3, 2009 12:10 PM

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American kids are smart. They know they can't compete with H-1B slaves. Want to know more about
H-1B slaves? Please go to:

www.desicrunch.com
www.itgrunt.com
www.endh1b.com

Posted by: Eric S | November 2, 2009 10:55 PM

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Respectfully, I believe the author may not be aware of some key facts. I invite all readers to get the facts about the H-1B program and how it is destroying the American Middle Class.

1. Fact - there is NO shortage of American technical and engineering talent. Recent Business Week story http://tinyurl.com/yzbpjag

2. Fact - H-1B "Significantly" Outnumber the Unemployed Americans they replaced (DOJ) http://tinyurl.com/ylzszsz

3. Fact - Why can't American employers find American workers? Because they don't want to. Cohen

Posted by: BFJ D | November 2, 2009 8:32 PM

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It was the influx of H-1B workers who were willing to work for a pittance, the greed of companies who employed these immigrants, the lack of action by unions and professional bodies at the onset, the lack of foresight by government and possibly the brown envelope influence, all combined to create this mess. Misleading dubious employment studies are also causing confusion. Why would any sane student study IT or pure Engineering in this present climate when homegrown graduates cannot get a satisfactorily paid job or are being made redundant? Cutting H1B visas is the only way forward as even if immigrants are paid the same rate as natives, their presence and their lack of willingness to seek increases in salary for security of employment reasons, will keep pay suppressed. Possibly some protests outside the relevant foreign embassies might highlight the problem, cause embarrassment, and result in action by government! The present softly softly approach is getting nowhere!
Fintan Lynch
http://www.EIAss.com

Posted by: Fintan L | November 2, 2009 2:48 PM

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The answer to your question in the title is: Yes.
Am I the reader who took you to task? No.
Is SAS CEO Jim Goodnight making silly statements and coming to duplicitous conclusions? Yes. He complains about the difficulty in hiring Ph.D.-level people interested in writing code (a little unusual to begin with I think), and as a response he asks Congress for more H1B visas. This is like if the governor of a state that specifically needed more heart surgeons petitioned congress for more "health workers" (including home health aids, social workers, gurney pushers, etc.). Only a small fraction of H-1Bs hold Ph.D.s. Why don't we make an H-1D visa then that's just for doctorates (D for doctorate, get it?) and then discontinue the chronically-abused H-1B.

Posted by: a b | November 2, 2009 1:07 PM

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