Posted on 11/17/2002 7:03:27 AM PST by FlyingA
As a consultant, I've been hit by the slowing of the economy and the destruction of the tech sector, I've recently caught myself dwelling over the prosperous times of the late 90's when I was making 6 figures. Being one to want to know the wheres, whats... and particularly the why's... I started researching the issues behind the downfall of the tech sector within the U.S.
While this is hardly a comprehensive explanation of what’s wrong with the economy and every aspect of the tech sector, it is in my opinion the quickest and most obvious thing that’s wrong with it today.
What I found out was that through out the mid & late 90's... Large software corporations were experiencing a very public and published labor shortage of skilled tech workers in America. Companies like Microsoft and Oracle among other large corporations began to lobby Washington to increase the cap on H1-B visas from 65,000 to 130,000 per fiscal year looking to get the bill "American Competitiveness in the 21st Century Act" (S.B. 2045) passed.
This bill received a lot of resistance from 1996, when it was first proposed, through 2000 and looked like it was dead several times. Due to amendments on both sides of the isle it remained alive and in Oct 2000, then President Clinton signed the bill S.B. 2045 into law. Which is effective from 2000-2003 and allows the number of 6 year H1-B visa to ultimately be increased to 195,000 per fiscal year. Over the last 2 years, the number of individuals in America under H1-B visa has risen to 650,000 people.
36% of the unemployed 1.8 million Americans could be working if it wasn't for this law. It seems to me that we as high tech workers need to right our Congressmen & Senators and put a stop to this law.....
FlyingA
I am all for an "Americans first" policy, but I have to disagree with this statement. I would stack some of my Indian colleagues against any American IT programmer. They're just like anyone else; there are good ones and there are not so good ones. Just as with any potential employee, you have to do a good job screening when you hire.
I dont see millions of american programmers working for Indian companies oursourcing here in America, nor do I see an equal number of american workers going to India to work.
Free market, capitalism, and the bill of rights apply to american citizens, not to the whole world. The playing fields must be eaual, with the same social security costs regardless of worker, the same environmental laws, the same taxes, the same regulation, etc.
An indian working at a dollar an hour, with no taxes, no environmental or child labor law requiremnts, competing against americans, is not free market.
Upset about gang bangers? Upset about Clinton's many women? Upset about that pimp with two pounds of gold chains and a screaming BMW?
Why that's "Just Envy"! Best be careful. Suppress that troubling feeling, friend. Avoid envy!
Ri-i-ight-o. Jolly, bloody, righto.
(2) Some people have claimed this is a "market response" to "unrealistic salaries". Wrong. The market sets salaries and thus they are never "unrealistic". During the Y2K and dot-com convergance salaries went up. Now they are back down. The aquisition of skills in IT is demanding - similar to engineering, like engineering skills they are not easy to acquire and take years of experience to do well. High tech employers did an "end run" around the market by importing foreign labor.
(3) Some folks feel that the IT workers were or are "overpaid". Based on what? For example - a "typical" IT worker with a Masters degree and 5 years of work experience can expect to be paid $85K in a major metro area. Is this overpaid? It is comparible to other advanced technology college degreed positions in other engineering fields. The H-1B initiative is mainly targeted at IT and is simply an approach to reduce the salaries paid to IT workers - thus it is a government program intervening in the free market.
(4) To Dave S who said: " Get over it. This is a global economy and everyone better be able to compete globaly. That doesnt mean that Americans necessarily have to be paid less but they certainly have to be more productive. If H1-B1's can be purchased for half as much and are nearly as productive than you and your kid, then they ought to get the job. BTW, the work could just be outsourced to India or another third world country. At least this way, the money paid in salaries continues to circulate in our economy."
That is a very interesting statement. Think about it. The reality is that any job in this country can be performed by someone, somewhere, in the 3rd world for 1/3 the money. Accountant? Manager? Computer Operator? Nurse? Fireman? Truck Driver? Each and every one of these positions could be filled by someone from India, Pakistan, Indonesia, or somewhere - and they would be willing to do it for a heck of a lot less money. So....is that what we should do? Because that raises some other questions that then must be answered:
What jobs do the unemployed Americans take - since according to this model any job is open to a 2nd or 3rd worlder who will do the work for 1/2 to 1/3 the wage?
What value is there to being an American citizen of we are just one big "globalist" happy family and turn over all of our jobs to anyone willing to come here and work cheap?
This sounds like the hard core Libertarian party position to me - just open the borders and let everyone in. Is this what we want?
Because that is what the H-1B program is doing.
Oops. I should have said, any job other than the President of the US - you have to be born in the US for that one. :-)
Looks like the global economy isn't really working out so well. Check the stock market or your 401K. There can be no competition if a Chinese worker can make $0.25 an hour because they don't have high taxes to pay and they have a low cost of living over there. An American has an extremely huge government to support ---well over half our incomes are taken right off the bat to support huge government social programs and all the rest. Do you call that competition?
(1) The H-1B program is not free market capitalism. It is a government intervention into the free market, targeting specific professions.
It is a free-market capitalism: citizenship is a barrier to an unbridled, completely free market; the government removes that barrier for certain professions.
Some folks feel that the IT workers were or are "overpaid". Based on what? For example - a "typical" IT worker with a Masters degree and 5 years of work experience can expect to be paid $85K in a major metro area. This, unfortunately, is only anecdotal evidence.
Firstly, in 2000 a Ph.D. in engineering with 20 years of experiense made $95,ooo on average. A person with Master's in CS could and was makeing $200,000 at the end of the nineties. Both the mean and the upper limit is much greater in CS than in enginnering.
Secondly, the salary is not everything. Because of negligible barriers to entry in software, great many "Programmers" made a killing by forming their own companies and/or options once the companies were taken public.
Finally, the requirements for "programmers" have become a bit more stringent only recently. Until 1985 there were no ads that would require higher education for the job. None. It was notewrthy that, in mid-1980s, of a sudden "B.S. in computer science is required" began to appear in ads. In comparison, not only education but even certification had been required of engineers for decades.
The reality is that any job in this country can be performed by someone, somewhere, in the 3rd world for 1/3 the money. Accountant? Manager? Not really. Services such as management are perishable and not transpotable: you have to be here to manage a team in this country.
Nurse? Fireman? Obviosly, the same. Computer Operator? Yes, if the computer is located in India. that raises some other questions that then must be answered:
What jobs do the unemployed Americans take - since according to this model any job is open to a 2nd or 3rd worlder who will do the work for 1/2 to 1/3 the wage? The cost of labor is only half of the story: the other is productivity. If I can hire someone for half the salary but he makes 1/3 of the product, it is not a good proposition for me.
What value is there to being an American citizen
That is were the problem with the arguments usually lie: I not only disagree but resent the implication that having a job here is equivalent to being a citizen.
But, let me return to economics, since this is what we discuss. I believe that the guest workers should be treated differently from the non-citizens in aspects other than salary. For instance, I do not see why they should not be assessed for public education of their children. Their pension benefits ought to be calculated differently, etc.
- just open the borders and let everyone in. Is this what we want? Because that is what the H-1B program is doing. Not at all: this is a very limited program. Our problem is really in the lack of control over borders.
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