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Debunking the Myth of a Desperate Software Labor Shortage
Testimony to the U.S. House Judiciary Committee, Subcommittee on Immigration ^ | April 21, 1998 | Dr. Norman Matloff

Posted on 06/25/2002 6:14:36 PM PDT by FormerLurker

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To: AnnaZ
What are your feelings though on Chinese communists being awarded software engineering positions over US engineers?

How about India and Pakistan, who are ready to nuke each other to death? Where do you think they came up with the means to deliver such a devastating blow to each other?

21 posted on 06/25/2002 9:17:14 PM PDT by FormerLurker
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To: FormerLurker
I think it's an outrage, who wouldn't? There are those who serve what is Good and Right, there are those who serve mammon.
 
(Just wait until the Chinese make good on allllllll the tech they've taken.)

22 posted on 06/25/2002 9:23:41 PM PDT by AnnaZ
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To: FormerLurker; Abundy; Action-America; AEMILIUS PAULUS; agenda_express; AGreatPer; ...
ping for formerlurker! :)

please tell me if you would like off of my ping list!

23 posted on 06/25/2002 9:27:18 PM PDT by christine
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To: FormerLurker; christine11
Thanks christine11;

Question: The industry claims that if it cannot bring H-1B workers to the U.S., it will be forced to move software operations to where the workers are overseas. Is this true?

This is a bogus threat, an obvious contradiction: Why does the industry want to bring Indian programmers to the U.S. as H-1Bs in the first place? Why not just employ those programmers in India? The answer is that it is not feasible to do so.

The fact is that, although a small amount of work is done abroad (largely old mainframe software), this will not escalate to become the major mode of operation of the industry. The misunderstandings caused by long-distance communication, the problems of highly-disparate time zones and so on result in major headaches, unmet deadlines and a general loss of productivity.

Just look at Silicon Valley. This is the most ``wired'' place in the world, yet those massive Silicon Valley freeway traffic jams arise because very few programmers telecommute. They know that face-to-face interaction is crucial to the success of a software project.

Actually, this not a bogus threat. It is already happening and a growing trend. The number of H1-B's won't change it up or down.

Off shore development is increasingly feasible and the face-time is moved off-shore to where the bulk of the programming staff reside - Hyderabaad, India to name 1 key center.

What remains and growing in the US is small companies (startups, growth co's, etc.) doing original product development. The teams and efforts are usually too small to move, and too proprietary to entrust off shore.

24 posted on 06/25/2002 9:49:43 PM PDT by Starwind
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To: FormerLurker
The same thing happens to engineers, nurses, to name two more fields where third world types are run in to kill the rate of pay. Instead of lifting boats world wide, they are sinking ours.
25 posted on 06/25/2002 10:30:07 PM PDT by MissAmericanPie
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To: FormerLurker
Before I start, I guess I should mention that I am an unemployed programmer. My company sold software to dot coms, so we tanked shortly after they did. I saw the writing on the wall and had a chance to get out, but did not take it. I even got an offer a month ago, but chose to stay in school and finish my master's degree. The market is very tight, and for a guy like me with only 2.5 years experience, it feels like I got in just a couple years too late. Most jobs now require a resume that I do not have even though I have never found anything about software that was challenging for any more than a week or so.

So far, I have worked for 2 very different companies. One was in the mid-west and very white. The other was in New York and I was a minority among many H1B's from India and Taiwan. The company in New York was very disorganized, and I commonly found problems communicating and working with the H1Bs. A very few were bright, many were run-of-the mill, and some were unable to effectively communicate technical English, work alone, or keep from constantly shoveling their work on to the people below or beside them. I don't really see how they do anything but help a company's bottom line by increasing supply, containing salary growth, and nearly eliminating any training a company might have to invest in.

I think this is a very lazy solution to the problem that will eventually come back to haunt the companies and the politicians who decided to take this course. The first thing that will happen is an angry group of programmers will be created when they find themselves out of a job while some guys from the 3rd world work jobs they could easily do. Another angry group of recent graduates will be created when they see that the career they were told to jump into is toast for the next couple of years. The gov't will look like idiots when people realize that it constantly tells them to study math and science while it adopts one policy after another that insures engineers will live in a world of feast or famine throughout their careers. Finally, engineers will come to see that the democrats are right when they spew their rhetoric about the republicans favoring businesses over people. None of these results are good. The right way to handle the shortage, whether you believe there was one or not, is the same as it ever was; LET THE FREE MARKET FIND ITS EQUILIBRIUM! Had there been no H1B program, companies would have been forced to train their own workers. I can't think of a better way to bring back the old apprentice style training that transfers knowledge from generation to generation while advancing it, and building a sense of company loyalty that is almost non-existant these days. Instead you are left with oportunists that will ratchet up their salaries by pitting one company against the next while while abandoning one technological advancement for anther that pays better at the moment. Some may argue that this is a more competitive, dynamic environment, but it looks pretty chaotic and unorganized to me.

26 posted on 06/25/2002 10:31:33 PM PDT by sixmil
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To: FormerLurker
That's such BS. Only a small percentage of developer jobs are actually "sensitive" for national security, and sure, those should be well protected. But the vast majority are coding jobs that a monkey could do. If companies are willing to hire foreign workers over domestic ones, it must be because they think they are getting a better deal. If foreign workers were so bad, this would quickly be known, and there would be no demand for them. But of course, foreign workers are good, either because of higher skill, or the willingness to work longer hours or for cheaper. In any case, I don't see why domestic software developers should be protected from competition. BTW, I'm a developer.
27 posted on 06/25/2002 11:09:11 PM PDT by billybudd
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To: FormerLurker
BTW, your argument about unemployed American workers being a negative effect on the economy is also BS because they don't disappear - they are simply displaced by new foreign workers, which will have a neutral net effect on the economy. Also, the fact that companies have to pay developers less means higher corporate profits, which means a better economy.
28 posted on 06/25/2002 11:11:56 PM PDT by billybudd
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To: christine11
My resume is three inches thick. Part of it documents experience as a real time data acquisition programmer. I learned it myself as part of basic engineering skills. I'm retired now. I became disgusted with being interview by people with mentalities like Bill Clinton. There is a surplus of people in many technical areas. What is lacking is companies and managers who have their heads together.
29 posted on 06/26/2002 12:36:59 AM PDT by RLK
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To: billybudd
The destruction of the managerial middle class means a better economy ? Programming isn't like being an athlete or a model. Age doesn't have one thing to do with doing it and doing it well.
30 posted on 06/26/2002 3:09:51 AM PDT by Tokhtamish
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To: christine11
ping for formerlurker! :)

Thanks Christine.

31 posted on 06/26/2002 3:32:19 AM PDT by FormerLurker
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To: sixmil
The right way to handle the shortage, whether you believe there was one or not, is the same as it ever was; LET THE FREE MARKET FIND ITS EQUILIBRIUM! Had there been no H1B program, companies would have been forced to train their own workers.

If there were no H1B program, the economy wouldn't be a mess right now. There are literally MILLIONS of US engineers who are laid off and can't find work. That is a LOT of people who are just sitting around biding time until "the economy improves", which of course will never happen as long as the H1B program continues in his present form.

32 posted on 06/26/2002 3:40:10 AM PDT by FormerLurker
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To: billybudd
Also, the fact that companies have to pay developers less means higher corporate profits, which means a better economy.

Well that's been happening and the economy isn't exactly better. High corporate profits seem to benefit a very few people, low wages are hurting many areas of the country where people can no longer provide for their families on one salary or without some kind of government program. The stock market is not doing too well ---how many people can sell their stocks before it completely crashes?

33 posted on 06/26/2002 6:14:54 AM PDT by FITZ
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To: ThePythonicCow
And when I am hiring, the more competition for my openings the better.

If you get laid off you will send out thousands of resumes, get maybe one or two replies and no interviews. After about a year of that you may have a different opinion.

34 posted on 06/26/2002 7:13:23 AM PDT by blueriver
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To: christine11
This is a tough problem. As a software engineer, I have an obvious interest in it. As someone with hiring responsibility, I have an even deeper interest in it. As an economist and a passionate lover of freedom... well, I hardly need say.

If viewed as a snapshot of trends in the high-tech trades, the assessment of the article is correct in every way. Companies are indeed shunning older engineers in favor of younger ones, and citizens in favor of guest workers. American law and legal practice have been shaped in a fashion that helped bring this about.

First, let's consider the older-versus-younger engineer problem. Older engineers are indubitably more expensive, whatever virtues they bring to the workplace. Their domain experience within a specific application of computer technology is of enduring value, but their tool experience tends to erode in value over time, at a rate proportional to the length of time they've managed to remain glued to the tool. Retraining older engineers can be vexing and difficult; many are simply unwilling to accept a new model for the way engineering is done.

BUT... In all fairness to the older engineer, coping with these difficulties can pay huge dividends. Domain experience and intuitive knowledge are conserved. The benefits of maturity in thought and execution are significant. The transmission-by-example of good work habits and sound engineering ethics to younger engineers should not be omitted. And "new models of engineering" that really, truly differ from previous practice in any way but jargon are actually quite rare.

I'm sure you can see the problem here. The benefits of retaining and nurturing the older engineer are largely intangible, difficult to quantify. The costs are easily perceived: higher salaries, higher training costs, more overhead to deal with retirement considerations, and of course a higher burden from life-maintenance fringe benefits such as health insurance, sick time and vacation time. The bean counters will always have a clearer picture to present to the corporate policymakers than the advocates of experience and maturity. A solution will remain hard to find.

Now let's talk about citizens versus guest workers.

The salary differentials and H1-B-to-greencard process are important parts of it, no question. Perhaps just as important are legal considerations that touch on hiring, firing, and company obligations to employees; the many new workplace laws and regulations that have recently developed; and the essential differences between American employees' attitudes toward their jobs and the attitudes of imported workers.

American workers of all altitudes and disciplines have been taught to think that:

Do all American workers feel exactly this way? Of course not. But the general predilection to adopt these ideas as premises and to react as they would indicate is widespread and growing in strength.

By contrast, foreign workers tend to think that:

Obviously, neither of these worldviews is correct or productive.

While it would be shameful if American employers were to favor cheap non-citizen labor over somewhat more expensive citizens categorically, this does not appear to be the case except in a few completely poisoned shops. Rather, the economic and legal incentives have produced a tendency in this direction, as relevant differences in cost, attitudes and legal status between American engineers and non-American engineers have widened. American citizens' advantages in skill level, ease of communications, and knowledge of the American business milieu have only partially offset these things.

I do not approve of the hiring of non-Americans to displace Americans... but I know how little can be done to prevent it under the current immigration and guest-worker regime. If there's a near-term palliative, it would probably be increased willingness among American engineers to change fields or subfields, and to moderate salary demands after having been out of work a while. The long-term solution will require both legal and attitudinal changes -- and I wouldn't care to speculate about which will be more difficult to bring about!

Freedom, Wealth, and Peace,
Francis W. Porretto
Visit The Palace Of Reason:

35 posted on 06/26/2002 7:46:01 AM PDT by fporretto
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To: billybudd
I didn't bother to read much of the article because it sounds like another Arm Chair General, and I am on the front lines. Yes, I have hired several H1B's. Not in the software industry or computer hardware, but another very very specialized tech industry for which US schools no longer provide training.

Now let me state that they are provided the same benifits, and pay level as our Home Grown, and to some extent pampered, I'll explain. We are a small operation been around 20 years, and always striving for that big prize, contract. Recently we got one, but had to form a JV with another CO in the same busines. The owner has been a personal friend for 30 years so trust wasn't a problem. However all of his employees were HG.

The project is very time to completetion sensitive, and there is big money, and future contracts riding on it. We had a joint meeting with the employees to anounce it and explain how we forsee it going. The entire project will last almost a year but the critical time will be at the end. When we might need at the most 4 Saturdays worked out of 8, of course at overtime rate. In addition during this period we need to get several people trained.

My partners people all said there is no way they work past 5 or weekends, "they have things to do, like party" Then came training, 3 weeks broken up over 3 months. Sorry party time again. On the other hand my H1B's said we will work all 8 Saturdays if you want(one is working on a D/P for a house, and another wants a fancy new car). As for the training, no problem, one got bent because I couldn't afford to send him to the whole series. Needless to say my partner was stunned. Now he wants to look at the H1B program. And if I don't pay and treat them well he will steal them, but I will whip his ass.

The result to his operation will now be that we will get 75% of the income, and the high tech part, his people get to carry out the trash. I could go into a lot more but I don't think H1B is the root of the problem just the scapegoat. Let me explain.

I think that what is really happening is a combination of things are comming together. First, we have lost our educational superiority in the world. Second, The EPA, OSHA, and Unions have run most manufacturering out of the U.S. When manufacturering goes so does engineering and software development. Third, the Internet allows me to develope a product at the lowest price anywhere. We are in the process of migrating from a producing country to a consuming country. Just like when we migrated from a Ag based to Indust. The big problem is that we don't have two generations to migrate just a few years.

You have to consider what has taken place over just the past few years to see what is happening. If I had a product to produce I can just put out a spec to say a Korean Co and they will do engineering, software, and produce the product for 1/3 of domestic. In fact if I got a domestic to do it they would likely farm it out to the Korean and add a markup.

We no longer have a corner, the Korean or whoever works with the same development computers, software, and production equipment but at a much lower wage base. You should all know the buzz word in Corp. AM is "out source"

If you think you have a problem now wait until you send the H1B's go back to the old country. They have contacts in the US CO's they worked for, know the products, and devlopment tools, they will be able to set up a sweat shop and beat you by 90%. H1B will die a natural death quickly if the INS would convert them to Green Cards to allow them truly into the market. Then if they are underpaid they can go to another employeer at the same wage you are getting. If your work is so much better then you will be the winner.

I really think the only hope for the US is if we can somehow keep the R&D edge. To do that we have to attract the best and brightest from whatever country or planet. We are not going to find that easy since Democracy has spread, of course some are only D in name, but the fact remains things are getting better in most of the old countrys, and it is a lot easier to get rich there if you are a National selling to the US. As far a US Grads go only about the top 5% will be in the R&D end. The rest should be looking at marketing their skills at interfacing and modifing software at the end user level because most products and software will be produced.

BTW I have noticed in the past few years the Canadians really eating our lunch for both software and hardware. Their wage base is about 50% of ours, and they don't have the language and custom problems some of the H1B's do. Take a look at the trade figures.

All in all, H1B is not the problem and sending them back will make it worse. I think the Politicians want to give you a scapegoat to keep your eye off the ball and their failings to develop proper policy to insure we would make this transistion as a strong country.

BTW I am looking at the Washington Compost 6/23/02 edition, page k4 and see a number of software e, hardware e, and network e, jobs listed. These are only for US Citizens no HIB's. Some have web pages let me know if anyone wants them.
36 posted on 06/26/2002 7:47:24 AM PDT by helper
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To: billybudd
That's such BS. Only a small percentage of developer jobs are actually "sensitive" for national security, and sure, those should be well protected.

So you're an expert on this, right? Ok, let me fill you in. Any major US university that does work for the DOD/DOE hires a large number of foreign nationals. Have you ever been to MIT Lincoln Labs? Our weapons laboratories such as Sandia, Los Alamos, and Lawrence Livermore hire a significant number of foreign nationals. In fact, do you remember the little problem that popped up some time ago over a Chinese scientist, Wen Ho Lee?

Then there are defense contractors such as Lockheed, Boing, Raytheon, and a host of smaller companies that are teaming with foreign nationals. And let's not forget that even such non-defense related work such as telecommunications can be applied to advance a potential adversary's infrastructure and provide them with a capability they would not otherwise have had. When these foreign nationals go back to the motherland, they take all of this knowledge back with them, classified or not.

But the vast majority are coding jobs that a monkey could do.

Whether or not these jobs were so easy a "monkey" could do it is irrelevant. Replacing American workers with indentured servants is still wrong, regardless of the difficulty of the work involved. In fact, if a "monkey" could do the work, perhaps they should utilize American monkeys instead....

If companies are willing to hire foreign workers over domestic ones, it must be because they think they are getting a better deal.

Of course the bean counters will always prefer the quick fix, the immediate gain. Most of then are indoctrinated in this philosophy, and little can be done to change their minds. That is the biggest reason for the dismal health of the economy as it stands today. Potential long term gains were ignored for the sake of short sighted immediate gratification. Those who have profitted from these policies are few, and without exception, already quite wealthy.

If foreign workers were so bad, this would quickly be known, and there would be no demand for them. But of course, foreign workers are good, either because of higher skill, or the willingness to work longer hours or for cheaper.

It is already known that the majority of those engineers are of mediocre quality. The only advantage is the companies can force them to work long hours, with 60 - 80 hour weeks being the norm, while paying them a sub-standard salary.

In any case, I don't see why domestic software developers should be protected from competition. BTW, I'm a developer.

Competition is one thing, but instituting a policy that imports foreign workers while American workers are being layed off by the thousands is insane. Can you really be that blind, or are you on a H1B visa yourself? If you're really a US citizen, you can pat yourself on the back for your sound judgement when you're out on the street selling hot dogs to the H1B who replaced you...

37 posted on 06/26/2002 9:14:22 AM PDT by FormerLurker
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To: helper
I didn't bother to read much of the article because it sounds like another Arm Chair General, and I am on the front lines. Yes, I have hired several H1B's. Not in the software industry or computer hardware, but another very very specialized tech industry for which US schools no longer provide training.

Hate to burst your bubble, but the "Arm Chair General" you refer to is Dr. Norman Matloff, a professor of computer science who conducted a study on this subject and reported his findings to Congress. You should have been able to see that by looking at the first page of the article.

The article states his background as follows;

Dr. Norman Matloff is a professor of computer science at UC Davis, and was formerly a statistics professor at that institution. He is also a former software developer in Silicon Valley.

For his bio, see http://heather.cs.ucdavis.edu/matloff.html

In fact, if you had taken the time to read ANY bit of the article you would have seen that his report is quite thorough and well presented.

You state that you are not involved in the software industry. As this article relates SPECIFICALLY to that industry, however valid your views might be in relation to your field they do not necessarily apply to the software industry.

38 posted on 06/26/2002 9:27:05 AM PDT by FormerLurker
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To: billybudd
BTW, your argument about unemployed American workers being a negative effect on the economy is also BS because they don't disappear - they are simply displaced by new foreign workers, which will have a neutral net effect on the economy.

Now THAT is pure BS. These "new foreign workers" usually end up sending most of their money back home. At the end of their term here, they go back to their homeland and live a confortable life with all the US money they put away.

Not only that, but many such workers don't pay into the US Social Security system. They are in fact taxed, but their taxes are sent to pay Social Security to the country from which they came.

Information on this is available below..

U.S. INTERNATIONAL SOCIAL SECURITY AGREEMENTS

http://www.zazona.com/ShameH1B/H1BFAQs.htm#DoWorkersPayFICA

Also, the fact that companies have to pay developers less means higher corporate profits, which means a better economy.

How do you figure that? Have you been in touch with reality this past year or so? Do you think the shareholders of high-tech companies are happy with the economy? What about the millions of engineers out of work right now, how about them?

39 posted on 06/26/2002 9:39:31 AM PDT by FormerLurker
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To: blueriver
Last time I went looking for work, I sent out thousands of resumes, and literally had to hire an answering service to keep up with the calls. Those were the days.

If it goes as you say, then my opinion would likely change, though how is tough to predict -- my mind sometimes works in strange ways.

40 posted on 06/26/2002 9:50:43 AM PDT by ThePythonicCow
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