H-1B Study (All you US Citizen IT Workers are TOAST!)

U.S. House Judiciary Committee Testimony ^ | September 10, 2002 | Dr. Norman Matloff

[dark_lord]

Debunking the Myth of a Desperate Software Labor Shortage

Due to an extensive public relations campaign orchestrated by an industry trade organization, the Information Technology Association of America (ITAA), a rash of newspaper articles have been appearing since early 1997, claiming desperate labor shortages in the information-technology field. Frantic employers complain that they cannot fill many open positions for computer programmers.

Yet readers of the articles proclaiming a shortage would be perplexed if they also knew that Microsoft only hires 2% of its applicants for software positions, and that this rate is typical in the industry. Software employers, large or small, across the nation, concede that they receive huge numbers of re'sume's but reject most of them without even an interview. One does not have to be a ``techie'' to see the contradiction here. A 2% hiring rate might be unremarkable in other fields, but not in one in which there is supposed to be a ``desperate'' labor shortage. If employers were that desperate, they would certainly not be hiring just a minuscule fraction of their job applicants.

Here is a table showing the actual number of job applicants hired for a variety of companies:

American Management Systems	2%
Broderbund Software	1%
Cisco	5%
Cohesive	2%
Datascan	5%
Deltanet	4%
ECbridges	2%
Flashpoint Technology	2 to 5%
R.D. Raab	1%
H.L. Yoh	4%
Inktomi	less than 5%
Microsoft	2%
Net Perceptions	2%
New England firm	1%
Qualcomm	4.5%
Radiant Systems	under 1%
Red Hat Linux	under 1%
Tangis	under 1%

Table 1: Percent of software applicants hired

In other words, there is no shortage of ``bodies,'' i.e. there is no shortage of experienced computer programmers. The problem is that employers are not willing to hire them. Employers are only willing to hire from three narrow categories of programmers:
* New or recent (within a few years of graduation) college graduates, who have cheaper salaries. Note, though, that even among new computer science graduates, fewer than half are hired as programmers.
* Foreign nationals on work visas, who have cheaper salaries.
* A relatively small number of experiencedprogrammers who have background in certain highly-specialized software technologies.

Dr. Matloff says: "Hiring managers have often complained to me that their firm's Human Resources Dept. screens out resume's of applicants who the managers feel qualified. HR apparently decides to screen out the applicants who are too expensive or too old - and then complains that there is a ``shortage'' of applicants...There does seem to be coordination among the HR departments of the various firms. The HR departments of the major firms in Silicon Valley hold monthly meetings, at which the firms exchange information with each other on policy, salaries and so on. (Personal communication from Paul Donnelly, IEEE-USA, June 30, 2000.)...All the firms hire an extremely low percentage of their programming applicants, due to the fact that all the firms overstate job requirements...Almost all firms aim for applicants having three to seven years (or two to eight) of experience."

He says: "It seems safe to say that experience may not be the most valued commodity, according to a survey of 200 IT managers nationwide conducted by InformationWeek Research in May. Though age wasn't specified in the question, only 2% of the managers said they would most likely hire a worker with 10 or more years' experience. Almost half-46%-preferred to hire a worker with four to 10 years' experience, while 26% said they would hire a worker with less than three years' experience, and another 26% wanted an entry-level worker or recent college graduate."

[RWG]

Do you think that auto mechanics, plumbers, electricians, and home handymen should work based on the finished result versus a $/hr rate?...ABSOLUTELY That's the way farmers who actually grow things get paid.

[blueriver]

I haven't been "in the street" since I was 15 years old..

Glenn, I hate to tell you this but you are living in a dream world if you think you are immune from this issue. The fact is most engineers that are currently unemployed and unable to find a job were just like you, busy working for the last 20 years of their lives. The fact is a lot of companies are either folding up or downsizing. If you are lucky enough to be in an industry that is not being affected than count your blessings and stop acting like you are better than everyone else.

[A. Pole]

A Indian gradutes out of IIT or the schools in Pune and Bangalore with almost no debt load. The Indian college eduacation has been subsidized by the state.

Is it good for India? Can America afford to subsidize education for American students the same way?

[blueriver]

That means we're about the same age. Don't tell me that no one told you while you were studying EE/CS in 1982 that the average career lifespan of an engineer was around 15 years?

Graduated in 1979, so I guess I am older than you. The government was not involved in sabotaging this profession back then. Back then the computer industry was just getting off the ground so there was no data indicating that it was a 15 year profession.

[blueriver]

Why IT? An indisputable section of the stats shows the H1B focus is in the tech/ software trade, why?

I may be wrong but I think this all started at Microsoft. The concept of working 24/7 was also started at Microsoft. If you ask me Bill Gates has done more damage to this industry than any person alive on this planet. Also, the Indian and Chinese governments have a plan in place to become technologically superior to America. We are actively supporting their goals (much to our own demise).

[bvw]

Those are very good questions. There is a real problem, evidently, long-term, with subsidized (that is, government funded) higher education for all. It seems to seek the lowest common denominator.

The guarentee of tax based funding of teaching and administration staff is a bias towards attracting the slothful and indolent who come to these careers for the safety and comfort, and not for the love of or knack for teaching, or even novel research. That's not to say that those with love for and known natural ability of teaching and research aren't also found, but that any govenment dole enables and in time develops a highly risk-adverse, fiercely entitlement-fond mix.

We have it, India will get it -- and sooner in cycle, too, since that socialist and pensionaire mindset is more found there already.

Short term, is it good for India? Yes, for reasons of creating a good bond between us, the extremely rich uncle of a nation and India. That it has already so developed, and will continue is very clear. But we have provided them a crutch, they can now walk by themselves. And China too.

Too allow continuance longer will be create back-pressure aggravations here -- anger at our supporting Indian and Chinese kids and workers at the hurt of our own -- and in both our school systems declining standards. In other words -- it will be bad for both nations.

[dark_lord]

Do you think that auto mechanics, plumbers, electricians, and home handymen should work based on the finished result versus a $/hr rate?...ABSOLUTELY That's the way farmers who actually grow things get paid.

You mean - except for those farmers who get paid not to grow anything.

[bvw]

Since money began the farm owner is paid by his farm's produce at the market, but the workers by *either and both* hour and bushel.

There have always been more farm laborers than farm owners. Just as today, you can find a plumber to do a job at a set price, another will do the same job but charge by the by hour. A mix of both units delivered and time worked is used as well: for example car mechanics use a "standard" hourly rate that the manufacturer determines for each car model for each type of repair.

[Glenn]

Glenn, I hate to tell you this but you are living in a dream world if you think you are immune from this issue.According to your "real world", most fully qualified engineers in the USA are unemployed and on food stamps. Bunk. Garbage. Swill. Period.

[Red Jones]

I think if you spent 20 years building a career...

Snerfling, you didn't consider that the marginal reason why hundreds of thousands of americans who have spent a lot of time and effort building their careers are having these careers destroyed is because of interference into the labor market by the government through h1b. Americans are right to expect that their government won't target their livelihood for destruction and justified in being outraged when it happens.

So, they told you in school that engineering careers lasted an average of 15 years and that other careers didn't have that problem, that's nice. Professor Matloff tells us that the situation has gotten a lot worse since then for engineering and especially computer science majors. Many people with degrees in this can't even get started. It was always like that, but now it is much worse and for the minority who do get careers launched many are finding less than 10 years is the time-frame.

So, h1b has taken an already tough career and made it much much tougher. Statistics show this. I know some individuals buck the trend.

[blueriver]

According to your "real world", most fully qualified engineers in the USA are unemployed and on food stamps. Bunk. Garbage. Swill. Period.

Gee.. you are pretty good at twisting things around. I never once said that "MOST" engineers in the USA are unemployed. What I said was that a lot of companies are shutting down or downsizing, resulting in a lot of people finding themselves unemployed in an environment where there are not many available jobs. Continue in your egotistical bliss... but please don't continue to claim to be an authority on the "real world" job market conditions.

[discostu]

Most of the part that went boom were businesses without plans, as well immortalized in South Park (Part 1 - steal under pants, Part 2 - ?, Part 3 - Profits). Guys had some really nifty ideas with no clue how to make money from it. A lot of businesses that actually had plans went under too, that's natural, but the real burst was ilconceived businesses that never should have been funded in the first place.

Outside of tech country high speed bandwidth companies are going out of business in droves. Outside geekdom demand isn't that high for the big pipe. I know personally I just won't pay that much for the internet. Most of the high speed companies charge in the neighborhood of $50/month out here, and I can buy a bottle of Talisker for that, the internet just isn't one bottle of Talisker a month cool. Even if I had the bandwidth a lot of the ideas (especially "rented software") just aren't good. Telecom tanking depends on the company, some were just outright mismanaged, some were definitely investor jitters. Where I'm at now the stock priced has tanked so bad that our valuation is actually less than what's in the bank. Of course my current company is run by morons who are going to destroy it even though we make the most popular product in a very lucrative section of the market, so maybe that isn't investor jitters.

Most business software is good for the person looking at the data but not good for the poor shlub stuck inputting the data. Which makes sense, what are computers good at? Crunching numbers. What historically aren't they good at? Being usable by normal people. So we've sacrificed the productivity of the people that enter the POs for the sake of the guy that analyzes the budget. We have done some cool stuff, but interestingly it wasn't in the areas we said we were going to revolutionize. Anybody that saw a good grocery store clerk in action in the old days and compared that to an idiot waving a product over the scanner over and over praying it'll read the bar code has seen the great leap backward of the industry; it takes less skill, but there's less room to excel also and the end result is slower than it used to be. But the marketing manager knows exactly how many Mac & Cheeses were sold between 2 and 4 on Nov 1st.

Interesting projection, interactive TV has been projected for a long time but the parts are finally in place.

I don't think foreigners can come up with the next big thing, at least not from India. Most of the country is still a 3rd world sh!thole and people don't have TV, phone and datasteam into the same building, hard to put it in the same device. I think. Really that's probably the best fix, we need to get back on the invention train, that's what we're better at than ANYBODY else. When in doubt focus on what you do best.

[Red Jones]

good news today! My #1 client just gave me a new project. this is my first new project since 1999. Since 1999 the only work I've done is on finishing up and fixing work I got in 1999 and even that was just an extension of what we started in 1995. So, the client uses my software a lot that I started on in 1995, but I get zero calls on it because bugs are a thing of the past for that work. They typically only give me work in little bits and pieces, this could take 3 weeks, then there might be more after that. It's a new app with lots of potential.

Also 18 months ago they threw a project to another programmer and that project was right in my alley. This other programmer is a Microsoft MVP, very much top of the line and a much better programmer than me. But I'm more intimate with this client's needs. He did a great job, my client let me evaluate his work. But the other good news is they're talking about giving me responsibilities for that work the other guy did also at some time in the next few months. They tested to see if someone else might suit them better in other words and I may have survived that test. And on top of that the other programmer is my friend.

It has been divine intervention today that has been planned for a long time, thanks and praise go to god.

I'm also progressing on my side job which is to market software I made myself. Although I've made zero money on this side job, i have reason to believe divine providence is at play on this one as well.

Just wanted to share good news!!!

[FormerLurker]

Just wanted to share good news!!!

Congratulations and good luck to you!

[FormerLurker]

I don't think foreigners can come up with the next big thing, at least not from India. Most of the country is still a 3rd world sh!thole and people don't have TV, phone and datasteam into the same building, hard to put it in the same device.

Unfortunately, it doesn't prevent US companies from bringing them here to do the work that Americans would normally do. And that is obviously where we all have a problem....

[discostu]

I've got 7 years of professional software QA experience and before then I was involved in a few game betas. I spent two years as the manager of a small QA department. FL and I have buried the hatchet I'd apreciate it if you didn't attempt to create more strife.

[blueriver]

I AM EXTREMELY HAPPY FOR YOU!!! Congratulations. Sometimes it does feel like divine intervention when good things happen out of a sea of darkness.

[discostu]

Well the coasts have a problem, the interior is still holding on pretty well. All the smart white people should flee the outer regions and come join us in the Republican L, really oceans aren't that cool, you'll hardly miss it.

Alright, that's a crappy solution, unfortunately we seem to be lacking in solution ideas.

[discostu]

Actually I think Jobs was more of a worshipper of moving into work. At least of the ones I've run into the MS guys spend a lot more time relaxing. The corporate ideas I've seen stolen from MS were things like heavy drinking fridays and fusball tables. The corporate idea I've seen stolen from Apple was to set weekends as work days on your gannt charts. Of course all the people I've dealt with are from later in the epoch of both companies, how they were in the early 80s I have no interior knowledge. I do know somebody that was on the tour team at Xerox when "the raid" happened. She's an investment banker in New York, smart hot and rich... way out of my league. Didn't invest in our company either.

[FormerLurker]

Alright, that's a crappy solution, unfortunately we seem to be lacking in solution ideas.

We need to dramatically reduce the H1-B quota. I'd say right now there should be no extensions given. Unfortunetely, GW has just given the thumbs up on extending H1-B visas...

US Bill to make life easier for H-1B visa holders