Is there really a shortage of high-skill American workers?
One of the primary narratives associated with comprehensive immigration reform has nothing to do with the millions of low-skill workers that would be granted an opportunity to compete against Americans for jobs. As a letter sent to the president and Congressional leaders signed by more than 100 chief executives of major tech companies and trade associations indicates, there is a shortage of highly-skilled American labor that drives reform as well. Yet as the Atlantic's Michael S. Teitelbaum reveals, that narrative is a lie.
"A compelling body of research is now available, from many leading academic researchers and from respected research organizations such as the National Bureau of Economic Research, the RAND Corporation, and the Urban Institute," Teitelbaum explains.
No one has been able to find any evidence indicating current widespread labor market shortages or hiring difficulties in science and engineering occupations that require bachelors degrees or higher...All have concluded that U.S. higher education produces far more science and engineering graduates annually than there are S&E job openings—the only disagreement is whether it is 100 percent or 200 percent more.
He then introduces the 800-pound gorilla of Economics 101, as in the reality that a genuine shortage of high-skill workers would pressure those seeking an ostensible scarcity of talent to offer higher levels of compensation to potential workers. Unfortunately, exactly the opposite is occurring. "Most studies report that real wages in many—but not all—science and engineering occupations have been flat or slow-growing, and unemployment as high or higher than in many comparably-skilled occupations."
How does this reconcile with the claims of people like Facebook CEO Mark Zuckerberg and Yahoo CEO Marissa Mayer? "Because labor markets in science and engineering differ greatly across fields, industries, and time periods, it is easy to cherry-pick specific specialties that really are in short supply, at least in specific years and locations," Teitelbaum explains. And while he concedes that high-skill occupations have unemployment rates lower than those of the workforce in general, "surprisingly high unemployment rates prevail for recent graduates even in fields with alleged serious 'shortages' such as engineering (7.0 percent), computer science (7.8 percent) and information systems (11.7 percent)."
The Economic Policy Institute (ECI) also hammers home reality about the so-called shortage of foreign workers, revealing that in 2011, the number of college-educated "guest workers" under the age of 30 comprised 66 percent of the 166,000 new college-educated Information Technology (IT) job-holders under the age of 30. They further note that this reality is discouraging many Americans students in the science, technology, engineering and math (STEM) fields from entering IT.
With good reason. Americans colleges already graduate 50 percent more computer science majors than are finding jobs in IT. The ECI further notes that if comprehensive immigration reform and/or the Skill Visa Act promoted by Republicans Darryl Issa (R-CA) and Bob Goodlatte (R-VA) become reality, the conservative estimate of 180,000, "new IT guestworkers and STEM green card beneficiaries will be greater than the number of new hires of young IT college graduates in 2011."
At the heart of this sellout is the H-1B visa program. The Government Accountability Office (GAO) does its best to obscure reality, stating that most of those visas are used to fill "entry level" positions. Yet EPI confirms Teitelman's assessment of flat or slow-growing wages, revealing that such workers are not only competing with recent U.S. graduates, but providing a supply of lower-wage guest workers that can take jobs from older workers as well.
Computerworld, which on April 1 received the latest data regarding H-1B visas from the U.S. Citizenship and Immigration Services (USCIS), explains there is such heavy demand anticipated, all of them will be claimed by the end of this week. They further note that the majority of claimants will be firms "that use visa holders to displace U.S. workers." "The offshore outsourcing firms are once again getting the majority of the visas," said Ron Hira, a public policy professor at the Rochester Institute of Technology in New York. "The program continues to promote the offshoring of high-wage American jobs."
The top three companies on the list of visa approval in 2013 were Infosys, Tata Consultancy Services (TCS) and Cognizant. Other players include IBM, Microsoft, Amazon, Intel, Google and Oracle. Many of these firms hire IT workers for offshore outsourcing contracts. Domestic workers who are replaced as a result often have to train their replacements as a condition of their severance package. Companies such as Cognizant insist they maintain a robust effort to hire American workers, but they do not disclose data to support that contention. Moreover, in 2013, Infosys agreed to pay $34 million to resolve a claim by the federal government: they had accused the firm of running an unlawful visa scheme. Infosys also refused to release data on its U.S. workforce.
Food and agricultural producer Cargill is another company outsourcing its IT jobs, sending them to TCS. Cargill's home base is in Minnesota, and Sen. Amy Klobuchar (D-MN), along with Marco Rubio (R-FL), Chris Coons (D-DE), and Orrin Hatch (R-UT) were developing the Immigration Innovation Act of 2013. The bill aims to initially raise the current H-1B cap of 85,000 visas, comprised of 65,000 H-1Bs, plus an additional 20,000 set aside for advanced degree gradates of American universities, to 115,000. It also includes an increase in the cap based on demand, until it reached 300,000 visas every year thereafter, even as it exempts advance degree STEM students from the total. In addition, the bill won't apply employment-based green card quotas to foreign students earning a master's or doctorate in STEM fields at a U.S. university, or their spouses and minor children.
The bill passed in the Republican-controlled House on Dec. 5, 2013. It has yet to be taken up by the Democratically-controlled Senate.
Even as this amounts to dream legislation for high-tech companies, they are keeping up the pressure on lawmakers. In March, Goodlatte, who is the House Judiciary Committee Chairman, held a high-dollar fundraiser in Silicon Valley with pro-amnesty forces who ponied between $10,000 and $40,000 apiece for the privilege. Ron Conway, a prolific angel investor and venture capitalist, expressed the kind of arrogance one expects from those who seemingly believe government should be particularly responsive to high rollers. "In this case, because there’s been mixed messages from the Republicans, before I write my check, I wanted some assurances that Bob Goodlatte would be prepared to discuss immigration reform and what the timetable is for immigration reform, because we’re coming down the wire here with the  elections and we need accountability,” he declared.
If genuine accountability is wanted--as opposed to the fulfillment of an agenda--getting the facts right would be a good place to start.
Both Teitelbaum and Michael Anft, senior writer for Johns Hopkins magazine, reveal that stores about a shortage of STEM workers are nothing new. Teitelbaum refers to five "alarm/boom/bust" cycles, each lasting about 10 to 15 years. From just after WWII through 2003, each cycle was initiated by alarms about a worker shortage, followed by policies to increase the supply of STEM workers, followed by the inevitable busts characterized by "mass layoffs, hiring freezes, and funding cuts that inflicted severe damage to careers of both mature professionals and the booming numbers of emerging graduates, while also discouraging new entrants to these fields."
Anft speaks to the same phenomenon, noting that prior to Americans worrying about the current emergence of China and India as the primary challengers to our status as the world's preeminent innovator, "there were ruckuses caused by an increase in foreign auto and electronics imports (Japan) in the 1970s and 80s, a fear that someone else (the U.S.S.R.) would win the space race in the 50s and 60s, and the wartime emergency (Nazi Germany) that led to the Manhattan Project in the 40s."
Hira, who has testified before Congress regarding the issue, notes the hypocrisy of high-tech firms like Microsoft, who advocate for more IT visas, even as they lay off thousands of Americans with comparable skills. Norman S. Matloff, a professor of computer science at the University of California at Davis, is far more direct. "This is all about industry wanting to lower wages," he contends.
Toward that end, high-tech companies are making contingency plans, in case their current push for comprehensive immigration reform proves unsuccessful. As Silicon Valley attorney John Bautista reveals, some companies with solely domestic operations are exploring the idea of opening offices overseas so they can hire people and bring them back to America on visas that allow for internal transfers of existing employees. "Before [corporate boards said], 'We've got someone we want to hire, what's the best way to bring him over?'" he explained. "Now it's, 'We have a hiring problem, let's use the immigration laws to come up with an overall strategy to bring teams of people on board.'"
Part of that overall strategy includes the oldest strategies of all: pumping loads of cash into political campaigns and lobbying efforts. According to the Center for Responsive Politics, the computer and Internet industries showered Democrat and Republican candidates for federal office, as well as political committees, with $62 million during the 2012 election cycle. That same year tech companies spent a record-setting $132.5 million on Washington lobbying efforts, running their ten-year total in that regard to over $1 billion.
In 2013, the tech sector combined forces with the agricultural sector. They were joined by the Chamber of Commerce, which added another $52.7 million to reform lobbyists' coffers. "We're determined to make 2014 the year that immigration reform is finally enacted," said Chamber President and CEO Tom Donohue in January.
By any means necessary, it seems. Whether they get across the finish line remains to be seen. Likely 2016 GOP presidential candidate Rand Paul (R-KY) is the latest Republican to drink the comprehensive Kool-aid, insisting that his party has to get "beyond deportation to the rest of the issues," if they want to compete for Hispanic votes. Those would be the same Hispanic votes that have never accrued to Republicans in more than three decades of elections. Furthermore, alienating both low-skill and high-skill American workers as a tradeoff is a fool's errand.
Unfortunately, for un- or under-employed Americans, the outright lie that there's a shortage of high-tech workers apparently takes precedence over their well-being. For Democrats, virtually anything the expands the dependency of Americans has become, rather than a badge of shame, an integral part of their party platform. For Republicans, the sop of accommodating their business allies, and siren song of possibly newfound Hispanic fealty that drives their ambitions. In a better world, the efforts by both parties would be seen as the contempt for the rule of law and the utter lack of concern for Americans they truly represent. In this one, the narrative, no matter how duplicitous and despicable, rules the roost.
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