The passage of immigration reform by the Senate was a big stepforward. The bill is far from perfect, but goes a long way towardsolving Silicon Valley's talent shortage " and America'simmigrantexodus. But big hurdles lie ahead as anti-immigrantgroups regroup. Extreme elements of the right will be fighting toclose the borders while their counter parts on the left " BigLabor in particular " work to undermine high-skilled immigration.Why are trade unions that have practically no presence in thetechnology industry trying to make things difficult for SiliconValley? I really don't know. What I do know is that Big Labor'sthink tank Economic Policy Institute (EPI) is publishing onequestionable study after another to sabotage immigration reform.
It continues tograbnational headlinesfor research that claims that there isno tech-talent shortage. As stupid as this may seem to people inthe tech industry, EPI keeps repeating this " despite the factthat its evidence falls apart once respected economists review itsnon-peer-reviewed papers.
Facts don't usually get in the way ofpolitics, however.
It started with policy papers byRonHira, an associate professor at the Rochester Instituteof Technology.
Hira has made a career of repeating the words H1-Bsare taking American jobs away. He says that claims of a shortageare a ploy by Silicon Valley companies to bring wages down and toreplace Americans with foreign workers (Iam not kidding). Then cameNorm Matloff, a computer-science professor at UC Davis, whomadetheassertionthat foreign students have talent lesser than,or equal to, their American peers. Therefore,skilled-foreign-worker programs are causing an internal braindrain in the United States, he argues.
To top it all off, Rutgersprofessor Hal Salzman co-authored apaperfor EPI claiming that the U.S. graduates far more workers inscience, engineering, technology, and mathematics (STEM) than thetech industry needs and that foreign workers are discouraging Americans from pursuing technology careers.
How did they come tothese conclusions? Supposedly by analyzing salary data and speakingto their own students. As Salzman et al. write, The effect of thislarge supply of guestworkers can be seen in wages in I.T., whichhave remained flat, and are hovering around late 1990s levels inreal terms. Matloff says, flat wages are discouraging talentedU.S. workers with STEM degrees from pursuing graduate study or evencareers in the field. Hira says H1-B's are taking American jobsaway.
It is easy to cherry-pick misleading data. Jonathan Rothwelland Neil Ruiz of Brookings Institute did anobjectiveanalysisof salaries for the professions that get themost H1-B requests.Theyfoundthat wage growth in these was actually strongerthan the national average. They also found that H-1B workers arepaid more than U.S. native-born workers with a bachelor's degree($76,356 versus $67,301 in 2010) and even within the sameoccupation and industry for workers with similar experience.
Thecharthere(courtesy of Harvard Business Review) looks atthe salaries of 26- to 30-year-olds " the same age group asgraduating foreign students.
In fact,foreign workers get paid higher-than-average salaries. U.S. companies would not deal with the high political and financial costs of applying for visas if they could fill vacancies with equally qualified American workers. EPI claims that since STEM salary data has been stagnant, there is no unmet demand for high-tech workers.
Unfortunately, its analysis is based on bad data. For example, in the Salzman report, Figure I supposedly reports occupational wages for programmers from 1990 to 2011. But theCPS(their source) does not report these data before 2000, because of changes in how occupations were coded. CPS data show that almost one-fifth of contemporary computer programmers would not be classified in theolder system, so wage comparisons across the periods would beinaccurate. In fact, computer-programming wages haveincreasedin theperiod for which they are consistently defined.
Additionally, theclaim that EPI makes about guestworkers discouraging natives fromstudying technology was supposedly based on surveys by the NationalCenter for Education Statistics and from field work conducted overthe past decade by the author. There appears to be no crediblesurvey that validates this conclusion. The field work is alsoquestionable. In emails that I exchanged with Salzman, he would notprovide any further information. Rob Atkinson of The InformationTechnology Innovation Foundation also debunked the many myths inthe EPI research in paper titledTheReal Story on Guestworkers in the High-skill U.S. LaborMarket.
The report refutes each substantive EPI claim toshow that American students are dropping out of STEM majors at highrates; those that complete their majors are finding abundant workopportunities in their fields, and wages are growing for most IToccupations. In any case, demand for current IT skills is extremelyhigh, as engineering and computer majors have low unemploymentrates and earn higher wages than any other field of study,according to research from Georgetown University.
The reality isthat the country's most innovative region, Silicon Valley, isstarved for talent. Startups can't find workers with the skillsthey need, and larger companies have to set up centers offshore forthe same reasons. Big Labor and a handful of academics in theirivory towers can pontificate about how things should be. But allthey will achieve if they have their way is to choke off theability of Silicon Valley to create jobs " for them.