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The Real Goal of H-1B Visas is Driving Down STEM Field Salaries August 11, 2016

Posted by Tantumblogo in Basics, Domestic Church, foolishness, General Catholic, It's all about the $$$, sadness, scandals, Society, suicide.
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Many readers will recall that I was laid off from my job of 8 years (12, actually, but in two different stints) earlier this year.  I have described my not only finding a new job, but one that actually allowed me to get a little uptick in pay, as miraculous.  Not only did I find that job in record time (5 weeks), but the fact that I didn’t have to take a pay cut after leaving an unusually high paying employer (Fujitsu) was beyond amazing.  Your prayers, I am convinced, made all the difference. I shall forever pray for you – I pray.

One thing I was frustrated by during my job search – and I’ve kept looking around just a tiny bit since – is how little salaries in my profession had gone up since the last time I was on the market in 2006.  They had remained totally flat, if not decreased a bit.  I found many companies unwilling to pay a senior, highly skilled mechanical engineer, with very strong CAD and analysis skills, more than the same amount a year they were offering 10 or 15 years ago.  I had a lot of contacts with HR people or hiring managers that got positively peeved when I told them my salary requirements, and I fired back more than once that they were basically paying under $50k a year in 2006 dollars for that $75k salary they were so proud of (when you factor in inflation).

So I was fairly interested to see this news report, and especially the attached graph, that shows how salaries among computer programmers and IT types have actually FALLEN since 2002 in constant dollars, and I can say that software engineers and IT folks have it better than more “old school” engineers like mechanicals.

Meanwhile, barely 2/3 of those with STEM degrees are actually using their degree in their present employment, and the unemployment rate of STEM types has nudged upwards over the years.

All of which proves that the much vaunted STEM shortage is really a fabrication.  Or, they never quite finish the sentence…….many corporations, including ones headed by astonishing wealthy individuals (Microsoft, Facebook, Google, etc), do have a shortage of STEM workers…..at the very low salaries they want to pay.

That is why, as the article below notes, H-1B visas tend to go to very young, inexperienced workers, making them cheaper still.

Leaching off last week’s DNC Convention, tech industry-behemoths Facebook, Microsoft, and Amazon hosted a mini-conference amidst the gathering elite aimed at building awareness of the supposed lack of tech-education among America’s youth. The policy-push comes off Microsoft’s ‘National Talent Strategy’ hatched a few years back; an initiative which the company’s own general counsel apparently admitted was nothing but a ‘manufactured crisis’ really geared to serve the industry’s H-1B immigration agenda. Indeed, if America really did have an ‘education crisis’ in the STEM-fields, why do so many of the hundreds of thousands of H-1B professionals imported here every year come from places that do far worse educationally than we do?

The H-1B program was created in 1990 following claims from the then-brand new tech lobby that American professionals with sufficient tech-skills were in short supply. Twenty-five years on, that labor market-shortage has apparently still not been corrected with the industry spending hundreds of millions of dollars a year lobbying Congress to import more and more tech-professionals from abroad. …….

……..Recently, the Immigration Reform Law Institute obtained government records showing that between FY2013 and May of this year, almost one million H-1B petitions for imported white collar-workers were approved by DHS officials. And of all those successful petitions, a whopping 70 percent went to white collar-workers from India. This isn’t exactly surprising. BigTech loves Indian workers; not only because English is India’s national language, but because the workforce there is young (and therefore cheap). Unsurprisingly then, according to DHS-data almost three-quarters of petitions awarded to professionals in 2011 went to those aged between 25 and 34—Gender discrimination’s also likely. Although DHS says it doesn’t track gender-data, one labor association’s estimated that at least 80 percent of H-1B petitions go to men.

For a very long time, I shied away from believing that corporate titans and captains of industry were really as greedy as they are often portrayed as being.  But that reticence is becoming harder and harder to maintain.

I don’t mean to sound like a grousing populist man of the people, but I have recent and direct experience of seeing how wages in my profession, the one I was promised by parents, teachers, professors, and counselors alike would always be in high demand and was a “sure bet,” have stagnated if not retreated in constant dollars.  I have seen how many long time professionals of eminent capabilities have not been as blessed as I have been, and are still desperately searching for engineering employement 6, 12, 18, even 24+ months after being laid off.  Or if they do find employment, it is most often contract-based with no benefits and at a significant cut in pay.  And I have seen far too many companies gut their R&D investment, placing short term profits over long-term viability.

Once again, it is little wonder Trump is as popular as he is.  It’s not only the blue collar types that are being crushed, it’s a great many white collar professional types, too.

Comments

1. Jo Lapiana - August 11, 2016

I am going to respectfully disagree with you on several points. I have been in the high tech arena, in various capacities, for approx. 25 years. In my former capacity as EVP Staffing, I have processed and hired over 100 H1B visas. The expense, frustration, delays and paperwork is NOT a prospect that many employers in this space can readily afford to deal with. An H1B must be paid the market rate and all housing costs are to be paid by the employer for a given period of time. It takes 6 months or longer once the paperwork begins (which includes college transcript translations, etc) and can cost anywhere from $4500 to $7500 in attorney fees. It was always highly preferable to find a US candidate but there were very few to be found in the telecommunication industry, at that time.

As Executive Director of a high tech trade association (AeA), I was intimately involved with a number of efforts to deal with the profound shortage of qualified STEM candidates coming out of US schools. I recall a few years back when China graduated 250,000 engineers while the US graduated 75,000. In some fields those numbers may have been adequate while other fields, where US citizenship is REQUIRED (i.e. petrochemical engineers), job openings go unfilled.

Clearly, the H1B issue is not the only challenge. We have more liberal arts graduates than we have engineering grads, we have a public education system that completely fails STEM education, policy makers that mistake the ability to run a computer with an understanding of technology and a populace that doesn’t know the difference or care enough to fix it.

Please forgive the lengthy post. I could go on and on about the failure of our education system to support our industrial requirements but that would require a great deal more space.

2. ms. old school dfw reader - August 12, 2016

“a few years back when China graduated 250,000 engineers while the US graduated 75,000” — Although I wasn’t a STEM (have a degree in economics) I just did the math. I in turn, must respectfully point out that China has what — at least a billion people in their population ? We have about three hundred million or about a third of their population. Three times 75,000 I believe is 225,000. I did that by long hand multiplication, not using a calculator so please forgive me if I made a mistake ; ) Looks like per capita we were about on target “a few years back.”

ms. old school dfw reader - August 12, 2016

Okay.

According to one source, China’s pop. is now way over one billion:

Capital: Beijing
Population: 1,367,485,388 (July 2015 est.)
Area: 9,596,960 sq km
GDP: $19.39 trillion (2015 est.)
Currency: Renminbi yuan (RMB)
Time difference: UTC+8
Data from: The World Factbook

According to same source, US pop. is:

Capital: Washington, DC
Population: 321,368,864 (July 2015 est.)
Area: 9,833,517 sq km
GDP: $17.95 trillion (2015 est.)
Time difference: UTC-5
Data from: The World Factbook

Soooo… without getting out my trusty ancient TI calculator, we can see that the US with over a billion less people, is doing even better than my off-the-top-of-my-head very-early-morning estimate when it comes to producing engineers per capita vs. China.

Jo Lapiana - August 12, 2016

Engineers per capita isn’t really relevant. Our economy is what needs to be driven. For many years, the US economy has been the leader in the world and to remain in the position, we need engineers.

c matt - August 12, 2016

To need engineers, you need industries. If manufacturing can be shipped overseas, so can the engineering.

Tantumblogo - August 12, 2016

So my present employer is a case in point. By quirk of fate, I’m relatively safe, I work for “corporate” instead of a business unit, but the BUs have been clobbered, just two weeks ago the base station antenna BU laid off 90% of their US engineers in favor of a very large group (~40) in China. Most other BUs have done the same. They have gutted engineering in North America and Europe in favor of Asia – which, coincidentally, is where most of the MFG is (there is none in the US anymore, but some in Mexico). The manufacturing went first, of course, followed by the engineering about 10 years later.

Tantumblogo - August 12, 2016

Darlin’, no offense taken (I hope none given). I know what you’re saying. I can only give my own experience. It says there is no real shortage and in fact a glut in certain areas.

Tantumblogo - August 12, 2016

WELL……..there are numerous factors. For one, China is still a hybrid command-free market economy. They actually have national goals for numbers of engineers, chemists, physicists, etc. And party apparatchiks get graded based on meeting their goals. So, they produce a certain number whether there is really demand for them or not.

Plus, my experience of Chinese engineers is that they are not so hot. They learn by rote and try to design by rote. They’re pretty good at copying but not very good at creating new content. No wonder Cisco and other companies have brought their development back to the US, primarily.

ms. old school dfw reader - August 14, 2016

“Numerous factors”… Very true. In fact I was thinking the very same thing even as I thought about my previous response. I replied to the number of engineers because I thought that’s what the point of your post was — that some parties say there aren’t enough of them in the U.S. so employers have to go outside the country to find professionals. I looked at one simple factor with everything else — as the economists like to say — being “ceteris paribus” (basically all other things being equal or the same as constants for the sake of analysis — sort of like constants in experiments in the physical sciences). Of course one not only has to look at how many engineers, (or widgets, or whatever) a society produces. You can also look for example at educational factors as you did — the quality of education, the age-demographics of a country’s population… for a example a nation with a younger overall population will also have more people in the educational system and would presumably produce more graduates. Unless of course there is little educational opportunity in that nation, or the nation chooses not to emphasize what we would call traditional education because their society has less need of it — for example a very rural society needs farmers and perhaps some engineers, but a different variety of engineers than would a highly technical society. I think everybody gets the point. That’s why there are people with PhD’s (not me) doing economic modeling and constantly trying to understand things. Economics is not an exact science. It has to do with human behavior with regard to (scarce) resources and while certain patterns of behavior can emerge, especially with large enough groups of people, God has given humans free will and so you can never predict anything with certainty. For example, in the days of Thomas Malthus (gives his name to the word “malthusian” ) with the agricultural constraints of the time, he thought that since the population grows “geometrically” and agricultural output was only growing arithmetically, i.e. at a lesser rate, that there would soon be too many people in the world and everyone would starve. As we have experienced, advances in food output have proven him wrong (I know people gripe about GMO’s, but anyway)… Malthus’s dire prediction has proven false, yet the nickname “dismal science,” has for better or worse, stuck to the discipline of economics…; ) see http://economics.about.com/od/economics-basics/a/Economics-As-The-Dismal-Science.htm

3. MrT - August 12, 2016

I have been in the engineering business for 36 years. Since my Day 1 there has always been crying about “a shortage of engineers”. There’s always been smoke and mirrors about software tools that “auto-generate” design and implementation artifacts that will drive us toward some mythical day in which a manager could feed customer specs into a gadget, press a button, and viola, out pops a product. All done without those annoyingly expensive engineers. The engineer does well to seek employment from companies that appreciate the brainpower of average to brilliant engineers and are willing to keep them happy and secure, albeit always looking for ways to make them more productive.

MrT - August 12, 2016

The “shortage of engineers” really means there’s not enough young and cheap ones to work to death for a few pennies. If only the world would embrace again truth that the basic economic unit of society is the family, not the individual. The head of the household needs the opportunity to provide adequately for family without being uprooted from home and culture, and without subordinating home life to work life.

Tantumblogo - August 12, 2016

My previous employer is a perfect example. They told us straight up they had far too many experienced engineers and needed new grads to “introduce new ideas.” That was crap, the entire goal was cost reduction. That, and they are importing huge numbers of H-1B types from India, who make so little they have to live 4 or 5 to a 2 bedroom apartment to send a little money back home.

4. c matt - August 12, 2016

Funny, you never hear of a shortage of Business Degree prospects. The legal biz (which is where I am) suffers from a self-induced glut. Sure, everyone hears about the guys making huge salaries, but that represents the top 1, maybe 5%. The other 95%, if lucky enough to find a job, probably average $50-75k. With a likely student debt load of close to $100k, probably not the best investment. And mid-size and smaller firms (the 90%) are usually one key client or partner away from disaster.

Tantumblogo - August 12, 2016

That’s exactly right. My cousin got a law degree from Tulane and has carried a pile of debt ever since (15 years of so). He has only been able to find work in DA’s offices where the pay is low.

c matt - August 12, 2016

It takes a bit of guts, but he should have enough experience to open up his own defense shop. There will always be work for criminal defense lawyers and divorce lawyers. But it does require a certain personality. Not everyone’s cup of java.

Baseballmom - August 12, 2016

Thank you C Matt. One son is an attorney, in CA. Practicing for seven years, not yet at 100K (small insurance defense firm) and student loan debt over 150K I believe. Every time he gets a raise his loan payment increases. He never sees any real increase. He says he would NEVER recommend Law School to anyone. Oh, and the hours? 60 a week on average.

5. David - August 16, 2016

I remember in the early to mid 1990s when I was a retread college student. I got a bachelor’s in engineering Classic of 94, and while I considered graduate work, I didn’t see a good enough reason to pursue an M.S. or a PhD.

However, I do remember being asked by professors to give grad school and try. Some of it had to do with being American, I didn’t have an accent, and could have gotten a TA slot which would have helped with the cost. Another reason professors at that time were asking American students to consider graduate school was not enough American students were applying, and universities were recruiting foreign students to fill the slots. In fact, most engineering professors I had were naturalized U.S. citizens who got their bachelor’s overseas, and their piled higher degree in the U.S.

I work with a fair share of civil engineers (both men and women) who the majority are U.S. citizens by birth. Most civils will get a P.E. license, which is basically required for advancement, but doesn’t require a Masters. To contrast, the majority of electrical engineers I run across throgh work that are under 45 years old are of foreign descent. Some have Masters, but many do not.

I did have one professor give a lecture to our fluid mechanics class that his opinion on American students was they were lazy. Some maybe, but I worked pretty hard as a retread student – I also paid my own bills.


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