Tech Firms Cry Worker Shortage – Americans Need not Apply

Scott Corley is a man with a mission. Corley is executive director of Compete America, an organization representing some of the top names in American high tech and information technology (IT), including Amazon, Facebook, Google, Hewlett-Packard, Intel and Microsoft. Corley is lobbying Congress to grant a significant increase in the number of foreign tech workers that the companies can hire under the H-1B temporary visa program.

Says Corley, “There is widespread agreement . . . that high-skilled immigration is good for the economy. Congress needs to act now.” Specifically, he wants passage of the Senate’s immigration “reform” bill, which increases the H-1B quotas along with hiking permanent visas and granting amnesty to illegal aliens.

Tech companies claim that our country has a shortage of people qualified to perform IT jobs, so we must keep importing them from abroad. Many people, including quite a number of congressmen, take this claim at face value. But it raises a lot of questions, two of which immediately come to mind. Does a country with 318 million people lack enough people with the talent to do these jobs? And if those talented people do exist, don’t we have some of the best educational institutions in the world to train them?

Well, almost obviously, the answer to the first question is no, and the answer to the second is yes. So why do the companies maintain that they must continually depend on foreign workers? Rather than just accept what the tech companies say, researchers at the Economic Policy Institute decided to look a little deeper.

What they found, in a paper published last year, was that there was no shortage of Americans who can be trained to do the jobs, or indeed Americans who already have the basic necessary skills. If truly there were a labor shortage, as the companies allege, wages in tech fields would have increased to attract those workers. That indeed is how the market functions in a free enterprise economy.

But in fact, the wages haven’t risen. To illustrate with one example, the study noted that the average salary for a programmer was between $70,000 and $80,000 a year in 2001. During the following ten years – supposedly during a time of shortage – that average salary, in constant dollars, did not rise at all.

What the companies did was import H-1Bs to keep wage levels down, while obtaining a young and compliant workforce – one less likely than older Americans to complain about working conditions. Many Americans with tech training simply had to look for work in other fields, and many students decided to find fields where they could earn a better income and not be out of a job at age 35.

Two decades ago, economic commentators told Americans not to worry about the loss of jobs paying middle-class salaries as our companies shifted manufacturing abroad. They said Americans could simply train or retrain for tech jobs, which would pay good salaries. Now the commentators seem to have forgotten that promise as they too repeat the companies’ tales of worker shortages.

Scott Corley says H-1Bs are good for the economy. Well, that’s true as far as the resulting economic benefits for IT companies, their CEOs and stockholders are concerned. The economic prospects for American job seekers, struggling to find jobs that pay decent wages, are – alas – not so bright.