Scholars Debunk Claims of High-Tech Workers Shortage, Question Industry's 'Free Pass'

Published on May 19th, 2014

Tony Lee
May 16, 2014

Four prominent scholars on Friday questioned why the high-tech industry gets a free pass to perpetuate the myth that there is a shortage of American workers in jobs related to science, technology, engineering, and math (STEM). 

Unlike industry lobbyists and politicians who have repeated that claim in an attempt to secure more high-tech visas that would lower the wages of American workers, the scholars presented firm evidence to debunk the notion that the high-tecn industry is suffering from a lack of qualified American workers.

On a Friday conference call that was organized by the office of Sen. Jeff Sessions (R-AL), who has been relentless in standing up for American workers and their interests during the amnesty debate, Hal Salzman, a Rutgers University public policy professor, said current wages in the high-tech and information technology (IT) industries do not reflect a labor shortage.

“Average wages in IT today are the same as they were when Bill Clinton was president well over a decade ago,” Salzman said. “So one has to wonder if there is in fact a shortage, why doesn’t that reflect in the market? Why don’t wages go up?” 

Norm Matloff, a professor of computer science at University of California at Davis, simply said, “When you talk about solutions, you have to ask whether there was a problem to begin with.”

Michael Teitelbaum, a senior research associate at Harvard Law School whose new book, Falling Behind? Boom, Bust, and the Global Race for Scientific Talent, explores these issues, said as far as he knew, “nobody who is not associated with the industry that is engaged in a rather effective and expensive generalized” campaign to clamor about the “widespread shortages of scientists and engineers” has been able to provide the evidence of such shortages.

Matloff said the high-tech industry has gotten a “free ride” from the media and enjoys a very “positive image” in this debate, which he said has “really been a non-debate.” 

The myth that there are such widespread labor shortages in the high-tech industry has been debunked in numerous studies, but Republicans and Democrats have continued to, as the scholars noted, perpetuate it without being challenged on their specious claims. High-tech lobbies like Facebook co-founder Mark Zuckerberg’s FWD.us have poured in millions of dollars in high-profile campaigns to secure more high-tech visas. 

And they have partly been succeeding. The Senate’s amnesty bill that passed last year would double and possibly triple the number of high-tech visas and, as Breitbart News has reported, House Judiciary Committee Chair Rep. Bob Goodlatte’s (R-VA) “SKILLS” Act that passed out of his committee would double the number of H-1B visas.

Ron Hira, a public policy professor at the Rochester Institute of Technology who has worked on these issues for more than a decade, said on the conference call that the H-1B visas that are filling the supposed “gaps” are “doing more harm than good” to the U.S. science and engineering workforce. 

He noted that the majority of the H-1B visas are being used for “cheaper workers” from abroad and mentioned that offshoring firms used 50% of the cap last year to further their business model of bringing in “lower-cost H-1B workers to replace American workers.” Salzman said that even after American software engineers train their replacements, they cannot speak out about their experiences for fear of being blackballed or having to forfeit their severance payments.

Hira said that the H-1B program has run amok because “Congress sets the wage floors way too low” and “far below the market wages for American workers” while not placing any “requirement to look for or recruit American workers first, so there is no displacement of American workers.”

“As a result, you are basically inducing companies to game the system to bring foreign workers to undercut American workers,” Hira noted. “Instead of complimenting the U.S. workers as it should, it’s substituting for the U.S. workforce and taking away future opportunities by shifting the work overseas.”

Salzman said that in this arrangement, the employer has nearly total control of the “indentured” H1-B workers because they hold their work permits. 

Matloff agreed, saying that figuratively “handcuffing” foreign workers is even “more important than saving on wages” because employers can “prevent foreign workers from leaving” in the middle of projects, unlike with American workers.

He also mentioned that IT guest workers are on pace to make up 30-40% of the entire IT workforce even when there are 50% more graduates than job openings in the STEM fields.

Further, Matloff emphasized that H1-B visa holders earn 5-10% less on average than American workers and there is a high churn rate that gives companies a “never-ending supply of new hires,” allowing them to replace workers over the age of 35 while weakening the “bargaining position of current workers.” The Senate bill, Matloff said, exacerbates this problem by providing 150% of the visas that the IT industry has said they needed at the beginning of the debate.

“You are replacing more innovative people with less innovative people, which also will amount to a net loss for the U.S. economy,” Matloff said, saying, for instance, that there are fewer patents per capita produced by those from abroad than those in America.

As a result, fewer Americans are able to move up the economic ladder through the high-tech fields. And the problem has gotten worse since the H-1B spigots were opened in the 1990s.

“Software development used to be a lifetime career,” Matloff, the U.C. Davis professor, said. Hira, the H-1B expert, added that the IT sector has traditionally been “an area of social mobility.”

“You’ve got people who come from working-class backgrounds who go into these sectors,” Hira said. “It’s a way of getting into the middle class and the professional class, and that’s being cut off.” 

This trend, though, is nothing new, according to Teitelbaum, the Harvard Law School research associate who has discovered that dating back to World War II, there have been five cycles in which alarms were sounded about shortages in the STEM fields that forced the government to respond by increasing the flow of high-tech workers through more education or visas. 

What immediately followed, Teitelbaum said, were periods of busts that put workers out of work and discouraged prospective students from going into the those industries, which would lead to another “shortage” cycle. Matloff said there are some indications that students in the STEM fields, even graduates in Silicon Valley, are responding negatively when faced with bleak job prospects in the high-tech industry after they were assured that STEM degrees would secure them employment. Matloff noted that other students may “eventually see that this is not a good career path” and, consistent with Teitelbaum’s findings, discourage others from pursuing STEM degrees and potentially sowing the seeds for a sixth cycle of boom and bust. 

Teitelbaum declared that such cycles in the high-tech and science industries represent an “unhealthy history” where workers are displaced as jobs become even tougher to find.  

“We may be in the process of repeating it,” he warned.

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