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Monday, March 23, 2015

The Myth of the STEM Shortage

For years, large technical companies have been arguing for expansion of the H1-B visa guest worker programs contending that there was a shortage of qualified scientists, technologists, engineers, and mathematicians (STEM) and, therefore, that more foreign workers with these skills needed to be imported. Unquestioned for many years, there has been an increasing amount of skepticism over the claimed shortage. Here are some articles, for instance, discussing whether there is, in fact, a shortage of STEM workers:

Charette observes that once you dig past the dire predictions of a STEM shortage, and the need to expand H1-B visa programs:
... you’ll also find reports suggesting just the opposite—that there are more STEM workers than suitable jobs. One study found, for example, that wages for U.S. workers in computer and math fields have largely stagnated since 2000. Even as the Great Recession slowly recedes, STEM workers at every stage of the career pipeline, from freshly minted grads to mid- and late-career Ph.D.s, still struggle to find employment as many companies, including Boeing, IBM, and Symantec, continue to lay off thousands of STEM workers.
He also explains that one of the reasons for perpetuating the myth is to suppress wages in STEM fields:
Companies would rather not pay STEM professionals high salaries with lavish benefits, offer them training on the job, or guarantee them decades of stable employment. So having an oversupply of workers, whether domestically educated or imported, is to their benefit. It gives employers a larger pool from which they can pick the “best and the brightest,” and it helps keep wages in check. No less an authority than Alan Greenspan, former chairman of the Federal Reserve, said as much when in 2007 he advocated boosting the number of skilled immigrants entering the United States so as to “suppress” the wages of their U.S. counterparts, which he considered too high. 
Although Charette's accusation is poo-pooed, there seems to be anecdotal evidence to support it, including last year's layoff of 18,000 workers at the same time Bill Gates had published an op-ed in the New York Times calling for more H1B high-tech workers. The most recent example is Southern California Edison, as shown in this report from The Washington Examiner:
The Senate Judiciary Committee recently held a hearing into abuses of the H-1B skilled guest worker visa program. Lawmakers heard experts describe how the use of foreign workers has come to dominate the IT industry, with many tech giants using the program to fire well-paid current workers and replace them with workers from abroad at significantly lower pay. 
"The current system to bring in high-skill guest workers ... has become primarily a process for supplying lower-cost labor to the IT industry," two experts who testified at the hearing, Howard University's Ron Hira and Rutgers' Hal Salzman, wrote recently. "Although a small number of workers and students are brought in as the 'best and brightest,' most high-skill guest workers are here to fill ordinary tech jobs at lower wages." 
Exhibit A in the abuse of H-1Bs was the case of Southern California Edison, which recently got rid of between 400 and 500 IT employees and replaced them with a smaller force of lower-paid workers brought in from overseas through the H-1B program. The original employees were making an average of about $110,000 a year, the committee heard; the replacements were brought to Southern California Edison by outsourcing firms that pay an average of between $65,000 and $75,000.

"Simply put, the H-1B program has become a cheap labor program," Hira, author of the book Outsourcing America, testified. "To add insult to injury, Southern California Edison forced its American workers to train their H-1B replacements as a condition of receiving their severance packages."
 
It was a powerful presentation, especially in light of the fact that many Republicans and Democrats in Congress do not want to address abuses of the H-1B problem but rather want to greatly increase the number of H-1B visa workers allowed into the United States. 
But one voice was missing from the hearing, and that was the voice of laid-off workers. That was no accident. In addition to losing their jobs and being forced to train their foreign replacements, many fired workers are required to sign non-disparagement agreements as a condition of their severance. They are workers with families and bills to pay, and they are told that if they do not agree to remain silent, they will be terminated with cause, meaning they will receive no severance pay or other benefits and will face an even tougher search for a new job and a continued career. So they remain silent.

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