5 ms·

America: Why are you so afraid of skilled immigrants?

4 points by nreece 14y ago

codgercoder 14y ago
1. Normally, when a market has a shortage, the prices go up until equilibrium is re-established. In this case, however, the market just seeks satisfaction elsewhere. 2. Income pressure leads to young people who are deciding on a career path choosing something that is less influenced by overseas wages, reducing our future engineer supply. 3. There is very likely a big surplus of older engineers who are automatically overlooked in favor of cheaper, more controllable immigrant workers.
- malandrew 14y ago
  Also keep in mind that older engineers tend to have family and kids. NYC and SF are not exactly regions that people with kids are quick to relocate to. This somewhat explains the shortage in these regions while there isn't a problem in other more suburban regions. If you have a spouse and kids, you need a much greater increase in income to move to an urban area. One big mitigating factor is the school system in these areas. Most schools are either excellent or terrible and most parents don't want to move unless they can be sure that they can put their kids in the best schools (often you only get this choice by paying for private school).
DamnYuppie 14y ago
My experience has shown their isn't a shortage of talented native engineers. There is however a shortage of companies willing to pay them a real wage. Hence they get H1-B's pay them substantially less money and essentially hold them hostage for a few years. Most of the time this is just a way for companies to depress wages. Of course my experience is only in IT other engineering disciplines maybe different.
autodidakto 14y ago
Rule #1 (more or less) of Economics: Free Trade (including open borders and free movement of people) is key to long-term growth. It's not a zero-sum game. Everyone wins. Rule #1 (more or less) of Politics: Blame the foreigner. They're trying to steal from us.
geebee 14y ago
While Mr Wadwha certainly has every right to express his opinion, I do feel that he frequently casts his opponents in the most negative light possible (in previous articles, he has often used the term "xenophobe"). In this article, he is somewhat kinder: "Detractors insist that there is no engineer shortage and that America should close its doors to foreigners because they take jobs away from citizens." The US currently takes 1.2 million immigrants legally into the country every year. Many people who object to the H1B visa have absolutely no problem with this - they are just opposed to a specialized visa designed to bring in more engineers when wage growth does not suggest a shortage. This is a long, long way from wanting to "close its doors to foreigners." Next, Mr Wadhwa claims that "if Bernstein spent any time talking to Silicon Valley executives or reading tech blogs like TechCrunch, he would learn that wages are indeed going up and that there is, in fact, a war for talent. These are already some of the highest paying jobs in the country—with salaries commonly in the six figures." I find this to be a particularly weak argument. Is Mr Wadhwa saying that we should just take silicon valley executives' word for it, and maybe read some tech blogs? No need to bother with actually looking at or measuring wage growth? I'm also surprised that Mr Wadhwa thinks that "six figures" is particularly impressive in San Francisco or New York, especially considering the high wages available to the "best and brightest" in other fields.
rogerbinns 14y ago
It is a location issue. Demand is high but in few places, and supply is fine, but exhausted in those high demand places and underutilized elsewhere. Americans seem obsessed with rising house prices as though they are good thing. But every time house prices rise it makes people far more "sticky" and harder to move around. That doesn't benefit anyone (except a few lottery winners). As a thought experiment would be it be better if house prices were around a dollar or a million dollars? Even if salaries dropped a bit. The solutions are apparent: * Make location less of an issue. Have national high speed and pervasive network bandwidth. People being (virtually) in the same room helps a lot whether they are employees or family. * That also makes training and education easier since its quality can be separated from the student's location * Encourage demand in other places - I'm not in favour of subsidies but getting rid of impediments is a good idea * Celebrate when housing prices go down not up as that enables mobility and rebalancing supply/demand * Single payer national health service not tied to employers. When people move their family needs to move. Remove health from the considerations. Immigration is good. You get to select the best and the brightest. This benefits the country and the immigrants. If the US does not do this, then other countries will.
dventimi 14y ago
U.S. trade policies seem designed to put "low-skilled" workers in direct competition with low-wage workers around the world, while protecting "skilled" workers from international competition. For instance, health care costs might be lower if foreign doctors could more easily practice medicine in the United States, and if Americans could more easily seek lower-cost treatment outside the U.S. I don't think I'm going out on a limb to say that skilled workers, who generally are wealthier and better-educated, have greater access to the levers of power and to protectionist tools, than unskilled workers do. Think of the AMA for doctors, the ABA for lawyers, and opinion journals and TV shows for journalists.
- geebee 14y ago
  I agree in large part - and I actually think this contributes to the low-ish level of interest Americans have for graduate study in science and engineering. The AMA and ABA are definitely cartel-like organizations - and by getting a degree in these fields, and American can (to some extent) gain protection from foreign competition. The opposite is true for engineering - not only is there no protection, but the US actually created a specific visa to bring in higher numbers of engineers that we'd normally get from the standard immigration system. In short, the US has pursued public policy designed (unintentionally, perhaps) to discourage its own citizens from pursuing engineering in favor of other degree paths.
  - dventimi 14y ago
    Do you favor more or less protection for engineering workers? If more, would you also favor more protection for lower-skilled and manufacturing workers (many of whom are actually highly-skilled)? Is there any class of worker who doesn't deserve protection?
    - geebee 14y ago
      I don't think the issue is protection so much as whether we should go out of our way to create a specific visa program designed to bring STEM workers to the US. I think this is a very complex issue - the US should make a greater effort to attract highly skilled and educated immigrants. However, I think that focusing too narrowly on one specific segment of the economy can end up stifling wage growth and suppressing the market signals that might have attracted more US citizens to the field.

4 points by nreece 14y ago

1. Normally, when a market has a shortage, the prices go up until equilibrium is re-established. In this case, however, the market just seeks satisfaction elsewhere. 2. Income pressure leads to young people who are deciding on a career path choosing something that is less influenced by overseas wages, reducing our future engineer supply. 3. There is very likely a big surplus of older engineers who are automatically overlooked in favor of cheaper, more controllable immigrant workers.

malandrew 14y ago
Also keep in mind that older engineers tend to have family and kids. NYC and SF are not exactly regions that people with kids are quick to relocate to. This somewhat explains the shortage in these regions while there isn't a problem in other more suburban regions. If you have a spouse and kids, you need a much greater increase in income to move to an urban area. One big mitigating factor is the school system in these areas. Most schools are either excellent or terrible and most parents don't want to move unless they can be sure that they can put their kids in the best schools (often you only get this choice by paying for private school).

DamnYuppie 14y ago

My experience has shown their isn't a shortage of talented native engineers. There is however a shortage of companies willing to pay them a real wage. Hence they get H1-B's pay them substantially less money and essentially hold them hostage for a few years. Most of the time this is just a way for companies to depress wages. Of course my experience is only in IT other engineering disciplines maybe different.

autodidakto 14y ago

Rule #1 (more or less) of Economics: Free Trade (including open borders and free movement of people) is key to long-term growth. It's not a zero-sum game. Everyone wins. Rule #1 (more or less) of Politics: Blame the foreigner. They're trying to steal from us.

geebee 14y ago

While Mr Wadwha certainly has every right to express his opinion, I do feel that he frequently casts his opponents in the most negative light possible (in previous articles, he has often used the term "xenophobe"). In this article, he is somewhat kinder: "Detractors insist that there is no engineer shortage and that America should close its doors to foreigners because they take jobs away from citizens." The US currently takes 1.2 million immigrants legally into the country every year. Many people who object to the H1B visa have absolutely no problem with this - they are just opposed to a specialized visa designed to bring in more engineers when wage growth does not suggest a shortage. This is a long, long way from wanting to "close its doors to foreigners." Next, Mr Wadhwa claims that "if Bernstein spent any time talking to Silicon Valley executives or reading tech blogs like TechCrunch, he would learn that wages are indeed going up and that there is, in fact, a war for talent. These are already some of the highest paying jobs in the country—with salaries commonly in the six figures." I find this to be a particularly weak argument. Is Mr Wadhwa saying that we should just take silicon valley executives' word for it, and maybe read some tech blogs? No need to bother with actually looking at or measuring wage growth? I'm also surprised that Mr Wadhwa thinks that "six figures" is particularly impressive in San Francisco or New York, especially considering the high wages available to the "best and brightest" in other fields.

rogerbinns 14y ago

It is a location issue. Demand is high but in few places, and supply is fine, but exhausted in those high demand places and underutilized elsewhere. Americans seem obsessed with rising house prices as though they are good thing. But every time house prices rise it makes people far more "sticky" and harder to move around. That doesn't benefit anyone (except a few lottery winners). As a thought experiment would be it be better if house prices were around a dollar or a million dollars? Even if salaries dropped a bit. The solutions are apparent: * Make location less of an issue. Have national high speed and pervasive network bandwidth. People being (virtually) in the same room helps a lot whether they are employees or family. * That also makes training and education easier since its quality can be separated from the student's location * Encourage demand in other places - I'm not in favour of subsidies but getting rid of impediments is a good idea * Celebrate when housing prices go down not up as that enables mobility and rebalancing supply/demand * Single payer national health service not tied to employers. When people move their family needs to move. Remove health from the considerations. Immigration is good. You get to select the best and the brightest. This benefits the country and the immigrants. If the US does not do this, then other countries will.

dventimi 14y ago

U.S. trade policies seem designed to put "low-skilled" workers in direct competition with low-wage workers around the world, while protecting "skilled" workers from international competition. For instance, health care costs might be lower if foreign doctors could more easily practice medicine in the United States, and if Americans could more easily seek lower-cost treatment outside the U.S. I don't think I'm going out on a limb to say that skilled workers, who generally are wealthier and better-educated, have greater access to the levers of power and to protectionist tools, than unskilled workers do. Think of the AMA for doctors, the ABA for lawyers, and opinion journals and TV shows for journalists.

geebee 14y ago
I agree in large part - and I actually think this contributes to the low-ish level of interest Americans have for graduate study in science and engineering. The AMA and ABA are definitely cartel-like organizations - and by getting a degree in these fields, and American can (to some extent) gain protection from foreign competition. The opposite is true for engineering - not only is there no protection, but the US actually created a specific visa to bring in higher numbers of engineers that we'd normally get from the standard immigration system. In short, the US has pursued public policy designed (unintentionally, perhaps) to discourage its own citizens from pursuing engineering in favor of other degree paths.
- dventimi 14y ago
  Do you favor more or less protection for engineering workers? If more, would you also favor more protection for lower-skilled and manufacturing workers (many of whom are actually highly-skilled)? Is there any class of worker who doesn't deserve protection?
  - geebee 14y ago
    I don't think the issue is protection so much as whether we should go out of our way to create a specific visa program designed to bring STEM workers to the US. I think this is a very complex issue - the US should make a greater effort to attract highly skilled and educated immigrants. However, I think that focusing too narrowly on one specific segment of the economy can end up stifling wage growth and suppressing the market signals that might have attracted more US citizens to the field.