Navarrette (Unwittingly) Hits the Nail on the Head

One of my readers pointed me to a recent column by Ruben Navarrette.  My reader, whom I’ll refer to as M, was irritated by a particular passage in the column, but to me the entire piece requires comment.

Navarrette’s theme here is that those who would like to tighten immigration policy, known to both sides as restrictionists, have changed their tactics, from race baiting to class warfare.  M, as an immigrant and person of color himself, must have found that “race baiting” characterization of restrictionists quite offensive.  Polls have shown over the years that many immigrants tend to agree that immigration policy needs some tightening, and native African-Americans have been particularly concerned.

The passage cited by M was this one:

[Center for Immigration Studies analyst] Vaughan made a pitch for fairness and told the story of U.S. hotel workers who had been fired after many years on the job and replaced with immigrants who were willing to work for lower wages.

Steam came out of my ears. I countered that jobs in the U.S. are not reserved for Americans but rather are open to anyone who comes here legally and competes for them. I said no one promised the American workers that they were entitled to a life free of competition and suggested those threatened by undocumented workers with limited skills need to go back to school and get more skills.

There is a lot in that passage.

First, the restrictionists have been pointing out for years that the American underclass is victimized by low-skilled immigration.  The case of LA hotel owners breaking up the mainly-black janitors union and hiring cheaper Latino immigrants in their place has been cited by the restrictionists for a good 20 years.  (This may or may not be what Vaughn is referring to.)  A 1992 article in the Atlantic Monthly, “Black and Brown in LA,” was also prominently mentioned by the restrictionist side at the time.  Navarrette’s claim that the restrictionists have suddenly discovered the impact on America’s poor as a reason for reducing the size of the yearly immigration flow is clearly false, and I suspect that Navarrette knows that.

After Hurricane Katrina, a number of locals, mainly African-American, were hired for the cleanup and rebuilding.  But after a few days, they were told, “We don’t need you anymore.  The Mexicans have arrived,” a statement that speaks volumes.  Ironically, the “LA” in black and brown in LA was now Louisiana.  Keep this in mind in reading Navarrette’s statement, “those threatened by undocumented workers with limited skills need to go back to school and get more skills” — he seems to be addressing his comments to African-Americans!

Though arguably Navarrette has a point, the really salient point is that HE is the one doing the race-baiting.

As to his complaint that restrictionists are couching the immigration debate in terms of misdeeds by Big Business, that’s not new either, and I suspect that privately Navarrette does not disagree. It’s true for high-skilled immigration too, of course, even more so.  Former Senator Alan Simpson, praised here by Navarrette, used to complain about the tech industry’s total intransigence in making the H-1B program more fair to American workers.  One remark of his, made in 1996 to the San Jose Mercury News, describes the situation most succinctly:  “`I was working with the business community…to address their concerns, [but] each time we resolved one, they became more creative, more novel.”  In the end, the industry blocked reform of H-1B altogether.

So why, then, have I titled this blog post as indicating that Navarrette actually got to the core of the immigration issue?  The fact is that I strongly agree with his statement, “…jobs in the U.S. are not reserved for Americans but rather are open to anyone who comes here legally and competes for them.”  Some of you have noticed that in writing about the impact of H-1B on Americans, I always define that latter group to consist of U.S. citizens and permanent residents.   An immigrant with a newly-minted green card has just as much right to a job opening as naturalized citizens and natives.

But that is the crux of the matter.  Our immigration policy should be designed so that a given occupation, whether blue or white collar, is not overwhelmed by the external influx.  Immigration keeps us from getting stagnant and complacent, but at a certain point it becomes harmful, both to the Americans and the newcomers alike.  H-1B, as I’ve said, is more than anything a tool to avoid hiring over-35 workers, and there are many older immigrant engineers in Silicon Valley who have trouble finding engineering work, just like the natives.

I used to be a fan of Navarrette’s, since before he started writing newspaper columns.  I bought and enjoyed his memoir of his journey from a poor Central Valley family to the rarified atmosphere of Harvard, published just after he graduated.  But then he turned into a hateful ideologue, a shameful waste of talent.

 

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Facebook, H-1B and Age

I’ve long emphasized that one of the major reasons the H-1B visa is so attractive to employers is that it enables them to avoid hiring older U.S. citizens and permanent residents. Other key reasons I’ve often cited are a desire for immobile labor (especially if the employer is also sponsoring the worker for a green card), and the convenience of simply recruiting at U.S. universities, where there are lots of foreign students.  In this post, I’ll focus on the age issue, though note that it ties in to the convenience issue as well, since most university students are young.  And I’ll use Facebook as my main example, both because Mark Zuckerberg’s FWD.us has been leading the fight in Congress for expansion of H-1B and because Senator Sessions called it out in his recent speech.

Though I generally place the age discrimination dividing line at 35, I’ve sometimes mentioned that it often occurs even earlier.  Just to make matters concrete before I get to the figures, let’s look at the example of my former student, whom I’ll call Tom.  He has skills of great interest to Facebook, and is one of the sharpest students I’ve had.  I certainly know people at Facebook who are not quite as sharp as Tom. Yet he didn’t even get a phone interview from Facebook when he applied.  This shocked his friends, who with similar backgrounds were in strong demand.

Tom’s problem, I believe, was that, in contrast to his younger friends, he was about 30 at the time he sought work at Facebook, as he had worked in the industry for a while before coming back for his Master’s degree. You might think that’s a plus, but it basically priced him out of the market.  I’m sure that Facebook would value his experience, BUT not so much as to pay him a salary appropriate to his years.

Keep that latter point in mind — experience is good in an absolute sense, but not when compared to the additional salary that goes with that experience.  To quantify that, consider this analysis of Facebook salaries.  The data there indicate that a Senior Software Engineer gets paid about $30,000 more than an ordinary Software Engineer, and more than $40,000 above what a new grad gets.  You do need to take these numbers with a grain of salt, first because it’s Glassdoor data and second because it doesn’t break down according to factors such as degree level (Bachelor’s vs. Master’s) and prestige of one’s university.  (Concerning the latter, two young men wearing Stanford sweatshirts are pictured as new grads, and data cited in my EPI paper indicate that a Stanford degree commands a premium of about 30%.) So, we shouldn’t focus on specific numbers, but one thing is quite clear:  That Senior title means a hefty differential in pay, compared to the ordinary Software Engineers.

Now, add to that another point I’ve shown repeatedly:  Even a Senior title typically means only 3-5 years of experience!  Now you can see why Tom was likely viewed as too expensive — at age 30!  Imagine how Facebook views a 35-year-old, let alone those over 40.  I’ve mentioned before a professor I know, who is over 70 but still active, and who after a visit to Facebook told me with his typical humor, “Most of their employees seem to be the age of my grandkids, a few the age of my kids and none close to my age.”

With that in mind, I looked at the PERM data (wage and other information for green card sponsorees) for Facebook, 2013.  Before I discuss this, though, a note on prevailing wage data (the legally required floor for H-1B and green cards):  I didn’t look at the measure I used in my Migration Letters paper, ratio of wage offered to prevailing wage, because of a major change in the latter.  The DOL has apparently replaced its Software Engineer category with a much broader Software Developers category — the latter having a prevailing wage about $20,000 cheaper than the former.  Knowing that the industry and the AILA are quite aggressive in pressuring regulators for favorable policies, I suspect that this category change came about at the behest of the industry.  In any case, though, I did not use that data here.  (Note by the way that these figures are for the hyperexpensive Bay Area, but it’s true that Facebook pays well.)

Instead, I tabulated the Prevailing Wage Level, I, II, III and IV in the DOL scheme.  John Miano has analyzed such data before, but here I wanted to tie it directly to the age issue.  The system is complex, but Level roughly corresponds to years of experience.  Note carefully that even Level II still is for the very young; if Tom had been an H-1B, he likely would have been at Level III.

Here are the results, among Software Developers:

I	II	III	IV
22%	64%	2%	12%

Well, there you have it!  86% of Facebook’s foreign software developers are younger than Tom (age 30)!  This, I submit, is why Tom didn’t even get a phone interview from Facebook — the firm wants the young H-1Bs instead of him.  And, as noted, they are immobile too, unlike Tom, making them much more attractive to Facebook even if he had been younger.

Easy numbers to remember when you read FWD.us’ literature.

 

“A Failed Recruitment”

One of the listservs that I subscribe to circulated a message today titled, “Any recent grads with an interest in transportation planning and GIS [geographic information services]?”  As many of you will recall, one of my central criticisms of tech employers’ claims of labor shortages is that they don’t reveal that they are unwilling to hire those over age 35.  They mainly want the new or recent graduates, who are cheaper in both wages and benefits.

Thus the title of the above e-mail message caught my eye.  But the body of the message is most interesting (bold-face emphasis mine):

XXXX County Transportation Commission…had a recent failed recruitment for a GIS staff member. The job description is attached.

I’ve been asked if I could beat the bushes for any recent graduates
(undergraduate or graduate level.) with a mixture of interest in land
use planning, transportation planning, and GIS skills.

If you’ve got any good candidates, please ask them to contact YYYY…

Did you catch that phrasing, “a failed recruitment”?  Keep this in mind the next time a tech industry lobbyist or ally makes a statement like “Employers can’t find the workers we need.”  Yes, they “beat the bushes,” but only ones that grow on university campuses.

The fact that the job in question was a government agency is irrelevant, as it’s the same in the private sector.  Job requisitions are typically earmarked to given level of experience, the NCGs and RCGs (new and recent graduates) in Intel parlance.

Not to pick on Intel — they are typical — but they do form an exemplar for the problem.  Former Intel CEO/Chairman Craig Barrett famously said, “The half life of an engineer, hardware or software, is only a few years,” and Tim Jackson’s book Inside Intel reported a practice in the firm of “bumping” (their term) out older workers.  An Intel job posted in 2013 at http://www.linkedin.com/jobs?viewJob=&jobId=4750771&srchIndex=3 (taken down after I wrote about it), overtly restricted to new or recent college graduates, just like the GIS job shown above.

A revealing look into Intel’s NCG/RCG policy is in Dawn Kamamoto’s piece in the excellent series she and Dice did last year.  Note in particular the passage (again, emphasis mine),

When it comes to finding engineers with advanced degrees, Intel’s proactive. It posts jobs on a number of websites, advertises through social networks, contacts universities and holds job fairs in the U.S. When it’s seeking to fill a position, it basically doesn’t care whether it’s a U.S. citizen or H-1B worker who fills it.

At college job fairs, however, the candidates with advanced degrees tend to be foreign students. In fact, most of the H-1B workers at Intel were hired through its college recruitment efforts. In some circumstances, the company isn’t able to find a suitable candidate on campus at all. In those cases, it resorts to other means.

The bold-face text makes the point — Intel is mainly seeking NCGs or RCGs, resorting to broader (but not much broader) venues only if there is a “failed recruitment” for NCGs/RCGs.  The later reference to research conferences does the same. Just as in the GIS case, it is clear that Intel’s definition of “beating the bushes” mainly involves the young.

The industry’s excuse?  “Older workers tend not to have the latest skill sets.”  I’ve explained in great detail before why this is a red herring, and in any case, even the industry concedes that many older workers do have the skill sets of interest to them.  If they really were beating the bushes, they’d try harder to find such workers.  In my experience, such workers are already in their databases, just dismissed for not being NCGs/RCGs.

John Judis Plays the Race Card

Longtime New Republic writer John Judis pulls no punches in his September 19 article, “America’s Worst Republican Could Soon Lose His Office,” concerning Kansas Secretary of State Kris Kobach,.   It’s a deft hit piece, all right, filled with innuendo and multiple levels of guilt by association.  It’s not clear what Judis has against incumbent Roberts, but Judis doesn’t hide his contempt for Kobach.

Mind you, Kobach is far from the type I’d vote for, and as a Democrat, I wouldn’t mind seeing him lose.  But language like “America’s worst Republican” bothers me, connoting as it does that all Republicans are Bad People, varying only in degree of evil.

I’ve never met Judis, but I was mentioned unfavorably in a piece he wrote in 2000, where he took the interesting position that the industry lobbying group ITAA had more credence than I. I have no problem with that, of course, but there are interesting connections to his present essay, as you’ll see.  But first things first.

Judis tells us darkly that Kobach’s history of discriminating against nonwhites began early in his political career;

In 2001, he joined the Bush administration, first as a White House fellow and then as an aide to Attorney General John Ashcroft, where he helped devise the national security visa system that required Muslims and Middle Easterners to register and be finger-printed. (It was suspended in 2011 because it had proved both ineffective and discriminatory.)

I didn’t like the system either, but Judis’ citing this as an example of racist attitudes in Kobach not only doesn’t follow, but also leaves Judis with a lot of explaining to do in light of similar views by liberal California Senator Dianne Feinstein.  A June 3, 2002 article in the San Francisco Chronicle, “Feinstein Says Racial Profiling Fears Hinder FBI / Admit That Nationality Is Key, She Says,” makes one wonder why Feinstein is not “America’s worst Democrat,” in Judis’ eyes. In it, Feinstein makes remarks such as that in hunting for possible terrorists, “one isn’t going to look for blond Norwegians.”  Sounds very Kobach-esque to me.

One of Kobach’s worst sins, in Judis’ eyes, is that Kobach does legal work for the Federation for American Immigration Reform (FAIR).  Judis’ argument is very mathematical:  Kobach has ties to FAIR, and FAIR has ties to the Pioneer Fund.  Judis’ SPLC link on the latter describes it as “a racist organization established by Nazi sympathizers in the 1930s to pursue ‘race betterment.'”  I’m sure that Judis and the SPLC know that FAIR’s executive director and much of FAIR’s staff are Jewish (and that Tel Aviv University in Israel has also had some Pioneer funding), rendering the implied Nazi connection ludicrous, but why ruin a good argument, eh?

And, if funding connections are so important to Judis (a legitimate question in general, of course), then why did Judis so readily accept industry lobbying group ITAA’s claims in that 2000 article?  A tad hypocritical, I’d say.

And needless to say, Judis failed to note the GAO’s harshly critical analysis of the 1997 ITAA report. Indeed, one didn’t need the GAO to see that, as it was clear just from reading the ITAA report itself.  An example I’ve often cited is this passage, which clearly shows what the ITAA’s definition of “labor shortage” and “skills shortage” was:

Training employees in IT would seem to be a win-win for both worker and
employer. And often that is the case. However, extensive training creates other issues. ‘You take a $45,000 asset, spend some time and money training him, and suddenly he’s turned into an $80,000 asset,’ says Mary Kay Cosmetics CIO Trey Bradley. That can lead to another problem. New graduates trained in cutting edge technologies become highly marketable individuals and, therefore, are attractive to other employers.

Clearly, Bradley just didn’t want to pay the going rate for IT skills.  The “shortage” was one of cheap labor, and H-1B was Bradley’s way out.  (The skills issue is a red herring to begin with, as I’ve explained before.)

Oddly, Judis based that 2000 piece on a point that I myself have emphasized many times:  One of the big attractions to employers in hiring H-1Bs is their immobility.  Judis wrote:

Since the terms of their visas encourage H-1Bs to be docile, many big companies like the arrangement. In Workforce magazine, a vice president of an engineering recruiting firm cheerfully called the H-1Bs a ‘new race of nomads.’ An editorial in the same publication praised (without irony) their ‘remarkable loyalty.’

Bravo!  Judis even cites the same quote (“remarkable loyalty”) I had used in my own writings. (Indeed, he may have indirectly gotten the quote from me via a third party; see below.)  Again, this is a key point to this day (subsequent legislation did help things a bit for the H-1B visa itself, but the “loyalty” problem continues to be acute for those H-1Bs whose employers are also sponsoring them for green cards).

Judis then praised IEEE-USA’s hiring of Paul Donnelly, who led the organization in replacing their old policy critical of H-1B by one with the slogan, “green cards, not work visas.”  This referred to a proposal to give “instant green cards” to foreign workers, instead of H-1B visas. This would solve the immobility problem, since green card holders have full U.S. work rights.

My problem with that proposal, and those like it that came later, including in the current Senate bill, is that they would still would swell the labor market, causing reduced wages and job opportunities, and in particular would exacerbate the already rampant age discrimination in the industry.  And again, I must credit Judis for recognizing that:

Some who oppose a higher cap argue that there really isn’t a labor shortage at all and that companies are simply using H-1Bs to replace aging (that is, middle-aged) and more expensive American-born programmers. Norman Matloff, a professor of computer science at the University of California, Davis, has authored a long paper, “Debunking the Myth of a Desperate Software Labor Shortage,” in which he charges that industry is motivated not by a shortage of workers but by a desire for “cheap labor and `indentured servitude.'”

The alert reader will note that Judis himself already admitted the (de facto) indentured servitude!  He even stated that employers indeed desire it.  The immobility also obviously results in wage suppression.  So why did he then say, “Matloff’s arguments are not convincing”?  Didn’t he notice his self-contradiction?

One more point about the 2000 article before I return to the present one:  Judis wrote, “Matloff has attacked Donnelly for convincing the IEEE to back a ‘proposal under which industry could bring in foreign engineers and programmers on an expedited basis.'”  This is silly.  I know and like Paul Donnelly (more on this shortly); my main complaint was and is with IEEE-USA, for caving to the pressure put on them from the industry/academia-dominated parent organization IEEE to back off on H-1B and related issues.  IEEE-USA had had an excellent Web page, the Misfortune 500, profiling 500 well-qualified engineers who could not get engineering work at the height of the dot-com boom; the parent organization made IEEE-USA take the site down. And IEEE-USA’s claims to fight against age discrimination have proved hollow, to say the least; in one case, its president even offered a training program to “young” engineers.

The amusing irony is that after that 1997 article appeared, Paul wrote to me, saying that he had been Judis’ source, but apologizing for the way the final piece was worded.

In his current article, Judis portrays the immigration issue as boiling down in some quarters to an attempt to keep out the nonwhites.  In a nation of over 300 million, there of course are some people who see it that way, but Judis is actually a step behind.  A similarly disturbing recent trend in opinion, with much more currency, is that of “good” immigrants, a euphemism for Asians, versus “bad” ones, largely meaning Latinos.  One sees this attitude a lot these days, including in “polite society,” and it has been noticed.  Regrettably, the same attitude has sometimes surfaced among Asian-American leaders, as I wrote in an invited op-ed back in 1997 (though much less common today).  Actually, it wouldn’t surprise me if many in Judis’ social set hold such views.  If so, he’s missing the boat with his attacks on Kobach, which in any case are just irresponsible journalism.

Let’s give Judis the benefit of doubt in 2000, chalking it up to ignorance, but that’s not possible for his latest article.  Shame of the New Republic for running such a piece.

Joe Green “Pushed Out” at FWD.us

Some of you may recall my recent posting here titled “Joe Green of Fwd.us Has a Relapse of His Foot-in-Mouth Disease.”  It seems that this view of Green was shared by someone else — FWD.us itself. This seems to be the import of this blog post at re/code, which reports that Green has resigned from FWD.us, with it being fairly clear that he had been forced out.

The latter organization was formed last year by Facebook’s Mark Zuckerberg to promote immigration reform of all kinds, ranging from expanding tech employers’ ability to hire foreign workers to granting some form of legal status to unauthorized immigrants.  Soon after the organization was established, Green made a famous gaffe, speaking too frankly about what the group could accomplish in DC with their huge money and power.

In my posting, I called Green out for in essence blurting out that tech employers were laying off U.S. citizen/permanent resident engineers and replacing them by H-1B visa workers.  Though such an action is legal, admitting it would be highly damaging politically.

Of course, Green is hardly the only one with a speak-before-think problem.  Back in 1999, for instance, Rep. Zoe Lofgren, one of the most strident supports of H-1B in Congress, introduced a bill to create a separate work visa for foreign students studying at U.S. universities.  A key provision was a $60,000 salary floor, aimed at preventing employers from hiring foreign workers as cheap labor.  In extolling the bill, Lofgren’s press secretary noted that “$60,000 is just peanuts in the [Silicon] Valley” — hardly the message Lofgren had hoped to convey.

Then there was a Microsoft executive’s blurting out that there just aren’t many jobs for older workers at the firm.  Note that Zuck himself once made a remark like that.  Many of the quotes I have in my collection on the Web consist of supporters of H-1B accidentally letting the cat out of the bag; it’s actually remarkable how often such slips occur, and I recommend the site to anyone who wants a quick education on the topic.

Too bad about ol’ Joe.  We’ll see if his replacement is any savvier.

 

The Fate of STEM PhDs (and More)

My post this evening will mainly involve a new report from the National Science Foundation (NSF) on how well STEM PhDs are faring in the job market, both short- and long-term.  But first I’ll bring in a couple of news items, and then connect them to the NSF, with the common theme of spinning almost any kind of news in a manner aimed at implanting in the American consciousness a positive view of expanded immigration policies.

So, first and foremost, congratulations to Kira Kazantsev, Miss America 2015.  She was my daughter’s classmate in high school and even junior high school, and though I’ve only seen her a few times, it has always been clear that she is headed for big things, and deservedly so.

But I was a little irritated to see the manner in which Ms. Kazantsev’s victory was announced by FWD.us:  “Did you know? The new Miss America 2015 is a first generation American and daughter of Russian immigrants.”  What possible relevance can that have?  It’s just PR indoctrination.  I’ve been critical of FWD.us in this blog before for their manipulative ways, as many of you know.  By the way, FWD.us is hiring interns for such work, which is troubling.

Maybe I need my own PR firm, which would make a proud announcement, “Did you know that H-1B critic Norm Matloff is the son of a Lithuanian immigrant?”

My second item before turning to the NSF report is this job-seekers advice column by Laszlo Bock, Senior VP of People Operations (read “HR”) at Google.  (I learned of this from an alert reader, thanks.)   The advice itself is good, but rather at odds with the Google/Bock stance on the labor market.  Bock writes

The toughest part is that for 15 years, I’ve continued to see the same mistakes [in re’sume’s] made again and again by candidates, any one of which can eliminate them from consideration for a job. What’s most depressing is that I can tell from the resumes that many of these are good, even great, people. But in a fiercely competitive labor market, hiring managers don’t need to compromise on quality. All it takes is one small mistake and a manager will reject an otherwise interesting candidate.

Huh?  Does Bock work for the same Google that insists there is a tech labor shortage, so severe that it must hire lots of H-1B visa workers?  Indeed, Bock testified to Congress in support of expanding the H-1B program.  In fact, in his testimony he talked about Google being in competition with other firms, here and abroad, for talented workers — a huge contrast to his statement above that even great workers are competing with each other for jobs, rather than employers competing to hire them.

Bock’s testimony, by the way, is laced with the term foreign-born in referring to the H-1Bs, rather than foreign.  I explained in an earlier post, titled “When Did Foreign Students Become ‘International’?”, that even this is calculated PR; nothing is left to chance.

A couple of days ago, a prominent journalist for whom I have enormous respect said to me, “The H-1B program has strong mainstream support.”  The above incidents show how such support is created by deft PR work and lots of money.

Which brings me, at last, to the new NSF report.  Keep in mind that the NSF has always been pro-H-1B, and it shows here:  The press release headline reads, “Unemployment for Doctoral Scientists and Engineers Below National Average in 2013.”  Wonderful!  But definitely misleading, for a number of reasons.  For example, those who bother to read the actual report will find that the NSF is counting someone as “employed” even if they are working just part-time.

Moreover, the comparison to the national average is inapropriate, since highly-educated people tend to be resourceful types, who will find some kind of job.  But WHAT kind?  The report actually answers that question, and there the picture is not so rosy.  Let’s look at computer science (CS), both because it’s my field and because it is the field with the largest number of H-1Bs.

Begin with Table 2, which shows that nearly 7% of CS PhDs are either working part-time or are unemployed (but seeking employment).  That’s a rather high rate, considering that the industry PR people say CS is such a red-hot field, and in light of the fact that the PR people often point to the high proportion of CS doctorates granted to foreign students by U.S. universities as a reason for hiring H-1Bs.

Things then get worse in the second half of the same table, where there is a breakdown by age.  I’ve emphasized many times that one of the major reasons employers like the H-1B program so much is that enables them to hire young H-1Bs instead of older (age 35+) Americans, and sadly, the table shows employment for PhDs declines markedly with age.

Table 3 compares, among other things, Americans to workers with temporary work visas (H-1B, L-1, F-1/OPT, J-1 etc.).  Look at the dramatic difference!  The percentage who are either working part-time or are unemployed is over 12% for U.S. citizens and permanent residents, but under 4% for the work visa people.  (Most of the unemployed in the latter group are presumably F-1s.)  A large part of this discrepancy is likely due to the age effect, but it is compelling in any case.

Finally, go to another NSF report, in data titled “Table 32-2, Involuntarily Out-of-Field Rate among Doctoral Scientists and Engineers, by Occupation: 2013,”  There we see the remarkable statistic that 11.3% of CS PhDs are involuntarily working outside the field.  Again, consider this in the context I described above — CS is supposed to be a hot seller’s market for employment, especially for PhDs.

The reality is that getting a doctorate in CS is overkill for most nonacademic jobs.  An HP manager told me, “The ‘sweet spot’ is the master’s degree,” and an Intel recruiter remarked, “Intel is not very interested in PhDs.”  Indeed, an HR person at Google told me that CS PhDs hired at Google typically get Software Engineer titles, just like bachelor’s-level workers.  And as I report in my Migration Letters paper, a study commissioned by the Computing Research Association (a consortium of university CS Departments across North America) found that the job market for CS PhDs is tough and will continue to be so.

I’ve often mentioned that a 1989 internal NSF report forecast (and spoke approvingly) that an influx of foreign doctoral students would keep PhD wages down, making doctoral study unattractive to Americans.  That is exactly what has occurred, as noted in the congressionally-commissioned NRC report in 2001, and put bluntly by Cisco Systems Vice President for Research Douglas Comer:  “…a Ph.D. in computer science is probably a financial loser in both the short and long terms, says Douglas Comer”  (Science Careers, April 11, 2008).

If having a PhD doesn’t add much value in CS jobs, then why does the industry hire them?   As noted, they actually don’t hire so many as they want the public to believe.  But the answer also lies in another point I often make about the attractiveness of the H-1B visa to employers — the visa (coupled with sponsorship for a green card, typical in firms like Cisco, Google etc.) renders the worker IMMOBILE, a status of tremendous value, as the employer doesn’t want an engineer leaving for another firm in the midst of an urgent project.  This is often pitched to employers by immigration attorneys as the advantage of hiring foreign students; the ad at the site http://hiref-1students.com/ should be required reading for anyone who wishes to understand the real dynamics of the H-1B visa and employer-sponsored green cards.

Once again, Senator Grassley’s comment about H-1B applies:  “No one should be fooled.”

Gaming the College Admissions System, Big Data Style

The current issue of Bloomberg Businessweek has a provocative article titled, “How to Get Into an Ivy League College—Guaranteed.”  No, this is not some commercial on late-night cable TV, paired with an ad for the slice it/dice it knife.  Instead, it’s about entrepreneur Steven Ma, who runs a booming business on how to scientifically game the system for admission to the nation’s top universities.

A few posts ago, when I wrote about Joe Green, president of the ruthless lobbying group FWD.us, I confessed that I had already had a pre-existing bias against Green back when he was in high school. He and some classmates had been the subject of a CNN documentary on the pressure on kids applying to elite colleges. To me, the students came across as cynically desiring the prestige these schools bring, rather than a wish to experience the intellectual stimulation imparted by world-class leading professors.

I am certainly not implying that most students in prestigious universities are like the ones in the CNN show, and I think the admissions officers usually manage to select students who genuinely add something to the academic, social and cultural atmosphere of their institutions.  But clearly these gatekeepers are having to scramble, what with the likes of Mr. Ma on their heels.

Ma simply applies statistical principles (call it “machine learning” if you insist) to data on applicants and their success or failure in getting into the school of their desires.  The more data he has, the more powerful his predictions are, so he’s constantly improving an already-strong track record.

Skeptical?  Surely the admissions officers don’t make decisions in such a formulaic way, you say?  Let me tell you a little story.

Way back when I was in grad school, I was employed as a Teaching Assistant, and part of my duties was to help grade exams.  One day I was grading papers, and an undergraduate happened to be in the office I shared with a fellow grad student.  The undergrad watched me grade a particular problem, say Problem 3, for a while, and after a few minutes he got to the point at which he could predict with remarkable accuracy what score I would give on Problem 3 to each student.  I was quite taken aback to learn that I had been grading on the basis of some formula that even I myself had not been aware of. Thus, in reading the BW article now, it doesn’t surprise me to learn that admissions officers at these selective schools are also unconsciously using formulas, all while thinking that they are evaluating each applicant individually.

And maybe some of it IS conscious.  I remember a friend of mine in the South San Francisco Bay Area telling me about 10 years ago that word had been circulating among his social set that Stanford was placing a major premium on applicants who had done well in a debate team.  Supposedly someone in the admissions office had leaked the word.  I’ll never know whether that rumor was accurate or not, but based on the successes my friend cited of kids acting on that tip, it may well have been legit.

One can hardly blame Mr. Ma, who is simply applying his quantitative skills to  a very lucrative market in the Asian-immigrant community.  There are many such companies, such as IvyMax, one that I pass by all the time in Fremont. (The Chinese name 飛達 means “fly to achieve”.)  Ma also is engaged in admirable philanthropic work.  However, I do blame the Tiger Mom type among his clients, as I have written here before.  Which brings me to one more story:

One Saturday in March a few years ago, when my daughter was a senior in high school, she participated in the local Science Olympiad.  One event consisted of building a catapult.  As I was watching, a pleasant fellow parent from another school  struck up a conversation with me.  “Which one is your child?”, he asked.  I pointed to my daughter, and mentioned that she and her teammates were high school seniors.  The other parent was dumbfounded that they were seniors, asking me “Then why are they here?”  Joe Green would know immediately what that parent meant:  It was March, way past the deadline for submitting admissions applications, so participating in that competition was “useless” from that parent’s point of view. To him, participating in the contest was simply a cynical act to build up a re’sume’ that college admissions committees would find attractive.  But I answered simply, though probably with an edge in my voice, “They’re here because they love science,”  The other parent recovered from his faux pas, and said, “Yes, that’s a good reason.”

This gaming of the system encourages cynicism among our young people, leading to even deeper cynicism when they become adults, Joe Green being a case in point. And I’m sure this article about Mr. Ma is causing much hand wringing among admissions officers; I don’t envy them.

Radio Shack Sales Clerk Wanted; Physics PhD Helpful

Yesterday’s Washington Post ran a piece titled, “Policymakers Hail STEM Education as a Strong Foundation, Pushing Innovation.”  As I’ve warned before, reach for your Skeptic’s Hat whenever you see a politician, academic, industry-funded researcher, industry lobbyist, immigration attorney and the like use the word innovation in a STEM context.

This crowd (discreetly referred to as “policymakers, advocates and executives” in the article, to be referred to as “policymakers and allies,” PAs, below)  generally has some hidden agenda lurking—expanded work visa policy, increased funding for academia and so on.

My (skeptic’s) hat is off to the Post for warning the reader of trouble, right there in the lead sentence of the piece (though sadly, not in the headline).  A synopsis of the article is this imaginary conversation:

PAs:  There is a natiuonal STEM labor shortage.

naysayer academics:  No, just look at the numbers, e.g. the flat wages and the percentage of STEM degree holders not working in STEM.

PAs:  Yes, but a knowledge of STEM is helpful in many non-STEM jobs.

One can’t argue with that second statement by the PAs.  I know that my math background helps inform lots of things that I do in life that don’t seem outwardly mathematical.  But the title of my post here, “Radio Shack Sales Clerk Wanted; Physics PhD Helpful,” is meant to convey the fact that the PAs’ image of STEM degree holders happily applying their background in some non-STEM profession, in an economy-boosting manner, can be highly misleading.  On the contrary, the STEM-er in question may actually be quite unhappy in his/her job, and it may be an enormous waste of economic resources.

Actually, all of this is basically political rationalization on the PAs’ part.  In order to explain, I’ll first give you a brief history of the shortage shouting.  Later I’ll return to the issue of tragic waste of STEM resources.

The tech industry, led by the Information Technology Association of America (ITAA) began in 1997 by claiming a labor shortage in the computer science field, which they aimed to leverage an expansion by Congress of the yearly cap on new H-1B visas.  They began the by-now time-honored theme of “the solution is more computer science education in the long term, but more H-1Bs for now.”  The plan worked like a charm. President Clinton ordered the Department of Commerce to play ball with ITAA (I used to have a copy of an actual memo from him to this effect, now lost, sadly).  Sure enough, DOC then produced its own report, very similar to the ITAA’s (though, interestingly, pretty much recanted by DOC a couple of years later).  Congress then nearly doubled the H-1B cap in late 1998.

But the increase was temporary, and the industry wanted even more.  They realized that a bigger umbrella would serve as a more powerful lobbying tool, so they broadened their claim to STEM in general.  (I have the impression that it was the industry lobbyists who actually coined the STEM acronym, though I haven’t been able to confirm it.)   They had no trouble selling this claim to Congress, the press, and the populace, playing the Education Card (citing international test scores in STEM, etc.).

The ploy worked for a number of years, until researchers Lindsay Lowell and Hal Salzman decided to check whether the STEM-shortage emperor was clothed; they found that he was not.  None of the PAs’ claims really panned out.  More recently, the authors (joined by Daniel Kuehn), did a more detailed study, again finding that shortage claim was not supported by the data, and that the H-1B program was adversely impacting wages.  They found, for instance, the IT wages in 2013 were still at their 1998 level.  Recently the Census Bureau added to such research by announcing that most STEM graduates are in non-STEM jobs.

And even the Microsoft-funded Tony Carnevale of Georgetown University found that the unemployment rates for new computer science and information systems grads was shockingly high (about 9% and 14%, respectively), given the tech industry’s shortage claims.  As I’ve explained before, there is more to these rates than meets the eye—not everyone who has a CS degree is fit to be a programmer—but it certainly undercut the lobbyists’ claims.

What were the PAs to do?  Their quest for an expanded H-1B visa program (and a fast-track green card program for foreign STEM grad students at U.S. schools) depended crucially on their claims of a STEM labor shortage.  So they came up with the spin that we see in the Post article:   a STEM education is helpful in non-STEM professions:   In fact, if my memory is correct, it was Carnevale who first offered this explanation. The Post piece quotes university president Freeman Hrabowski, who supports H-1B expansion so strongly that he has discussed how to sell it to the American people, expressing the same view rationalizing the surplus of STEM degrees.  (I’ve written elsewhere why universities are so anxious to attract foreign students.  It’s much more than simply that many pay full freight.)

All this is of supreme importance.  Those of you who listened to yesterday’s broadcast of the Marketplace radio show, in which DOC chief Penny Pritzker said we have a STEM labor shortage, must have wondered how she could be so poorly-informed. Had the interviewer asked her how she reconciled her statement with the studies showing the contrary, I believe that at least part of her answer would have been that many STEM graduates work in non-STEM fields.

This theme was already common in government circles as of 2011, I found at an invitation-only research conference in 2011.  The attendees, about two dozen in number, included policymakers from relevant government agencies.  Many of these policymakers were high-level, key people.

The contrast was interesting:  Roughly speaking, the academic researchers had one point of view, that of being skeptical of a STEM labor shortage, while the government policymakers generally took the opposite position, that either we had a shortage or if not, then having a surplus was beneficial anyway.  I’d been researching the H-1B issue since 1993, and have been a political junkie since age 12, if not earlier.  But even I was not prepared for the stark difference between the two groups.  I was particularly struck by the comment of one of the attendees, who when challenged about his claim of a STEM shortage, frankly replied that he must implement what comes from “the top,” meaning the President.

(I urge you to read my report on the conference.  Some readers of this blog were present; if any of you saw things differently, please let me know, and I will post your comments here, anonymously.  I believe that my report is consistent with the official report.)

The attendees from government had already coined a new (somewhat Orwellian) term, diversion, for the STEM people in non-STEM jobs, and were trying to spin diversion as a good thing.  Quite a bit of the discussion was on this topic.

One government analyst, for instance, pointed to molecular biology PhDs now working on Wall Street, covering the biotech industry for investment firms.  The fact that this was a questionable return to the huge government and other investment in the education of these scientists didn’t bother him.

Another government researcher in attendance, a young woman not far out of her own engineering PhD work, claimed that many people with STEM PhDs really DON’T WANT to work in STEM.  Though I have no doubt she was sincere about her own case—I got the impression that she had pursued a PhD largely due to parental pressure—I don’t think her claim is generally true.  Most people don’t go through the huge time commitments, expense and opportunity costs of a PhD program unless they find their field to be captivating.  I submit that most “diversion” is involuntary (and that most of the “diverted” don’t even have a Wall Street salary to ease their sorrows and frustration).

In short, the “diversion” concept, and the STEM-helps-you-help-Radio-Shack notion, are rationalizations, formed to excuse what the PAs want:  expansion of the H-1B and green card programs, as we saw with Sec. Pritzker.

So there is indeed a human toll to having a STEM surplus, and as mentioned, a terrible waste of precious resources.

What Do You (Falsely) Take for Granted Regarding U.S. Outsourcing?

The loss of manufacturing from the U.S. costs American jobs but at least brings big cost savings to American consumers, right?  And anyway, the U.S. is too advanced an economy to do its own manufacturing, right?  Well, not so fast.  That first assumption is false in most cases, and the second is questionable.

What prompted me to devote this evening’s blog post to this topic is an article, “The Human Toll of Offshoring,” that ran in the New York Times on Labor Day.  It in turn was triggered by a new book, Factory Man: How One Furniture Maker Battled Offshoring, Stayed Local, and Helped Save an American Town, by Beth Macy, a longtime reporter for the Roanoke (VA) Times.  An alert reader of this blog called my attention to the NYT article, though I had heard Macy interviewed on NPR a few weeks ago.

Sadly, even the NYT buys into myth that offshoring brings U.S. consumers big cost savings.  Generally, this is not the case.  The typical profit margin for manufactured goods is so small that the savings in labor costs accrued from offshoring make a big difference proportionally to the manufacturer, but the difference in consumer price is small, as the labor costs are a small portion of the overall cost.  More generally, labor cost savings don’t bring big reductions in retail price.  For instance, my UC Davis colleague Phil Martin, an agricultural economist, once calculated that consumers save about a nickel per head of lettuce grown with unauthorized-immigrant labor.  Negligible savings for the consumer, but the growers win big.  Labor is a small part of retail price even in some service industries; Card and Krueger, writing in support of raising the minimum wage, found that a 19% increase in labor costs led to only a 2% rise in fast-food prices.

Of course, the politicians’ and unions’ favorite boogey man in such discussions is China.  Yet an investment analyst estimated that Chinese labor forms only 2-5% of the retail price of an iPhone.  I’ve seen other similar analyses.  A 2011 analysis by the Boston Consulting Group (BCG) stated that “…labor accounts for a small portion of a product’s manufacturing costs.”  Since the NYT article is about the furniture industry, note that the profit margin in that industry is said to be 2%.  If one combines this fact with the BCG statement, one sees that the savings to consumers is very small.  Again, remember that it is the manufacturer who wins from offshoring, not the consumer.

Significantly, a BCG survey found that Americans are willing to pay considerable premiums for products made in the U.S.  In fact, the amount they are willing to pay extra actually exceeds the small savings they actually get from offshoring.  Apple is moving some of its Mac production back onshore, presumably at least in part from this consideration.  BCG claims that this is a coming trend, as does The Economist.

So, the economics professor cited in the NYT article (requoted from the Macy book, and endorsed by the NYT reporter) seems to be rather off base in his statement:  “In reality, we shouldn’t be making bedroom furniture anymore in the United States. Shouldn’t we instead be trying to educate these workers’ kids to get them into high-skilled jobs and away from what’s basically an archaic industry?”  Moreover, his apparent attitude that all Americans should get an education and pursue one of the professions is of course absurd on its face, and  frankly, is amazingly naive.  Should more Americans go into the science research field, for example?  No, they can’t get jobs as it is, as a National Institutes of Health study found a couple of years ago.

Moreover, the NIH stated that foreign-worker programs were part of the problem.  Importation of foreign labor is just like offshoring, really; whether cheap labor is used abroad or brought to the U.S., the losers are U.S. citizen and permanent resident workers.  UC Berkeley economics professor Clair Brown and her coauthors have found that the H-1B work visa program negatively impacts American engineers, and the congressionally commissioned NRC report found that H-1B was adversely impacting IT wages.  (See references on NIH, Brown and the NRC in my Migration Letters paper.)

Apologists for offshoring, such as the NYT’s Tom Friedman, try to excuse all this not only by the old “the labor costs savings are passed on to the consumer” canard, but also by saying that the workers abroad will be enabled to afford American products, thus creating U.S. jobs.  That is true to some extent, but the benefit is probably not as great as the loss.  Friedman, for instance, has noted that software development work offshored to India is compensated by the fact that the Indian software “factories” use Carrier brand air conditioners.  But the extra Carrier sales arising from this are probably not going to result in Carrier hiring more engineers; the engineering is largely a fixed cost.  So, we are losing engineering jobs in this scenario but MAYBE gaining some manufacturing jobs (assuming those are not in India, which would be counter to Carrier’s best interests)–not a very good trade, is it?

Is the solution to place restrictions on globalization, in the form of imposing tariffs on goods and tightening policy on importing foreign labor?  As I’ve emphasized before, those questions should be for the American people to decide–based on full information, not on misleading NYT articles.