New CS Grads’ Wages Down 9%

I’ve often cited data from NACE, the National Association of Colleges and Employers, a widely-respected organization that tracks the salaries of new graduates.  I believe most universities are members.  It has always shown in the past few years that Computer Science graduate salaries have basically been flat — up 2% one year, down 3% the next.  But the current figures show the biggest one-year change I can ever recall seeing — and it is downward.

The 2014 mean starting salary for new CS bachelor’s degree grads was $67,300, according to NACE.  But the organization’s projection for 2015 is only $61,287.  If that projection holds, it will be a drop of 9%.

Yet the tech industry continues to say, “We’re desperate to hire.”  And Congress continues to believe them; so does President Obama.

As I’ve said, the new grads still have it pretty good.  No, they are NOT all immediately being snapped up by employers, but their situation is still far better than those who are 10 or 15 years out of school.  I’ve written about this many times, but I direct your attention to an article in Venturebeat, sarcastically titled “Disposable Employees May Be the Tech Industry’s Greatest Achievement.”  Lots of interesting layoff data in there.

The industry would counter, of course, that those being laid off don’t have the background to work on the latest technology.  I’ve explained before why that’s a red herring — the short answer is that if only young new grads have that background, how is it that they acquired that knowledge from old guys like me? — but again, Congress believes it (or claims to).


Oops, Mr. President, Those Numbers Don’t Add Up

This past November, President Obama held a ceremony to honor the 2014 recipients of the National Medal of Science and the National Medal of Technology and Innovation.  In his speech, Obama really zeroed in on the fact that some of the honorees are immigrants, spending far more time on that topic than in his brief remarks on science funding and U.S. STEM education, and calling on legislation to avoid “[sending] them home after they graduate.”

That was highly misleading.  Through a combination of visas and policies (discussed by me elsewhere), they do stay.  In my long experience with foreign grad students, both in my own department and elsewhere, I’ve never known a single case of a foreign STEM student who wanted to stay in the U.S. but ultimately was not able to do so.  Surely there must be some exceptions, but they are rare.

But what is far more misleading about the president’s remarks is that his implied numbers don’t compute. Only 3 of the 18 awardees are immigrants, about 17%. Contrast that to the much-vaunted numbers shouted by the tech industry lobbyists, e.g. the fact that over 50% of computer science PhDs awarded by U.S. universities are earned by international students.

In other words, the foreign students are underperforming.

I’ve stated repeatedly that I strongly support facilitating the immigration of “the best and the brightest” from around the world, and that I have personally acted on that conviction.  For example, just recently I urged a Silicon Valley startup to hire a highly creative student I know from China.

But the vast majority of foreign STEM students are just not in that league.  On the contrary, at least in the computer science field, they are on average of lower quality than their American peers.  And since even my stridently pro-immigration UC Davis colleague Giovanni Peri concedes that in various ways the foreign STEM students displace the Americans, we’ve got a frightening tradeoff here:  We are replacing more talented people by less talented ones, a disaster for our economy and national well-being.

Yet Obama, and many in Congress, want to give free rides to the foreign students, with unlimited numbers of work visas and green cards — without any regard to quality at all.  It’s an absurd policy.

So, Why DID Sen. Blumenthal Cosponsor the I-Squared Bill?

A friend in a little H-1B discussion group I participate in asked the other day why Senator Richard Blumenthal (D-CT) had signed on as a cosponsor of the I-Squared bill, which I characterized in my last blog post as the worst H-1B “reform” bill I’d ever seen.  Normally, I’m not interested in who sponsors what — as I’ve often pointed out, I don’t lobby, and I’m usually the last to know about the political ins and outs on legislation — but the degree to which my friend was surprised about Blumenthal and I-Squared intrigued me.  Thus I noted with interest today’s article in the New London (CT) Day, “Blumenthal Defends Bill to Increase guestworkers.”

At least judging from the article, my answer to my friend’s question would be, “Clearly, Blumenthal made some kind of political deal, and is now trying to put a good face on it.”  His phrasing in the article is mostly straight from the industry lobbyists’ standard talking points, and his attempts to rationalize his action by saying his role as a cosponsor will keep him in the game, so he can add some worker protections into the legislation, are just plain feeble-sounding.

For example, he cites the standard industry line that the long-term solution to the (claimed) tech labor shortage is to train more Americans for tech jobs, but the short-term solution is H-1B.  Of course, that presumes that there IS a shortage in the first place, which just can’t be true in view of the flat wages. But that has been the industry’s mantra for as long as I’ve been following this issue (starting in 1993!); they know that this line works, and apparently so does Blumenthal.

Blumenthal also uses another standard industry lobbyist line, “The [H-1B] law isn’t being enforced vigorously enough.”  On the contrary, violations of the law are rare (and in most cases mild), though for a very bad reason: The law is so filled with loopholes that employers don’t have to cheat in order to get cheap labor.

And finally, Blumenthal invokes the industry lobbyists’ favorite showstopper:  “[F]or every one green card recipient who gets a job utilizing high-tech skills, studies have shown that 2.6 additional jobs are created for American workers.”  This research genre is fraught with major methodological problems; even the staunchly pro-H-1B Wall Street Journal said so. The 2.6 figure comes from the industry-sponsored research of Madeline Zavodny, an economist at Agnes Scott College. Recently, analysis by R. Davis, summarized in my blog, has shown severe problems with Zavodny’s numbers.

Interestingly, Blumenthal mentions the immobility issue that I’ve said is so important, but he gets it wrong.  It’s the green card sponsorees who are immobile, not H-1Bs in general, and the 60-day rule he cites wouldn’t do much, other than giving the weaker H-1Bs more time to find another job after being laid off.

One blogger, in reviewing this London Day article, cites an interesting personal reason for his disappointment as Blumenthal’s action regarding the bill:

This is a bit of a hobby horse of mine. Years ago I wrote about the fact that The Hartford decided that my sister and her co-workers were no longer skilled enough and/or were unwilling to perform their jobs. It therefore hired H1-B workers from India to replace them, which they did, once the unskilled Americans whose jobs they were taking trained them.

Sadly, the article buys into the myth, popular among people on both sides of the H-1B debate, that the H-1B program is fine except for the offshoring firms.  (The fact that one of the “fathers” of the original H-1B legislation in 1990, current lobbyist Bruce Morrison, is from CT and holds such a view, may be coming into play here.)  No one seems to understand that to that blogger’s sister, it didn’t matter whether an H-1B replaced her and worked in Hartford, or her job was shipped to India; either way, the sister was out of a job.  It seems that if Blumenthal does manage to slip a bit of worker protection into the bill, it will concern offshoring — of NO HELP to people like the blogger’s sister.

New Definition of Chutzpah — Senators Propose an Infinite H-1B “Cap”

In the math world, i2 = -1, but in the Senate i2 = ∞.

If you don’t get the math pun here, don’t worry.  It’s just my way of leading in to the I-Squared Act, introduced in the Senate today.  The measure would in essence allow an unlimited number of H-1Bs, in that it would remove the cap, currently 20,000 per year, on the special H-1B category for foreign students earning graduate STEM degrees at U.S. universities.  (I’ll call this the “Master’s Category” for reasons to be explained shortly.)  It also would allow a tripling of the ordinary H-1B category, as well as do all kinds of other damage.  But trust me, the numerically most harmful provision would ultimately be that newly-infinite Master’s Category.

Sadly, this is directly related to a topic that I’ve discussed often — the notion that the H-1Bs hired from U.S. schools are the “good” H-1Bs, while those hired directly from India by the bodyshops are the “bad” H-1Bs, a claim I strongly dispute.  This is why the Master’s Category was created in the first place, and now the bill’s authors are capitalizing on all the publicity that supports the Good H-1Bs, Bad H-1Bs concept.  I’ve argued in my blog (see above link) that this publicity is actually counterproductive; by giving the impression that the problem is largely limited to the bodyshop sector, this publicity hides the fact that the problem pervades the entire industry.

So, you ask, what’s wrong with giving visas to those with graduate degrees?  Aren’t they more qualified?  If not enough Americans pursue graduate study, isn’t it justified to fill this “gap” with foreign workers?  The answer is very simple:  NO.  Explaining this point will be my focus here.

First, let’s keep in mind that some of the most successful people in the computer field didn’t even have a Bachelor’s degree:  Bill Gates, Steve Jobs, Larry Ellison (Oracle), Mark Zuckerberg, Mark Andreeson (developer of the first widely-used graphical Web browser) etc. Others had degrees but not in computer science such as Nathan Myhrvold, the former Microsoft Director of Research, and Tim Berners, inventor of the World Wide Web.

Next, though the industry likes to claim they hire H-1Bs because not enough Americans earn a PhD, that is a falsehood.  While it’s true that more than 50% of computer science degrees in the U.S. go to foreign students (itself a consequence of H-1B, as a National Science Foundation report correctly predicted way back in 1989), that is NOT the main reason they are hiring H-1Bs; the vast majority of H-1Bs hired by the tech industry, including by the big-name firms, do NOT have doctorates.  Data is hard to come by on this, but as of 2000, only 1.6% of the H-1Bs in computer-related fields had a PhD (in any field).  More recent comments to me by an Intel official, for example, show the percentage is still low today.

One can argue whether having a doctorate in computer science is a big thing or not (I would argue mainly not), but the point is that it is irrelevant.  At least in the case of CS, in the special 20,000-visa H-1B category, we are talking about Master’s students.  Hence my term, the Master’s Category.

You may ask, “Aren’t workers with Master’s degree holders better, more qualified?”  My firm answer is NO.

For example, consider the UC and CSU systems in California.  The CSU campuses have some excellent faculty — I know some personally, and highly respect them — but the fact is that the average quality of the students is lower at CSU.  Moreover, to be frank, the Master’s courses at CSU schools tend to be of the same quality as Bachelor’s level courses at the UCs.  In other words, for a foreign Master’s holder from CSU, the claimed “higher quality” due to having the Master’s is an illusion.

Nationwide, I believe that most of the students in the Master’s Category are at lower-tier schools such as the CSUs, including private institutions.  While I don’t have complete data on this, I believe the following help may make the point clear:

In addition, my EPI paper showed that the average quality of the foreign grad students in CS is lower in terms of patenting rates, participation in R&D, and as mentioned, selectivity of graduate institution.

In other words, folks, the claim that the Master’s Category H-1Bs are of higher quality is simply false.

And that flatly contradicts the claims made by the authors of the bill, such as:

  • “The bill focuses on areas vital to ensuring the United States can maintain its competitiveness in the global economy…”
  • “America must be a country that makes things again, that invents things, that exports to the world, and to do that we need the world’s talent.”
  • “Our immigration system needs to be modernized to be more welcoming of highly skilled immigrants and the enormous contributions they can make to our economy and society.”
  • “…it’s important that we take steps to ensure that the world’s best and brightest do their work here in the United States.”

Really?  The foreign students at CSU are “the world’s best and brightest”?  They can “make enormous contributions” even if their Master’s degrees are actually more like Bachelor’s degrees?  Listen, I’d the first one to say that any institution has a few extraordinarily talented students, but the percentage is low; the vast majority of the CSU students are mediocre.

The reader should not infer that I’m in favor of giving all the foreign STEM grad students at UCs visas either.  They’re nice people for whom I wish the best, but in general they are no better than the Americans. I really do believe H-1Bs should primarily be for the best and the brightest.

And by the way, the bill fails to deliver on another claim made in the above press release:  “[the bill would help employers hire immigrants] while making reforms to protect [US.] workers.”  I’ve read both the summary and full text of the bill, and there is NOTHING there about U.S. worker protections.

Worst bill I’ve seen in the H-1B field.



Changing Silicon Valley Demographics

Those of you following the reader comments to some of my posts may have noticed some that mention that whenever they go in for a job interview, the staff is all or mostly Indians, giving those readers the impression that only Indians need apply.  Some of you might worry that such readers have something against the Indians, but I find that this is not generally the case; they just want a job, that’s all, and are understandably upset if they believe their own ethnicity is a barrier.  My post here will discuss the changing demographics in Silicon Valley, and various implications.

I’ve written before that, once “ethnic enclaves” form within a company–or in some cases, the entire company becomes such–it can be very frustrating for job applicants who are outside that ethnicity. The perception, often correct, is that outsiders have little or no chance to get the job.

The “outsiders” need not be Caucasian. Some years ago the San Jose Mercury News ran an article on the dominance of the Indian workers, and quoted some Chinese engineers as having heard a rumor that the U.S. government is actually giving preference to the Indians for visas. Not true, of course, but it does show how the outsiders feel.

In China, academics and the press have noticed too, and have tried to analyze why the Indians seem to be outsucceeding the Chinese.

It certainly has been interesting to watch this demographic change. In the 1980s, the dominant ethnicity among immigrant engineers in the Silicon Valley was Chinese, mostly people from Taiwan. Cities such as Fremont became heavily ethnic Chinese. But after the H-1B visa was implemented in 1991 (before that, there was a visa named H-1), things changed rapidly, with the Indians supplanting the Chinese.

There are still many Chinese in Fremont, for example, but the city government announced about a year ago that the Indian population had surged ahead of the Chinese, at least among schoolkids. The immigrant population of the city is still decidedly mixed — one of my favorite Chinese restaurants, at Paseo Padre and Fremont Blvd., keeps Halal in its cooking, and has many Middle Eastern customers in addition to Chinese — but it’s clear that the Indians are on the upswing.

Here is some data on employer-sponsored green card applications (nationwide), showing the percentage of workers from China and India:

year Chinese % Indian %
2005 10.8% 31.2%
2006 9.6% 35.`%
2007 9.2% 36.7%
2008 8.0% 41.5%
2009 7.7% 43.6%

I ought to update this, and do some Bay Area-specific analyses, but in any case, the trend is dramatic.  Note, by the way, that these are green card applications (from the PERM data), so they basically exclude the Indian bodyshops.  These workers are being hired by mainstream employers.

So, in the minds of many tech workers, H-1B has become synonymous with Indian.  Hopefully this puts some of the reader comments in perspective.

Correction:  In my earlier post today, I stated that my MS program link was to SJSU; it was actually to SFSU.

San Jose State’s Master’s in Outsourcing

In my writings about H-1B, I’ve spent a lot of time trying to explain that the use of H-1Bs to facilitate offshoring of tech work is really no worse than using H-1Bs for projects done entirely in the U.S. Whether the job is filled by an H-1B here or done by a worker abroad, it’s still a job lost to U.S. citizens and permanent residents.  But today I’ll make a rare exception and discuss a topic directly related to the offshoring issue.

This was prompted by a reader who wrote to me this morning that “Those are not my words but the words of more than one silicon valley CEO. SJSU is flooded with MS students from India graduating with MS degrees in software engineering and once they graduate are almost immediately hired by a Silicon Valley company.”  This reader, who lives in Silicon Valley, tends to be well plugged in, but my focus is not so much on his comments as what they led me to find, when I followed up by looking at the Web page for that SFSU program.

It turned out to be quite interesting:

Master of Science in Computer Science:
Concentration in Software Engineering
For general information for all computer science students, see Graduate Programs in Computer Science above.

This concentration emphasizes both the principles and best practices of software engineering with the blend of individual and practical team-oriented projects in distributed and global setting. Graduates with this concentration will have skills to:

  • Perform R&D in computing field or continue to Ph. D. programs.
  • Be successful software engineers in global development environment.
  • Manage or be tech leads in small and large software development teams including those operating in global environment.

In other words, the main goal of the program is to develop experts in offshore outsourcing!  Your tax dollars at work if you live in California (and the CS Dept. probably receives some federal funding as well).

What’s especially interesting about this is that Congress (and sadly, even some critics of H-1B) has basically taken the view that those H-1Bs that come to the U.S. as foreign students at American universities are the “good” H-1Bs, as they aren’t involved in offshoring.  Sweet irony, no?

This shows again, as I’ve stated so often, that (a) the distinction between “good” and “bad” uses of the H-1B program (as defined in terms of offshoring) is artificial and unwarranted, and (b) the idea in Congress that the foreign students should get automatic green cards is based on false premises, including that the idea that they won’t be involved in offshoring.

No wonder SJSU President Mohammad Qayoumi has been an advocate of the H-1B program.

Oh, No, 49ers, Not You Too!

Just when you thought you had seen everything, there is now a tech-related age discrimination lawsuit against the San Francisco 49ers football team.  This season the team moved from SF to a new stadium in Santa Clara, right in the heart of Silicon Valley.  Why, the huge Cisco complex, one of the Valley’s icons, is on the same street, just a few blocks away!

According to claims, the team wanted to act like a “tech startup,” and wanted to hire the young techie types.  At least one of the plaintiffs was in a tech job (though not really IT).

The Atlantic Dares to Question the Economists

Interesting, provocative piece by David Frum of The Atlantic, titled “Does Immigration Harm Working Americans? Many economists say no—but they may be too glib.”  That subtitle is quite a contrast to the blog today by Jennifer Rubin, the conservative columnist at the Washington Post, in which she says,

Virtually every credible economist has found that immigration increases growth, tax revenue and wages — with the exception of a modest decrease in wages for those without a high school education. In particular, immigrants are over-represented in high-tech start-ups and new patent filers. So for now, why not reform the immigration system for the brainiacs, the highly credentialed and the entrepreneurs only? No serious person can argue that we don’t have a shortage in some high-tech fields or argue against allowing foreign students with advanced degrees to remain in the country.

(Of course, I have made the very arguments Rubin thinks “no serious person” would make.  I support facilitating the immigration of “the best and the brightest,” but otherwise do not feel we should make a surplus any worse than it already is.)

I’ll discuss the substance of Frum’s piece below, but first I want to emphasize how remarkable it is, “daring” in the phrasing of my blog title here.

I use the word dares in my title reluctantly, as I know some will take the word in the sense of, say, “putting his job, career and social life at risk,” which is not what I mean at all.  Instead, I mean “‘dares’ as in, willing to think out of the box, questioning the conventional wisdom.”

In being interviewed by the press often in the last 20+ years, I have seen very few journalists, editors and so on who are truly biased, out to write polemics.  (Rubin may be an exception.)  However, many have unconscious assumptions, often formed in society at large by PR experts and so on.  This forms a climate that profoundly effects our thinking.

When former NY Governor Mario Cuomo passed away last week, I thought of a statement Cuomo — the quintessential liberal — made in 1994 (quoted in To Be an American, by my former UC Davis colleague Bill Hing):

[Immigrants] are part of our strength.  They will be a nourishment for our future…They are also expensive [in terms of use of government services],

No Democratic politician would even consider making such a statement today, nor would one see such a statement in the liberal press.  Nor would the Democratic Leadership Council invite me to write an article on immigrant abuse of the SSI program, as they did in the 1990s for their magazine The New Democrat.  I’m not saying this pejoratively, being a liberal myself, just pointing out how mind sets have changed.

This change became clear to me in a rather unsettling way a few weeks ago in a conversation with a journalist on a major prominent big-city newspaper.  He said he didn’t think that the age discrimination I write about as the scourge of programmers and engineers applies to the foreign-born.  He seemed to buy into the notion that immigrants are hardier than U.S. natives, and when they reach age 35 or 40, they’ll still find programming and engineering jobs.  An outrageous statement — yes indeed, the immigrants suffer from age discrimination too — from an otherwise very thoughtful, reasonable guy, starkly illustrating today’s liberal (and in the case of Rubin et al, business conservative) climate.

Now, what about Frum’s remarks?  He begins by citing CIS research, that shows that not only have most new jobs in recent years gone to immigrants, but also the natives have actually lost ground, i.e. fewer are employed now in absolute numbers. He then points out that this is in stark contrast to what the “experts” say.  In my view, he falters a bit by citing as experts people who don’t actually do real research on immigration, e.g. Nowrasteh, but merely cite (very selectively cite, at that) research of others.  But then he does cite a prominent researcher, another UC Davis colleague, Giovanni Peri.

Giovanni has become THE go-to guy for pro-immigration views these days.  Notably he played that role for the Obama White House, as I recently reported, and here Frum has gone to him as well.  Frum then presents Giovanni’s complementarity argument, and tries to deconstruct it.

Though Frum gets bonus points with me for noting the fragility of statistical regression models, I think he misses a couple of important points about Giovanni’s analysis.

First, Giovanni’s “engineer and construction worker” parable is reasonable if we have a shortage in either occupation.  But we don’t.  We have a surplus, which is eroding wages and job opportunities in both professions.

Second, in contrast to the rosy picture Giovanni painted for Frum, he himself has conceded that highly-educated Americans are indeed displaced by the immigrants, and that there is at least some concomitant wage loss (Giovanni Peri and Chad Sparber, Highly-Educated Immigrants and Native Occupational Choice, working paper, 2008):

…we assess whether native-born workers with graduate degrees respond to an increased presence of highly-educated foreign-born workers by choosing new occupations with different skill content.

…we add to evidence from past studies by showing that [U.S.] native occupational adjustment in response to immigration occurs among highly-educated workers and occurs for those already employed.

As the foreign-born share of highly-educated employment rises, native-born employees respond by moving to jobs with less quantitative and more interactive content.

The wage consequences of immigration were not estimated in this paper…If the evidence from the labor market for less-educated workers is an indication, the occupational skill response among highly-educated natives is likely to mitigate their potential wage loss from highly-educated immigration.

(This last comment is similar to a Peri quote in Frum’s article, but that quote focuses on low-skilled workers, whereas the above quote is for the high end.)

And of course, this flies in the face of the claims that (a) only the low-skilled natives are harmed, not the high-skilled ones, and (b) upward mobility is the solution.

The article touches on the “immigrants as consumers” argument for a positive effect of immigration.  I don’t necessarily disagree, but I’ve been saying for many years that it isn’t so simple.  Just as weather forecasters need to “look out the window” once in a while instead of relying only on numbers, immigration economists need to take an up-close look at immigrant-enclave labor markets.

Take for instance the Ranch 99 chain of Chinese supermarkets, popular in the Bay Area and southern California.  They don’t employ many non-Chinese, due to linguistic requirements, and their clientele are largely shopping at Ranch 99 rather than the mainstream stores.  Just this one example alone makes it understandable that natives might be losing jobs while immigrants gain them.  And the Ranch 99 stores typically anchor entire immigrant-oriented malls, where even the Starbucks is staffed by immigrants, serving immigrant customers.  My wife and I shop in these malls frequently, and especially enjoy the one in Concord, CA, which is largely Latino but with a Ranch 99 too; we patronize businesses of both ethnicities.  But the point is that there are a lot of factors that have the effect of shifting jobs from natives to immigrants (though of course this is a highly complex matter, with effects in both directions).

All in all, though, my hat is off to David Frum and The Atlantic.