More Shortage Shouting in the WSJ
More Shortage Shouting in the WSJ
Date: Thursday, July 27, 2006 12:44 PM
<<<<< JOB DESTRUCTION NEWSLETTER No. 1528 -- 07/27/2006 >>>>>
The Wall Street Journal is at it again. The article below contains the
typical shortage shouting, and then the dire warnings that H-1B must be
raised.
This dubious statistic stands out as the most egregious of them all:
The Bureau of Labor Statistics said the U.S. needs 135,000 new
computer professionals a year, but the U.S.'s universities are
producing only 49,000 computer-science graduates annually.
Several questions should be asked when we see stuff like this.
Question #1: If those statistics are correct, isn't that good news?
It would be great for wage earners, but bad for employers, so whether the
news is good or bad depends on who you are. If there truly is a shortage of
IT pros then wages will increase, new job opportunities will abound, and
waves of new students will enter the profession to cash in on the wealth.
In our capitalistic system shortages are eventually balanced out. Using
H-1B to manipulate the labor market is a socialistic approach to
controlling our economy.
If there is a true shortage then we will see salaries increase, but that's
not happening.
Question #2: Could there really be a shortage of CS grads?
The following excerpt is from a human resources magazine article dealing
mostly with how human resources managers should negotiate starting
salaries. If the law of supply and demand has any relevance, then IT
salaries in real terms should be up, not down 16% since 2000.
Workforce Management Magazine, July 2006
Negotiating Starting Salaries for Top Performers
Highly profitable companies have learned how to skim the cream off the top
of the talent pool without locking in larger fixed salary costs.
By Fay Hansen
Survey results for 2006 starting salaries captured headlines earlier this
year when the National Association of Colleges and Employers reported 2006
increases averaging 5.4 percent for new accounting and engineering
graduates. But a closer look reveals that the 2006 average starting salary
of $50,892 for new computer science graduates is 3 percent below the
$52,473 average for 2001 in nominal terms. If the current average starting
salary is adjusted for inflation, it is 16 percent below the 2001 level.
Question #3: Are the statistics accurate?
At the very least the numbers are very misleading. The term "computer
professional" is a broad term that also includes technicians, system
admins, management functions, and many other types of work that have
nothing to do with programming, and they don't require CS degrees.
Logically the statistic is flawed because it assumes that every IT position
requires a person with a CS degree. That's just not true because most IT
jobs are taken by non-CS degreed people, such as those with degrees in
business, accounting, science, math, engineering, and sometimes even
liberal arts majors. Many IT jobs are even taken by non-degreed workers.
The one-to-one relationship in the statistics between CS degrees and IT
workers is totally fallacious.
Only a fraction - 33% of the IT workforce comes from CS grads. The
majority come from business,
engineering, and math majors. See figure 5-3 here:
http://www.cra.org/reports/wits/charts_figs_boxes_tables.pdf
The propaganda campaign to support an increase in H-1B and other types of
worker visas continues unabated. These articles are being planted in the
mainstream media in order to put pressure on Congress to approve the Skil
Bill.
I received this question in reference to my last newsletter on idiotorials.
I get so many similar questions I thought it was worth my time to give my
opinion, for whatever it's worth!
QUESTION: A constant stream of editorials and op-ed pieces from "our" point
of view would help the cause. Can you tell if articles promoting this
point of view are widely printed or are they suppressed?
MY ANSWER: Yes, without question we are losing the infowar on H-1B. The
only point of view we are seeing in the mainstream media is the corporate
view - and of course corporations always want more H-1Bs and more access to
cheap foreign labor.
Unfortunately we don't have organizations that are reaching out to the
press. There are many reasons for this, but let me discuss a few of the
most important ones:
* There are very few organizations that want to reduce or abolish H-1B. The
ones we have are staffed entirely by volunteers and most of them get very
little public support in terms of manpower or funding. Compare this to the
professionally staffed organizations on the other side such as
CompeteAmerica and the ITAA.
The lack of resources and manpower make it very difficult if not impossible
spend the time and efforts required to reach out to the press. All that
CompeteAmerica has to do is to hire a PR firm to launch a new propaganda
campaign.
* Most organizations we have make no effort to reach the press because they
don't understand the need to publicize our point of view. Some theorize
it's because most of the opposition to H-1B comes from geeks who have never
had good communication skills and don't understand how the media works. I
think the problem has more to do with the lack of funding to make a strong
organization. The disjointed efforts of a few unemployed techies just isn't
going to get the job done.
* One of our biggest problems is that other professions that are affected
by H and L visas such as doctors, nurses, teachers, accounts, and truckers
who seem to be blissfully unaware of what is happening to their jobs. We
have a polarized workforce that is going up against employers who are
totally united behind the cause of cheap labor. It's not a fair battle.
+++++++++++++++++++++++++++++++++++++++++++++++++++
http://online.wsj.com/article_email/SB115386385704817028-lMyQjAxMDE2NTIzNjgyNjYzWj.html
July 26, 2006
U.S. Firms Search
For Technical Talent
By CHRISTOPHER SCINTA
July 26, 2006; Page B2D
U.S. companies are desperate to find technical talent, prompting many to
step up retention efforts, while making a dash to move higher-paid research
operations to China and India. It raises new debate about caps on visas for
foreign workers and the need to attract more U.S. students to careers in
math and science.
"I think there are too few people choosing technical careers," said Urs
Hvlzle, senior vice president at Google Inc. The company has added
operations in places such as Seattle and New York to be closer to talent
pools.
The Bureau of Labor Statistics said the U.S. needs 135,000 new computer
professionals a year, but the U.S.'s universities are producing only 49,000
computer-science graduates annually. The agency also predicts the need for
science and engineering graduates will grow 26% to 1.25 million by 2012.
The number of graduates in those fields, however, has remained relatively
flat for two decades.
In 2004, Chinese schools awarded 351,000 bachelor degrees in engineering,
computer science and information technology, while the U.S. awarded only
137,000 similar degrees, according to a Duke University study. India was
close behind with 112,000.
Tory Johnson, head of New York-based job fair and recruiting firm Women for
Hire, said being a professional -- particularly a woman -- with highly
technical skills means "employers are knocking down your door." And that
equates to more than just a substantial salary. These candidates can shop
around for the right fit as far as corporate culture, location and flexible
work schedules, she said.
The search for technical talent in the U.S. has become "fiercely
competitive," said Yahoo Inc. spokeswoman Heidi Burgett. The company
"re-recruits" existing employees to keep them happy, offering job rotations
and access to the most important, high-profile projects.
The intense competition for such a limited group of workers has fueled an
expansion to offshore locations well beyond the now-ubiquitous customer
call center in Bangalore. Many U.S. companies are moving more advanced --
and higher-paid -- research and development work to China, India and
Eastern Europe, not only to be involved in their fast-growing economies,
but to tap a pool of engineers, software developers and other technical
professionals.
Texas Instruments Inc., Intel Corp. and International Business Machines
Corp. are just a few of the companies that have recently said they would
open, or add to, technical operations in India.
EMC Corp. last month said it would make large investments in both India and
China. "We will invest $500 million in India through 2010, and in China
$500 million between 2006 and 2010," said Greg Eden, an EMC spokesman.
Those investments are meant to be all-encompassing efforts to build sales
and infrastructure, as well as product development.
EMC currently has about 28,000 employees world-wide, including 700 software
developers in Bangalore. The data-storage company expects to increase that
figure to 1,600 by 2008.
John McArthur, a senior analyst at research firm IDC Corp., said EMC has
been adding workers in India and China to gain access to highly skilled but
relatively cheap labor, particularly in software development, as well as to
gain a foothold in those countries as they become bigger
information-technology consumers.
Another answer to the dearth of talent in America: simply bring foreign
workers with the skills to the U.S.
Newmont Mining Corp. has found it difficult to recruit engineers and
geologists in the U.S., said David Kern, human resources manager at the
gold producer. It is tough to find experienced engineers, he said, adding
that Newmont recently staffed three upper-level engineering jobs with
candidates from Canada, Mexico and Australia.
The mining industry has been particularly hard hit by the lack of technical
talent and expects tough times ahead -- about half the 5,200 practicing
mining engineers in the U.S. will retire in the next 12 years, said Leigh
Freeman, general manager of Downing Teal, a firm specialized in finding
talent for natural resource industries.
During a downturn in the 1990s, many people left the mining industry, and
now that natural resources are a hot market again, Newmont is using
headhunters to try to track down some of those veterans, as well as make
sure it keeps the people it has. Mr. Kern said Newmont tries to provide
clear career paths for its technical professionals, so they can see
opportunities to advance within the company and won't be tempted to leave.
Gary Flaharty, spokesman for oil-services company Baker Hughes Inc., said
universities in the U.S. and Western Europe simply aren't attracting and
graduating enough students with the skills needed by the energy industry.
"The industry is more and more turning to the Eastern Hemisphere to meet
the requirements" for qualified petroleum engineers and geophysicists, Mr.
Flaharty said.
Citing statistics compiled by the Society of Petroleum Engineers, Mr.
Flaharty noted that 1,732 undergraduate students were enrolled in
petroleum-engineering programs at U.S. universities in 2004, versus 11,014
in 1983.
But getting foreign-born professionals into the U.S. to fill those jobs
isn't always easy either. Short-term visas for foreign workers coming to
the U.S. to fill specialty occupations such as mathematics, physical
sciences and engineering -- known as H-1B visas -- are limited to 65,000 a
year by the federal government, though that was temporarily raised to
195,000 from 2001 to 2003. Another 20,000 visas are available to
foreign-born workers who received a master's or doctorate degree from a
U.S. university.
Arthur Rothkopf, senior vice president at the U.S. Chamber of Commerce,
said the H-1B quota for fiscal 2007 already has been met. The chamber is
lobbying, with various companies, to have that cap increased to 200,000 or
300,000 a year. Mr. Rothkopf said there is a "critical, urgent need" for
more foreign-born professionals in the U.S.
For the long term, Mr. Rothkopf said the U.S. needs to build up its science
and math-education system. A report published in late 2005 by the National
Academies of Science said addressing the lack of math and science graduates
in the U.S. would be key to maintaining the country's economic stability.
"We have to remain competitive," said Mark Heesen, president of the
National Venture Capital Association, which represents the majority of
venture-capital firms in the U.S. "Otherwise, Asia will take over what
we're doing."
Science and engineering tend to be difficult disciplines to master, and
many students are enticed by positions in law and finance that seem more
lucrative, he said.
As competition for the shrinking pool of American engineering graduates
becomes more intense, defense contractors like Northrop Grumman Corp. have
established "pipeline" programs with U.S. universities, high schools and
even junior high and grade schools to encourage more American students to
study engineering. Northrop has put more resources in apprenticeship and
internship programs, said John Krakowski, Northrop's corporate director of
employment and employee relations. The company is also encouraging veteran
engineers to delay retirement to mentor young employees.
Newmont has made a $2.5 million commitment to the University of Nevada at
Reno to fund teaching and recruitment for mining professions, and copper
giant Phelps Dodge Corp. has made a $2.5 million endowment to the
University of Arizona for training mining engineers and offers scholarships
at several other schools.
Thus far, it appears the efforts haven't been very effective. During the
fall of 2003, there were 91,000 engineering students in programs for
master's degrees, by the fall of 2005 that number had dropped to 83,000,
said Michael Gibbons, director of data research for the American Society
for Engineering Education.
--Bob Sechler, Frank Byrt, Megha Rajagopalan, Mark Boslet, Jonathan Vuocolo
and Jason Ma contributed to this report.
Write to Christopher Scinta at chris.scinta@dowjones.com1
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