Friday, January 12, 2018

Turnabout is Fair Play

I ran across an interesting story in the Machine Design daily newsletter.  It pertains to H1B visas, in a way.  H1B visas are the ones that are granted typically to "hi-tech" workers with the mythology that the skill set doesn't exist in America.  You might remember the 2016 talk about Disney hiring IT workers on H1B visas, and forcing the American workers to train their replacements before being laid off.

That story turned out to be far from abnormal; it was literally the tip of an iceberg, an orgy of cronyism in which a handful of companies lobby the US government to allocate H1B visas so that they can get cheaper workers, foreign companies lobby to provide those visas to workers in those countries and displace American workers.  Meanwhile, we have national programs to push STEM education to provide graduates for jobs in the US - that are being taken by H1B visa imports.
On one side, we have national programs to convince US kids to major in STEM programs to produce the "next generation of scientists and engineers" while on the other hand we import these H1B visa holders to fill the very jobs we're trying to get American kids to prepare for.  Don't forget the workers who were in those jobs, were replaced by H1B visa holders, and are now either unemployed or underemployed.  The is creating unemployment and misery for generations to come.  It's easy to understand Gates, Zuckerburg and those CEOs: the more of these H1B visas the allows, the more they can suppress wages and the more candidates they can choose from.  It's, unfortunately, also easy to understand the; they get money from Cognizant, Wipro and the like.  In the case of our administration, already concerned that Americans have too much of the world's wealth, it's even easier to see a motivation to send that wealth overseas. [Note: this is from 2016.  SiG]
So while it's true that the illegal immigrants hold down wages for low end jobs (how could they not?), and conservatives rightfully try to change that, we also have the wages of hardware and software engineers, as well as IT workers and other STEM careers being held down by the H1B visa industry (again, how could they not?).
With that background, this week's Machine Design story shows the shoe on the other foot.  Foreign companies are hiring engineering talent out of the US. Is it possible the big picture might be engineers from low income countries move into the US (on H1Bs) while US engineers move overseas on whatever the equivalent law is there? 
However, the skilled job market is growing. Deloitte —an audit, consulting, and financial advisory company—published that 3.5 million manufacturing jobs will become available from 2015 to 2025, and about 2 million of them will go unfilled due to a skills gap.

“Getting people interested in these careers is challenging—especially young people,” says Bruce Hamm of the Manufacturers Association of Central New York (MACNY). “Historically, over the last few decades, we’ve had so much manufacturing leave New York because of offshoring; we were one of the rust belt states. The fact that modern manufacturing has changed the whole equation hasn’t penetrated to the public, the schools, the kids, or the parents for that matter.”
Germany, a strong economic and engineering powerhouse, failed to find 1.1 million skilled workers and professionals in the third quarter of 2017. In an economic upswing, there is a shortage of young talent to meet the high demand for labor. Now German companies are urgently looking for talent from all over the world.
While Germany is an “economic and engineering powerhouse”, the other country they specifically mention is New Zealand.  The Kiwi projects they mentioned are major construction projects, not systemic growth in their engineering sector. 

Still, the US is 4x the population of Germany (total population, not engineers) and 67x the size of New Zealand, so Germany could make a dent in the US job market but it's hard to imagine New Zealand could.  I don't really imagine a large percentage of people want to make that sort of migration, anyway.  (Wait... I might have to think about New Zealand.)  The US still has the (alleged, reported) shortage of high-skilled workers that leads to trying to import (and grow new) engineers here.
A published report from the Public Policy Institute of New York State Inc. states that, “While shortages in professional skills were most pervasive, employers reported that STEM-specific skills and qualifications were the toughest to find. Almost a quarter of executives reported ‘high difficulty’ finding candidates with the necessary scientific, engineering, and technical skills. Half reported moderate or high difficulty finding candidates skilled in using technology, and close to 30 percent reported moderate or high difficulty finding candidates with other STEM skills such as data analysis and applied math.
My summary is that it's interesting but probably not a big influence.  Engineering salaries are among the few percent that have held up well over the last 40 years.  Will that trend last?  Some of you know what I'm going to say: “prediction is difficult, especially about the future”.


  1. New Zealand is a very liberal country. I have friends in their intelligence service which is an extension of the national police. The place is making strides to get out of the South Island sheep raising mentality and to join the 21st.

    I think that the US will step up it's hard science education and once we have stemmed the flow of illegal aliens, the trades will fall back to journeymen Americans rather than semi-skilled illegal aliens who take a lot of those jobs for sub-par wages.

  2. Attempting to not compete with labor from the rest of world is unsustainable. It takes an iron curtain to prevent the workers from moving to the jobs. If you do erect an iron curtain, then successfully avoiding competition for a time means you lose the competition of the next war, because your industries and workers are uncompetitive. Military strength comes from economic strength. If you implement socialism for engineering wages, you make America easier to attack in war.

    The way we learn what wages a certain job requires to motivate humans to do it, is by statistically summarizing the wages being paid. Claiming there is a "standard" of wages for a job which is higher than what actually is being paid, is mere wishing.

    Jobs belong to the employer, not the employee.

    1. Is that you, Jeb!? Shouldn't you be changing Grandpa's diaper instead of posting here?

    2. Was an iron curtain good for any country which had one? Please explain a plan to get the results you want which doesn't trip over the problems I've listed.

    3. If you would bother to get your head out of your Sea Hunt, you would understand that the "iron curtain" kept people in. Not out. But then I suppose you're just another product of fine western "education".

  3. Nation...natal...Patriarchy...Pater...

    A nation is bound by blood, language, borders, and culture.

    These are, or SHOULD be, my people. Thus, H1Bs are an act of disloyalty. Treason, if you will.

    I only hire Americans. I only trade with Americans. I will not be replaced. My sons will NOT be replaced.

    They have to go back.

    1. If your sons have uncompetitive price/performance in the world market for labor, they will be replaced soon enough. There is no way to avoid Darwinian competition between humans. You only control one side of that competition, your own performance, not the other side.

  4. That last graph may be misleading, since it is not corrected for the type of work these executives oversee. For instance, it shows that not many executives have trouble finding candidates with skills in applied math and research – but it is also true that few high tech companies actually have much of a need for either. Also, the ratio between "moderate" and "high" difficulty level responses appears to be close to a normal distribution.

    I am agreed that we should be using our own people, but if a company is looking for young people it is also true that American education absolutely sucks.

  5. I worked in a field full of H1B workers and I can tell you with confidence most of them weren't that brilliant. They were hard workers and would eagerly work 80 plus hour weeks for a few dollars less than their American counterparts. And of course that is what it was all about, not skill sets or lack of American workers.
    I have a good friend who worked for Apple and a few years back they let him go in favor of foreign workers.

  6. GREAT POST!!!
    Straw Poll - Do you approve or disapprove of the job President Trump is doing?

    ps. would you consider adding CC to your blogroll?

  7. Trump's administration is going to attempt to increase taxation to cover the increasing cost of Medicare. Actual tax collection won't increase, but surveillance to squash economic freedom will become tighter. Then President Oprah is going to implement wage and price controls because it feels right. This is mere delusional wishing enforced at gunpoint. It didn't work when Nixon tried it, either. The remaining middle class will scatter to evade those policies. You thought radar detectors and CB radios to evade the 55 MPH speed limit was a scofflaw culture? You haven't seen anything yet. The point of Bitcoin is to end tax collection, and therefore, government.