Tech Companies Stoke Fears of a Talent Shortage to Get Cheaper Labor

How is Silicon Valley supposed to stay exceptional when its belief system keeps getting debunked? First empirical evidence proved there’s no such thing as a meritocracy. Then they had to add a disclaimer that “change the world” may not mean for the better. Now the shortage of tech workers—a phenomenon used to justify both immigration policies and insane perks—”doesn’t really exist.”

Businessweek spoke to a number of academics who said that when tech CEOs complain about a labor shortage, what they meant to say was a shortage of cheap labor:

“There’s no evidence of any way, shape, or form that there’s a shortage in the conventional sense,” says Hal Salzman, a professor of planning and public policy at Rutgers University. “They may not be able to find them at the price they want. But I’m not sure that qualifies as a shortage, any more than my not being able to find a half-priced TV.”

The desire for more affordable labor explains the tech industry’s “muted enthusiasm” for President Obama’s new immigration order. The president’s plan “will let U.S. companies temporarily hire more foreign college graduates.” However, it won’t provide more H1-B visas. And according to Businessweek, those H1-B visas for highly-skilled workers are the tech sector’s top priority:

“It seems pretty clear that the industry just wants lower-cost labor,” Dean Baker, the co-director of the Center for Economic and Policy Research, wrote in an e-mail. A 2011 review by the U.S. Government Accountability Office found that the H-1B visa program, which is what industry groups are lobbying to expand, had “fragmented and restricted” oversight that weakened its ostensible labor standards. “Many in the tech industry are using it for cheaper, indentured labor,” says Rochester Institute of Technology public policy associate professor Ron Hira, an EPI research associate and co-author of the book Outsourcing America.

A Facebook spokesperson maintained that the tech talent gap was real, but the data-loving behemoth couldn’t show Businessweek any evidence:

“We look forward to hearing more specifics about the President’s plan and how it will impact the skills gap that threatens the competitiveness of the tech sector.”

For more concrete numbers, here’s a Wall Street Journal piece from a month ago where author and professor Vivek Wadhwa argues that the brain drain is caused by the lack of green cards:

Mr. Wadhwa says the real problem is what he estimates are up to 1.5 million skilled immigrants and their families who—thanks to visa quotas, bureaucratic sloth and other roadblocks—are trapped in the limbo between H-1B and the green card that earns them permanent residency and a chance for citizenship. At current green-card approval rates, Mr. Wadhwa tells his students here from India, it will take 70 years for them to gain permanent resident status. Most will eventually leave. They’ll add to a growing brain drain—100,000 skilled immigrants a year from China, India and other nations, Mr. Wadhwa and his team estimate.

Tech industry isn’t lobbying for green cards, however, because that doesn’t help them hold on to employees:

Large tech companies are an unacknowledged factor in the brain drain. As long as H-1B immigrants are in limbo (that is, once they have started the process of applying for permanent-resident status), they can’t risk changing jobs and have the clock start over. It is to the advantage of Big Tech, especially mature companies fearful of losing top talent to startups, to retain the failed status quo precisely because it freezes employee mobility. Mr. Wadhwa believes that’s why Silicon Valley tends to lobby only for more H-1B visas, rather than more green cards.

It’s just another retention strategy: Freeze your eggs, freeze your foreign employees.

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Tech Companies Stoke Fears of a Talent Shortage to Get Cheaper Labor