U.S. Programmers: Shortage or Glut?

Ann All

My recent post on Indian services providers establishing operations in the U.S. drew interesting comments from two IT pros, both of whom say they have worked for Indian companies and found them to be good employers.


While conceding my point that foreign investment won't be as good for the U.S. as domestic investment, the first commentator sees little difference between companies employing contractors to achieve added efficiencies and companies using machines for the same purpose. The commentator asks:

If a company decides to outsource its IT functions by 40 percent, is it not better that we capture some of that 40 percent domestically?

The second commentator makes the provocative point that much IT inefficiency is due to an oversupply of programmers. This flies in the face of lobbying by tech companies, which have been trying for several years now to get limits eased on H-1B visas.


A number of experts share the commentator's opinion, however. In March, I wrote about several studies that show little evidence of IT staff shortages. Duke University's Vivek Wadhwa, and Ron Hira, a fellow at the Economic Policy Institute, both note that IT salaries are not rising as steeply as might be expected in the event of a shortage. And Hal Salzman of the Urban Institute contends that the industry's "unrealistic expectations," rather an actual shortage of folks with IT skills, is making it difficult to fill job slots.


Earlier this year, I interviewed Norm Matloff, a professor at the University of California-Davis, who believes the tech industry is fabricatinga false talent shortage in order to push for more H-1B visas, which allow them to employ younger -- and far less expensive -- workers.


The reader who commented on my post about the activities of Indian companies in the U.S. suggests that growth in other kinds of jobs, rather than growing the ranks of IT workers, will drive demand for software. Making a case for broader immigration reform, the commentator writes:

The best way to create programming jobs is to bring in other workers. Factory workers create a demand for ERP software; lawyers create a demand for legal support software; truck drivers create a demand for logistics applications; retail clerks create a demand for point-of-sale systems.


Our current philosophy that the way to have a high-tech economy is to have an economy that consists of 100 percent programmers is faulty thinking. If the entire economy consisted of 100 percent programmers, they'd keep each other busy with design specifications, bug fixes, and test plans. There'd be no shortage of work -- but nothing would get done.

Of course, immigration is no easy fix. Sweeping legislation was shot down in the U.S. last summer, andother countries struggle nearly as much as we do with the hot-button issue.

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Jul 16, 2008 1:11 AM Al G Al G  says:
There may be a glut in certain programming sectors in particular locations around the US, but talk to anybody in flyover country about the shortage of experienced legacy system programmers and you'll likely hear a different story. The right person can easily walk into a six-figure-plus salary in numerous smaller cities around the middle part of the US. While there, you can enjoy short commutes and a median home price about the same as your salary. Downsides: winter and a lack of 4-star Eritrean restaurants, but that's the tradeoff. Reply
Jul 16, 2008 10:09 AM Bob Bob  says:
For some real information on skilled worker shortages, H-1b visas go towww.eng-i.com/E-Newsletters.htm Reply
Jul 16, 2008 10:14 AM Weaver Weaver  says:
Your referenced post "Indias Investment in U.S.: Not Exactly a Win/Win " might have been a little bit light on the estimate of foreign workers in the US working for BPOs.Top 20 H-1B Employer list 2006:2006 H-1B and L-1 visas in Top 20 list -- Total visas = 48,159Business Process Outsourcing Specialists (12)TATA CONSULTANCY SERVICES LIMITED = 8293INFOSYS TECHNOLOGIES LIMITED = 5202WIPRO LIMITED = 4841SATYAM COMPUTER SERVICES LTD = 3830PATNI COMPUTER SYSTEMS INC = 1831HCL AMERICA INC = 1421LARSEN & TOUBRO INFOTECH LIMITED = 1090I-FLEX SOLUTIONS INC = 876MPHASIS CORPORATION = 809TECH MAHINDRA AMERICAS INC = 781COGNIZANT TECH SOLUTIONS U S CORP = 5746LANCESOFT INC = 645Total H-1B and L-1 visas reported = 35,365Percentage of "Top 20" Total = 73.43%Accounting Services (2)ERNST & YOUNG LLP = 913DELOITTE & TOUCHE = 2067Total H-1B and L-1 visas reported = 2980Percentage of "Top 20" Total = 6.19%Producers of Tangible Goods (6)MICROSOFT = 3285IBM CORPORATION = 2367INTEL CORP = 1222ORACLE USA INC = 1198CISCO SYSTEMS INC = 893MOTOROLA INC = 849Total H-1B and L-1 visas reported = 9814Percentage of "Top 20" Total = 20.38%Source: GRASSLEY, DURBIN RELEASE NEW INFORMATION ON L VISAS Data: grassley.senate.gov/public/releases/2007/062620072.pdfThe B-1 visa allows foreign workers to work in the U.S. for equipment installation and trainging -- why do we need 6 year H-1B and 5 year L-1B visas?One would think that if a foreign firm wants to do business in the U.S. they can hire and train U.S. citizens. Reply
Jul 16, 2008 11:09 AM Jake Leone Jake Leone  says:
Employers are not wanting for employees. In May, Oracle laid 500 hi-tech workers from its acquisition of BEA. I interviewed 2 of these workers, both were programmers were working on WEB 2.0 projects at BEA. If companies such as Oracle are really hurting for people with advanced programming skills, then why did they lay off the 500 Silicon Valley hi-tech workers?The tech worker shortage is a big lie.This lie is perpetrated by officials at the highest levels of companies of like ORACLE, MICROSOFT, CISCO, and GOOGLE.There is no IT worker shortage. After interviewing these 2 candidates, we went on to interview several more, for the same position.The h-1b Visa is overwhelmingly being used to import IT workers (not doctors and nurses or workers we actually need). The h-1b is used to discriminate against U.S. workers. And this documented by recent judgements (and video).Hey, who can blame Bill Gates, he wants low-cost indentured servitude. Who wants a worker with human rights, when you can put a ball and chain around a foreign worker, pay them half what you pay an american. And use that same foreign worker to move jobs overseas (where the pay isn't even 1/10 that of the U.S.).The whole thing is a big-fat greedy lie, this kind of lying that would land people in jail for contempt. But not, Sir Gates, he's royalty. Reply
Jul 17, 2008 5:36 AM joe ham joe ham  says:
Okay Al G, talk to Bea Dewing. She has years of legacy system experience. She's been out of work for 4 years.She was only recently hired in April. The same month that the h-1b visas ran out.She's taken a significant pay-cut. So much for the high-demand you are imagineering in your post.I guess WalMart couldn't hire an h-1b worker, so they actually started looking at a U.S. Citizen worker. That's what you have to do when your cut-throat h-1b recruiter comes up empty.Read about it in the Wall Street Journalonline.wsj.com/article/SB121623686919059307.html Reply
Jul 21, 2008 3:55 AM Jeff Wells Jeff Wells  says:
It was quite revealing to read the story in the Wall Street Journal about the poor IT worker. It implies that no one at the Journal read Tom Friedman's "The World is Flat". Now here is an idea to ponder: Outsource jobs in the legal profession to India. Promote the idea that there is a major American shortage in the the legal area. Set up a high tech video tech link to allow Indian lawyers to properly interact face to face across the ocean. Maybe a subscription based LegalYouTube mashup with Facebook and LexisNexis.If things go well, the lawyers in India will soon be outsourcing work to IT folk in the USA. Reply
Jul 21, 2008 12:23 PM Larry Larry  says:
H1-B and other visas have been a lucrative business for years.Here's some of the behind the scenes events:- lawyers and investors perceive lucrative profits in providing visas to foreign workers, getting paid by both the worker and the US company employing them and perhaps also by a foreign firm based in the country of origin for the worker- lawyers form law firms and corporations specializing in procuring cheap foreign labor to US companies, and perform all the visa paper work, all the legal actions and filings, a visa paper work machine kind of office- lawyers sell US companies on undercutting their current HR costs, per-head-count-costs, by 40% or more by employing foreign workers on "temporary" visas- lawyers and companies collaborate or "conspire" on reporting of employment statistics, salaries, and establish PR and HR policies and practices that give a statistical appearance of a worker shortage- to re-inforce the statistical appearance of a worker shortage, companies complain at shareholder meetings and in other new-press-release statements that they can't find people to do the work they need...omitting that they want to pa 40% less than the current market rate, and never mind that no Executive would take a position in a US Company at 40% less than their current salary- to reinforce the statistics, companies abuse technical workers with unrealistic expectations, demands, work hours, work conditions, and cuts in benefits, perks, and pay- in sensitive or critical work areas, a few foreigners are brought in, as a lead-in effort...these are "seeded" across specific lines of business, and paired with existing IT workers- being from out of town, with no friends and no kids and no family and no life, these foreigners are quite happy to work 80 hour weeks for 40% to 50% less than the American Workers they have been paired up with- companies laud the productivity and capability of foreign workers and express dismay at the lack of effort by American Workers- more foreigners are brought in, and they often converse in their native language, and even keep software notes and code algorithm pseudo code in their native language (hindi or whatever)...btw this is the main reason Windows Vista is not yet approved for US Government use - millions of lines of code were written in chinese, with no english translation of the code or the notes...and these workers collude to expedite the expulsion of American IT Workers, with the implicit support of company management- being from a foreign land, these visa IT workers have no understanding of US Law, and will do anything they are told to do, up to and including Enron Fraud, and worse- Project and Program managers receive professional conference sessions on accepting Foreign Workers, from association board members who are paid consultants to the law firms and / or foreign corporations - these presentations often cite the dubious statistics mentioned above, and do not stand up to professional review or scrutiny and fact-checking.Organizations like PMI.Org are complicit in the importation of foreign workers, as their board members are often bought and paid for by foreign companies.- at most the American IT worker is let go with severance pay and notice, at worst they are told to train their replacements or they well receive a bad referral.Well, legally, the worst referral possible is "not to re-hire", but, these same firms often embrace systems that identify any IT complainers, track them, and harass them up to and including hacking the complaining parties machines (often an overseas hack, go figure)So, thats the game. Reply
Jul 21, 2008 12:23 PM Larry Larry  says:
Its a rigged game.So, the companies loose loyal employees that understand American Society, and gain HR cost savings of 40%, or more.So, we have not seen a "cutting edge" application since 1999, when this rigged game went into full production.These used to be called something else, but the term has fallen out of use and I cant even remember it.So, no one really knows where the "next big thing" in IT is likely to come frome.So, no one who is a US Citizen and who has been laid off due to importation of cheap foreign labor, advises their friends, their children or their distant family members to get into IT or pursue an IT College Degree.Very few do so.Even these often are not employed at graduation.A few corporations have made out like bandits, about 50,000 IT millionaires are created in India every year, and the US IT industry is in rapid decline.Oh yeah.This was the right choice for the good of the USA as a whole.Such is the government we get, when lobbyists and corporations rule..and cause representatives to disregard the wishes of their district, their electorate, their voters.Oh well.Whatever I invent using IT, I will just keep to myself, never expect to make a dime on, and never distribute or sell.... Reply
Jul 30, 2008 4:37 AM Ryan Ryan  says:
I agree in your estimation that the IT sector is experiencing a significant worker shortage. While many of the larger companies are outsourcing to IT countries like India, many of the smaller IT businesses companies that you mention don't see outsourcing as a viable option. Providing an afforable solution for these job openings are America's career colleges. A new study by the Imagine America Foundation on the skill shortage found that career college graduates represent approximately 24 percent of the annual 35,000 job openings needed for network systems and data communications analysts. The study analyzes throughly into the various IT sectors impacted by the skill shortage. To find out more see www.imagine-america.org Reply

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