Bill Gates, writing in the Washington Post, makes two concrete appeals to help maintain American competitiveness:
Two steps are critical. First, we must demand strong schools so that young Americans enter the workforce with the math, science and problem-solving skills they need to succeed in the knowledge economy. We must also make it easier for foreign-born scientists and engineers to work for U.S. companies.
Education has always been the gateway to a better life in this country, and our primary and secondary schools were long considered the world's best. But on an international math test in 2003, U.S. high school students ranked 24th out of 29 industrialized nations surveyed.
Our schools can do better. Last year, I visited High Tech High in San Diego; it's an amazing school where educators have augmented traditional teaching methods with a rigorous, project-centered curriculum. Students there know they're expected to go on to college. This combination is working: 100 percent of High Tech High graduates are accepted into college, and 29 percent major in math or science. Contrast that with the national average of 17 percent.To remain competitive in the global economy, we must build on the success of such schools and commit to an ambitious national agenda for education. Government and businesses can both play a role. Companies must advocate for strong education policies and work with schools to foster interest in science and mathematics and to provide an education that is relevant to the needs of business. Government must work with educators to reform schools and improve educational excellence.
American competitiveness also requires immigration reforms that reflect the importance of highly skilled foreign-born employees. Demand for specialized technical skills has long exceeded the supply of native-born workers with advanced degrees, and scientists and engineers from other countries fill this gap.
This issue has reached a crisis point. Computer science employment is growing by nearly 100,000 jobs annually. But at the same time studies show that there is a dramatic decline in the number of students graduating with computer science degrees.
The United States provides 65,000 temporary H-1B visas each year to make up this shortfall -- not nearly enough to fill open technical positions.
Permanent residency regulations compound this problem. Temporary employees wait five years or longer for a green card. During that time they can't change jobs, which limits their opportunities to contribute to their employer's success and overall economic growth.
Last year, reform on this issue stalled as Congress struggled to address border security and undocumented immigration. As lawmakers grapple with those important issues once again, I urge them to support changes to the H-1B visa program that allow American businesses to hire foreign-born scientists and engineers when they can't find the homegrown talent they need. This program has strong wage protections for U.S. workers: Like other companies, Microsoft pays H-1B and U.S. employees the same high levels -- levels that exceed the government's prevailing wage.
Reforming the green card program to make it easier to retain highly skilled professionals is also necessary. These employees are vital to U.S. competitiveness, and we should welcome their contribution to U.S. economic growth.
We should also encourage foreign students to stay here after they graduate. Half of this country's doctoral candidates in computer science come from abroad. It's not in our national interest to educate them here but send them home when they've completed their studies.
The immigration bit is certainly important -- we all know how difficult it is for foriegn postdocs to travel back and forth to their home country -- but it is more of short-term than a long-term fix.
Read the whole thing.
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Of course, high-tech jobs that require high education will never move offshore like low-tech manufacturing jobs. Only, of course, they already are moving offshore. After all there are about 2 billion Indians and Chinese and I imagine a proportionate number of them are every bit as smart and capable as the corresponding Americans. How does Gates propose to stop that? Sino-indian wages for high-tech jobs in the US?
Mark,
Wages generally track the marginal product of labor. What will happen is that as the tech sectors of those countries mature, the wages for those jobs will rise to near US levels as they have in other countries that matured as manufacturing centers - see Japan and South Korea for example. A gap in productivity related to what would be termed the quality of "institutions" (effectiveness and honesty of legal and regulatory systems, strength of capital markets, quality of monetary policy, etc) and presence of established brands and markets would persist and cost of living differences would impact wages but largely the process would consist of the professional classes of these countries catching up with the American profesional class.
There is a simple test to determine whether differences in marginal productivity or a lack of scarcity are the primary driver of the gap in wages. If the initial wages paid H-1B visa holders (who compete with people from their home and other countries) track the wages in the home country, then a lack of scarcity is the dominant factor. If they track wages in the US, then labor is scarce and wages governed by marginal productivity. At most companies H-1B wages track US wages with a gap related to the higher costs of switching between H-1B jobs (the H-1B is linked to the job, so you need to go through the ordeal of getting an new visa) compared with switching jobs for citizens or permanent residents.
The economists got everything else right before, so they must be right about this, too? The economists said that the US economy was changing from a manufacturing to a service economy. They said we would lose those dirty old manufacturing jobs but we would get tons of high-tech jobs that used people with higher-level education. All those new jobs would replace the dirty old jobs. Only now those high-tech jobs are following the manufacturing jobs. So what's the new mantra? Lose jobs left and right, but it's OK because at some uncertain future date wages in India and China will be comparable to those in the US? And then all the jobs will come back? Right.
Jake, why do you think "the immigration bits" is only a short-term fix? I think that the foreign-born scientists, ranging from the giants like Einstein and Fermi in physics and Delbrueck and Luria in biology to countless unknown footsoldiers (including myself), have been vital to the success of sciences in US for many decades. I think that is at least a part of advantages that US has over, say, European countries.
What is happening now is that it is becoming more difficult (and therefore unattractive) for foreigners to come to US. If US is not producing enough well-trained scientists and engineers on their own AND those that are coming from outside also decrease, think what will happen.
I think Gates is self serving. Fix schools so he can have more trained employees and let foreigners emigrate to fill the rest of his hiring needs. With plenty of potential employees, he doesn't have to pay any more than necessary to get the talent he needs. I'd leave the educational and job market analysis to the researchers in those professions before I would trust Gates' analysis.
Of course, American business needs well trained applicants. But did you notice that Gates does not cite any data on hiring problems in the computer industry or any other industry? He just says that schools must do better and government must make it easier to keep foreign employees. Why? Where are his data?
He says there are 100K computer-related job openings per year. About 65K US citizens graduate in computer-related degrees per year. The USA now has a pool of hundreds of thousands of under-utilized computer-workers (software architects, SW engineers, sys admins, DBAs...). If not a single additional guest-worker would be allowed into the USA for the next 4 years, and all the current visas expired, there would be no shortage.
http://www.kermitrose.com/images/CSdegreesUSA.jpg
http://www.kermitrose.com/images/CSdegreesAccumUSA.jpg
Of course, they won't all expire. They're usable for up to 3 years, then another 3 years with renewal, then indefinite extensions, one year at a time.
And there are other visas, 10,500 E-3 visas per year (much the same as H-1Bs), unlimited L-1 visas, J visas, TN visas, and F (student) visas with a work rider can all be used and abused for computer workers.
The current H-1B limit is not 65K but over 85K... "over" because there are sub-classes with no limits at all. Bill Tucker of CNN recently reported: "That's 85K visas a year. But the United States Citizenship and Immigration Service approved 116,927 applications in 2005. It approved 130,497 in 2004."
http://transcripts.cnn.com/TRANSCRIPTS/0701/26/ldt.01.html
The vast majority of guest-workers are nowhere close to "best and brightest", certainly not "innovators". The education system from which most of them come emphasize rote learning of "trivia" rather than the ability to creatively apply concepts and use existing tools. "Innovation" is just the by-word of the executives' lobbying campaign, with which they hope to drown out the more reasoned arguments against them. When all is said and done, the guest-worker visa programs are, as renowned economist Milton Friedman pointed out, subsidies to the employers.
MattXIV, you say "At most companies H-1B wages track US wages with a gap related to the higher costs of switching between H-1B jobs." Where are you getting your data? From Bill Gates? Wages paid H-1B visa holders are public records and available online. H-1B holders are paid about a third less than Americans. That is why Microsoft wants them. Tech employment has been on the decline. There is no shortage. Americans are being REPLACED by H-1Bs. No independent study shows a shortage of techs or, for that matter, farm workers. It is a cheap labor thing.