Early last February, America's unemployment rate dropped to four percent, the lowest since January of 1970. President Clinton marked the event by proclaiming that the numbers confirmed "once and for all that this is the longest economic expansion in our history." But while this seller's market was good for politicians and employees, it has put additional strains on America's employers. And nowhere is that more true than in the technology sector, where programmers, hardware engineers and maintenance people can all but write their own ticket.
Everywhere you look in the Silicon Valley and other centers of American technology, the talent hunt is intense. Virtually every technology company website has a career section with invitations to "join the team." Job recruiters, nicknamed "headhunters" in the U.
"The demand far exceeds the supply, and demand is across the board," says Randy Prout, a recruiter for NetSoft in Santa Clara, California. He says that in the software development sphere, all kinds of specialists are needed, from application- and system-level developers to programmers specializing in embedded system design. And then there's the Internet, where demand ranges from applications to the network layer programming. While demand comes from both large and small companies, Prout's firm focuses on start-ups, a sector, he says, that can now compete with much larger firms for their share of the talent pool. "Five or six years ago, people tended to take salary cuts and get equity in the company in exchange. But now demand is so high that salaries are fairly comparable. Programmers coming from larger companies can pretty much maintain their salary and get stock options besides. When you see companies go public and get market capitalizations of $2 billion to $10 billion, that's definitely a lure."
The tight employment picture is also keeping Jeff Andreson busy. He is in charge of technical recruitment for Careerpath.
Andreson, who spent part of his childhood at a U.
The push toward online postings have emerged as the single best way for companies to attract engineers. "Five years ago a lot of computer jobs were advertised in newspapers," Andreson says. Now, you just set an online search agent to go out to the different sites, checking for the skill area, job location and desired salary. The results are delivered daily by e-mail.
One consequence of the job market is job hopping---the practice of jumping from a good offer to a better one. Where employees used to stay on jobs an average of six years, now it's two and dropping. These short employment tenures can lead to lawsuits, especially when the transient personnel are key executives. Last November, for example, SAP America sued Siebel Systems, alleging that Siebel engaged in "predatory hiring practices...
Crowded highways, housing shortages
The hot economy has also made the Silicon Valley region, in particular, a victim of its own success. For the first time in its history, the area actually lost population---last year, 11,800 people came in, 13,000 people left. The reasons aren't hard to spot. With so many people making so much money, housing costs have gone through the roof. In extreme cases, like Palo Alto---the home of Stanford University---even a modest house can approach the $1 million price range and the mean average house in the region costs a whopping $410,000. When local salaries are considered, the Silicon Valley has some of the least affordable homes in the United States---enough to stretch the budget of even a $50,000 salary earned by beginning programmers (although compared with other professions, such as teachers, computer engineers are hardly suffering). Nevertheless, people are buying bigger houses, further away, resulting in denser traffic.
"Some people are commuting two to three hours each way," says Carl Guardino, president and CEO of the non-profit Silicon Valley Manufacturing Group. "That costs in terms productivity, air and water quality, stress levels and overall success of economy. It even effects community participation---you aren't going volunteer to be football coach if all you have time for is getting up early and returning home late." Guardino's organization was founded by David Hewlett (of Hewlett-Packard) to tackle some of these issues with the help of some of the area's larger employers including Intel, Applied Materials, and the Knight-Ridder newspaper chain. For example, the group has pushed for affordable housing and claims it helped instigate 24,000 new affordable homes in 17 different cities. The group hopes to amass a projected $20 million fund to encourage more such construction. But, says Guardino, new building must be smart because, as in Japan, there isn't much land left. "We are, after all, a valley," he says, and vacant lots are at premium. The group is tracking what's left, inventorying every buildable plot and how it's zoned.
And then there are teachers, who are needed to teach the kids of the engineers here. School teachers in America are famously underpaid and in the Silicon Valley, one in four leaves their job---many citing the high cost of living. The Manufacturing Group hopes to counter that with a loan program, where part of the loan would be forgiven for teachers who stick it out.
Reaching beyond the borders
With so much pressure to find technical talent, companies have pressed on the government to allow more hiring from overseas. One company that specializes in Japanese recruitment is Los Angeles-based Teruko Weinberg, Inc. Christy O'Hara, an international recruiter for the firm, represents software companies in northern and southern California and in Mexico, among other places. O'Hara says she favors Japanese nationals who have graduated from American universities. "For example, a lot of Japanese are majoring in computer sciences at Oklahoma State University," she says. "American companies will offer them $40,000 to $50,000 without any work experience." She says that the bilingual ability is considered an asset, especially for companies that are localizing their software for the Japanese market.
As for Japanese workers in Japan, O'Hara says that many don't understand America's visa requirements as well as their counterparts do from Europe and India. "Many people accessing our website think they can work in the United States if they have a skill. But first they need to have a visa, which is usually obtained from the sponsoring company."
Many people wishing to work in the United States apply for an H-1B visa, which currently allows up to 115,000 professional employees to work in America for up to six years, granted in three-year increments. While H-1B employees are not limited to the technology sector, the computer industry accounts for many of the applicants. "It used to be that the H-1s covered everybody from accountants to zoologists," says Carl Shusterman, a Los Angeles-based immigration attorney. "Now, I have to correct reporters because they think it's the essentially an 'IT visa' expressly for people working in IT. That's not true, but it seems so because IT professionals so dominate the category. More than 50 percent of those people are from China and India."
But most Japanese working in the United States apply not for an H-1B, but a flavor of visa called an E-1 or an E-2. These are given to key employees of businesses that either conduct a substantial volume of trade in the U.
But the H-1B category is where most of the legislative debate takes place. In 1998, Congress temporarily expanded the H-1B program, nearly doubling the number of visas granted from 65,000. Even so, companies are clamoring for more. The U.
Roberta Katz, chief executive officer for The Technology Network, a network of technology company senior executives, told a Congressional hearing that the demand for computer-related technology personnel is expected to more than double between 1996 to 2006. She cited the importance of foreign born professionals, both in large companies like Intel and Sun Microsystems, and in small start-ups, noting that "nearly one-third of start-up companies in the Silicon Valley are run by an Indian or a Chinese immigrant."
But not everyone is thrilled with opening the gates wider. "We have an abundance of well-educated college people," said Jack Golodner, president of the AFL-CIO's Department of Professional Employees, in an Associated Press interview. "There are industries that like to flood the market of our college graduates because they want to keep the salaries from going up."
Another critic of the H-1B program is Dr. Norman Matloff, at the University of California at Davis's department of computer science. He has testified before Congress that the software labor shortage is a myth, and that what companies are really looking for is cheaper labor. He said that foreign nationals earn 15 to 30 percent less than their American counterparts, in part because American programmers tend to be older, and therefore can demand more money. "Insincere employers use the skills issues as a pretext for not hiring older programmers," he said. "Sincere employers generally believe they need to hire a programmer with specific skills, but they are misinformed, because any competent veteran programmer can become productive in a new programming language in a couple of weeks on the job." He called the H-1B program "demonstrably broken" and said that the number of visas granted has been rising 10 times faster than the growth rate in jobs.
Maybe so, but the U.
An interview with Carl Shusterman, immigration attorney
Based in Los Angeles, Attorney Carl Shusterman was for six years an attorney with the U.
- How important is immigration to the technical sector of the US?
- They used to say about Irving Berlin that he was American music. Immigrant computer professionals are the technical revolution in America. The number of startups founded by Indians and Chinese are phenomenal.
- Does that mean that if you have computer skills and you are abroad and you want to come to the US, that it's a given that you'll get an H-1?
- Depends on what part of the year. The last two or three years, they've run out mid-year, so you can't get over here. From October to April the programmers can get in, and from April to October they can't.
- Is there legislation to raise the cap?
- There's a bill being sponsored by a bipartisan coalition of 20 senators that would raise the current H-1B cap to 195,000 over the next three fiscal years. The current limit is 115,000 in Fiscal Year 2000, 107,500 in FY 2001 and 65,000 in FY 2002.
- Some American programmers have said that as they get older they feel less job security, and that young immigrants will take over their jobs.
- My position is that the labor market should determine this, not Congress. Congress does a lousy job of determining how many foreign workers should come in or how much foreign goods should come in. The economy has been so great for the last eight years not because Clinton was the president or that the Republicans were in control of Congress. It was great to the extent that they let the economy alone and the technological sector just blossomed in the last eight years.
- But it is true that companies hiring holders of H-1B visas are not hiring a lot of 50 year old programmers. You also have to wonder if these programmers have the same skill set. I'm the webmaster on my own website, but the 14 year old across the street will always know more than I do.
- And the nature of the industry is very entrepreneurial. To bring over the H-1Bs you have to guarantee you are going to pay the average prevailing salary. That's probably okay for Microsoft and Oracle, but startups offer stock options and a cot to sleep in for overnight sessions, along with the promise of fabulous wealth if the company's IPO takes off. They don't have the money to pay the prevailing wage, and they can't get H-1Bs unless they do..
- The other thing about 50 year olds is that they are competing with people who are learning new programming languages, grew up on the Internet, and are fanatic. It's hard to for a 50 year old to fit into that lifestyle. He wants to go home to his family and not sit around until midnight working on some coding.
- Are you arguing that monetary discrepancy doesn't play as big a factor as people think?
- It's a factor for someone from India. They get a job for $50,000 from some consulting firm that sends them to south Texas, they think they died and went to heaven.
- You mentioned Chinese and Indian engineers applying for H-1B visas. What about the Japanese?
There are very few Japanese H-1s. That's because the United States has a treaty with Japan to let in Japanese nationals, which is not limited by quotas. As a result, Japanese companies tend to bring everybody in as E visas. Whether you are talking to Mitsui or Mitsubishi or some big Japanese bank, all the people working there who come from Japan are all on these E visas. By contrast, the U.
S. has no comparable treaty with India.
- Japanese companies have a different problem: they are criticized for mostly just hiring Japanese and not hiring Americans in their companies within the US. It's not a totally invalid criticism either.
- Do your clients in the Silicon Valley have a hard time explaining housing costs?
- Most of our clients are down here, in Los Angeles, which is also getting expensive. But unlike in the Silicon Valley, there are expensive places and cheap places to live in LA. If you share a little apartment in Mar Vista [a suburb within the greater Los Angeles metropolitan region] with two other programmers, it's not all that expensive.
- Is that what computer engineers tend to do?
- Actually, not. To get the H-1Bs, they are all making between $50,000 and $100,000, so they can afford their apartments quite well.
- You hear stories about immigrants not getting promoted. Is there discrimination?
- I do think there's discrimination. For certain things, the government regulations do take care of the IT people or the H-1Bs from getting exploited because they set a floor under their wages. These things are not done for the benefit of the foreign programmers, they are done for the benefit of the Americans to make sure that their jobs are not undercut, that Microsoft can't start bringing in Indians for $25,000 and get rid of a bunch of Americans. But whether they get promoted or not is not in the regulations.
- We just had a terrible incident that barely got in the press at an Air Force Base in Southern Texas that employed both Indian nationals and Americans. One day, the alarm bells went off and they were supposed to walk off to this field. The Border Patrol guys immediately segregated the workforce in whites and Indians, and asked all the Indians for their visas. They put handcuffs on the Indians who had left them at home, put them into custody, they had to get bailed out, they are under deportation proceedings. The bottom line is this air force base did not properly list the locations that their H-1B employees were going to work. And even though the programmers had no knowledge of it, they could all get deported for this. Frankly, if the programmers had been British, for example, I don't think this would have happened.
- Why is the international community so good at filling these positions?
- I have this running debate with my brother, who is a chemistry professor, of why don't American kids go into the sciences. Look at any school, from UCLA to Cal Tech to MIT, and look at their grad students: most of them are foreign. The American schools are turning out mostly foreign graduates in the sciences.
- I worked at the physics library at UCLA, and it was the same thing back then, and it has intensified now. My brother says the Americans want to be doctors and lawyers and MBAs and they are going where the money is. But for these people from foreign countries it's very prestigious and lucrative to go into engineering or science, especially if they can get a job in the United States.
- Any advice for any of my readers who are thinking of working in the U.
- They are lucky they are born in Japan and not India or China, because of the country quotas. If you are one of the lucky minority that is not from one of those two countries, the opportunities are boundless here. You can get a job and if you don't like it, you can go get another job right away because somebody will hire you at a higher rate of pay, and you can also get your green card while you're here if you want to stay permanently.