kitchen table math, the sequel: Big data strikes again

Thursday, July 25, 2013

Big data strikes again

The New York Times is reliably fun to read on the subject of technology:
SAN FRANCISCO — Although certain kinds of engineers are in short supply in the United States, plenty of potential candidates exist for thousands of positions for which companies want to import guest workers, according to an analysis of three million résumés of job seekers in the United States.


[T]he technology industry argues there are not enough qualified Americans [to fill tech positions]. Its critics, including labor groups, say bringing in guest workers is a way to depress wages in the industry.

Many economists take issue with the industry’s argument, too. One side points out that wages have not gone up across the board for engineers, suggesting that there is no stark labor shortage.


“I didn’t expect this result,” said Steve Goodman, Bright’s chief executive.


“We’re Silicon Valley people, we just assumed the shortage was true,” Mr. Goodman said. “It turns out there is a little Silicon Valley groupthink going on about this, though it’s not comfortable to say that.”


The Senate immigration bill, passed last month, nearly doubles the number of H-1B visas that companies can seek every year. Industry lobbied heavily for it, bulldozing efforts to add language that would force companies to try to hire an equally qualified American first.


The age of workers, which the study did not look at, may also play a role....[A]mong 32 technology companies surveyed, only six had a work force with a median age over 35. At Monster, the job search portal, the median age was 30; at Google, 29; and at Facebook, 28. The median age of American workers over all is 42.3 years old, according to the Bureau of Labor Statistics.

As if to underline the study’s findings, Mr. Goodman spoke from a conference room that looked out on decorated ping-pong tables, a liquor bar and tiki-themed snacks. Later that day, Bright was having a party, partly to attract new talent, he said, including foreign programmers here on H-1B visas.

Big Data Analysis Adds to Guest Worker Woes
JULY 23, 2013, 10:23 AM
Groupthink in Silicon Valley, groupthink amongst the punditry, groupthink in the White House....


This part was interesting:
For a few job categories, like computer systems analysts, there are relatively few “good fits” among American applicants, Bright found. Computer systems analyst jobs, considered relatively low-skilled in the tech world, had four openings for every American candidate. For others, like high-skilled computer programmers, there were more than enough potential candidates in the United States, the company found.
As I recall, there's a section in the Steve Jobs book where Jobs explains to President Obama that the workers they really can't find are skilled workers with Associate degrees.

I'll have to find that and post.

For the record, I had absolutely no idea there wasn't a shortage of engineers until Kitchen Table Math readers explained the world to me. I never questioned the narrative; I just took all the Silicon lamentations at face value.


SomeoneInSoftware said...

The job categories make absolutely no sense. What distinguishes a "computer systems analyst" from a "high skilled computer programmer"? Folks, the proper term for a person who is highly skilled at designing, analyzing, and creating software is "software engineer", and this is the term that most tech companies use for the position.

In some companies, usually in the non-tech sectors such as healthcare, "systems analyst" means "software engineer" but it can also mean the person who figures out the business processes and communicates them to the software engineers. This is also typically NOT an associate's degree position.

The people who work helpdesk, and who configure and install the PCs in the company, often have associate's degrees or IT degrees from lesser schools. Perhaps that is what this article is referring to? But there are always plenty of candidates for those jobs, so I don't believe the statistic that there are 4 openings for every applicant.

Many of the people who analyze the software industry have no background in software and have no inkling of what software engineers actually do.

Anonymous said...

These discussion always seem to get heated, but I can address one line from the article:

"One side points out that wages have not gone up across the board for engineers, suggesting that there is no stark labor shortage."

Yes, one side does point this out. But that side does *NOT* point out the profit margins for many of these tech companies. Applied Materials, for example, has averaged about 2/3 of a billion dollars per year in profits over the past three years (with a lot of volatility). And Applied has about 15,000 employees -- figure about 5,000 of them are engineers.

So ... a $10K raise for each of them would cut Applied Material's profits by about 10%. This *IS* feasible ... but more likely is that Applied Materials just moves even more development to India.

Note that IBM now has more India based employees than US based employees.

My take is:
(a) US techie wages haven't gone up much in the last decade because (1) we've been in a bit of a recession, and (2) lots of cheaper foreign competition, and
(b) Lots of engineers are *AVAILABLE*, but (sadly) a lot of them aren't very good (partially because the good ones tend to be well paid and less likely to look for work).

h1B VISAs move engineers from India and China (and other countries) to the US. An alternative (which is also pursued) is to simply move the work to India and China.

Companies are doing both ...

-Mark Roulo

Anonymous said...

As the wife of a software tech worker, I completely agree. Wages haven't gone up even though productivity continues to rise. Until the 1980s increases in productivity corresponded with increases in wages. My whole working life (yeah.) wages are not tracking productivity gains, and have stagnated.

Again, my husband is currently in software. While working for a software giant, he was required to offshore testing to Hydrabad. The level of workers he had in India were NOT as well trained as American testers, and more frustratingly, as soon as they "learned testing" on one project, the testing staff completely changed, so there were no productivity gains from working with the same trained people from project-to-project. Add to this problem the 13 hour time difference, and communication errors--the results were dismal. My husband actually proved in a white paper, that it cost (ultimately) less to hire American workers, but no one wanted to listen.

Later, he was part of a HUGE lay off (1900 workers). Interestlingly, THE NEXT DAY, 1900 new job postings were on (including jobs that sounded EXACTLY like his!). Since the majority of displaced workers went to an outplacement service, one could quickly see that the majority of workers were in their 40s and 50s. Hmmmmm. Of course, to receive your severance pay, you had to sign a paper agreeing not to sue the company at a later time...

In a market economy, when there are great needs for labor, wage increases will bring those trained people...until this generation...