The Great Tech Worker Divide

Is there really a labor shortage, or are tech companies lobbying Congress for more visas and green cards simply to avoid paying Americans better wages?

by Moira Herbst

With a B.S. in computer science, an M.A. in information systems management, and 20 years of experience, Rennie Sawade would appear to be a strong candidate for a job as a software development engineer. But all the 44-year-old can find these days are short-term, temporary jobs—like the 15-month contract he's currently on at a Seattle-based medical device company. At Microsoft, the most prominent employer in town, he's had contract jobs and even interviews for permanent positions. But after several failed attempts, he's given up on trying to land a staff position at the software giant. "I feel like my time is being wasted," he says.

Just across town at Microsoft headquarters, in suburban Redmond, Wash., Kevin Schofield is grappling with what he calls a severe shortage of qualified workers. Schofield's job is to help develop recruiting strategies to stay ahead of rivals like Google (GOOG), IBM (IBM), Yahoo! (YHOO), and SAP (SAP). The 40-year-old says Microsoft is desperate to fill 3,000 core technology jobs in the U.S., and there are so few Americans with the specialized skills required that the company needs to bring in more workers from overseas on temporary visas and permanent green cards. "There just aren't enough people," says Schofield.

Reform Likely

Sawade and Schofield's contradictory viewpoints highlight a deepening fault line in the technology industry. While American tech companies say they can't find enough qualified people, many tech workers say there aren't enough good jobs. Employers point out that the unemployment rate in the sector is extremely low, a mere 1.8% in the second quarter of this year. Workers counter that salaries in the sector are still below their level in 2000, adjusted for inflation, a sign that companies haven't had to bid up wages to get staff.

The frustration is growing on both sides. Bill Gates, Microsoft's founder and chairman, testified in Washington earlier this year (BusinessWeek.com, 3/7/07) that he feels "deep anxiety" over the competitiveness of the U.S. and says that the country needs to do more "to attract and retain the brightest, most talented people from around the world." Meanwhile, John Miano, founder of the Programmers Guild, which represents tech workers, calls the idea of a labor shortage in technology the "big lie" that U.S. employers are trying to use to hold down labor costs.

Is there any way to satisfy both sides? It may seem like an impossible task, but that's precisely the challenge ahead for Congress and public policy experts. The Senate and House of Representatives are considering whether to try to overhaul the immigration policies for high-skilled workers. The question is whether there's a way to help U.S. tech companies recruit the talent they need to stay competitive, while also easing American workers' anxiety. Representative Zoe Lofgren (D-Calif.), chair of the House subcommittee on immigration whose district includes Silicon Valley, says "there is a greater willingness to move forward on immigration reform" (BusinessWeek.com, 9/11/07).

Outsourcing Abuses?

Radical options are on the table. One reform could be to ban outsourcing companies from using temporary visas (BusinessWeek.com, 5/25/07), since the firms have been accused of using the U.S. program to send American jobs overseas. Another could be to eliminate temporary visas altogether and allow high-skilled workers to come to the U.S. only on permanent green cards. There's even talk of limiting visas to positions in which a demonstrated shortage exists so the market isn't flooded with workers and wages driven down. "The question is how the workers will be brought in," says Ron Hira, assistant professor, public policy at the Rochester Institute of Technology. "Are we just increasing the supply of workers or increasing a particular kind of supply?"

The distinction is crucial. While the political debate often seems like one between those for and against immigrant workers, reality is much more complicated. There is no single "tech job market," but rather a collection of markets for workers with different kinds of skills. There may be shortages for certain kinds of workers, but there are way too many with other skills. For example, demand for network systems analysts, the people who design and set up computer networks, is surging. But the number of computer programming positions in the U.S. has tumbled 25% since 2000.