NYT: Giant Study Proves Mark Zuckerberg Wrong On Economics Of Immigration
July 24, 2013, 03:11 PM
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From the NYT
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. 
The numbers, prepared by a company called Bright, which collects résumés and uses big data tools to connect job seekers with openings, enter a contentious debate over whether tech companies should be allowed to expand their rolls of guest workers. In lobbying Congress for more of these temporary visas, called H-1B visas, the technology industry argues there are not enough qualified Americans. 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.[Big Data Analysis Adds to Guest Worker Debate, by Quentin Hardy, New York Times (blog), July 23, 2013]

To be precise, economics takes issue with the industry's argument. In contrast, economists, on average, have been shamefully reticent about pointing out that the Silicon Valley billionaires are denying the basic findings of economics (e.g., supply and demand) to add to their billions. Why? Maybe they figure if they are nice to the billionaires, the billionaires might be nice to them.

... “I didn’t expect this result,” said Steve Goodman, Bright’s chief executive.
Bright is based in San Francisco, and it makes money in part by placing qualified candidates with recruiters and, according to Mr. Goodman, employs workers using H-1B visas. “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.” 
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. 
Bright’s study is unlikely to end the debate, partly because it rests on the company’s proprietary algorithm to determine who is a “good fit” for a particular job opening. Its algorithm uses a range of criteria, including work experience and education, but also work descriptions that indicated a high likelihood of other skills.  
For the study, Bright looked at the job categories for which firms applied for H-1B visas, and then, looked at résumés of job seekers in the United States whose résumés matched those same categories. 
Giovanni Peri, an economist at University of California, Davis, said that the Bright study was insufficient to determine whether there was a need for foreign engineers.


Hey, Giovanni, didn't you prove that in 2007, immigration was wonderful for California workers? Has anything happened economically in California since 2007? Seems like I read about something in the papers.

“It is the difference between job vacancies (demand) and unemployed with right qualifications (supply) that provides a measure of the excess (or not) of demand,” he said. “Knowing only the number of unemployed with right qualifications does not do it.” 
The Senate immigration bill, passed last month, nearly doubles the number of H-1B visas that companies can seek every year.
... Bright’s analysis suggests a hierarchy in the industry that mirrors what has long been said about jobs like low-skilled agricultural or restaurant work: Americans could do these jobs, but are unlikely to accept the pay or conditions. As a result, the jobs are taken by immigrants. 
The age of workers, which the study did not look at, may also play a role. Experienced American workers tend to be older in an industry that prizes youth. 
A study conducted by a Seattle-based company called Payscale found that among 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. 


Another reason for a youth bias is the cost of health insurance, which is immense these days. Peter Schaeffer's rough estimate is that health care (private and public) costs a staggering $12 per hour worked in the United States.

Yet, what do you think health insurance costs per worker at Facebook compared to, say, at General Electric? Not much, right? It's one reason you can get so Zuckerberg Rich in tech — you don't have to pay much for your employees' health insurance. Obviously, that's not the only reason, but it's pretty weird that ultra-rich companies like Facebook bear so little of the burden of health care.

But, in my experience, people tend to get old. So, shoving the costs of health care onto somebody else, while good for Mark Zuckerberg's net worth, is just a zero sum game, one that the tech billionaires are winning, which means that somebody else (i.e., you) are losing.

... Later that day, Bright was having a party, partly to attract new talent, he said, including foreign programmers here on H-1B visas.


Bright's report is here.