Foreign Scientists, Technology professionals, Engineers, and Mathematicians (STEM workers) Boost Everybody's Wages

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A new National Bureau of Economic Research working paper looks at how H-1B visa workers affected the wages of college-educated and non-college-educated native workers in 219 American cities between 1990 and 2010. The economists find that H-1B workers are good for economic growth and increasing wages. The researchers find that …

…a rise in the growth of foreign STEM by one percentage point of total employment increases growth in the wages of native college educated workers by a statistically significant 7-8 percentage points.The same change had a smaller but usually statistically significant effect on the wages of native non-college educated workers equal to 3-4 percentage points. No statistically significant effects were found for the growth of native employment. We also find that an increase in foreign STEM growth had a significantly positive impact on growth in housing costs for college educated workers. The increased cost in non-tradable services (housing) absorbed about half of the increase in the purchasing power of college educated wages.

Finally, we use a simple model of city-level production and the estimated wage and employment effects to calculate the effect of STEM on total factor productivity (TFP) and skill-biased productivity (SBP). We find that STEM workers have positive effects on both TFP and SBP. Aggregating at the national level, inflows of foreign STEM workers may explain between 30 and 50% of the aggregate productivity growth and 4 to 8% of the skill-bias growth that took place in the U.S. between 1990 and 2010.

BTW, total factor productivity meaures the efficiency all inputs to a production process. Increases in TFP result usually from technological innovations or improvements.

It's just stupid to send away talented people who want to work here. Clearly whoever said that every foreign student who earned a scientific or technical degree at an American University should find a green card stapled to his or her diploma was right.

Comments

[WTF]

DEY TUK ER JERBS!!11!!!!!!

[Episiarch]

WELFARE AND ANCHOR BABIES HURR DURR

[Drake]

So round up the Mathematicians and Bio-Engineers as they climb the border fence.

[Calvin Coolidge]

Post a mathematical puzzle that will guide them to the non-electrified section if they answer it correctly.

[PM]

The average H1B candidate, of course, being perfectly representative of the broader immigrant (or native) population.

[Pro Libertate]

Technology is our friend. We need more of it.

[Hyperion]

Technology will take our jerbz!

[Brett L]

My friends, I say we throw our sabots into the servers!

[UnCivilServant]

Find them - and get past our cracked security of - A locked Door!

[antisocial-ist]

It's not really locked, you just have to jiggle the handle a little bit.

[UnCivilServant]

The pattern has been when someone leaves for whatever reason, we take a look at their duties and see what can be automated. There are usually a bunch of really stupid manual processes that we can make the computers take care of. We can't do this when they still work here because of strong resistance from the person assigned the work. Mind you, these are state workers, so even if we managed to remove all of their work (never going to happen at my agency) they wouldn't be fired. So I'm not entirely sure why the users resist making their own jobs easier.

[Hyperion]

OT, but you know it's bad here in the USSA when the Aussies are trying to school us on sane economic policy:

Even Aussies don't want any part of Obamas climate change non-sense

[waffles]

I had no idea how racist Australia has become.

[Brett L]

I might agree with you, except that the same people who were busy price-fixing salaries at the top of my industry (still not sure they've stopped, despite the big fine they paid the Department of Labor to go away) are leading the H1-B expansion push. While I think it is probably very good policy to do away with the H1-B program and let a more free labor market signal clearing prices, I think the actual implementation is going to be set up to fuck me AND my foreign co-workers. Hell, I'd love for free migration to become to norm for technical workers. There is nothing in the world that would prevent me from doing my job from Costa Rica other than work visa restrictions.

[Scruffy Nerfherder]

There is nothing in the world that would prevent me from doing my job from Costa Rica other than hookers and blow.

[Calvin Coolidge]

There is nothing in the world that would prevent me from doing my job from Costa Rica other than hookers and blow

[Heroic Mulatto]

There is nothing in the world that would prevent me from doing my job from Costa Rica other than work visa restrictions.

If you mean telecommuting, then why not go to CR on a tourist visa, and when the visa expires go on a visa run to get it renewed, rinse and repeat until you rack up enough years of residency to apply for permanent residency. Unless, CR has already tied up that loophole.

[Brett L]

When I worked there illegally 12(!) years ago now for a giant multinational, we had to return to our country of origin 3 days out of every... 60 or 90. Residency was at one time easy to get. Having a work permit was more difficult or expensive. I haven't looked lately, but my wife isn't interested unless the differential in disposable income allows her to crossfit and shop and have a nanny for 12 hours a day. Otherwise, she'd just as soon live close to her mom and work.

[Heroic Mulatto]

Ah, the visa run. When I worked in Thailand, I had a work permit so I only had to renew my visa yearly, but for those who didn't, they just had to cross the border and spend a weekend in Laos, Cambodia, Malaysia, or my choice, Singapore. I can't imagine what it would have been like if Thailand forced them to return to their countries of origin (for most of my expat friends, it would have been the UK).

[trshmnster the terrible]

OT: Just had a dog go through an outpatient surgery with general anesthesia, microchipping, a weekend stay at the vet, and full meds for a week, along with vaccinations for 2 other pets, and it was sub-$600. You try that sort of thing on a human, and it's $10k! Heck, I should go to the vet the next time I feel sick.

[UnCivilServant]

I'd forgo the microchipping if I were you. Word is they itch like crazy.

[Snark Plissken]

How do you know he doesn't sleepwalk?

[sarcasmic]

The anesthesia alone would have been three grand.

[Suthenboy]

my dog broke her leg badly. I scooped her up, drove her to the weekend emergency vet and three hours later she was out of surgery and back home. Cost: 400

my wife broke her hand ( boxers fracture) last thursday. The clinic couldnt do anything, the ER couldnt do anything. As I type this on my iphone we are sitting in the orthopedic sugeon's waiting room 4 days later with her hand still broken. Endless fiddlefucking around and still no help.

[Brian D]

Jesus, by the time someone sees her they'll have to re-break her hand!

[JEP]

I dislocated my knee last June tearing my ACL and my meniscus. I did it on a Sunday, took Monday off work, and went straight to the orthopedic surgeon's office on Tuesday. Got an MRI the same day.

If I had gone to the ER, I probably would have paid an extra `0 dollars minimum for them to give me some pain killers I didn't need and to tell me to ice and elevate.

[JEP]

* 600 dollars

come on squirrels

[Lady Bertrum]

I tore a muscle in my upper back on Wednesday. Ice and hot packs and a handful of Percocet have gotten me through.

No reason for his post other than to moan and whine *currently tearing up for a pity party*.

[PM]

Jesus, where do you guys live? I had to have the tip of my cat's tail amputated at an emergency veterinary clinic and it was something like $1,300. And that was 6 or 7 years ago. And they fucked it up and I had to pay another $900 to get it done properly at my regular vet's office.

Which, of course, is still practically free compared to the human equivalent. I just feel ripped off now.

[dannye]

I'm amused at the people whining about H1B visas aren't remotely qualified for the relevant jobs to begin with.

[UnCivilServant]

I've interviewed a few of those that the 'employer' (the contract house) was trying to foist off on us. We didn't take them.

[The Immaculate Trouser]

The economic case for most forms of immigration in a free market (high-skill and low-skill alike) is pretty ironclad. There are a few externalities to account for, but for the most part immigrant labor operates like any other good in a market. Low-skill labor immigration in the current environment is distorted by the existence of a price floor on labor (min wage), subsidy in lieu of labor (welfare), and many of the occupational restrictions in place making it difficult for both citizens and immigrants to operate in something approaching a free market of labor. There are also non-economic concerns (crime, voting patterns, etc.), the vast majority of which can be accounted for through a rational regime of immigration and acculturation.

Unfortunately, the current regime and plans for reform seem to maximize the cons of immigration and minimize the pros by providing a poor environment for free labor and an over-generous environment for the indolent, as well as a poor program of acculturation (and indeed, some programs which actively interfere with said acculturation).

[Hyperion]

I think that my organization will stop hiring H1B visa holders in the very near future, or we've already reached that point. We've recently lost 2 workers who were on an H1B because they couldn't make the transition from H1B to green card and there H1B time expired. It's apparently a real pain to sponsor someone because of all the requirements the H1B person has to make. I'm not real clear on all of that, but I think it's very unlikely that we'll be seeing anymore employees in my dept that aren't either a citizen or has a green card.

[Sevo]

Yeah, but not as much as the minimum wage!

[Dances-with-Trolls]

OT: The GOP, our small government allies.

"A larger electorate is to Thad's advantage," said former Gov. Haley Barbour, a Cochran supporter and former Republican National Committee chairman. "The McDaniel people did a very good job of turning out their vote ? I give this as an example of expanding the electorate: School people ? teachers, administrators, bus drivers, parents, parents of special-ed students, will be much more motivated to go vote if they know one candidate, McDaniel, wants to do away with $800 million in federal support for education, while Senator Cochran has always supported it."

[Scruffy Nerfherder]

1980 GOP Platform

We understand and sympathize with the plight of America's public school teachers, who so frequently find their time and attention diverted from their teaching responsibilities to the task of complying with federal reporting requirements. America has a great stake in maintaining standards of high quality in public education. The Republican Party recognizes that the achievement of those standards is possible only to the extent that teachers are allowed the time and freedom to teach. To that end, the Republican Party supports deregulation by the federal government of public education, and encourages the elimination of the federal Department of Education.

[Kaptious Kristen]

Speaking of technology... I am embarking on learning me some JavaScript (I only have a passing familiarity with it and have never written my own code).

What kinds of shit can I do to my web site that would give me a good overview of JS? I think working with the DOM would be important, and getting a good x-section of some JS functions & methods would be good, too. My site is in WordPress, BTW, if that makes a difference.

A form submission or quiz seems too simple. I'd like to do something that I have to puzzle out and think about.

Any ideas on cool shizz I can do that would help me learn this stuff?

[Paul.]

I've done a bit of Javascript (back in the 90s) during Web 1.5/2.0 with mouseover/rollover stuff.

My understanding is it's pretty powerful now. I'm sure someone else can give you details, but here's a link that describes some 'amazing' things that you can do with JS that most people don't know:

http://www.creativebloq.com/we.....do-6122835

[Jordan]

The best advice I can give you re:JavaScript is to learn jQuery. It is vastly superior to vanilla JS. As far as what to implement for your website, I'm not really sure. I'd just buy a book like Head First jQuery and follow along.

[Kaptious Kristen]

I definitely need to learn the basic JS first, before jumping into jQuery. Like, syntax and all that.

For example, I would say I'm fairly advanced with CSS, but I just really know the proper syntax. I actually have to use a reference lookup a lot when I'm writing CSS.

I just need to familiarize myself with the structure & stuff for JS. Then I'll jump into jQuery.

[Kaptious Kristen]

Right now I'm using Lynda to learn, but the way my brain works is I have to put it into practical application for me to really "get it". And using the projects at the end of the Lynda course is all well and good, but that won't help me think and conceptualize.

Lynda is awesome, BTW, and the host of the Javascript course I'm taking sounds like Forrest Sawyer with a Liverpudlian accent.

[Jordan]

If you know a server side language, you might try implementing a commenting system. When you're done, you can license it to Reason.

Seriously, though. I think that would be a decent exercise.

Oh, and there's also a Head First Javascript, fyi.

[Jordan]

Or perhaps a calendar app. There's plenty of existing JS calendars, but reinventing the wheel would help you learn.

[Kaptious Kristen]

Another good idea.

You're better than my boss, of whom I asked the same question and all I got was "learn jQuery". Yeah, real helpful, fucknut!

[Jordan]

LOL happy to help!

[Kaptious Kristen]

That's a great idea! I'll give it a whirl. I'm so-so with PHP. I'd say I'm more familiar with it than I am with JS.

[Christophe]

http://www.codecademy.com/tracks/javascript is where you should start, probably.

[trshmnster the terrible]

This is good for teaching the syntax of the language, but I found it useless for showing why javascript exists.

There was a similar site I came across where it was 3 windows, an HTML window, a JS window, and a "results" window. You could see the results of your changes in real-time, and it helped my understanding immensely.

[Christophe]

http://jsfiddle.net/ would be the site you're thinking of, probably.

[Rasilio]

I don't know how much value add H1B workers are in other fields but in Computer programming I am sorry they are a complete waste of money and the practice of using them only continues because of the broken window fallacy and management incompetence.

This is not to say that foreign workers cannot do the job but rather there are American workers who could do those jobs just as well and would do them for basically the same cost. What they lack is the proper credentials and maybe a little skill gap that could easily be closed with some OJT (which costs far less than the whole H1B process)

[Paul.]

Exactly this.

There are a metric ton of problems with the whole 'outsourcing/hr/hiring practices' thing in the IT industry right now.

There seems to be a push (at least in my corner of the industry) to create replaceable IT workers by simply checking boxes for credentials.

Having been going through the process of outsourcing myself to India, I'm perplexed at the lack of skills with these highly (and I mean HIGHLY) credentialed H1B workers.

This desire to silo off skillsets and create 'towers of technology' will surely kill us all.

/end rant

[UnCivilServant]

During the current "IT Transformation" where I work, the generalists have the uneviable task of telling the specialists (and management, who bought their overblown promices) why their plans won't work, and what really bad ideas they've embedded in them the moment they do such unusual things as run into other aspects of the organization, or *gasp* get touched by users.

Management wants to shut us up because the golden promices sound better than harsh reality. We've racked up quite the list of "I told you so" moments and we've only been at this for a year.

[Rasilio]

"I'm perplexed at the lack of skills with these highly (and I mean HIGHLY) credentialed H1B workers."

Tell me about it. A few years ago I had an Indian QA Engineer who supposedly had a Masters Degree in Computer programming waste 10 weeks failing to build a vbscript that would allow our test team to create test data in a spreadsheet then push a button to spit out the SQL Insert statements to plug that data into the database for later use.

When we were finally out of time and less than 2 weeks away from initial code delivery I took the job away from her and created the first of 3 scripts that were needed (the other 2 were basically copies with some name and row number reference changes) in about 12 hours and I don't even have a degree.

And that right there is the problem. 90% of employers would look at her Resume and mine and conclude she was the better person to hire. The reality was she either did not have that degree she claimed to have or she got it without actually managing to learn how to code

[Kaptious Kristen]

In our (web) shop, pretty much experience and portfolio are all that matter. I have a degree in International Relations, for cryin' out loud, yet they hired me.

[Brett L]

You can still work for a contractor this way. All they care about is maximizing the dollars that stick to their fingers. Anywhere else, it seems that HR is winning the war on IT.

[Paul.]

Anywhere else, it seems that HR is winning the war on IT.

They won a long time ago. They're in our houses, sleeping with our women and drinking our beer.

[Heroic Mulatto]

I'm guessing her degree was from an Indian university? The dirty secret is that in much of the world, especially the 3rd, if you pay tuition you get your degree even if you did fuckall. That's why the ambitious ones, who actually want to learn something, come to study abroad.

[PapayaSF]

I had a similar experience with a SharePoint "expert" from India. It soon became clear he was a beginner who knew little more than the rest of us did.

[AlexInCT]

Most of the time these resumes are put together by the company the foot soldier works for and reflect nothing of said foot soldier's real skillset. That goes doubly so when the worker is off-shore. Buyer beware. Some of these guys know their stuff, but they bill premium dollars if they do, so the business model fails.

IMO, the reason there is such a push for H1-B programs, especially in IT, is that the management teams tend to dislike the fact that they are dependent on the people they used to make fun in high school. Especially if those people make better money than them now. I had a manager as much as admit that to me: it rankled him that the geeks were doing so good and he felt jibbed.

The fact of the matter is that the entire software offshoring model is a sham. It relies on a few individuals to clean up the crap that comes from dysfunctional coding farms off-shore so management can keep deluding themselves that the model works and is cheaper (at least on paper). If more of us simply refused to do the heavy lifting, this model would crumple. Of course, I like my income, so I am not going to risk it.

[buybuydandavis]

" the reason there is such a push for H1-B programs, ..."

Is that hiring through a contracting agency creates a huge slush fund that can find its way back into the pockets of corporate managers, whether in envelopes of money, or positions with the contracting firm later on.

[Brett L]

I've actually known two very good developers who were H1B orginally. I think both have their green card. And one who could run code in his head, but refused to listen to anyone once he had an idea. I will say the PhD candidate who was lecturing me on increasing performance via maximizing data entropy* by using dynamic SQL statements was so smart, he had gone around to stupid. But I blame graduate school for that one.

*This is probably true if the next query coming down is a random query from your application. Mostly, he just introduced security vulnerabilities and maintenance headaches.

[Rasilio]

Indeed, the point is not that there are no good H1B developers. The point is you can find Americans who can do the job just as well in aggregate as those H1B's and will accept wage rates which match or beat the cost of the H1B.

The main differences will be in the resume's and credentials. The American worker might not have quite as many years of experience listed and probably won't have the same educational credentials or maybe doesn't have experience in your specific business domain or with the programming languages you use but domain knowledge can be gained pretty quickly (at least enough for programming purposes) and once you know how to code in 1 language moving to another is not that hard.

Some of the best developers and testers I have ever worked with were Indian contractors either here on an H1B or located offshore, however on average I could have spent 2 weeks on various message boards and found people here that could do the job just as well and would do it at a discount for the experience.

[Rasilio]

For example, when I managed a QA department of 35 the best tester on the team had no degree and no prior Testing or development experience. He was a Geek Squad Field agent (not the guys in the stores, the ones who go out on the road and serve as a "rent an it department" to small businesses) making $13 per hour with the usual random schedule you find in any retail setting. We hired him at $17 per hour and after 3 months promoted him to a $40k salary position. At that time the bill rate for our offshore Indian Contractors was $23 per hour and if they were onsite it was $65 per hour.

Most companies would never have made that call, rather than hiring that guy they would have just brought in another H1B with a "masters degree" that couldn't figure out how to write a simple vb script

[trshmnster the terrible]

I've actually known two very good developers who were H1B orginally.

It's just like everything else. If you get the cream of the crop, they're as good as some of the best Americans that you can skim from the top schools. If you hire a handful of H1B's "off the boat" without checking their credentials, there's a major divide between the "haves" and the "have nots" with regard to talent.

Honestly, when it comes to interns, I've found the smartest/most capable were 1st generation American of Chinese ancestry. Granted, we were recruiting from Stanford, but those kids took ownership of the work they did and produced some quality results.

The guy we had last summer was an Indian grad student in Computer and Information Services (or something like that) with a very impressive resume (picked him out of a group of 30+), but he just couldn't hack it. He spent 2 weeks bumbling around adding some small functionality a script that took me 30 minutes to write, and never caught up from that. His code is still sitting in our system somewhere, rotting away, never to be used again.

What I find most interesting is that the Indians who are here and are very talented tend to be the most scathing critics of the hacks. They quite nearly take it personally that so many of their countrymen are making fools of themselves in the IT and computer science fields.

[The Original Jason]

Nah, let's just ship all the H1-B Visa holders back and let them start the next technical revolution overseas.

That way they won't steal jobs from Americans and their company will be able to hire foreigners who won't steal jobs from Americans.

Nothing bad could possibly come from that.

[Hawk Spitui]

Clearly whoever said that every foreign student who earned a scientific or technical degree at an American University should find a green card stapled to his or her diploma was right.

Only if you're dumb enough to believe "highly trained" is synonymous with "in demand".

Tell us - do you have any idea how many jobs for particle physicists are available as opposed to how many students with Ph.Ds in particle physics are graduated each year?

Obviously not.

[Christophe]

Fun Fact: it doesn't matter.

Give them a green card anyway. The theoretical physics grads can work in finance (apparently the math is similar enough, according to a few Phys grads I know).

Worst case scenario: they'll go back to their country of origin to work in that chosen field (a green card isn't an obligation to stay), or they'll find alternate work inside the US. No harm done either way.

[Acosmist]

Why is Reason staffed by American citizens at all? A shiny penny a day could attract plenty of foreign workers, yeah? Hit the bricks, guys.