Tuesday, March 13, 2007

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Gideon Rachman, security risk

Over at his FT blog, Rachman points out that excessive regulation for admitting both foreigners and foreign capital is posing some problems for the United States:

[T]he survey for the Discover America partnership – a group of big businesses that seeks to promote tourism – also suggested that 39 per cent of regular travellers rate the US “worst” for immigration and entry procedures; the Middle East came second on 16 per cent. Discover America complains of a “climate of fear” and a “travel crisis”. It cites a “near 20 per cent drop in the United States share of overseas travellers since 2000” and claims that this has cost 200,000 jobs and $93bn in revenue.

There is always a slightly spurious precision about figures like these. But it is not just the tourism industry that is complaining. A McKinsey report into America’s financial services industry, also published in January, warned that New York risks losing its status as the “financial capital of the world” within 10 years. The first two problems it cited were over-regulation and fear of litigation. But problem three was “US immigration restrictions which are shutting out highly skilled workers”. Getting foreign businessmen into the US for one-off meetings can be a problem. Long-term work visas are an even bigger issue. One financial service executive is quoted as complaining: “It is much easier to hire talented people in the UK – I couldn’t hire the team I need in the US and I wouldn’t bother trying.”

The McKinsey report says Wall Street is still the best place to find talent. But the City of London is catching up, as it benefits from free movement of workers within the European Union and the fact that Britain does not have a quota-limit on work visas, even for non-Europeans.

Testifying before Congress last week, Bill Gates of Microsoft argued that US computing companies are also suffering from a severe skills shortage and that: “America’s immigration policies are driving away the best and brightest, precisely when we need them most.” Mr Gates sees an interlocking set of problems. A smaller proportion of international students are now studying at American universities, partly because it is made so hard for foreign graduates to then get a job in the US.

In 2001, the US issued 200,000 H-1B visas for highly skilled workers. That figure has now shrunk to about 65,000 a year. A big increase is promised, if and when a new immigration act is finally passed. But in the meantime Mr Gates complains that American companies are shifting research and development work overseas.

Presenting an unwelcoming face to the world has political as well as economic implications. Surveys regularly show that foreigners who have actually visited the US have a much more favourable impression of the country. The same report that uncovered widespread fear of American immigration procedures reported that 72 per cent of visitors had a “great” experience inside the US.

The good news for the US is that so far the damage is at the margins. American universities, investment banks and computing companies are still clearly the world leaders. The American government has shown that it is keen to improve immigration procedures. The annual number of student visas issued for the US, after falling for some years, rose in 2006. The number of business visas issued for the US also rose. The waiting time to get a visa interview in India, which used to be notorious, has been cut back to a few days. Tourist numbers are also going up again. A lot more needs to be done. But at least there is an awareness of the problem.

You'll have to read his whole post to understand the title of this post.

posted by Dan on 03.13.07 at 11:09 PM


America produced the Wright Brothers, Goddard, Henry Ford, Ely Whitney, Samuel Morse, Alexander Graham Bell (okay, he's Canadian, but you know what I mean), Thomas Edison, Shockley, Moore, Claude Shannon, Donald Knuth,.... we just really don't need a bunch of low level, relatively low wage coders. We need to nuture our own talent and bring them up through the ranks. I wonder how much native talent is being surpressed by immigration.

Ironically, Bill Gates, Steve Jobs and other heroes of the computer revolution benefitted as they went through school at a time of low immigration and high standards post-Sputnik education.

Finally, we know immigration is harmful to natives on aggregate because people are voting with their feet. Native-born Americans are leaving high impact states like California -- and it ain't because the weather is bad. Revealed preferences indeed!

posted by: Mitchell Young on 03.13.07 at 11:09 PM [permalink]

Mitchell Young, commenting above, should learn to make some elementary distinctions:

1) between legal and illegal immigrants
2) between educated and uneducated immigrants
3) between a failing secondary school system, unresponsive to the needs of talented natives, and a relatively successful higher ed system, attracting smart and energetic foreigners.

If he made these distinctions, he would see that Californians are not fleeing educated legal immigrants, and that educated legal immigrants do not take jobs from natives. Rather, Californians flee from uneducated and unassimilated illegals, while educated bright legal immigrants do not take jobs from people who have never been encouraged and trained to qualify for those jobs.

Gates is right to sound the alarm.

posted by: Elementary on 03.13.07 at 11:09 PM [permalink]


One of my points was that back in the 1950s and early 1960s, rather than seek to import 'talent' Americans put resources into developing our own. Moreover, I gave examples -- many examples -- of talent that could be called 'native' , partly as a corrective to the idea that Americans are somehow incapable of developing technology, etc that has been foisted upon us by the mainstream media. (For years, for example, I thought immigrant Andy Grove was the only force behind Intel -- not so , Robert Noyce and Gordon Moore, born in Iowa and San Francisco respectively, were the technical guys). I don't think its coincidence that the major technical advances in America came at a time of low immigration. Today's possible Gates, Jobs, Hewlett, Packard, etc are being crowded out, with little gain that I see.

while educated bright legal immigrants do not take jobs from people who have never been encouraged and trained to qualify for those jobs.

Well, why go into a field which is flooded with H1-Bs when you can become, say, a lawyer and be protected from both outsourcing and H1-Bs. Flooding a field with H1-Bs does not encourage people to go into a field.

I certainly would agree with a proposal to cut 'family reunion' migration in an amount commensurate with an increase in H1-Bs (although I think high levels of both are a mistake).

posted by: Mitchell Young on 03.13.07 at 11:09 PM [permalink]

Wright Brothers, Goddard, Henry Ford, Ely Whitney, Samuel Morse, Alexander Graham Bell Thomas Edison, Shockley, Moore, Claude Shannon, Donald Knuth et al are the kind of people who would have succeeded no matter what, no matter how many H-1B's flooded the "market". Lets get that clear.

65,000 H1's are issued every year, most of them for jobs that require tech skills and a willingness to learn and push yourself harder. These H-1's are in place because employers have benefited greatly - take for example Microsoft. What exactly stops MS from employing Americans ? Nothing actually. They do not go out of their way to hire H1-B's - it is more like they are willing to hire the best talent available even if it means, sponsoring their H1's. And of course, they want to retain talent after observing how they have helped the company. What's wrong with that?

I dont think that people are afraid of competing with 60,000 candidates - the number of tech jobs run into the millions now. My personal take is that people take up careers which they like. If they dont want to be some geeky techie, they are not going to be forced to. And if you need talent to overcome this demand, you try to meet it in all legal ways possible.

posted by: NS on 03.13.07 at 11:09 PM [permalink]

"Bring me your tired, your poor, your huddled masses yearning to breathe free..."

...unless you might force some lazy native to actually compete in the open jobs market with you.

Immigrants are the future of this country, they always have been. Immigrants sacrifice almost everything in order to work here, often for jobs that are beneath their skills and experience, mostly so their children can grow up to have a better life than they did. Tha was true 100+ years ago and still is today.

posted by: Useless Sam Grant on 03.13.07 at 11:09 PM [permalink]

NS you are missing my point -- Edison et al would probably have succeeded, but in a different fields. The propaganda now is that Americans can't or won't go into tech fields, but the entire history of the country shows that to be wrong. And nobody has refuted my point that the real advances in the 20th computer revolution came at a time with historically low immigration -- today's Jobs or Gates are probably going into law. Therefore, the argument that US technology will be damaged by lack of H1-Bs is false. From the basic architecture for the internet, to Unix, to the first PCs and PC operating systems, all were devised by an overwhelmingly native born workforce (a few exceptions, like John Kemeny or Kernighan (Canadian, does that count?)

I think enrollment figures show that fewer Americans are going into tech fields because the field is not protected like, say, law or a field where language ability or connections , like investment banking, protects you.

Businesses like H1-B's because they are essentially indentured servants. Or in some cases they are used as ethnic conduits to get relatives and friends into the US from the 'old country'. And BTW the 65000 figure is for 'new' H1-Bs. As they can be renewed, the actual figure is of people working in H1-B status is much higher.

As for 'tired, poor ', sorry, but a 100+ year old poem doesn't qualify as sound public policy. Heck, it didn't even when it was written. Indeed, 'Useless' is living proof of the MSM and many libertarian's views of Americans 'lazy' etc. Just about par for the course of high immigration advocates -- let's call it xenomania.

posted by: Mitchell Young on 03.13.07 at 11:09 PM [permalink]

I am sorry but i should have told you that i am on H1-B myself !! And no, i am not indentured to anyone. I can quit a job any time i want to if i can find an employer who can sponsor my H1.

I want to address your point about how most innovations in the computing industry have been pioneered by Americans ( i hate to use the word "native" - it sounds wierd ;-)).

People that you have named (Knuth,Kernighan,Gates etc) are visionaries, pioneers that this country has simply been blessed with. They took to their respective domains at an early age and did not look at computing from the point of getting jobs alone. In fact, jobs were the last thing on their minds. They had big dreams, and more importantly they were capable of carrying them out. The men that you are talking about do not come along easily, nor are they by products of any particular policy/system.

The United States, like like minded Western countries has managed to create an environment where people can think and work hassle free, with a lot of emphasis on making life easier and better. Unlike most other countries, there is also a great entrepreneurial spirit here that brings these ideas to the market place in a way no one can even come close to replicating - no body has marketed Windows PC like Microsoft has. Entrepreneurship will always flourish no matter how many people from different countries are going to compete for jobs.

Bill Gates is concerned about retaining people who are on H1's that he thinks are providing value to the company - value that he does not want to lose after 6 years. Also, you have to remember that H1-B salaries are at the market rate - the employer needs the Department of Labor to certify that the salary that he pays for a H1 candidate is commensurate with market rates and the standard of living in the State ( Washington in MS 's case) in which the H1B employee resides. H1-B's cant be used for a lot of cost cutting either. In fact many people who are on a H1B here have post graduate degrees and you cannot imagine employing these people without good salaries ranging anywhere from 75K to 120K.

I have read a bit about programmers losing their jobs because they are now being shipped offshore - in fact this happens to be a bigger concern for people than the number of H1's that the US Government is ready to issue.

It is easy to understand why people get concerned about losing their jobs - who does'nt ? But this has almost nothing to do with the number of H1-B's that are issued.

posted by: NS on 03.13.07 at 11:09 PM [permalink]

NS -- I exaggerated when I said indentured, but there is still a tie to an employer that is stronger than for a native.

People that you have named (Knuth,Kernighan,Gates etc) are visionaries, pioneers that this country has simply been blessed with. They took to their respective domains at an early age and did not look at computing from the point of getting jobs alone.

I will put my point again -- these guys all happened during the low immigration point in the US . Historically, low immigration does not equal low achievement in technical fields, and seemingly its quite the opposite. Is there a casual connection between 'native' achievement in tech and immigration-- I suspect there is, but it would take a whole paper to even approach proving it. Let's just say I think it has to do with a society concerned with generating its own social capital to benefit its own members, versus the 'market writ large' that libertarians like. In other words, I don't think these guys 'simply happened' , I think they were the product of mid-twentieth century America that looked after its own first.

I hope you enjoy your stay in the US, NS , and I hope you have the opportunity to take the experience you have gotten here and put it to use in your home country.

To be transparent, I have lived abroad also , working in Germany (though for a US concern) and studying in the UK. The UK is actually pretty tough on those seeking student visas. Germany was pretty efficient (naturally!), but did require a lot of paperwork.

posted by: Mitchell Young on 03.13.07 at 11:09 PM [permalink]

Mitchell, you have proven my point entirely. What are you so afraid of? Your ancestors, who were not always Americans, would be ashamed of you. Your lack of understanding of the meaning and significance of the Vow of Liberty is very sad.

Our people are our strength, in whatever manner they choose to become American.

posted by: Useless Sam Grant on 03.13.07 at 11:09 PM [permalink]

How do you account for the fact that Google, Youtube, Apple IPods are still being invented here and now where else - i mean we had quite a few search engines before Google came along. So why do they now dominate the market place like no one else does ?

A couple of guys from Stanford had this brain wave about making Internet search more efficient with better search algorithms. I just fail to understand how h1-b's can have any effect on an individual's desire to succeed or their creativity.

Also, most people who do come here on h1's come for an opportunity to work - and of course they like the country after having stayed here long enough that they want to immigrate legally - Gates is now railing about the wait time it takes for becoming a permanent resident - i dont think he pegged innovation to people getting PR status - he just wants to retain people he thinks should be in Microsoft and if only their green cards could come in say 3 years instead of 6, he'll shut up.

I am enjoying my stay here and in all probability, i will go back to India. But i will always love the incredible time i had here. My admiration for America just grew a lot stronger which i am sure is the case with most people here on what ever work visa they are on.

posted by: NS on 03.13.07 at 11:09 PM [permalink]

If US companies want to be the best in the world they have to hire the best people period. Even if US high schools were the best in teaching math and science and not at the bottom 20%, it would still be better to allow companies to select workers from the best and brightest from all the world - a US citizen that's really good will still find a job - and it's better than to have the entire company move elsewhere.

Since US high school are terrible at teaching math and science and at best it would take at least 10 years to fix them, restricting companies access to educated foreign workers is economic suicide.

posted by: BB on 03.13.07 at 11:09 PM [permalink]

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