Don't Drink the Tea. Think With the WE.
Nov
2014
24

“They may not be able to find them at the price they want. But I’m not sure that qualifies as a shortage, any more than my not being able to find a half-priced TV.”

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Slightly lost in President Obama’s executive action granting deportation relief for millions was the expansion of visas for foreign-born U.S. college graduates, a move industrial leaders say is necessary to combat a worker shortage.  Many scholars, however, argue that the worker shortage in no way exists. Among them is Hal Salzman, professor of planning and public policy at Rutgers University. He told Bloomberg Business,

“There’s no evidence of any way, shape, or form that there’s a shortage in the conventional sense.  They may not be able to find them at the price they want. But I’m not sure that qualifies as a shortage, any more than my not being able to find a half-priced TV.”

Simple economics drive most of the skepticism about a worker shortage. Wages are supposed to rise when there is limited worker supply, in order to bring more workers into the market. But in many of the industries crying shortage, wages have been stagnant for decades, Bloomberg Business explains:

For a real-life example of an actual worker shortage, Salzman points to the case of petroleum engineers, where the supply of workers has failed to keep up with the growth in oil exploration. The result, says Salzman, was just what economists would have predicted: Employers started offering more money, more people started becoming petroleum engineers, and the shortage was solved. In contrast, Salzman concluded in a paper released last year by the liberal Economic Policy Institute, real IT wages are about the same as they were in 1999. Further, he and his co-authors found, only half of STEM (science, technology, engineering, and mathematics) college graduates each year get hired into STEM jobs. “We don’t dispute the fact at all that Facebook (FB) and Microsoft (MSFT) would like to have more, cheaper workers,” says Salzman’s co-author Daniel Kuehn, now a research associate at the Urban Institute. “But that doesn’t constitute a shortage.”

The concern is that the tech companies calling for change are looking to expand their ability to exploit workers and pay low wages.  The Government Accountability Office has taken note:

A 2011 review by the U.S. Government Accountability Office found that the H-1B visa program, which is what industry groups are lobbying to expand, had “fragmented and restricted” oversight that weakened its ostensible labor standards. “Many in the tech industry are using it for cheaper, indentured labor,” says Rochester Institute of Technology public policy associate professor Ron Hira, an EPI research associate and co-author of the book Outsourcing America.

The industry’s general tone deafness on the issue does not help matters. Take, for example, Facebook, which when questioned about the myth of the worker shortage responded to Bloomberg Business with the following one sentence statement:

“We look forward to hearing more specifics about the President’s plan and how it will impact the skills gap that threatens the competitiveness of the tech sector.”

We look forward to seeing how far these companies will go to continue exploiting workers.

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