Commentary
Foreigners Don't Take IT Jobs, They Create Them
Research shows that immigrant-founded companies generate billions in revenue and employ hundreds of thousands of Americans, so why do so many people want to seal our borders?
The eight commenters came to pretty much the same conclusion: If we keep foreigners out of the U.S., employment will rise and the economy will rebound. One of the more articulate commenters, someone whose "job was outsourced to a foreign company doing business in the US," put things this way:
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More >>"We need to put Americans back to work by sending all of these foreign nationals home. Hire Americans first. If a company wants to outsource, require that American citizens and permanent residents are used by the vendor. This would help the economy some. I truly hope that OWS threatens outsourcing to foreign companies and foreign workers."
Another commenter insisted that H-1B and other work visas "be immediately suspended. MILLIONS of our better paying jobs would be instantly RETURNED, to Americans, in America."
While I understand the deep frustrations and fear that accompany 9%-plus national unemployment, I'm not buying this line of reasoning. A body of evidence shows that encouraging highly educated technology and other professionals to come to the U.S., or to stay here after graduating from U.S. universities with engineering or other technical degrees, actually increases employment and economic growth because those go-getters are more likely than the average professional to start and build businesses.
A research team led by Vivek Wadhwa of Duke University, building on studies conducted in the 1990s by AnnaLee Saxenian of the University of California at Berkeley, determined that in a quarter of the U.S. science and tech companies founded between 1995 and 2005, the chief executive or lead technologist was foreign-born. Wadhwa's research estimates that those immigrant-founded companies generated $52 billion in revenue and employed 450,000 people in 2005. In Silicon Valley, the percentage of immigrant-founded startups was even higher: 52% in 2005. Looking over the rich history of the U.S. high-tech industry, consider the economic contributions of companies such as Intel, Oracle, Google, and eBay--all of them with immigrant founders.
Furthermore, Wadhwa's research found that foreign nationals living in this country were listed as inventors or co-inventors in 25.6% of patent applications filed from the U.S. in 2006, up from 7.6% in 1998. Foreign nationals also contributed to most of the patent applications at Qualcomm, Merck, GE, and Cisco at that time, his team found.
More recently, a 2011 report from the Partnership for a New American Economy finds that more than 40% of the current Fortune 500 companies were founded by immigrants or their children. The revenue generated by those companies "is greater than the GDP of every country in the world outside the U.S., except China and Japan," the report states.
In a speech in Washington in late September, New York Mayor Michael Bloomberg, who made his billions developing systems for financial traders, called on Congress to eliminate the cap on H-1B visas, increase the number of green cards for technical pros, and give foreign students with PhDs in science and tech fields permanent resident status. "Turning these students out of the country is, to put it bluntly, about the dumbest thing we could possibly do," Bloomberg said.
Clearly, foreign nationals aren't just "taking" U.S. jobs; they and their offspring are producing more than their fair share of innovations and economic opportunity, much of it on these shores.
Critics of this line of reasoning will point to the abuses: mainly, the H-1B and other visa holders brought in to do mid-level engineering and other work that could be done by U.S. nationals. But the answer is for government visa issuers to crack down on the abusers, not to end the visa program and shut down immigration of high-skill workers.
What about those U.S. companies moving IT and other jobs offshore by the boatload while accepting U.S. government bailout funds? In this regard, if the Occupy Wall Street climate prompts U.S. businesses and consumers to skew their buying toward companies dedicated to keeping jobs in this country, that's their prerogative. But let individual buyers decide whether to apply that pressure. Don't cede that decision to government bureaucrats.
Rob Preston,
VP and Editor in Chief, InformationWeek
rpreston@techweb.com
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Comments:
2013-03-01T10:35:03
Outsourcing the IT job of an "average professional" in the U.S. to India or China for equal or inferior work is based on price. Companies shouldn't swap out average work here for average work over there because the workers are cheaper to hire/keep. Expelling above-average Indian or Chinese students of IT who are in the U.S. is stupid. If they're smart enough to earn graduate degrees, then they're smart enough to start companies and hire those average U.S. workers.
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2013-03-01T04:25:19
It may be so that all of these companies were formed by immigrants, but they were immigrants who stood in line to get into the country, not leapfrogged to the top by taking a H1B visa job. It also makes sense that they should hire the IT workers here that already have an adequate education and experience in the field to be able to help a company. Because companies are not hiring Americans that already have this education is one concern that I have over these types of bills. By letting companies hire all over the world, it allows them to cherry pick from a lot larger group of applicants, which gives the American worker much less standing. I guess that just because a person is an American citizen, that does not guarantee them a job, so an Indian or Chinese should have preferences over them. After all, people come and go into this country all the time without repercussions or papers. This would give them some papers that would enable them to take American workers jobs. If there really was a shortage of talent here then why don't companies with business here hire the unemployed that are perfectly fit to work there. Because they might have to train them, and this would cost them something, and if they hired somebody from India they would work for peanuts. That way corporations that do business in this country can denigrate the people who perform the work. After all, I am sure that they can put a million foreigners to work easily, but are unable to solve the unemployment problems here. When is the 1% going to stop conducting war on the rest of us in this country?!
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2013-02-27T21:31:35
As an IT consultant I've worked beside immigrants all 30 years. I see management making decisions. They put in the budget and try to staff up 3 projects. But they are unable to fully staff all 3 with citizens, even when the hiring manager consciously discriminates in favor of citizens. So they face 3 choices. 1) Kill one of the projects and shift the partial staff of that one to the two survivors. 2) Offshore the project (usually to India). 3) Hire immigrants.
With options 1 and 2 us citizens have fewer jobs. With option 3 us citizens have more jobs. What most nativists don't realize is that immigration and offshoring are enemies of each other.
Any attempt to repeal the law of supply and demand is sure to create unintended consequences.
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2012-01-20T05:28:27
i might be digressing here a bit but what about those illegal immigrants that are IT-inclined that might will soon be granted amnesty, become permanent residents and earn a certificate or a degree, should we start to whine about them too? LOL..
let's just shut up, prove our niche and compete not unless we are scared to do so. we might cry unfair because the country is loosely being invaded by foreign IT talent but what about America being the worldwide bull not only in the IT work field? are we really looking at the bigger picture?
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2011-12-05T20:47:53
The only end to this crisis is when foreign labor is more expensive than American labor.
Will that happen ??
The most likely for that to happen is if the US dollar crashes relative to other currencies. The US has gotten a free ride to the extent that the US dollar is the world's reserve currency.
How much longer that is going to be is anybody's guess. Right now the dollar seems to be the only game in town with regards to currencies. The gig is up when everybody decides most likely at the same time that acquiring more dollars is risker than dumping the current ones in their possession.
Right now we have a $15 trillion dollar debt along with $40 trillion in future unfunded liabilities with a GDP of about $15 trillion. We are having deficits close to $1.3 trillion being almost 10% of the GDP. Also we are having a trade deficit of over $30 billion a month.
Who knows how much longer this Ponzi scheme can continue ?? Many if not most of the Indian and Chinese H1Bs that are sending dollars back home are having the relatives convert them into gold and silver.
Or in other words, they are taking dollars but not holding onto them. One of the reasons inflation is really taking off is the prices of basic necessities (unlike IPads which you can't eat) is because foreign individuals and countries with a glut of dollars actually want to buy something.
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2011-12-05T03:54:37
In the Capitalistic Society money is made on stability (it's called prosperity where the benefits of hard work are available to the contributors and investors) or on destabilization (it's called crisis where essentially all of the money is channeled to speculators and middleman). Sending hundreds of thousand of IT jobs to India and China and bringing thousands of inexperienced Asian workers in is the essence of creation of chaos. The headhunters companies make every year nearly 100 billion of U.S. dollars doing just that that. That means that the U.S. IT workers are deprived of 100 billion of the fruits of their work which goes to the middleman. The crisis sees no end...
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2011-12-04T22:00:01
One of my major gripes with the people writing these blog articles is that they probably never worked in IT in the first place.
I tell young Americans to avoid IT because you have to compete with the whole world even in your own country. With a plethora of visa types be it H1B, B1, L1, etc. companies can keep labor costs down.
Just common sense would tell you that if your job can be done in the third world for one third of the cost being your salary is that sooner or later that you are going to lose your job.
Anyone who works in the trenches at Oracle, EBay, Yahoo, Google, etc. will tell you first hand that the companies are highly H1B infested and very few US nationals are employed in IT.
Even worse is hearing nonsensical arguments about bringing in foreigners create more US jobs. What is not said is that bringing in more foreigners more often than not just brings in more foreigners to work in the US.
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2011-12-03T09:21:32
My Indian manager stated in public “I feel sorry for those Americans, as I do not see any future for them ". Sure he managed to convert his H1-b visa to GC and now enjoys the U.S. salaries. His technical skills and work attitude are just horrible. Yet he admitted that it takes at least twice as long to do any work in India as in the US. So the conclusion is obvious: take advantage of professionals born and educated in America and push them to the commodities salaries band.
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2011-12-03T08:53:36
I do not care for better Honda and Better Toyota. French buy Pequot, complain about it and are much better-off overall and enjoy better quality of life. I stick to my Chevy for another 10 years!
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2011-12-03T06:04:42
A CEO for a well known company decided to do “killing” in a quarter. So she / he fires X number of experienced engineers doing a software feasibility study and architecture in exchange for 2X of inexperienced H1-b engineers from India to do the flashy prototype. A few months later the CEO leaves the company with a “benefits” package satisfying all of his needs for the rest of his life. The project turns out to be a total fiasco and the department is dissolved. Anyone who has spent in a high tech industry a few years can bring a couple of scenarios like this.
The worst is when the H1-b visa beneficiaries after say 10 year of being “guests” of this country get in a position of management. With a few exceptions, the managers from China quickly develop the management style of their homeland which is communistic-style passion for obedience and a curbing innovation.
The managers with the roots in India quickly establish feudal-like families of connections destroying normal healthy competition. When the family extends to entire Indian village the taxpayers furnish the bills for social and medical services.
Steve Jobs was U.S born and educated (to whatever level he needed the formal education) engineer. On many occasions he made it clear that there was very little he owed to his foreign born father.
As an immigrant-engineer from Europe I feel sorry for (not so many anymore) American born engineers who work in “their” country for the engineering companies where the English language is hardly spoken.
The overpopulation of engineers from India and China clearly destroyed the engineering profession in the United States. The most creative work in the area of software technology is done currently in Europe, where the destructive results of guests immigration are not yet as visible.
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2011-11-27T01:30:29
Burger flipping you say? Enter illegal immigrants, which is a far worse problem than the H-1B program. Don't you agree? :)
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2011-11-27T01:27:46
That was what Corporate America wanted at that time and now that they are feeling the backlash, people are whining.
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2011-11-27T01:02:25
All is fair in love and in war. In this case, Trade Wars. The H-1B program as whimsically projected by some people here is capped at only 65,000 a year.
I think we all know why America is on its knees right now, it is a backlash of greed and exploitation.
If you truly believe that "you've got (IT) talent", innovate, move on, prove your niche and stop bitching about H-1B. In any issue America just wants to exploit but not exploited but when we are, we bitch to hell about everything and how America was so great as it was once were. Sounds familiar?
People are whining because apparently they cannot move on because they really don't have the talent. Do you bigshots really think that U.S. Companies will settle and risk ruining their business because of mediocre talent, foreign talent that is? Logic dictates that they won't.
All whiners are scared individuals.
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2011-11-27T00:47:05
Answer: Lobbyists. The system is "workable" by lawyers and it was intentionally made that way. Why? Washington, Inc.
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2011-11-27T00:43:00
When the American economy was good and products and services in America were cheap because of programs such as the H-1B Visa, outsourcing. off-shoring, etc. Americans were certainly not whining or at least the majority of Americans didn't
Blame that to Corporate America.
Everything is fair in love and in war. In this case, Trade Wars.
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2011-11-18T18:10:31
But if all you need is cheap labor, it makes sense to bring them here. If the US is the main market and services need to be rendered, then having folks sit somewhere overseas doesn't help. And you don't have to deal with foreign governments, customs, etc.
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2011-11-18T16:24:19
My major problem with bloggers is that they often don't investigate the facts but merely rebroadcast somebody else. The concept of checking the validity of Wadwha's study instead of just quoting it assuming that it is factually accurate doesn't even come to thought.
To be fair, bloggers are not acting like a journalist. Assuming that true journalism exists any more with a journalist going around pounding the pavement then one often finds that what you were told is not factually accurate.
The end result is you get statements such as
>> Clearly, foreign nationals aren't just "taking" U.S. jobs; they and their offspring are producing more than their fair share of innovations and economic opportunity, much of it on these shores. <<
which is hardly "Clearly" at all.
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2011-11-17T23:29:12
Perhaps some of what you reported could be true. BUT....many companies created here in the US are former H-1b's who gained their citizenship and started IT consulting companies. And guess what?? There are over 300 hundred companies who partner with my company and send me all of their available consultants - who you say ? - Guess What again... are 99% H-1b's ! I've be in IT since the late 70's and I know more about the industry than you! The former H-1b's who are now US citizens and have move up in management now choose H-1b's over US citizens. Many of the H-1B companies are presenting US citizen resumes to their clients and and jacking up the rates without the US citizen knowing and presenting h-1b/green card rates at the client desired rate minus several dollars. I have already caught several of these companies in these practices including discrimination. The program has it's place - BUT THE PROGRAM IS TO NEVER REPLACE A QUALIFIED US CITIZEN WITH AN H1-B - PERIOD!!!!!!!!! WHY don't you log in to some India H-1B blog sites like I have done and screen captured what they are saying - like ' We own the US IT industry'.....and you know what - if they don't they're might close. I like my friends that I have worked with who are from India. Many are also hard working US citizens. No problem with that at all. But we have millions of natural born citizens who spent thousands to go to college but out of work - 450,000 are IT workers. There are currently 2 million H-1B's here for 6-years minimum. (go to http://www.uscis.gov for the facts) DO THE MATH !! We use to let in 250,000 plus per year. We're down to 65,000 plus 20,000 Master h1-b's. We're losing our homes, our families and our minds. KNOW WHAT YOU ARE WRITING BEFORE YOU publish. GET AN ACTUAL PULSE ON THE IT COMMUNITY ! p.s. I am collecting the evidence and will provide to EEO and necessary Inspector General offices.
And if you would like to go undercover to see these practices firsthand so you can write the truth - please let me know.
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2011-11-16T01:18:35
If you can build your product cheaper in another country then you do it outside the US and don't bring foreign workers to the US in the first place.
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2011-11-16T00:58:23
The difference is that the Chinese have tons of cash and the US doesn't. So why do you think is calling the shots in any form of trade negotiation. The US lost out on that due to reckless administrations wasting trillions on wars rather than on investing into the country's future.
Aside from that, there is plenty of opposition to Wal-Marts all over the place, not just in China.
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2011-11-16T00:55:22
Protectionism is bad, because it protects companies that are not competitive and make mediocre product, because they are guaranteed to make sales. Limiting or even eliminating competition is never a good idea. Besides that, there are plenty of products and services the US can hardly do without and that are not made here in sufficient supplies, namely oil and rare earth metals. Protectionism isn't unilateral and will always be met with retaliation, means other countries cut the US off from important supplies. How is that supposed to be better for the US economy?
The only way to compete is on quality, price, or even better on ingenuity. Same applies to the workforce. Either match the cheap labor or be so excellent that you are worth the money.
Also, right now Indian companies ARE hiring US workers, mainly expatriates, but also others who have special skills that the run of the mill engineers in India do not have. It is coined to be the 'reverse brain drain'.
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2011-11-15T01:23:34
>> One day, businesses will realize that building in cheap countries and selling in America is a defective business model, especially when Americans are being put out of work. In other words, people without jobs can't buy anything! <<
I am a firm believer that Americans should start living like North Koreans. For those that are out of work then you may not have a choice. If you have a decent job that can be offshored then one needs to plan for the worse case scenario of being laid off and not being able to find another decent job.
>> The other option is to continue letting the American standard of life decline to third world status and let the people occupy all the streets. <<
That is a problem for the next quarter. The CEO is only concerned for this quarter about increasing profits by reducing labor costs. The new CEO who takes over with the reduced sales due to inability to sell the companies product due to that no one is working anymore at decent jobs in America can solve that problem.
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2011-11-14T21:08:19
It is very funny how people are always trying to cite some old study about how foreigners are creating jobs in America as opposed to taking them. It doesn't matter how much math and science Americans study, they will never be able to compete with a foreigner working for a fraction of the cost. I've been in the IT industry for over 20 years and have seen the landscape change, not necessarily for the better. Early outsourcing proponents used to say that low skill jobs would be outsourced, those people would advanced and purchase more goods and services. These purchases were supposed to translate into more jobs (back-office) in America. I haven't really noticed a change. Businesses just continued to outsource everything. One day, businesses will realize that building in cheap countries and selling in America is a defective business model, especially when Americans are being put out of work. In other words, people without jobs can't buy anything!
Now don't take my words as being against all outsourcing. I'm in the IT industry but do understand Economics. However, it has to be done fairly. America seems to have open markets for everything but other countries do not reciprocate accordingly. I won't go into the argument but basically, something has to be done to account for the difference in labor rates and quality of life differences between countries trading with each other. The other option is to continue letting the American standard of life decline to third world status and let the people occupy all the streets.
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2011-11-14T19:50:12
>> He is right that neither the visa program not immigration should end. <<
Given the extremely dismal economic conditions only true geniuses should be allowed to come to the US.
>> Not many people will object to bringing in additional resources or talent on broad. <<
Simple
Go out and hire an American
If you can't find someone at the salary you are willing to pay then either raise the salary or don't do the job.
IT for the most part is just labor. If I can't find someone to flip a burger for $8 an hour then I raise the salary of the burger flipper or the burger doesn't get flipped. In the booming North Dakota oil fields Carl Junior burger flippers are paid $15 an hour.
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2011-11-14T19:32:16
Mr. Rob Preston has underestimated the magnitude of Visa abuse. He is right that neither the visa program not immigration should end. If he were to analyze each and every outsourcing transaction, he will be aware that misuse and abuse is rampant. Not many people will object to bringing in additional resources or talent on broad. It generates a great deal of grief and anger when jobs are here in this country but the people or replaced.
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