April Fool’s Day for many, the first day of the month is also opening day for tech firms hoping to snag foreign-born talent. The H-1B visa allows these U.S. companies to hire non-citizens. The total number of visas is capped and the program is usually exhausted in a matter of weeks. In the rush for talent, the rich get richer. The largest firms have the in-house capacity to secure the most visas. Having a team of immigration lawyers on retainer is a competitive advantage. The largest tech firms also have the loudest lobbying voice when it comes to immigration reform and the great STEM employee shortage:
Todd O’Hara, 31, a derivatives trader who founded startup Toodalu, which was acquired last year, circulated the letter on behalf of FWD.us, a bipartisan political advocacy group co-founded by Facebook CEO Mark Zuckerberg and other prominent Silicon Valley leaders.
“To be very honest, this was not an issue that was on my radar until I got in the tech community,” O’Hara said. “I’m a Caucasian guy from Minnesota. I’m not directly affected by immigration reform. But once I immersed myself in the tech community, it became clear that some of the brightest and best minds in the community were from abroad. … And after we educate them, we tell them they can’t stay here. We can’t reap the benefits of our own intellectual property.”
There is a chronic shortage of computer engineers, software designers and other tech professionals. More foreigners with expertise and visas, as well as paths to citizenship, would help fill the need. And basic economics says that if the supply of talent increases, then the price of acquiring that talent falls.
Emphasis added. And basic reading comprehension says that the phrase “price of acquiring” is a rhetorically convenient way of talking about wages. As the supply of talent increases, wages fall. The cost of talent is too damn high. The Innovation Economy is dying.
“[T]he alarms about widespread shortages or shortfalls in the number of U.S. scientists and engineers are quite inconsistent with nearly all available evidence.”
The tech industry relies heavily on captive labor markets. If talent can move freely from firm to firm (or country to country), basic economics says wages will increase. Talent is not the intellectual property of a place (e.g. country) or a company. International borders and non-compete agreements (not to mention collusion) depress financial compensation for world-class talent.
Mark Zuckerberg isn’t interested in the human rights of migrants. The tech lobbying effort for immigration reform is a ruse to keep wages low. Facebook wants to monopolize talent. Author Michael S. Teitelbaum calls Big Tech’s bluff: “[T]he alarms about widespread shortages or shortfalls in the number of U.S. scientists and engineers are quite inconsistent with nearly all available evidence.” In fact, Teitelbaum contends that spiraling real estate prices are the cause for the talent attraction woes.
In San Francisco and Silicon Valley, the rent is too damn high. And basic economics says that tech companies should move to where the cost of living is cheaper. The Innovation Economy is on the cusp of converging, picking up stakes and relocating to where the talent is produced: the Rust Belt.
