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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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I Don’t Understand Our US Immigration Policy

Comments (17)

Reuters had an article out today titled US reaches visa cap, skilled workers out of luckAs someone who is constantly trying to recruit great software developers for companies I’m an investor in, this is an insane situation.

The US Immigration Service apparently “reached its annual quota for visa applications in one day.”  The article summarizes the situation:

“The Citizenship and Immigration Services received a record of more than 150,000 applications for the H-1B visa on Monday, nearly double the number of visas it can grant for the fiscal year beginning October 1, 2007. Individuals cannot apply for the visa. The employer must apply or submit a petition on the worker’s behalf. The visa is good for up to six years. The government will grant 65,000 visas to those who hold the equivalent of an undergraduate degree and possess the technical expertise in a specialized field, such as engineering and computer programming. Another 20,000 visas will go to people with advanced academic degrees who have technical expertise.”

There is just no reason why there should be a quota on this type of H-1B visa.  I don’t want to delve into the more generic immigration policy issue, but we are talking about highly educated employees in a segment that is seriously supply constrained, especially if you believe anything about demand over the next 10 years.  One of the main reasons I’ve been as involved as I have been in the National Center for Women & Information Technology is because I believe that we don’t have enough qualified software developers in the US and one way to solve for this is to get more women interested.  

It certainly doesn’t help when the government artificially constrains the supply of H-1B visa, especially from people that are already employed.  Maybe a few of our presidential candidates gearing up for a 2008 run will understand this issue.

  • http://www.petertdavis.net Peter Davis

    Well, what happens when supply overwhelms the demand? I’m not saying that I believe the current quota makes sense, I don’t know. But, what happens with all those people here on H1Bs when the boom is over? Isn’t it generally more healthy for the economy overall to have somewhat less qualified employees? If employers get hundreds of qualified applicants for each position, where’s the incentive to pay wages that will inspire the next generation of skilled workers?

  • http://www.feld.com Brad Feld

    Peter – that’s the basic argument for constraining supply. However, the current vector of need for software talent is steep. In addition, as outsourcing has shown us, supply and demand don’t match up well and the US will cede its historic lead in software if it doesn’t address the supply side of this issue. It’s happening – now – and stuff like this is just wrongheaded. In addition to resulting in a mismatch of supply and demand, it artificially inflates wages (not good at a macro level) and encourages people who want to make their life in the US (“land of the free, home of the brave”) to move somewhere else. It’s especially dumb if companies have already hired them and our academic infrastructure has already educated them.

  • http://www.petertdavis.net Peter Davis

    I understand the point your making. Of course you’re correct. However, it seems like a short-term solution to simply remove the quota. I don’t think it’s the immigration policy that endangers the US’s economic position.

    I live in an affluent area just outside of Boston. I feel very uneasy about sending my kids into the public school system. I don’t think the public schools do a very good job of educating. And, if someone in an affluent area in Massachusetts feels their kids can’t get a good education in the system, what chance do the rest of the kids in this country have?

    Maybe removing the quota will help this year. What about next year? I think that there needs to be radical change in the educational system, very few of us can afford private school education for our kids.

  • http://adamduvander.com AdamD

    See Eric Sink’s personal account:
    http://www.ericsink.com/entries/H1B.html

    He lost a great employee because of this.

  • ScienceGuy

    If the supply of crucial talent is so constrained, shouldn’t the salaries of said talent be skyrocketing? Just playing devil’s advocate here – but most of the salary surveys I’ve seen haven’t shown large increases in compensation for engineers and scientists in *any* field since the late 90′s. This would seem to indicate to me that the ‘talent shortage’ for engineers and scientists is a myth. Unless I’m missing something. Does someone wish to clarify this paradox for me?

  • http://www.feld.com Brad Feld

    Science Guy – my experience is that salaries for software engineers at all level had a steady climb pre-bubble, a big correction post bubble, and once again a steady climb back up to pre-bubble levels in the past 36 months.

  • http://blog.fredjean.net Frederic Jean

    Hi Dave. Why not look north? Canada has many very qualified engineers who would be willing to work in the US. They can come on board under the TN-1 visa instead of the H1-B one. This allows them to stay and work for a year before having to renew their status. It’s also a lot easier to get than the H1-B. I worked for 3 years under a TN-1 visa before switching to a H1-B. After Hockey players (and apparently whole hockey clubs), engineers is one of Canada’s biggest export ;) — Fred

  • Cameron

    Peter – in response to your first post, if wages did stagnate post-boom and visa cap removal, then one could argue this would only act as an entrepreneurial incentive for these qualified workers. In turn, the successful entrepreneurships that continued would demand more labor, and wages once again rise. Consider what happened after the Web 1.0 bust

  • http://weblog.masukomi.org masukomi

    Based on my personal experience with sofware companies the problem isn’t so much that there is a limit. The problem is that US companies seem to think that bringing in lots of cheap programmers from foreign countries is better than paying the higher per-employee wage of a skilled US developer. I have yet to see this strategy pay off in the end. Based on my experience and the experiences of my collegues the resulting code is much poorer quality and ultimately requires hiring skilled, but more expensive local labor.

    The end result of all of this is that the limit is quickly filled because there are a lot of cheap CEOs who just don’t understand the fact that lots of cheap inexperienced coders will cost you far more in the long run than a handful of really talented ones.

    I think that, in general, there are plenty of talented US developers but people either don’t want to pay what they’re worth or they’re not offering positions that are interesting enough to tempt them away from their current jobs.

    p.s. before anyone flames me for this I do believe that there are some truly talented programmers in other countries, it’s just that the visas tend to go out to the hordes of cheap cheap programmers, and you get what you pay for.

  • http://www.solidw.com Sue Kunz

    There’s more than 1 issue here. 1st of all, there’s pure talent, then there’s pipeline. Having been in hiring mode for the last 20+ years, we’re in short supply of both. Tragically, both trends are in the wrong direction. Most undergrads we interview are HTML ready. Don’t ask about software optimization, formal proofs, or even the best way to hack an architectural deficiency.

    The folks I’ve hired from the PRC and Eastern Europe (including a team I built in the former Soviet Union) have way out-CS’ed our domestic CS undergrads.

    Now don’t get me wrong, our team is 2nd to none, but with the bar set high (because we need it there), the pipeline is outrageously narrow.

    The grad programs we’re working with incl. CU, U of Illinois, and Berkeley are largely (sometimes exclusively non-US students), and they’re doing some great stuff. When they gradute, they get to go home (although many would like to stay).

    Personally, I’d hand out green cards with graduate diplomas. This would help our competitiveness as a nation.

  • http://www.cisco.com Patrick

    Yeah Brad. You already made your millions and its easy for you to say folks here are overpaid. Maybe, you would like to start over and see how hard it is to feed a family on a single salary. This is the problem with you rich folks, you accidentally make money and then want cheap labor to stretch that dollar.

  • sigma

    The ‘shortage’ of software developers in the US is much the same as the ‘shortage’ of fruit pickers advertised in Oklahoma as in ‘The Grapes of Wrath’.

    The US is awash in native born US citizens with world class qualifications in computer science, long, deep, and up to date experience in software development and practical computing, but absolutely, positively, permanently unemployable as software developers at any price in any capacity, PERIOD. They can send 1000 resumes and get fewer than 10 interviews and no offers when earlier in their careers they could send a dozen resumes, go on seven interviews, and get five offers.

    Software developers can do well if they start their own businesses, but for getting hired as an employee the field is a disaster for native born US citizens. The main reason is that the US NSF long had a policy to require academic computer science grant applications to support students, and the schools were encouraged to get the students from outside the US. Here the NSF deliberately flooded the US with foreign born computer science graduates of US schools. The NSF had a staff of economists ‘engineering’ the over-supply.

    The norms then became that, in the US, software developers had to be foreign born and young. US born developers are much less welcome; US born and out of college 10 or more years is a black mark on a resume more serious than a felony conviction and hard time in prison, literally.

    Foreign born and over 35 is also a black mark. The guy that manages the gas station in the next small town has a Master’s in computer science, is foreign-born, and over 35.

    Net, in computer science and ‘information technology’, three points are crucial: (A) Never claim to anyone that you have qualifications in anything technical. PERIOD. F’get about it. It’s at best your own secret recipe for your own secret sauce. (B) Give up on being an employee. Nearly anywhere in the US, a sole proprietor with an electrician’s license can do better than an employee with a Ph.D. in computer science. It’s just true. Some people who come to the US are smart and start, say, a landscaping business, but some others are dumb and get a Ph.D. in computer science and try to get kids through college as an employee. (C) Find something that needs doing that you can do with technical means, do it, sell it based on what it can do for the customer, give demos but never mention the core secret sauce, and keep the money. That is, start a business. If you do well, maybe buy Chrysler. I hear that it may go for only $4 billion. Then, hire yourself as an employee. That will be easier than getting hired as an employee for ‘software development’.

  • Jeff Sherman

    Brad,
    I couldn’t agree more. I personally believe that there should be no quota for highly skilled immigrants–the more we have in the US, the better off we are. The question of unskilled immigrants is trickier to me.

  • http://www.procida.us/ Tom Crimi

    I’m surprised H1-B’s are handed out by lottery and not with preference to those with higher starting salaries. You’d think a company bringing over a $150k/yr engineer will be bringing in better talent than one getting a $40k/yr engineer. It’s better for visa-granting to be a competitive market.

    Maybe this would distort the higher end of the market?

  • Kimbal

    At the end of the day, the US is a global competitor. It needs the best talent, period.

    It’s done a good job of attracting and bringing in that talent for 200 years. I suspect that every person who commented here has ‘imported talent’ somewhere in their family tree.

    Now it should stop? Or there should be some articifial quota?

    Any argument for a quota could be made at any time in the US history. Imagine if we had a quota in the 1800′s? The US would have been a province in the 20th century instead a world power.

    Having worked in Silicon Valley, where salaries are sky-high, ‘imported’ workers get pretty much the same as anyone else. The reason they’re brought in is for their talent and skillset, and if they are good, they will get hired away by someone else quickly if you aren’t paying them a competitive salary.

    The argument for quotas is basically socialism. Nothing wrong with that if that’s your belief, I just don’t think it’s a path to a great country.

    I’m for getting the best talent in the world into the USA, so that we maintain our lead as the technical leader.

    I will also say that I am an immigrant (just getting my citizenship next week), and I am very proud to be part of this country.

    America is a country of immigrants. Let’s keep it that way.

  • http://www.petertdavis.net Peter Davis

    Well, I don’t think salary level would be a good measure of who should or shouldn’t get the H1b either. I think the primary reasoning should be on what adds the best value to our economy long-term. I doubt that very many people would argue that the 22,000 H1b requests from Infosys are in the long-term interest of the US software industry, for example. Companies like Infosys send their employees here for a year, or a few years, to learn the American way of business, then they go home to help them better compete with us. When you look at things like this, it really should make it clear that opening up the H1b to everyone as Brad suggests isn’t at all going to help the long-term health of the software industry in this country.

  • http://blog.offbeatmammal.com OffBeatMammal

    I’m in the US working on a non H-1B visa because of the quota issues.
    It means that while I’m committed to being here potentially forever I’m unable to put down any roots or make any long term investment in the country because once every 2 years we have to go through the visa hoops with no guarantee of success.
    We applied again this year, but won’t know for several weeks if we’re in the lucky group.
    It’s frustrating and wasteful.

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