‘Scuse Me While I Solve This Immigration Problem

There’s a crippling STEM talent shortage out there, stalking the streets of Silicon Valley; just ask any Valley executive in the choir crying out for immigration reform. But the IEEE, PBS, and Fortune — an odd triumvirate if ever I saw one — disagree, singing back their own united refrain: “The STEM shortage is a myth!”

And, as usual, everyone is wrong.

The immigration reform on the table basically boils down to two things: “startup visas” and “more H-1Bs.” Its naysayers mostly attack the latter, and they almost sound convincing at first. “The main conclusion that we need more foreign tech workers is not true,” quoth Fortune. “We’re Already Generating More Qualified Students Than Jobs,” according to NPR. “It is difficult to make a case that there has been, is, or will be soon a STEM labor shortage,” says the venerable IEEE.

Unfortunately, all three are making the same dumb mistakes. Most notably, they’re confusing “people with degrees” with “people who companies want to hire.” Unfortunately for them, in the STEM world, there’s very little correlation between academic achievement and actual ability. Don’t take my word for it; take Google’s. Or Vivek Haldar’s, in a great blog post:

The flaw is in the assumption that every STEM degree holder is a qualified candidate for a STEM job. Carried through to its logical conclusion this implies that simply presenting a STEM degree should be enough to get one placed in a STEM job, which is absurd. This becomes readily apparent if one has ever been on the evaluation side — grading students, or conducting interviews for jobs.

Half of all computer-science graduates are below average. But nobody wants to hire a bad programmer, and only a minority of companies will grudgingly hire the mediocre. With good reason: a single excellent programmer can code rings around 10 (or often N) mediocre ones, and bad ones almost invariably add negative value.

Put another way, there may not be a skill shortage…but there is most definitely an ability shortage.

At the same time, though, it’s pretty disingenuous for the companies calling for immigration reform to pretend that immigration always brings in the best and the brightest. According to Chartio,

Consulting companies provide the most H-1B Visas. Infosys Limited, Wipro Limited, Cognizant and PriceWaterhouseCoopers take the gold by awarding a combined 67,139 H-1B visas.

Fine companies all, I’m sure, but, er, not exactly the great world-changing innovators of the century. I think it’s safe to conclude that H-1Bs are used for (at least) two distinct STEM purposes:

Hiring excellent foreigners because there’s a shortage of excellent American workers
Hiring decent-to-mediocre foreigners because they’re cheaper than decent-to-mediocre Americans. (And/or more tractable, since they can’t get a new job without a new visa.)

Now, you can–and I would–argue that immigration is almost always a net good, that current American immigration “policy” is an insane debacle, and that even in case 2 above, the benefits of immigration far outweigh the costs. Of course, as a foreigner myself (I’m Canadian, working here on a TN-1) I would, right? But hey, Zuck’s with me.

However it’s a moot point. What matters is that most people agree that case 1 is a win for everyone. So how can we at least ensure that excellent foreigners can always immigrate, with minimal political upheaval? One iterative win at a time, after all, is the Silicon Valley way.

The answer is surprisingly simple.

How can you ensure that employees are excellent? You can’t–but you can ensure that their employers genuinely believe they are, by seeing how much they’re paid. The proposed “startup visa” would accept immigrants if they had received money from qualified investors; similarly, STEM H-1B immigrants should be approved–or not–depending in large part on their salary.

Right now H-1B immigrants only have to be paid the alleged “prevailing wage” for their occupation and location. (Here are the current numbers for San Francisco. They look pretty low to me.) There’s your problem right there. Instead, employers should have to pay STEM H-1B workers significantly more than the current “prevailing wage” — say, six figures — with a “startup exception” for small companies offering some minimum of equity along with their lower salary.

Now, before you cry out in outrage, that’s pretty much what the big Valley companies already pay. According to myvisajobs.com, the lion’s share of 2013 H-1B visas went to “Computer Systems Design and Related Services” workers (ie programmers.) Within that group, Google sponsored 1,714 H-1B employees with an average salary of $127K … while Tata Consultancy Services brought in four times as many workers, paid half as much.

There seems to me to be broad agreement that we want to encourage the former, not the latter. So why not simply hike the wage requirements for H-1Bs? Voilà. That’ll help the real innovators, bring in the best talent, reduce demand for scarce visas, incentivize body shops like Tata to broaden their local hiring practices, and maybe even goose salaries industry-wide. Best of all, it’s a straightforward tweak to the existing system, rather than a wholesale reform to get bogged down in today’s pathological Congress like all wholesale reforms. Everybody wins! There you go, America. HTH.

Image credit: Katy Stoddard, Flickr.