Any jobs plan needs to reverse the U.S. IT workforce implosion.
One of my favorite movies is “Dave,” the Kevin Kline vehicle about a guy who gets called upon to impersonate an ailing president while his aides try to take over the country. The movie gets me thinking about what I would do if I were president for a few weeks. I think I would do what Dave does in the movie: I would work to create a job for every American who wants to work. If we put this poll question on our site, I suspect my answer would be the most popular, especially in light of the current recession-level unemployment (6 percent).
We recently put an edgier poll question on the site: Your current job situation? Of the 69 respondents, 27 said they are happily employed, 15 said they have jobs that used to occupy five people, 11 responded, “Laid off and wasting away in front of the TV,” eight said they were laid off and back in school and eight others said they were laid off and doing other things, such as contemplating moving to Bangalore for better employment opportunities. Now, it’s an unscientific poll, and several people click the more humorous responses just for the fun of it. But the question itself implies that we’re very concerned about the plight of U.S. IT workers.
The most frequent feedback item we receive is from highly qualified engineers, programmers, and systems analysts who are out of work for the first time in their lives and scared to death about their prospects. Just yesterday, I had a long phone conversation with a reader who’s 44 with three kids and a Sacramento mortgage. He’s an engineer who has more than 10 years of project management experience working with all types of networks, including PBX, VOIP and Wi-Fi. He’s been working all available job channels for six months and has not had a single interview. This is an all-too common story.
The question is, what can we do about this problem? One idea is tax cuts: The current president is trying to spin his tax cut legislation into a jobs proposal. The administration claims that one job will be created for every $500,000 in tax cuts. Economists are not so sure about this correlation. My own analysis says that this is wishful thinking. If you want to create jobs, you have to have a mechanism specifically for that purpose. If you want to use tax cuts to create jobs, they need to be in the form of tax incentives for employers to retain the U.S. workers they have and to hire new American workers. Tax cuts to individuals will create some jobs, but it is not clear just how many. In any event, tax cuts to individuals cost much more per job created than jobs-focused tax cuts or other jobs programs. I’m no John Maynard Keynes, but it seems to me it should cost less than $500,000 (plus the interest on the debt it creates) for each new job.
Beyond a soft business IT market, two issues negatively impact the market for IT workers. One is an immigration issue and the other is a jobs exportation issue. A reader recently e-mailed me reminding me that my stance on H1-B visas is still relevant. Basically, H1-B visas for alien IT workers are not needed in a country in which 212,000 U.S. computer and mathematical professionals are unemployed (according to the U.S. Bureau of Labor Statistics). Companies and organizations (such as the ITAA) that lobby Congress for at least status quo on H1-B visas–if not increases–want more foreign workers for two reasons: Foreign workers are cheaper and they can’t complain about poor treatment because they risk deportation by doing so.
When critics of the H1-B program complain, the ITAA and member companies justify the program on the basis of stemming the tide of exporting IT jobs abroad. This is a threat that, in fact, has not materialized. IT jobs are getting shipped abroad in record numbers despite the H1-B program. Forrester Research Analyst John McCarthy estimates that at this rate, by 2015, 472,632 IT jobs will move to countries such as Russia, India, China, and the Philippines. That’s nearly 40,000 jobs per year–gone. Combined with a soft economy and more than 100,000 ongoing IT H1-B visas, it’s no wonder hundreds of thousands of highly qualified people are begging for work.
Mr. Bush’s tax cuts could enable more commerce and create more jobs, but they would do very little good for American workers if the stimulus went into foreign workers and offshore jobs. If H1-B visas were harder to come by and companies received tax incentives to retain and hire U.S. workers versus outsourcing them abroad, IT jobs would be more plentiful for Americans. As Dave showed his fictional cabinet, it’s not that hard to do. All we need is some resolve to do it, rather than a lot of rhetoric and wishful thinking.
James Mathewson is editor of ComputerUser magazine and ComputerUser.com