Thursday, March 13, 2008

Bill Gates on Immigration, Education

Yesterday Bill Gates testified to Congress about the need to both improve our nation's math and science education, and to increase the number of workers who can come here on H1-B visas. I wholeheartedly agree with this position. Improving our math and science education is not a particularly controversial point, so I won't belabor it. But I think it is worth reiterating the need to increase the H1-B visa cap.

For a long time, our nation enjoyed a near monopoly on producing qualified engineers and scientists, but this lead is rapidly eroding as other countries (especially China and India) have started producing world-class technically trained people. The laughably small 65,000 cap on the H1-B visas means that the US is effectively cut off from this pool of talent. While this may appear to help US workers compete with foreigners who supposedly are willing to work for lower wages, the actual result is that American companies have to work with the best homegrown talent (often leaving many roles unfilled), as opposed to being able to work with the best talent period. So we end up deliberately weighing our companies down with two handicaps: insufficient staffing, and sub-optimal staffing (sub-optimal not because the American talent isn't good, but rather sub-optimal because the pool of talent is artificially restricted).

This is not to say that we don't have top-notch homegrown talent; we absolutely do. And despite its many documented problems, our educational system does still produce some of the best and brightest. But it doesn't produce nearly enough for what our industry needs. Gates pointed out - quite correctly, IMO - that allowing more H1-B visas would not throw Americans out of work, and would not depress wages. For one thing, even if the cap were doubled, the number of visas would still be far too small to impact the market. And since the tech job market is still seeing labor shortages and wage inflation, increasing supply to meet that demand will help these companies achieve more, which will lead to more growth.

Companies faced with H1-B restrictions do the only logical thing: they outsource. So instead of hiring a talented engineer from, say, India, to work in California at California wages, we are instead paying that engineer Indian wages to work in India, thus helping to build up the competitiveness of the Indian economy and of Indian companies. While I applaud growth of foreign economies and companies (even though they're competitive, it's in our interests for other countries to be prosperous!), it is pretty clear to me that these arbitrary restrictions on the movement of the best labor is a US-taxpayer subsidy for these foreign corporations at the expense of domestic corporations. This hardly seems to be in our best interests to do.

I'll add one more point from a social perspective, since immigration is a hot topic these days. Many of the most active voices favoring greater restrictions on immigration claim that immigrants are a drain on society, live on welfare, increase crime, etc. They're largely talking about poor and illegal immigrants, and these claims may or may not be true, but we should be very clear about the kinds of people that come in on H1-B visas: these are people we WANT in this country. They are highly educated, highly skilled, highly paid workers. They will educate their kids here (producing the next generation of skilled American workers), they pay taxes and in general are a huge net positive to the economy and to society as a whole.

Personally, I think we should remove numerical caps on H1-B visas altogether and instead restrict them only to the candidate's meeting a bar of likely economic potential. Let the our companies have access to the best talent in the world, wherever that may come from, and have them bring those people here. We're the United States, why should we be afraid of competition?

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