Intersecting Minds: Education, Business and Technology at the North Carolina State Jenkins Graduate School of Management

Hire American First? | February 22, 2009

Technology giants Microsoft, IBM, Intel and HP are coming under fire for some of their recent lay offs and subsequent hiring practices. Microsoft recently let 5,000 employees go, many of whom are long-time American workers. However, they are also planning on hiring 2,000-3,000 new positions this year, many of whom will be foreign workers entering the country on H1-B Visas. Here’s Iowa Senator Chuck Grassley (R):

“If they lay people off, are they going to think of America first or are they going to think of the world first?” Chuck Grassley, a Republican Senator from Iowa, said in an interview. He sent a letter to Microsoft Chief Executive Officer Steve Ballmer the day after Microsoft announced the job cuts last month, demanding Ballmer fire visa holders first.

There’s a lot to say here. First, to Senator Grassley, Microsoft’s executive board is not supposed to think of America first, nor is it supposed to think of the world first. As our finance professor has drilled into our heads, Microsoft’s priority is to maximize the value of the company for its shareholders. You know, those people who own it? For all of Senator Grassley’s previous concerns about socialism, this quote sure has a distinct wiff of not wanting to let the labor market work freely.

Second, there’s a bigger issue that Senator Grassley is missing. Why is Microsoft hiring H1-B Visas instead of American workers? What’s the systemic cause of this shortfall in skilled American labor when it comes to technology? I wrote a blog post on this very subject about a month ago. Simply put, America’s educational institutions are failing us. India, China, Japan, South Korea and others have surpassed us in terms of science, engineering, and technology.

This is not an ideological issue. America needs to do a better job of teaching its young people. But it makes for a nice, convenient soundbyte to rail against companies that hire foreign workers than it is to tackle a complex issue like education reform. The stimulus package had billions set aside to update our schools and bring them into the 21st century. Senator Grassley voted against the stimulus package. And now he wants to score political points by waving the populist flag against Microsoft? Sorry, but I’m not buying your argument, Senator Grassley.

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10 Comments »

  1. It’s a lie that h1bs are skilled workers. They are very junior programmers, the only reason companies hire them because they are very cheap and you can abuse them to work long hours. It’s a shame we have Americans like you, that don’t like anything American. I hope one day your job will be taken by a cheap writer from India. That’s the reason why we call it Guest Worker Visas. These visas discourage our students to take up Engineering, Computer Science and Science degress. You must not have an “real life” experience in IT, or business. Why don’t you go out and interview Americans that have been replaced by Cheap Labor, it will open your mind, we are not just numbers. Be ashamed to call yourself American.

    Comment by debug — February 23, 2009 @ 12:23 am

  2. “Simply put, America’s educational institutions are failing us.”
    You are a product of American eduction system, If you think
    American eduction is not good, why not go for India eduction, and Indian education is cheap too.

    Comment by eric smith — February 23, 2009 @ 1:19 am

  3. Now pleae tell me how “Simply put, America’s educational institutions are failing us. India, China, Japan, South Korea and others have surpassed us in terms of science, engineering, and technology.”. So, we import a bunch of foreigners to the US, educate them in our best universities, and then when they are finished with their education at American Universities, we give them an H1B visa in order to take away an American citizens job. But wait – generally, we make the American employee train them before they are let go. What kind of f’ed up thinking do you do all day. You sound like a first year MBA student – idiot. Why don’t you get some actual real world experience, and try to do something about the downward spiral that this country is in. I sincerely hope that one of those H1B’s takes your job just after you graduate – then you might change your tune…. I bet you are a big supporter of ‘Globalization’, you won’t be for long when a foreign student takes what should have been your job for 60% of the prevailing wage. Wake up, stop listening to your idiot liberal professors, and take a look at what is happening in the real world, then I would like to see what your blog says.
    Good Luck.

    Comment by godboy — February 23, 2009 @ 3:44 am

  4. Without getting into personal insults, I’ll respond to a few of the arguments above.

    First, Godboy, my professors for the most part are conservative, particularly my economics professor who is a free-trade maven. You can read his blog here: http://newmarksdoor.typepad.com/mainblog/
    Yes, I am a supporter of globalization. While thousands of people have been damaged and hurt by it, thousands more have been aided, including many Americans. I subscribe to the rising boats theory. Free and fair trade helps all of us.

    In terms of America’s educational systems, I am referring to our elementary, middle and high school system, of which I am a product. I was fortunate to go to a well-funded high school though, and so I was lucky to receive top notch education. Millions of Americans don’t get that opportunity, and what’s worse, millions more aren’t encouraged or incentivized to study science, math or engineering.

    Another point I’ll make, at least in my experience (and yes I have real world experience), H1B Visas are not cheap for companies to hire. About 10 of my classmates are from India and two more are from Taiwan, and they’re having a hard time finding work because no company wants to go through the time-consuming and costly experience of sponsoring and processing the Visa. And debug, even if the cost of hiring foreign programmers is cheaper, shouldn’t companies be looking for the best available labor rates? And shouldn’t government have a safety net in place to ensure that displaced workers still receive unemployment comp., health benefits, and further skills training to get them back on their feet?

    I will finish this extended comment with the following. I understand I’ve touched a raw nerve with this argument, and that globalization does impact real lives. However, I love America, and I love her ideals. We are the global melting pot, and our values are the best in the world. But that doesn’t mean we’re perfect, and it certainly doesn’t mean that during hard times we need to throw up a quasi-nationalistic protectionist bubble to fix what ails us. In today’s world, that will make all of us worse off.

    Comment by Ryan — February 23, 2009 @ 2:08 pm

  5. Ryan– great post, this really resonates with me. I consistently lose consulting engagements to Indian firms using on-shore/off-shore models with H1-B visas working here in Silicon Valley. I completely reject the idea that the skills they offer are inferior across the board. While they are not competitive with a Tier 1 consultancy, they are certainly more cost-effective– a much more attractive option in this economic climate for our clients.

    One thing I will add: our expectations for standard of living and salary in the US have grown completely out of control…it is not going to be an easy ride for folks who have a skill-set that can be marginalized in a global economy. Some of the previous comments are definitely evidence of this fact.

    Comment by GregG — February 23, 2009 @ 5:43 pm

  6. nice site

    Comment by axl — February 24, 2009 @ 4:59 pm

  7. Publicly traded companies go where the money is. it is nothing personal. If their Chinese investors are asking for higher returns threatening to fire senior management, you will see who is going to jump through hoops.

    Your only chance is to offer something the Chinese cannot yet do.

    Comment by letterofcredit — February 25, 2009 @ 1:18 am

  8. I think you are an H1B – care to comment on your citizenship status? Based on your arguments, and your obvious lack of real world experience – I can only come to that conclusion. Please give some examples of your experiences in the real world to back up your claims of the superiority of these imported workers – and I will give you ten ACTUAL examples for every theoretical one that you provide. Remember – professional student does not qualify as a real world example. If you ever want to see how things really work in this world and the damage that is being done, step out of your campus setting, and I will take you on a tour of the carnage being wreaked upon the USA currently (apparently you cannot see it), and give you some thoughts on why this importing of foreign workers may not be in the best interests of this country in the long run. Go ahead, rattle off some numbers about how these H1B’s start companies and employ hundreds of thousands of workers, how they are the best and the brightest, and how we increase the number of patents awarded based on these einsteins coming from foreign lands. I welcome the chance to reply to these frequently repeated lies or any other propoganda that you can produce. I myself am not an MBA, but I know how the real world works. Seems that many of the people who got us into this current mess have very high-level and fanciful educational backrounds like yourself. Maybe we should try to apply a little common sense going forward to fix the problems that this country is in. It seems that we have listened to many folks like yourself, and followed their advice for many years now, and look at the situation that we find ourselves in. The United States government is not in the business of providing the tools to make sure that business can turn the highest profit possible at the expense of its citizens. They are charged with providing representation for the citizens of this country, and providing for their needs. As a start to this discussion can you provide me with the stated purpose of the original intent of the H1B visa program – lets begin there…

    Comment by godboy — March 14, 2009 @ 3:38 am

  9. Thanks for your effort here godboy. From someone who has just trained and lost their job to the “off shore” — your comments are appreciated. Here is something I wrote in a Forbes blog a few days ago. I believe is is also appropriate here:

    —-
    Let me give you a very simple scenario:
    You are one of the millions of laid off IT workers. You have previously trained the folks that have “off shored” you.

    You have years of exp. in IT – cannot find work. Your mortgage is late – you are losing your house, your kid’s education has stopped, you have no health coverage. There is really no positive outcome in the future.

    Now, you have folks telling you that American workers are not trained, lazy and spoiled. In addition, you have many “experts” continuously chanting the global market mantra/Theory and expounding the need to “flatten” out the labor market for the future of the world.

    You folks really don’t see the problem/issue here? Really??? Guess my question to you is – why the hell not?!! What has blinded you to the plight of your fellow Americans? What has “disconnected” in you where the actual cause and effect of the policies you propose and act on have no personal impact on you? What will it take for you to open your eyes? 1 million more Americans losing their jobs, 2, 3 million more??

    No worries, by the time we hit these numbers, Americans will be marching in the streets.

    Wake up, work with reality not theories. Oh and here is a funny word that i am sure you rarely hear – Compassion.

    Comment by dw123 — March 29, 2009 @ 7:18 pm

  10. Ryan, I pretty much think you’re a liberal idiot that buys into all that Obama globalization crap.

    I’m a 57 yo american male, that graduated from a top tier US univerity. I have worked in IT for 25 years, I live within walking distance of Microsoft. What do you think the chances are that they would hire me? Nil. Not when they can get H1Bs for half the price. By the way, I’ve managed IT teams, and the H1Bs that I’ve met around Seattle were definately intellectually inferior to most of the american workers I interviewed. How many people have you interviewed/hired for IT jobs lately?

    Also, I have been laid-off for 5 months now.

    Idiot!

    Comment by Bob Carpenter — December 6, 2009 @ 10:13 am


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