H1-B visas and the talent shortage. The Silicon Valley reality.

Recently I came across this well written article about the STEM talent shortage being a myth and the discussion around the H1-B visas and I’d like to share my point of view.

I’m not in a position to talk about H1-Bs from areas other than software nor the effects of this visa outside the San Francisco Bay Area, but I do understand how it works for tech companies around here.

I’m a senior software engineer from Brazil that currently holds an H1-B. I have 15 years of experience developing software, I work for a startup and I don’t make less money that an US citizen in the same position. How do I know that? Comparably.

Not all software H1-Bs are created equal, there is a clear separation between two use cases.

On the first group, you have big tech companies and startups that want to hire the best and the brightest engineers that they can find, no matter where they come from and are happy to pay them very good salaries (100k–200k range), great benefits and they accept paying recruiters and headhunters indecent amounts of money for finding new engineers for them.

On the second group you have consultancy companies that are in the business of placing foreign workers inside third party companies, to work on whatever projects these companies have. They usually pay H1-B workers close to the bottom limit of the salary range and they make money with the delta between that and what they charge the companies.

I’ll talk about the first group only, because it’s the only one I understand well.

Coming back to the article, it’s probably true that the sheer number of STEM graduates is equal or bigger the number of currently available job openings.

However the article is comparing apples to oranges.

First, there is a world of difference between a software engineer, a physicist, a chemist and a mechanical engineer. The job market is really hot for software and maybe hardware engineers, but that’s less true on the other STEM areas.

That’s not to say mathematicians and physicists can’t take a software engineer job, they can! In fact, most of my coworkers are expats from other STEM areas. However, to do this they have to apply themselves studying for months in a coding bootcamp, and not all of them are willing to do that.

Second, the article implies that if a person holds a computer science degree and there is a software engineering job opening somewhere, that this person is automatically qualified for that job and that’s not true. When interviewing candidates, you realize that a degree doesn’t mean someone can code. Also the opposite is true, lots of people without a STEM degree can code.

Third, the reality is that startups and big tech companies have a really high bar for candidates. They only want to hire what they call “top talent”, or “10x programmers” or “rockstars”. The names vary but the meaning is the same:

In Silicon Valley, it doesn’t matter if you have the right degree or not, it doesn’t matter if you’re a US citizen or not, all that matters is how good you are.

They have thousands of job openings, but they won’t employ someone that is an average coder. Why? Because they don’t think it’s worth giving a job to anyone that is not a top performer.

You might disagree with this approach, you might think it’s morally wrong, dumb and shortsighted… and you might be right. However, so far this is working wonders for them:

So when the tech companies say there is a shortage of talent, they don’t mean a shortage of STEM graduates, they mean a shortage of top performance coders.

I understand that this causes a lot of anger among the US STEM graduates that don’t find a job while thousands of foreigners get hired every year. And the anger drives people to pressure for cutting the visas, which the current administration might be considering right now.

If this happens, two things will probably happen:

First, the big tech companies already have offices in many other countries, as you can see here, here , here and here. So if you won’t let them bring people to the US, they’ll just shift the job openings abroad and hire there. This will hurt the US economy because the money will be spent abroad instead of here.

Second, top talent in the US will become even more expensive and scarce, which will badly hurt startups. Multiple other countries are trying to create their versions of Silicon Valley right now, and cutting the influx of foreigners here will help their chances of luring the next unicorns away, which in the long run will also hurt the US economy.

Lets keep in mind that tech companies are location independent and can operate from anywhere that has a good internet connection. This means if they decide to and their employees are willing, they can just hop on a plane and setup shop in New Zealand, immediately transferring GDP, tax revenue and employees spending power there.

I believe there is room for improvement in the H1-B visa and I believe the US should review it and try to make it better. But it should do it carefully to avoid causing more harm than good.


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