Government · Policy

Federal Government offers free money to tech companies?


November 3rd, 2015

As a recent grad in the tech industry- the recent news of the federal government preparing to offer American technology companies $12,000 in free money for every foreign-born, US trained tech worker they hire is rather discouraging. Not only does this seem completely wrong but it can have a heavy repercussion on American college grads like myself. The (OPT) Optional Practical Training program is already up and running. What are others thoughts on this new federal government program? What should these tech companies do?

Rob G

November 3rd, 2015

@ anonymous member. i suspect any feeling of alarm you may have from this article is due more to the source and slant of the article than reality. The article didn't site the source or quote any details of substance so it's hard to address your concerns. Reading the article and many of the comments gives the impression that the author and readership are bent toward a 'protectionist' mentality rather than reality. reading between a lot of lines the issue boils down to a supply and demand issue. There is more demand for technical talent than local supply. The US simply does not produce enough engineers (including software engineers) and scientists to meet the demands of US companies. I am based in Seattle. One of my companies hires a lot of software engineers, technical project managers and technical program managers. The other soon will. If we can find qualified local talent who are US citizens we hire them. Most US tech companies are in the same boat. Typically the supply of the skills we need simply is not adequate. Often we cannot find US citizens with the right skills at any cost. Sometimes you can find the skills, but the demand is so high that the cost are simply out of reach given alternatives. When we search for candidates (based strictly on technical skills - not filtered for cost) i would say fewer than 10% of the qualified candidates are US citizens. These are typically national searches. If we hire someone who is here on an H1-B for example, we pay them prevailing wages and benefits so we are not saving money by paying a lower wage to a foreign citizen. If we sponsor their visa it costs us on average $6-12k in legal and other fees so not only are we not saving money by hiring a 'foreign' worker, it actually costs us more. These fees could be what this program is trying to address, i don't know without seeing the details of the program. Then there are the costs of training - not the least of which is helping them to understand how things get done here in the US - how we communicate, how we set expectations, quality, deadlines, deliverables, etc. The US doesn't produce enough engineers. The University of Washington has solid engineering programs - and well funded from gifts from the likes of Microsoft, Boeing, Amazon, Expedia, Starbucks, Nordstrom, etc. It is the largest university in the state. Still, as a public university the state of WA limits the CS program to 250 graduates each year (i've not checked that stat in a few years). Amazon alone will suck up 250+ CS grads in a month. That doesn't leave much for the rest of us. India produces more engineering graduates in 1 year that all US universities produce graduates of any kind. So US companies have the demand, US universities don't produce enough US born graduates and other countries do (non-US). But the problem does not lie only with our universities. US high schools do a poor job of getting students interested in STEM. We can't force kids to go to engineering school. Ask a US kid what they want to be when they grow up and you will typically hear "a pro basketball player" or "rapper" or "reality TV star" or "fire fighter". Ask a student in India and you will typically hear "a software engineer" or "doctor". We need to do a better job of promoting STEM to young people. There are lots of non-US citizens who want to be educated in US universities - we have some pretty good schools. So those families who can afford it pay significantly more (than US citizens) to send their kids to US schools. What often happens then is these graduates take their US diploma and return home. Yes, the university made some money, but why not provide an incentive for that US trained graduate to stay here in the US and work for a US company? Perhaps better is to offer a discount on their tuition in exchange for a x year commitment to stay and work here. this, i suspect, is the real target of this incentive program. We live and operate in a global economy. As a US student no longer is your 'competition' the kid siting in the desk next to you - it is the kid sitting in Asia or Europe or South America. US companies are the best in the world at innovating and competing. There is a reason we are the #1 economy in the world. We have to compete on a global scale and we will continue to compete - our government needs to catch up. It would really help our competitive advantage if we could get more kids interested in STEM. We can no longer survive with a "protectionist" mentality. That goes for students too. US students and their families need to understand that they must compete globally. Offering a financial incentive for non-US-citizen graduates to stay and work here for US tech companies is not protectionism, its survival. The sooner the US education system and universities learn how to produce more qualified technical graduates the better off we will all be. This is imperative if the US is to remain the #1 economic power.  And this is not just a "nice to have some day when we get around to it" issue.  This is a national economic and security issue and it needs to be addressed NOW.  Or we could all work for the foreign companies and governments who figure it out first.
So those are my thoughts on this program - if it exists i'd like to know more. As to your second question: "what should these tech companies do?": do what we do best - compete. Take advantage of the program if it exists, hire great engineers, produce great products and hopefully let more of these engineers become US citizens. Build successful companies and produce more successful entrepreneurs who pay taxes and support our universities and invest in startups and make big grants to their alma-maters, and raise kids who think being a geek is cool. We are a country of emigrants. Look at our greatest accomplishments from the automobile industry to steel, to railroads to the lightbulb to photography to moving pictures, to electricity distribution, to the Manhattan project to telecommunications to the transistor to the PC industry to the mobile phone industry to the software industry to Wall street to the internet. You will find many foreign-born engineers and scientists at the heart of these world-changing accomplishments. Take a close look at the Manhattan project for example and see if perhaps WWII may have turned out differently if not for all the foreign-born scientists and engineers we had working on it.

Benjamin Olding Former Co-founder, Board Member at Jana

November 4th, 2015

Huh - I wonder if this will happen.  I see it as a positive.  What would really help though is a better path to H1-B for OPT students.  It's nerve-wracking to train up a promising new grad for 2 years and then be subjected to same lottery as engineers coming from outside US...  Doesn't make a lot of sense; the government has already acknowledged US-trained engineers should be encouraged to stay in the US with the OPT program (which is great) - having a better path to H1-B would be more helpful than anything else I can think of.

Our country received a huge subsidy following WWII in the form of scientist-immigrants from Europe.  I think most people know about that.  What many probably don't know about is the equally large (if not greater, at least in terms of numbers) subsidy we received in the 70s from India and China, due largely in mistakes those countries made in terms of governance, and smart immigration policy on our part.  Those countries have fixed a lot of that since then, and they actually have opportunities for their scientists and engineers today.

It's been great for everyone in our country that many of the  world's best and brightest have wound up becoming US citizens despite being born elsewhere.  We shouldn't confuse that history of ours with conversations about factory labor cost.  There's an analogy to be made with factories & laborers when slinging JavaScript, I guess, but it's really not the same.  

The supply of engineers & scientists is way too low and the supply of basic physical labor is - sadly - way too high for our generation in the US, at least relative to current employment demand.  The solution to one problem has nothing to do with the other.  We need to address both issues, not pick one or the other go blindly champion as the right uniform policy.