Where are the Workers? by Edward Frauenheim TechWeek (biweekly Silicon Valley magazine), June 28, 1999 Don't tell John Popescu there's a shortage of high-tech workers in the Bay Area. Popescu graduated with honors from San Francisco State University's computer science program in 1992, carries glowing letters of recommendation and is fluent in programming languages such as Visual Basic and Visual C++. But countless high-tech firms have swept past Popescu's resume, not even bothering to interview him. He believes that at age 35 he is considered too old to be willing to work the long hours often required to complete a project on time. "They're writing me off," says the San Francisco resident, who has spent most of his post-graduation years working in construction. "I think they want someone in their 20s who'll work 14 to 15-hour days and bring a sleeping bag." Popescu is one of the dissenting voices in the debate over the shortage of high-tech workers, an issue that was in the headlines again recently as the limit was reached on the number of foreign workers allowed to take jobs in the United States. On one side are those who see the shortage as a ruse intended to increase the number of foreign workers, who often may be more willing to work longer hours for less pay than their American counterparts. On the other are those who claim the shortage is real and that the government must allow an ever-increasing number of foreign workers into the country and beef-up education programs or risk choking off the tech industry's access to skilled labor. Help wanted According to the Information Technology Association of America, there is a "desperate" dearth of skilled, high-tech workers. The association's "Help Wanted" study last year found a nationwide shortage of 346,000 programmers, systems analysts and computer scientists. Also worrisome was a decline in the number of U.S. students embarking on computer-related careers. Meanwhile, the industry's appetite for high-skill workers continues to grow. Companies face increasing pressure to get their products to market quickly, says Neil Sims, managing partner at San Francisco-based recruiter Optimum Executive Search. "These employers don't have room for fat," Sims says. "There's no time available to train someone in modern programming languages." Some critics see the focus on specific "skill sets" as both wrong-headed and short-sighted. What's more, they say there are enough students in the pipeline and attack the ITAA's study as misleading. The "shortage" crisis is largely a scare tactic to drive down wages, contends Norman Matloff, a computer science professor at the University of California, Davis. Matloff has become a leading voice opposing industry claims and also has gathered the stories of older programmers who feel they've been forced into premature obsolescence. "There is no shortage," Matloff says. "I consider this primarily to be an age-discrimination issue." Much at stake Both sides agree that the stakes are high for Silicon Valley and the broader U.S. technology industry. Those who see a glaring gap in native talent warn that U.S. companies could be forced to relocate some or all their operations to burgeoning high-tech meccas such as Bangalore, India, and Dublin, Ireland. Matloff, on the other hand, likens a growing dependence on foreign IT workers to dependence on foreign oil, with ramifications for both the U.S. economy and its defense infrastructure. He speculates that if India-the country providing by far the most H-1B visa workers-grew angry with the United States, it could keep its programmers from travelling here. Meanwhile, H-1B visas have been flying out of the State Department. A year after Congress increased the annual limit from 65,000 to 115,000, visas available for high-skilled workers ran out in mid-June-even though the federal fiscal year doesn't end until October. In response, Sen. Phil Graham (R-Texas) has called for upping the limit once again, to 200,000 visas per year. Also sounding the alarm about the receding high-tech labor pool are industry groups such as the American Electronics Association. The AEA, whose members include Hewlett-Packard, Intel and Cisco Systems, published a study in April saying that U.S. schools and universities are failing when it comes to preparing students for the information age. The report found that not only are U.S. students performing behind many of their counterparts in other countries in science and math, but that the number of U.S. high-tech degrees awarded dropped 5 percent from 1990 to 1996. California produces more degrees in engineering, computer science, engineering technology, math, physics and business information systems than any other state. But the 20,809 associate, bachelor and advanced degrees given out in 1996 was 1,567 fewer than those granted in 1990, according to the report. There have been some recent signs of student interest in tech professions: New undergraduate computer science and engineering enrollment rose 40 percent in the United States and Canada in 1996-97, and another 19,803 students signed up for such majors in 1997-98, marking an additional 39 percent rise. This year, however, new enrollment dipped about 4 percent. And John Hatch, an AEA spokesman, says the demand for tech-savvy workers is simply overwhelming the supply. "The industry is expanding," he says. "We added one million high-tech jobs [since 1993]." In recent years, both the ITAA and the U.S. Commerce Department have published studies saying there aren't nearly enough IT workers. The ITAA's "Help Wanted" study estimates that 10 percent of high-tech job openings are vacant. The methodology of these studies, though, has been faulted by the General Accounting Office and other critics. In the ITAA study, for example, only 532 of 1,500 companies responded to the survey on job openings. "There is a shortage" The Computing Research Association, a group composed of academic departments, government and industry centers and professional societies, reviewed the topic earlier this year. Its report agrees with the GAO that many high-tech jobs can be filled with people who don't have degrees in traditionally "tech" fields. But the CRA report authors, Peter Freeman and William Aspray, concluded that the "preponderance of evidence suggests that there is a shortage of IT workers, or at least a tight labor market." A study this year by consulting firm Meta Group backed that assessment. The group's "IT Staffing and Compensation Guide" estimates there will be 400,000 vacancies for information technology positions in the United States by the end of the year. The CRA report also points out that the unemployment rate for IT workers was 1.3 percent in 1997. It notes that the Bureau of Labor Statistics has projected that between 1996 and 2006, IT-related occupations (computer systems analysts, engineers and scientists) will grow by 108 percent, compared with overall job growth of only 14 percent in the United States. Currently, there are about 2 million IT workers in the country, according to the labor bureau. The report has a number of recommendations, including getting more students interested in the field. The ITAA has made a bold proposal to do exactly that. In March, ITAA President Harris Miller called for the creation of "ITAA University," a new employer-supported school that would focus on graduating high-tech workers. By contributing one penny for every salary dollar they spend, IT employers could eventually produce 75,000 trained computer engineers per year, Miller says. "Not enough to close the gap entirely," Miller said in a statement. "But enough to make a serious dent." San Jose State University, meanwhile, is making its own dent. The school has seen student inte rest in technology majors ramp up significantly in the past few years. The number of computer science majors jumped from 744 to 1,212 between 1994 and 1998, and the number of computer engineering majors climbed from 550 to 939 during the same period. Even with the additional interest in technology fields, the job market seems favorable to graduates, says Irene Peck, the school's recruiting service coordinator. Peck, who has worked in the SJSU Career Center for the past 25 years, says demand is particularly strong for students who have internships or other experience with specific programming tasks. "The last couple of years it's really been hot," she said. "Students are definitely getting opportunities." Not all students, though, are happy with the opportunities. One student graduating with a bachelor's degree in computer science from the University of California at Davis, was disappointed he couldn't get a position in the Bay Area as a programmer. The student, who had a 3.1 GPA, was offered local jobs designing Web pages, work he considers to be beneath his skills. Ultimately, he took a networking job in the Portland, Ore., area. "It seems [for] all the interesting positions in the Bay Area you need a graduate degree or a lot of experience," he said. "If they're desperate for workers, I don't see it." Howard Louie, a 24-year-old who earned his bachelor's degree in computer science at UC Davis in March, also feels high-tech firms in the Bay Area are "picky" rather than parched for programmers. Louie decided to continue in UC Davis' computer science master's program to enhance his job prospects. But he still had some difficulty landing an internship in the Bay Area, let alone the promise of a job a year from now. A top business consulting firm declined to give Louie either, despite the fact that he graduated with a 3.6 GPA, interned for two summers at Intel and served as a network administrator at Davis for about a year. "[The company has] some real technical divisions," Louie says. "I can't imagine why they wouldn't want someone that can leave grad school in one year." Not isolated cases The students' experiences aren't surprising to Matloff. In his own informal research, Matloff found that companies typically are choosy, offering programming jobs to 30 percent or less of the candidates they interview. As an indication that companies shun older workers, he notes that 20 years after getting their degree, only 19 percent of computer science graduates remain in the field. That compares with 52 percent of civil engineers. The Institute of Electrical Engineers noted evidence of age-discrimination in a study last year. The institute's employment survey found that unemployed members typically require three additional weeks to find a new job for each year of age over 45. IEEE President Paul Kostek has opposed Sen. Graham's proposal to increase the visa cap, saying it's too early to judge the results of last year's increase in the number of foreign workers. Matloff argues that even well-intentioned companies err when they focus on hiring someone with the latest "hot" computer language rather than letting an experienced worker learn on the job. Most smart programmers can pick up the newest code in a month or so, he says. By bidding high for people with specific skills, firms end up shelling out higher salaries, contributing to the job-hopping and leaving positions vacant for longer than necessary. "[These companies have] genuinely but mistakenly bought into the notion that you have to have a skills match," Matloff says. "They're shooting themselves in the foot." James Brentano, who heads Internet research for Orinda-based Intraware, agrees that general programming skills are more important than specialized knowledge. But Brentano, who was a student of Matloff's, parts company with his former mentor on the overall supply of IT workers. Intraware, which sells and maintains software over the Web, struggles to find talented, devoted people, he says-and it's not because the firm discriminates on the basis of age. "It's not about chronological age at all," Brentano says. "It's about work habits and desire." But critics say that kind of talk is a euphemism for demanding long hours and minimal wages--exactly why employers like H-1B visas so much. As evidence of low-pay to foreign workers, Matloff points to his own study of the 1990 census. He found that in Silicon Valley, foreign-born workers with Master's degrees under the age of 33 made an average of $42,845, about 20 percent less than their native-born counterparts. A 1996 U.S. Department of Labor report found that 75 percent of companies hiring H-1B workers did not properly document that they planned to pay wages comparable with domestic workers. Even when employers did properly document the wages to be paid, 19 percent of visa holders were paid less than the company promised. Additionally, the Department of Labor has cited numerous firms for abusing the H-1B program. Between 1992 and 1998, the department found employers to be in violation of H-1B regulations 109 times. Back wages were due in 87 cases, amounting to $2.3 million for 519 workers. Firms also paid $209,000 in civil penalties. Given his frustrating work search, John Popescu has little trouble believing companies are more interested in hiring people willing to work long hours. But because of an enduring passion for programming, he remains hopeful about landing another job in the field. Earlier this year, he had and lost a post as a customer-support technician. So, he's back to sending out his resume. "I know my skills are strong," he says. "I could adapt easily if given the chance. And that's the problem--I'm not given the chance." Edward Frauenheim is a Bay Area business reporter.