What tech worker shortage? This one!

This article is circulating, suggesting that the tech industry's claims of a worker shortage are really just complaints that it "can't hire them as cheaply as they would like", instead bringing in cheaper foreign labor on work visas. In general it's arguing that the software industry is trying to suppress wage growth. While there are cases like the non-poaching agreement between some major companies, overall the industry is thriving and there's more and more money to be made.

I find this a silly argument for a number of reasons.

1. Microsoft (and other large companies) hire lots of foreigners into their full-time staff. These people all make comparable salaries, bonuses, benefits to American full-time employees. Additionally, the company must sponsor their work visa, which requires significant HR, legal and financial resources. Essentially, the company is forced to prove needing this person to do the job because there are insufficient local alternatives. So, Microsoft (and other large companies) are saying they would rather spend more money (extra cost all front-loaded too!) to staff the same job. The only incentive to do this is that Microsoft (and other large companies) are unable to find quality employees from the USA (or it's costs more money to find a few diamonds in all that rough).

2. The argument about real-wage growth being flat since 1999 is cherry-picked. 1999 was the peak of the tech bubble. The industry was nascent and there were very few qualified people for a suddenly exploding area. Companies' stock prices were skyrocketing and they were desperate to grow. I expect significant compensation was given in stock and that stock was doing very well. We should see how real-wage growth did from 1999 to 2002, BusinessWeek/Josh Eidelson. I'm just a single data point, but since starting at Microsoft in 2007, my real-wage growth has been very significant (without being too specific, over 5 percent per year, compounded). While I may (or may not) be promoting faster or performing better than others, I know for a fact that a median performer's comp growth easily outpaces inflation. For other major companies to be competitive and not lose workers, they need to be keeping similar pace as well.

3. Higher initial salaries are unlikely to drive much more interest. Tech already pays very well, especially considering the high-paying jobs are available directly out of college, canonically at age 22. Many of my peers were single-family detached house owners by age 23, and could also comfortably afford a fairly nice car and had money to spend on travel/dining/entertainment. Unless wage suddenly jumped to day trader levels or something, I don't know that the industry's appeal would elevate. A smaller increase may serve to re-route engineering-minded people from other areas (like mechanical, civil, chemical, electrical, ... ), but then we'd have a shortage there. Or, it's all enough money that people will follow their passions (which is better for the industries anyways).

4. Major employers like Amazon, Microsoft, Google, etc are perpetually looking to hire. In other words, they're chronically unable to fill positions for all the work they'd like to get done. So, it's not like they are just driving some excess of employees to lower-paid/contract jobs.

 

Of course tech companies (like any companies) want to pay their workers the least they possibly can while still getting good results out of them. Their competition with each other has lead us to the state we're in. And the biggest constrained resource in growth is qualified people. The end.

PS: I participate in interviews regularly, and can personally attest to the lack of amazing candidates.