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Are American Engineers in Short Supply?

I think that his point about offshoring of innovation is an important one. Apple employing 10 Chinese for each American when making an iPod or iPad is a serious problem. Worse yet, Apple is the current best case scenario where about 50% of the revenue is split between Apple and it's overseas partners. In most cases the split is much smaller. The net result is that American companies spend a lot of money in the R&D phase, only to ship the manufacturing overseas where most of the benefit is enjoyed. This highlights why it's important to bring manufacturing back to the US. It's also important because it's often not possible to separate manufacturing from R&D. Continual process improvements means that engineering needs to be close to manufacturing in many cases. One point that I disagreed with Zachary on though is that I don't think that "Silicon Valley has had a revival as a global innovation center". Facebook (and twitter) offered next to nothing as far as technical innovation, but was rather an evolutionary improvement of myspace. He has a better case for the resurgence of Apple, but by and large, I think that Silicon Valley has been hit by the same outsourcing and in-sourcing problems that have killed innovation elsewhere in America. It used to be the case that the cycle of innovation occurred when the employees of large tech companies decided to do something new and different and strike out on their own and innovate new products in new markets. Nowadays many if not the majority of engineers being employed by tech companies are employed overseas. This only helps to ensure that any new start-up innovation from the engineers of these companies will be done overseas. At the same time most of the US based workers are being replaced by foreigners on H-1Bs. The handcuffs that go along with the H-1B and also the immigrant culture that tends to favor larger more established companies over more risky start-ups also acts to dampen domestic innovation.
— April 8, 2011 1:26 p.m.

Are American Engineers in Short Supply?

I hadn't read those letters. Thanks for posting the link. I think that Henry Foster's comments echo many of my own. I don't think that there ever was a shortage of American SW engineers though (pre-H1B), most descriptions called it a "tight labor market". One that has now given way to a glut. He also touched on a point that the government requires that companies use of H-1B labor does not "lower the prevailing wage". The problem though is that the government does not define or enforce this clause. So companies are free to define it how they want. In the case of Qualcomm whose labor force went in 10 years from 95.5% American to 40% American, and whose H-1B population climbed to 42% of the total workforce, it's pretty obvious that not filling 7000 jobs from Americans will have a huge impact on the local job market. More importantly, I also have to agree that outsourcing and in-sourcing will be a massive problem for America going forward. Technology has been the main driver for this country, fueling 50% of total job growth since WW2 (according to White House numbers). But now the massive amounts of outsourcing and in-sourcing have caused Americans to avoid technology fields like the plague (imagine working 65 hrs a week having Qcomgeek as a boss?), all while technology is being transferred overseas and workers are being trained in the skills to eventually surpass us. If this weren't bad enough, we also have to suffer through the CEOs, Bankers and Industrialists who are profiting massively through reduced labor costs, trying to convince the American people (and apparently being pretty effective at it) that: 1) This is job CREATION, 2) There is a labor shortage, 3) Americans just don't have the skill set needed (see Dr. Matloff's recent article on "if you only knew Python"), 4) American workers just need to compete. 5) American schools are crap and so are our students. 6) "These are the best and the brightest" 7) We need to issue more Visas in order to prevent Brain Drain. This rundown of America, using misinformation in order to drive a profit agenda, really should be one definition of treason. What the Soviet Union could never do to us in almost 50 years, Wall Street and the Robber Barons have done in 10.
— April 7, 2011 6:20 p.m.

Are American Engineers in Short Supply?

Very true. Most economists are in the pocket of Wall Street and only see potential sales when the word trade is used. I've come to believe that there really is no such thing as free trade. All trade is managed at some level, whether by exchange rate manipulation, cultural barriers, government favoritism or by outright protectionist laws. Many of the Asian countries that we have large trade imbalances with are the worst offenders in this respect. Certainly no one can claim that China truly engages in free trade. Requiring companies to hand-over technology in exchange for market access is inherently not free trade. But most other countries institute a VAT tax that allows their domestic industries to be protected while they pay non-slave wages to their workers. If the US had a large trade surplus then economists would be in a much better position to argue that keeping the US free from protectionism is a good thing. The reality though is that massive trade imbalances have played a major role in the decline of America. What's really happened in many cases is that US companies traded jobs and economic wealth in exchange for empty promises of market access. Anyone remember NAFTA? Gore promised tens of thousands of new jobs through increased trade. The reality was just the opposite. This is the same argument that Qualcomm's Dan Sullivan promised 13 years ago which resulted in a loss of 7000 jobs to Americans and it's what CompeteAmerica is currently promising.
— April 4, 2011 2:20 p.m.

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