Sunday, April 4, 2010

Coincidence? I don't *THINK* so (Part 2 of 2)

So, how come y'all are being overrun by foreign engineers? Well, let's look at some options.

The Indians are smarter than y'all? Well, there are certainly some bloody smart Indians, but my experience is that they're much the same as the rest of us. Sure they'll throw up the odd Ramanujan, but they don't have a monopoly on brains. Ditto the Chinese. Smart, but no smarter.

OK, so maybe they're more experienced? Absolutely not. Here, the Americans do win. Experience in semiconductor design means "tape outs" -- or, pretty much, numbers of designs. In my experience, your average Indian (based in India anyway) hasn't had enough time to get as many tape outs under his belt. It doesn't mean they're bad, just young.

So something else that makes them "better" in some way? Better at learning quickly? No. Better at explaining their ideas? No.

No, I think we'd have to conclude that from the point of view of actual ability to get the job done, your average Indian or Chinese engineer is no better than your average American .

So is it cost then? Yes, I think maybe that could be it. It makes sense. If the foreign engineer is pretty much the same as the local engineer in capability, but is lower in cost, then that could account for at least some of the difference, no? But the trouble is, immigration rules are supposed to deal with that. I've hired "foreign" engineers, and the way I hire, the way I advertise, and the way I pay is scrutinized. You can't just pay foreigners $4.00 and a chocolate cookie an hour.

But there's more than one way to skin an immigrant. Let me tell you of my own experience at the hands of US immigration.

I came to the US in 2004 to open the first US branch of my UK company. I came on an E2 "Treaty Investor" visa. We invested almost half a million dollars, and spent a lot of time in planning and executing the opening. Since arriving, I've "created" US jobs. I'm law abiding. I own my own home. I pay all my taxes. I even mow my lawn.

But at any point in the first two years of being here, while I was still under my visa, had my company folded, men with guns would have come and forcibly removed me, my wife, and my children, from the home we owned, and would have deported us. And at any point in those first two years, had I had an unfortunate accident and died, those same men with guns would have come and deported my bereaved wife and children. What American man would not be outraged at that threat to his family. What *Texan* man would not be outraged? Wars have begun for less.

But here's the point. Given that very large Cost Of Failure facing me with my company -- a cost far larger than faced by my native-born American counterparts (and competitors) -- can you see that the "free" market was being heavily distorted? The American entrepreneur loses a contract bid, and maybe his revenue drops for the month. Worst case, he loses the company. But my worst case was deportation. Kids at school, friends, neighbourhoods, the whole thing -- ripped up in the Land of the Free. Would it be a surprise if, all things considered, my risk profile was different from my American neighbours?

So, now to all those Indians and Chinese; those H1/B holders. There's your lowered cost. Precisely because they are enslaved to a single employer, and dependent on that job to even stay in the country, the job market around them is being distorted. They may actually be somewhat cheaper in dollars than the equivalent American (the authorities aren't *that* good at controlling wages). But they are very much cheaper in the sense that they are not free economic agents in the way their American brothers and sisters are.

So here's my alternate theory. The reason there are so many Indian and Chinese engineers in high tech, and so few new-native Americans -- a "problem" being attacked by the likes of DARPA -- may not be because your immigration rules are too lax, but because they are not lax enough. By holding over foreigners' heads -- *our* heads -- the threat of deportation at the loss of a job, immigration rules widen the cost gap between Americans and foreigners, making Americans less attractive.

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