Solving The Tech Worker 'Shortage' Is Easy: Just Pay Them More

Tech CEOs love to complain about a lack of skilled workers, and want the US to change its immigration policies for high-skilled workers to fix the problem. It turns out, this is a problem that doesn’t exist.
Facebook CEO Mark Zuckerberg gestures while delivering the keynote address at the f8 Facebook Developer Conference Wednesday, April 30, 2014, in San Francisco. (AP Photo/Ben Margot)
Facebook CEO Mark Zuckerberg gestures while delivering the keynote address at the f8 Facebook Developer Conference Wednesday, April 30, 2014, in San Francisco. (AP Photo/Ben Margot)

American tech CEOs love to complain that they can't find enough skilled workers, and they want the U.S. government to change its immigration policies to fix the problem. But it's a problem that doesn’t exist.

The real problem is not that there aren’t enough qualified workers to do tech jobs, but that tech companies simply don’t want to pay people enough money to do them, Bloomberg Businessweek’s Josh Eidelson pointed out on Monday, citing academic research.

Specifically, Eidelson quoted Rutgers professor of public policy Hal Salzman saying that tech companies looking for new hires “may not be able to find them at the price they want. But I’m not sure that qualifies as a shortage, any more than my not being able to find a half-priced TV.”

Salzman’s research found that 50 percent of computer-science college students don’t enter the tech industry after graduation. Thirty-two percent of the students Salzman surveyed said there weren't enough tech jobs available -- countering any idea of a worker shortage. Fifty-three percent of students said they “found better job opportunities outside of IT occupations." That suggests the relative pay of tech is the real problem.

Tech companies do pay well compared to the median U.S. income of $53,000. A few years ago, Business Insider reported that starting median salaries at big companies ranged from $55,000 to $87,000. But these companies are not competing to employ the median U.S. worker; by their own admission, they want highly skilled workers. Those 53 percent of tech grads who found better offers elsewhere suggest that tech companies pay less than some companies they are competing against for talent.

Add to this Salzman's finding that inflation-adjusted tech pay hasn't risen since 1999, and you don't get a picture of an industry that is, overall, offering best-in-class pay.

Even if there were in fact a shortage of tech workers, tech CEOs could fix it by simply paying workers more. It’s the same solution The New York Times’ Neil Irwin called for when the trucking industry bemoaned a lack of truckers: Pay them more, and they will come.

Instead of taking a free-market approach to attracting workers -– raising pay to increase the supply of workers -– the tech industry has focused on lobbying politicians to increase the number of temporary H1-B visas for high-skilled workers, to let a greater number of workers enter the country. Facebook CEO Mark Zuckerberg created an entire organization, called FWD, to push for immigration reform that included more H1-B visas.

It's no accident that these H1-B workers are cheaper. According to the Economic Policy Institute, 80 percent of H1-B visa workers make less than Americans in similar jobs.

In arguing to bring in more of these workers, tech CEOs claim their industry is unique. Tech workers are nothing like truckers, they would say. Tech jobs are specialized and talent-based, with top performers that are vastly more productive than other employees.

But the same can be said of many white-collar occupations. Technology companies are not unicorns. Other industries deal with the same issues tech companies are constantly decrying, including global competition for talent and a sub-standard U.S. education system, and seem to do just fine.

For instance, look at finance. Wages are high enough that there are plenty of people willing to do complicated, skilled work for more than 80 hours a week.

As a result, no one ever talks about a banker shortage. Quite the opposite: There are semi-regular columns imploring young and impressionable college graduates to ignore the allure of high pay in the financial sector -- and instead try working in tech, maybe. And some of those grads do. But you will never hear a bank or hedge fund complain that they just can’t hire enough people.

FWD, the group founded by Zuckerberg, did not respond to a request for comment. Nor did representatives from Apple, Google and Facebook.

Popular in the Community