Tech Week, June 28, 1999, www.techweek.com


Where are the Workers?

by Edward Frauenheim

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 résumé, 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. "It 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 résumé.

"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.