I have seen several pieces by Wadhwa in Techcrunch [1]. The point usually seems to be "Microsoft and Google can't hire all the developers they want at the price they're willing to pay; we should increase H1-B quotas".

This isn't to say that immigration is bad or that MS and Google aren't having trouble hiring, it's to say that MS and Google might very well be able to find more people within the US if they paid more.

Look at it in the context of six top tech companies being caught colluding to keep domestic employee wages down through no-poach agreements [2].

[1] http://techcrunch.com/2009/08/30/free-the-h-1bs-free-the-eco...

[2] http://www.justice.gov/opa/pr/2010/September/10-at-1076.html

Seriously. Microsoft, Google, etc, are in no position to lobby for more H1B until they address the rampant anti-competitive employment practices in the industry.

Google in particular is a fun case study:

  $1,167,000 revenue per employee     [1]
    $299,000 net income per employee  [1]
    $106,000 mean salary              [2]

[1] http://www.advfn.com/p.php?pid=financials&symbol=N%5EGOO...

[2] http://www.salarylist.com/company/Google-Salary.htm

I like to point out that Google has higher revenues per employee than Goldman Sachs, but a mid-level banker at GS makes several times as much money as a mid-level engineer at Google.

This is an excellent point.

I did some quick Googling (ha!) and found that GS net income per employee for last quarter on an annualized basis was about $119,000, less than half Google's average

http://money.cnn.com/2012/07/17/investing/goldman-sachs-earn...

$962 million * 4 quarters / 32,300 employees = $119,133

I think why this happens is this: if you're on a trading desk of 10 people that makes $10m, it's easy to quantify your contribution and use that as leverage to get a big bonus. If you're on one of 10 product teams that each have 10 people and in total generate $100m in revenue, it's hard to quantify your specific contribution and use it to negotiate a large bonus, even though you're bringing in the same revenue on an averaged basis.

I've always wondered why compensation in software engineering is lower compared to revenues than similar professions. A lot of the things that are either facially true or commonly held beliefs: software has low capital costs, good programmers are much more productive than bad ones, a lot of revenue can be brought in with a relatively small team, are the things that make banking, law, consulting, and even accounting more relatively lucrative for workers as opposed to shareholders. But I think there is this holdover perception of treating software engineers like other engineers, even though the dynamics of those fields is very different (massive teams coordinating to build pyramids with huge capital costs).

Commodity programmers have externally limited individual leverage (aforementioned 'teams building pyramids' strategy [1]) and systematically limited measurement (because their measurable output is blended with that of the supporting organization). On top of all that, any commoditized worker is going to have extremely limited leverage in salary negotiations due to the ease of replacing them.

pg's "How to Make Wealth" [2] does a great job of explaining the interplay between leverage, measurement, and wealth:

To get rich you need to get yourself in a situation with two things, measurement and leverage. You need to be in a position where your performance can be measured, or there is no way to get paid more by doing more. And you have to have leverage, in the sense that the decisions you make have a big effect.

Measurement alone is not enough. An example of a job with measurement but not leverage is doing piecework in a sweatshop. Your performance is measured and you get paid accordingly, but you have no scope for decisions. The only decision you get to make is how fast you work, and that can probably only increase your earnings by a factor of two or three.

An example of a job with both measurement and leverage would be lead actor in a movie. Your performance can be measured in the gross of the movie. And you have leverage in the sense that your performance can make or break it.

[1] http://mitpress.mit.edu/sicp/front/node1.html

[2] http://www.paulgraham.com/wealth.html

But then why isn't, say, academia incredibly lucrative? It's got both measurement and leverage in the form of research grants, and leverage as well in publications.

Academia can be incredibly lucrative for rockstar grant writers, leaders in scientific fields, and authors.

These folks typically don't command astronomical salaries (though they do get paid much, much more handsomely than you'd imagine). Rather, some of them publish bestsellers (and demand the university's help in getting access to leading magazines, publishers, press, etc.). Some of them start their own labs, companies, or institutions that are funded by the schools. Some of them clean up on the lecture circuit. Some researchers -- especially in biomedical fields -- make fortunes (for both their universities and themselves) by selling or licensing patents to private enterprise.

For instance, I'm a writer by hobby. As such, I tend to hang around a lot of other writers (note: I don't recommend this). A common complaint among writers is that writing doesn't pay well. And, on average, that's true. But the world of writing isn't a neat, Gaussian distribution of income. It's a power-law distribution. Most writers are lucky to clear $50k a year in academia, or working for a large and respectable publication. But Malcolm Gladwell earns well north of $10 million a year. Michael Lewis probably makes even more. And don't even get me started on fiction. The woman who wrote "50 Shades of Grey" makes, on average, $3 million a week. J.K. Rowling is a billionaire. Stephen King is probably a near-billionaire. That guy who crapped out "The Da Vinci Code" could just about afford to purchase the Mona Lisa from the Louvre, were he so inclined.

Writing, like academia, is an all-or-nothing sport. There tends to be a very small slice of outsized winners, and a very large slice of abject losers. I don't mean "winners" and "losers" in a pejorative sense. I mean it in the sense that the pie is divided very, very, very unevenly. The average is very low, but the high end is quite high.

This is in stark contrast to, say, i-banking -- wherein a small proportion make an outlandish amount of money, but everyone else still makes a really large chunk of money.

- Research universities aren't generally for-profit organizations and so the simple calculus of profit generated versus salary paid isn't directly applicable.

- Professorship in many disciplines (i.e. liberal arts) is a glamour job, that is one with an effectively bottomless supply of qualified aspirants that do not have easy access to higher-paying alternative jobs.

- "Rainmaker" grant writers pretty much can write their own ticket within academia, but they won't necessarily be able to capture a lot of the grant money as salary. They should still be able to set their own hours while running projects with top-shelf employees and equipment. There's no guarantee that the most interesting, respectable research will be appealing to the types of people who fund research though. (n.b.: I am only guessing on this last point.)

Do you think there are many Americans who would turn down jobs at MS and Google due to low pay?

That's not the right question. How many highly qualified Google or Facebook engineers would jump for the chance to work at Microsoft if it meant that their salary would double or triple overnight? Suddenly Microsoft doesn't have a tech hiring problem.

Edit: Also, more of our "best and brightest" would choose tech majors (thus qualifying themselves to work at major internet companies) if they paid as much as traditional white-collar professions.

I don't think many (any?) engineers from Google or Facebook would jump to Microsoft for higher pay. If money was the one motivating factor then surely said engineers would be working in finance rather than at Google or Facebook.

I chose Microsoft partly for the money and would do so again.

I know at least one person at Google who used to work in finance and would not have worked at Google without competitive salary.

Thought experiment for you: what fraction of current salary would it take to get a current Googler to flee the company? Would they still do the work for $30k rather than $150+stock?

No company with with an HR department is going to their average employee over $100k without a business reason.

I think the offense you've taken results from the way two almost unrelated issues are completely merged in the debates around specialized visas for STEM workers. An extremely simplified version of the discussion goes like this:

A: "There is a shortage of stem workers, therefore, we should facilitate immigration for stem workers"

B: "No, there is no evidence of a shortage of stem workers, therefore, we should not facilitate immigration specifically for stem workers"

A: "I'm amazed that you wouldn't support legislation that would make it easier for highly skilled and productive people to stay in the US."

The problem for me in this debate (which I'm still hoping can be a discussion) is that I think that the "shortage" of STEM workers is generally a rational response to market conditions when you consider the other opportunities available to highly educated workers. I also think that targeting specific professions through immigration programs (while restricting mobility in others) can end up distorting the market badly and deterring US Citizens from entering these fields, something that could badly harm the US economy in the long term.

To me, this is almost completely unrelated to the question of whether we should make it easier for high skilled immigrants to come to the US in a more generalized way (like Canada or Australia's points system). To that question, I'd answer "yes".

In general, I think this is an honest misunderstanding, but I do think that some of the PR machinery behind the lobbying for specialized visas does take deliberate advantage of the ambiguity.

I agree with you. And I also feel a bit offended with the parent comment. If you're not an immigrant trying to overcome all the hoops and doing ridiculously steps to try to stay "legal" in order to pursue your goals then you probably don't get it... And your goals will (although probably not directly) translate to improve the economy.

I just don't get it. We as immigrants pay as much taxes as anyone else, however we have far less benefits and probably much more obligations. This freaking country was founded by immigrants, unless you tell me that all the senate is constituted by native americans, don't bring the crap that immigrants will somehow fuck the economy. I would actually like to see evidence that having more flexible immigrant laws will harm the economy.

Also, having your health system tied to corporate America, and not something universal is just stupid: how is it reasonable to tie something as important as health to your employer?

Anyway, I don't see anything changing anytime soon. So we should just stick to complain every now and then and keep doing what we know best (everyone knows what that is for them).

I pretty much agree with all your points, but you are conflating several issues.