Wednesday, August 20, 2008

Michael Phelps and H-1Bs

So let's say you have to hire someone for a programming job, and here's how you go about it. You put an ad in the paper stating that you have such a job, and then 100 people come in. You don't talk to them in any depth, don't consider whatever experience or aptitude they might have, but you put them at 100 workstations and put them to work on various problems you have. You don't pay them anything, but, over time, maybe a great deal of time, you realize which of them is the best one, and that's the one you hire.

There are big problems with this, which is why we don't use this method. First, who's going to go for this? I enjoy programming, but I wouldn't sit in a room solving problems for free, waiting to see if I'll get hired. More importantly, there's no guarantee that you'll end up with someone even minimally competent. You might, you might not. Since you probably won't, you're wasting your time.

What you do, assuming you're trying to find the best person for the job, is to recruit in places that might have potential employees who know what they're doing. You screen resumes, conduct interviews, possibly give a programming test. You try to maximize the probability that you're selecting from a pool of high-potential candidates, then you try to select the single best person out of that pool. And this is such a natural way to do this that we rarely think about it.

But we select our Olympic athletes the first way. We open a pool, or a gymnastics school, and, if we're lucky, Michael Phelps or Shawn Johnson wanders in. A lot more luck later, they become Olympic champions. We allow private enterprise to determine where the school is located, and we let fortune dictate whether or not the individual ever gets there.

And, since we fundamentally don't care if we get a Michael Phelps (no, we don't; we may thrill to his accomplishments, but, if he didn't exist, we would feel no loss - five gold medals, six gold medals, what's the difference?), this system works fine for us. It demands nothing from us. If the Johnsons want to mortgage their house to keep Shawn on the balance beam, they can go ahead - means nothing to me one way or the other.

If you did care, however.... Let's say you were given the job of increasing the number of swimming medals the U.S. wins. Your livelihood and your children's future depend on seeing gold, silver, and bronze draped around wet Americans. Would you:
a) Work hard to encourage people to build swimming pools at random places around the country, then just sit back and hope that kids who are genetically blessed wander in and start to take lessons, or;
b) Go out and try to identify kids who have the makeup to become great swimmers, have the requisite shoulder and ankle flexibility and other qualities, then send them to existing training facilities that could enhance and hone their skills?

Of course, you would choose b), you would have to. But that's what the Soviets and East Germans did, and that's what the Chinese are doing now, and we all feel a little queasy about that. It goes against the American ideal of individual choice, of allowing everyone to do what they want regardless of ability. "You can be whatever you want to be" is a far better motto than "E pluribus unum." There might be 10 or 100 more Michael Phelps out there in the U.S., and we'll never know it. They're off cooking or knitting or mountain biking, fulfilling their desires rather than maximizing their gifts.

It's fairly clear, however, that, for things we truly value, for which we're accountable, we take a more proactive approach. China's done so with respect to the Olympics, and they're winning medals left and right, and they've also done so in training engineers, just as India has chosen to work toward dominance in software and call center jobs.

What does this have to do with H-1B visas? Here in the U.S., we take approach a), where we just allow in a clump of workers who've demonstrated little more than the ability to earn a college degree, and assume that, out of thousands, some number of them will have the entrepreneurial bent necessary to build the companies of the future.

Grandpa John not only doesn't see a problem with that, he supports more of the same. From his campaign website:
John McCain will expand the number of H-1B visas to allow our companies to keep top-notch talent – often trained in our graduate schools – in the United States....For every foreign worker hired, corporations generally hire five to ten additional American workers.
[Link pointed out by the invaluable Job Destruction Newsletter.]

I'm not sure what's more disheartening here, that McCain believes that the H-1B visa program is geared around the desire to find "top-notch talent," or that his staff is inflating the results of a flawed regression study, which found that each H-1B application generates 5 to 6 new jobs (a ridiculous result, implying that we only need to apply for visas in order to employ the entire country, and ignoring the reality that the largest H-1B companies are Indian outsourcing firms).

Sure, it's possible that by letting thousands more immigrants into the country, without any additional screening other than "got a college degree," we will find the next founder of a Microsoft or an Intel, creating industries that will generate millions of jobs. But setting this up as a crapshoot, praying that the person is out there who will bring untold wealth to the U.S., is as quixotic as building a pool in the middle of South Dakota and just praying that the next Michael Phelps will wander in.

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