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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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February 14, 2013

How Can There Be a Shortage of Scientists And An Excess At The Same Time/

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Posted by Derek

I wanted to come back to the topic of whether we have (1) too many unemployed (or underemployed) scientists and technology people in the US, or (2) a critical shortage of qualified people that's leading companies to complain that they can't fill positions. Can we really have both at the same time? All this bears on (3): should we revise the visa rules to let in more technically qualified immigrants?

The other day I wrote about a PriceWaterhouseCooper (PwC as they would have it) report on this very issue. I'll pick up where that post left off. One thing to notice about the PwC report is that it's aimed at HR departments, and it tells them some of the things they want to hear - that they're important, that they're unappreciated, and that they have a crucial role to play in today's hiring environment. This is not just flattery; this is advertising - aspirational advertising, to be more accurate. That's the technique (used since forever) of pitching an ad to a slightly more elevated group (socioeconomically) than the one it's actually aimed at. Think of mail-order catalogues and credit-card offers; that's where you see this in the crudest form. The idea is to make the recipients think "Wow, they must think I'm one of those people", or (even better) "Wow, I must really be one of those people". That is, the sort of people who shop for this pricey merchandise, or who think nothing of paying the annual fee for a MatteBlackAnodizedPlatinum Card, what have you, because that's the high-end life they lead.

What's PwC selling, then? Why, consulting services to all these HR departments, to help them navigate their extremely important, critical-like-never-before jobs in this extraordinary environment. The HR people have their morale improved, PwC gets some new accounts, and everyone's happy. But the report is still a pure example of the "critical lack of good candidates" idea, being put to more immediate use by a company that sees an opportunity to trade on what's saturating the air right now.

But how can there be a shortage and an excess at the same time? Part of the answer might be found in the work of Peter Cappelli of the Wharton School at Penn. A reader sent that link along to me the other day, and it's well worth a look. Cappelli is the author of Why Good People Can't Get Jobs, and his take is that employers are largely to blame for this situation:

. . .Today’s CEOs regularly blame schools and colleges for their difficulties in finding adequately prepared employees. The complaint shows up in survey after survey, as Cappelli shows in his book, and it is substantially more common among American employers than their peers in most other developed and developing economies.

But do these surveys “show that the United States is among the world leaders in skills gaps,” Cappelli asks, “or simply in employer whining and easy media acceptance of employer complaints?”

He thinks a body of lesser-reported studies contains the answer. “If you look at the studies of hiring managers and what they want, they’re not complaining about academic skills,” Cappelli says. “You hear the business spokespeople saying this, but the actual hiring managers are not saying this now. And in fact they’ve never, in modern times, said that.”

And Cappelli also has pointed out that this view of the world is appealing to several constituencies at the same time, among them, people who advocate school reform and changes in research funding, social reformers of several different kinds, and employers who would rather place the blame for some of their problems on outside factors. There's a reason this idea keeps circulating around - there are a lot of extraneous reasons to keep believing it.

He goes on to decry what he calls the "Home Depot" approach to hiring:

In a 2011 op-ed article for The Wall Street Journal, Cappelli remarked on a telling statistic from the Silicon Valley tech boom of the 1990s: only 10 percent of the people in IT jobs had IT-related degrees. But a lot of the same people would probably have a hard time landing similar jobs today, because employers have increasingly adopted what Cappelli calls “a Home Depot view of the hiring process, in which filling a job vacancy is seen as akin to replacing a part in a washing machine.

“We go down to the store to get that part,” he explains, “and once we find it, we put it in place and get the machine going again. Like a replacement part, job requirements have very precise specifications. Job candidates must fit them perfectly or the job won’t be filled and business can’t operate.”

He lays some of the blame for this on software-based hiring practices, the CV-scanning programs that look for the keywords that supposedly have to be present for a candidate to be considered. (Many readers here may have run into this problem; chemistry and its associated disciplines are an unfortunately good fit for this approach). And here's where some sympathy for the HR people might be appropriate: these sorts of "solutions" are often used when there aren't enough people (or enough time, or money) to do a good job of screening applicants. That's not to say that there probably aren't some HR people who truly believe that this is the best way to do things, but some of them also have their backs to their own walls.

There's another part of that article on Cappelli that takes us to the H1B visa issue:

When there are three or four job-seekers for every vacancy—and some postings draw applicants by the hundred—firms have an understandable incentive to wait for a dream candidate to show up. And ideally, a dream candidate who expresses a low salary requirement.

In (a recent) Manpower survey, 11 percent of the employers reporting skill shortages chalked it up to applicants unwilling to accept job offers at the wages companies were willing to pay.

I have the impression that much of the push to open up the technical-worker visas is coming from Silicon Valley and the IT world in general. (Someone correct me if I'm wrong). And it's also my impression that there are already a lot of people in that job market looking for work - again, if I'm mistaken about this, I'll revise this post. So one (not very charitable) explanation for a drive to bring in more job candidates from abroad is that they will be cheaper to hire, and that employers will have more leverage over them because of their visa situation. Plausible, or not? Update: apparently all too plausible - see this New York Times piece.

Now, it pains me to write that sort of thing, because we could head right off into the whole immigration-reform swamp, which is concerned with a lot of issues that are peripheral to this discussion. (Undocumented workers from Central America, for example, are not a big factor in IT or chemistry hiring). And I think that the US should indeed admit immigrants, that doing so has been one of the big factors in making us the nation we are (the good parts, I mean), and that if we're going to let people in, that we should strongly, strongly bias the process towards smart, entrepreneurial, hard-working ones. So I have a natural sympathy towards the idea of bringing in technically and scientifically trained people.

But not to use them as a source of cheap labor that can be leaned on because of their immigrant status. I don't like that idea much at all, not for what it does to the people who are already here, and not for what it does to the ones who would come here looking for something better, either. And this illustrates the tangle of mixed motives, declared and otherwise, that this whole issue is stuck in. The real reasons people advocate the positions they do in this area can be hard to work out, and that has the nasty side effect of giving everyone plenty of opportunities to accuse others of acting in bad faith, etc. It's a mess.

So, in the same way that I tried to dig into the motives of PhRMA the other day, one can try to look at motivations here. Employers, in fact, could well have an interest in keeping the whole "We can't find good people" line of thinking alive, which is something I mentioned when I brought up the PriceWaterhouseCoopers report. It gives upper management someone else to blame, and in some cases it can be used to keep wages down. As I've said here before, the idea that companies here in the US will hire workers here if they're forced to is, I think, a fantasy. They'll keep those positions open and complain about it instead.

And although this is a particular problem for Silicon Valley and that industry, biopharma is not immune. Not at all.

Comments (60) + TrackBacks (0) | Category: Business and Markets


1. David Formerly Known as a Chemist on February 14, 2013 9:54 AM writes...

"So one (not very charitable) explanation for a drive to bring in more job candidates from abroad is that they will be cheaper to hire, and that employers will have more leverage over them because of their visa situation. Plausible, or not?"

This very notion was addressed in a New York Times op-ed last Friday, where these H1-B workers are portrayed as indentured servants, bound to their sponsoring employer for wages below those non-immigrant employees earn. I don't know how true that is in industry, but I've certainly seen it happen in academia.

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2. Vader on February 14, 2013 9:57 AM writes...

It seems to me that the overspecification of job candidate requirements points to risk aversion by those doing the hiring. Which, if true, raises the further question whether hiring is in fact risky, or the folks doing the hiring are irrationally risk-averse.

I tend to avoid explanations that rest on some larger group being irrational. So that leaves hiring being really risky.

Which seems like a perfectly reasonable explanation, actually. It's very expensive to hire someone, so a lot of money is at stake. It's also very expensive to fire someone, especially if they challenge their firing in court. "At-will" employment is going the way of the dodo as a job is being increasingly looked on as an entitlement. This is particularly true in the public sector, but I'm seeing some signs of it in the private sector as well.

Hence: If you hire someone and it doesn't work out, you're out an awful lot of money. This leads to an excess of caution.

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3. Helical_Investor on February 14, 2013 10:09 AM writes...

I don't think it odd that there is both a shortage and excess. The issue is skill set match. What we educate for, in this case often early stage research, isn't often what the market needs (clinical skills, regulatory, etc. etc.). Yes, employers themselves are often to blame as continuing workforce education may be the only way to gain those add on skills. Companies want to hire rather than train to get experienced workers (in any area), but that mindset always leads to the glut/shortage conundrum in any specialized area.

To add some hyperbole, most R&D spend in pharmaceutical development is clinical. How many of us were encouraged to go to nursing school rather than graduate studies in biology / chemistry to pursue such a career? How many went later? What are all of you currently training for that is outside of what you do day to day? Hopefully something.


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4. Hal Incandenza on February 14, 2013 10:16 AM writes...

There was a recent piece in the NYT Magazine about this so-called "skills gap" and how it often boils down to companies not finding qualified people who will work for lower wages.
e.g. "At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour."

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5. exGlaxoid on February 14, 2013 10:17 AM writes...

I must agree that 1) there is not a shortage of skilled, educated people in the US, and 2) many companies take advantage of foreign born workers with visa issues as they cannot change jobs or complain about their work situation easily.

A interesting connection to your topic is the recent change in policy at a large company that I am familiar with. It used to be that when groups were let go (downsized, redundant, laid off, put in the pool...) it was extremely difficult for laid off people to find other jobs within the company, even when there were relevant jobs posted and the workers had the skills needed for them.

Of 200+ people in one group around 2010, only a couple were rehired from "the pool" even through there were 60+ jobs posted, many of which could have been easily done by the people in the pool. At the same time, groups were complaining of having a hard time finding people with exactly the skill set that they wanted.

But more recently, one of the high level managers had the good sense to realize that there was a simple answer. They created a "re-deployment" program that actually helped match people in "the pool" with open positions, used some of the funds earmarked for severance pay to provide some funding to groups who hired from within the pool, and allowed groups to hire these people on a temporary basis to see if they could do the new work well.

While I don't work at this company currently, I have heard that the program was a success. Most of the people let go from one job have found new jobs in other departments, almost all have done a great job, and some have already been promoted. As it turns out, most of the people were pretty smart to begin with, which is why they had been originally hired. Also, the company has saved money on severance pay, hiring expenses, training costs (the people hired already knew the IT system, company policies, etc), and recruiting.

So, I think that the success of that program shows that the main issue is that HR does not want to take the effort or expense of figured out who can do the job, and that hiring managers sometimes think only someone just like them can do their job. I have seen some very capable people in a med chem lab who had biology, zoology, Comp. Sci. and other degrees, so the same applies to chemistry as well, although I will admit it is hard to train someone in chemistry who does not have at least the basics of it, all of those people had taken quite a bit of chemistry along with their major courses, most had gone back to school for further education as well, but the HR resume search engines might have missed all of that.

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6. barry on February 14, 2013 10:17 AM writes...

prof. Jeremy Knowles would often take on a post-doc and give him/her a project far from her/his graduate specialization. If he/she were fool enough to protest that his/her training was in something different, Jeremy woud draw himself a bit taller and respond mildly that "horses can be trained. I like to think that chemists can be educated".
Skill-set match may be a real problem. It's a fuzzy matter; hard to prove and easy to hide behind. But the most parsimonious explanation is that HR wants to drive wages down.

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7. Anonymous academic on February 14, 2013 10:27 AM writes...

I agree that driving wages down is the most likely explanation, but I'd also argue that the attitude towards immigrants isn't necessarily sinister, to the extent that I haven't seen many reports of employers abusing visa-holders. I'm sure American tech companies would be thrilled with the domestic labor market if there was a large supply of native PhD recipients willing to work 60 hours/week for $50,000/year, even if they couldn't threaten them with deportation.

I also share Derek's view on immigration, but it makes my blood boil to see CEOs (and parasitic consultancies) lying to the media, the public, and the government in order to screw American workers. If they would simply be honest and admit that they want to depress wages, I would have more respect for them.

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8. z on February 14, 2013 10:46 AM writes...

I think that maybe one component of the "shortage of scientists" story is that people are very good at covering themselves and passing the buck. If you create a story that everyone starts believing, which says that there just aren't enough qualified people to fill the positions in your company, then when your company runs into trouble you're in a stronger position to deflect the blame away from yourself and onto a larger social problem. Like so much of politics, it doesn't matter whether your story is true, it matters whether you can convince people to believe you.

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9. Virgil on February 14, 2013 10:51 AM writes...

Overall I don't buy the idea of a skill shortage, but the key factor is GEOGRAPHY. If anyone in Silicon Valley tells you they can't find people, they're lying because all the cool kids wanna be there! Same thing for Boston, NYC, Bay Area, and anywhere cosmopolitan/sunny/by-the-sea. The "magnet" cities where people in their 20s ans 30s actually want to live, have no problem cherry-picking the best candidates. Out in the "real world" (mid-west, rust-belt, deep south, flyover states) where the cities are not "fun" for young folks, that's where the hiring problems are. Try convincing a 20-something software engineer to relocate to Ohio (versus Mountain View). Try getting a hotshot post-doc' to work for a biotech startup in Nebraska (versus Cambridge MA). You know the places I'm talking about - the ones that advertise themselves as "a great place to raise a family" (a perfect euphepism for quiet and boring if ever I heard it).

I live in one of those towns, and it's all we can do to convince young folks to come here. Last year one of our graduate programs made 16 offers and we had 2 students accept. Our grad' programs in total have half the number of students they did 10 years ago, in tune with the decline in the local economy. The houses are so cheap here that all of my grad' students and post-docs OWN their homes. The only young folks in the tech industry here are people who were born here or those who have family and came back after college.

A big part of the problem lies not with the skilled individuals (who can blame them for wanting to live somewhere nice?), or with the companies/colleges. It lies with the cities and local governments, recognizing that they need to invest in infrastructure and support local arts and other enterprises that bring people in. Young folks want to live in towns where the entertainment options include vibrant night-life, theater, ballet, symphony, art galleries, music, good sporting facilities, NFL teams, good schools, bike trails, street festivals, diverse restaurants, organic food, farmers markets, solid public transportation (thus negating the need for a car), having a hub-airport (versus making 2 stops to fly anywhere). People are willing to make sacrifices to get these things, such as not being able to afford a house or maybe taking a lower salary. There are maybe a dozen cities in the US that fit these criteria, everywhere else is a wannabe.

So yeah if you live in one of those middle towns, there IS a skill shortage.

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10. Hap on February 14, 2013 10:52 AM writes...

I am cynical about employers in general - I think that the skills gap is a measure of their unwillingness to train employees. Part of that unwillingness is rational, based on self-interest in a labor market where they have no long-term relations with employees, but that, too, is of their own making. In a sense, it is related to the shift of pharma research overseas (or to smaller companies) - employers are hoping that someone else will spend the money to train their employees to do what they want, and allow them to make the money now (analogous to pharma hoping that someone else will find their drugs so that they can make the money later).

Example: There is also a related article in the New Yorkeron the decrease in employer training by Surowiecki as well - in that, the cuts in training cited were rather significant.

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11. ScientistSailor on February 14, 2013 10:53 AM writes...

Easy: There's a shortage of good people willing to work for free, and and excess of mediocre people who want to get paid.

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12. darwinsdog on February 14, 2013 11:07 AM writes...

We need to distinguish between the important idea that the cream-of-the-crop foreign scientist is someone we should attract/train and then retain vs. the many low level foreign scientists filling positions that domestic job seekers could fill. I don;t know how to address that better in policy but it is a critical aspect of this debate.

Speaking to preferring indentured servitude of foreign scientists to hiring domestically - a certain big pharma with a hub in NC and a affinity for 'performance unit structure' has a program to bring-over Chinese graduate students to work for the 2-3rd years of their graduate program then they must return to China to finish their degree. They don't speak English, they can't drive they spend all their time in the lab including wknds and holidays, they have nothing else they can do. They aren't that skilled (being students) compared to hiring from the domestic job seekers pool but they work cheap and hard and importantly they are not employees of the US company, they remain employees of the Chinese universities they hark from (no benefits, temporary status).

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13. Gyges on February 14, 2013 11:40 AM writes...

The 'Home Depot' description is happening in Blighty. My recruitment agent told me that he had lots of able and competent people on his books but they just sat there because hirers wanted people who start doing the job on day one. No employer was prepared to tolerate an induction period even to the detriment of the company. In contrast he told the story of an engineer who lost her job at the end of Nov, he found her a job within two weeks to begin in Jan; this was possible because it was almost exactly the same job but at a different company.

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14. anon the II on February 14, 2013 11:43 AM writes...

Three thoughts:

1. It is all about money. Mostly short term money.

2. Virgil is off base. People don't want to go to where Virgil is because they don't want to lose their jobs and have to move again in 2 years. Scientist were happy to go to those places when they thought they could stay a while.

3. It's partially our fault for not slapping the HR guy the first time he said "FTE". By using and letting others use that term in our presence, we became replaceable widgets.

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15. darwinsdog on February 14, 2013 11:50 AM writes...

Quit picking on Home Depot they are picking up a lot of the Pharma unemployed ;-(

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16. Chrispy on February 14, 2013 12:01 PM writes...

When I was laid off from my discovery research job in Pharma, part of the severance agreement was that I could not even apply to openings at that company. Ever. These regular layoffs lead employees to a kind of PTSD survival instinct: they come to believe that they have shed the dead weight and the company is better off. HR encourages this thinking because it is good for morale and tends to delude people into thinking that they are immune from being laid off as long as they work extra hard. The fact is that the dead weight at most of these companies has been shed long ago or hopelessly burrowed into the upper levels of management.

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17. David W on February 14, 2013 12:08 PM writes...

Virgil - I'm one of those 'young people reluctant to move to a middle town', and yet I find my reasons to be almost exactly the opposite of what you describe. I don't care about art, sports, public transportation - it's not like I have the time or energy to appreciate it on my 2 weeks of vacation a year. Not really all that expensive to travel when I want to go visit museums and see a game, either, compared to the cost of rent. I get most of my entertainment from the internet, do much of my shopping on Amazon. There's very little in my personal life that keeps me away.

But - how many technical employers are there where you are? One? How easy is it for both me and my wife to find employment there in different technical fields, simultaneously, and what kind of commute are we looking at if we split the distance? If your company (or university, or whatever you are) goes under, or I get a boss I can't stand, what are my options short of moving? Can I get promoted for any reason but my boss retiring? Even if I'm currently happy, how easy is it to network with engineers at other companies, to learn of opportunities and knit a safety net? If I'm offered an interview, but it's tomorrow, elsewhere, and no travel included, can I go?

Moving is expensive, and even if you pay for people to come, I bet you don't give them a voucher to leave. I bet you don't offer a salary premium, either, to compensate for that risk, or a guaranteed five-year contract. What does cost of living matter if I'm not there long enough to pay for the move?

The way I see it, accepting a position away from the big cities is accepting a big upfront cost, and a lot of risk, and a period of separation from my wife (at best), and usually for the same or lower salary. It takes quite a bit to make up for all of that, and most companies don't even try. Certainly 'cost of living' isn't enough.

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18. newnickname on February 14, 2013 12:29 PM writes...

First comment (more later): Does anyone remember "Merck University"? The first couple of years at Merck was a phenomenal learning experience ... and Merck knew and expected that it would take a while.

I wonder if the Bayh-Dole biotech explosion destroyed that? Spend time and money to train the new guys at Merck U only to see them jump ship to a startup.

MANY more comments later, if I find the time.

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19. wizzle on February 14, 2013 12:59 PM writes...

The quality of the individual scientist has got to be part of the answer to question "How Can There Be a Shortage of Scientists And An Excess At The Same Time" - not all scientists are created equal basically. I am not saying that it explains all of the problems in pharma R&D, but in my experience in multiple companies there have been exceptional scientists and I will say it - there have been some pretty bad ones. Some were so brutal I had to wonder how they got hired in the first place. So maybe there is a shortage of excellent scientists (which all the employers want)and an excess of the rest (which the employers are less interested in.

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20. sciencemonkey on February 14, 2013 1:01 PM writes...

I'd love to move to a smaller town, especially since housing is still affordable outside big cities. (I am Canadian; we have a nice housing bubble going here.) However, #17 David does raise some good points about the danger of the small town approach. I always shook my head at the chem dept couples; how would they both find work in the same area?

Regarding the link #4 Hal posted, I'm always struck by the incongruity inherent in a business approach that pays employees poorly, but expects someone else's well-paid employees will buy their product. We must remember the Categorical Imperative, which states that one should "act only according to that maxim whereby you can, at the same time, will that it should become a universal law."

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21. RKN on February 14, 2013 1:39 PM writes...

If anyone in Silicon Valley tells you they can't find people, they're lying because all the cool kids wanna be there!

Sure, if you have disposable income. But the cost of living in SF (probably NYC, San Diego, and Boston are similar) is very, very high. A typical new hire will need to spend many years of time in the rat race before they've saved enough to live the kind of "hip" lifestyle they imagined, or run up so much debt trying they'll regret it.

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22. Pig Farmer on February 14, 2013 1:45 PM writes...

Sad to say, Derek has hit the nail well and truly on the head. 12 years ago, I came to the States from the UK, on an H1B visa, to work at a well known CRO in the Capital District of New York. There were alot of Brits in the department I worked in, and we used to make wry jokes to one another about indentured servitude. The money was great compared with what I would make in the UK. By US standards? not so much. The hours were very long, and the equipment was second rate: it was 6 years before we got any jacketed reactors in our department, for example, despite frequent requests. But the CEO knew we were pretty much a captive work force (I can think of only one person who went back to the UK). The guy who brought me over (a fellow Brit) even suggested to the CEO one year that he could afford not to give us raises as we didn't have our Green Cards yet (he didn't make that remark in my presence: I got it second hand from my boss at the time). Needless to say, when I finally did get my Green Card after 6 years, my willingness to put up with these conditions dropped off dramatically. Come the Great Recession of 2008, I was let go, along with 100 or so others. The words of my ex-boss " I think it is right that a man should struggle for his pay-check" are still ringing in my ears. I am now a citizen, and gainfully employed with a large chemical manufacturing company on a good salary in the mid-West. But I will never forget my time at that CRO, and the treatment I put up with wilst I was there.
Plenty of my colleagues could tell the same story, or worse. And that's the point. These aren't just urban myths. They happen to be true. The companies clamoring for more H1Bs just want to keep their supply of cheap labour. They should be ignored.

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23. Dr. Manhattan on February 14, 2013 1:50 PM writes...

"A typical new hire will need to spend many years of time in the rat race before they've saved enough to live the kind of "hip" lifestyle they imagined, or run up so much debt trying they'll regret it."

and then be laid off....

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24. exGlaxoid on February 14, 2013 1:51 PM writes...

#7 - I have seen many cases of foreign workers being treated as indentured servants. There is a clear desire to have workers who cannot change jobs, join a union, file a complaint, or ask for more money. And if they can't drive, speak English or gt a green card, that limits there options also.

#9 - I can't agree with that either. I have avoided moving to San Diego, Boston, etc as they are expensive, crowded, and often require long commutes. I have an mechanical engineer friend in NJ who has been looking for a job in Ohio to be closer to his family for years, but could not find any reasonable job there, even at half the wage, since the cost of living would be less than 1/2 of NJ.

#12 - While every company has their losers that no one can figure out how they were hired, I have not seen quality to seemingly be related to employment. I DO see a relationship between wages, age, brown-nosing, family status, health and their employability. I have seen 1) people who discovered marketed drugs get laid off, 2) people with national awards for their work get laid off, and 3) some of the brightest people I ever meet get laid off. Most were older, well paid, highly skilled, and unwilling to work 60 hours a week. For every lousy scientist I have seen let go, there were 8-9 very good ones lost.

But they have been mostly replaced by foreign postdocs, outsourcing, young hires who are book smart and drug discovery stupid, and purchases of biotech companies.

#14 - Couldn't agree more.

#19 - Again, there are some bad people out there, but I know lots of good scientists that cannot get good jobs. Many don't want to move to Boston or Cal, as they can't sell their houses in affordable places and afford to live there.

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25. Chemjobber on February 14, 2013 2:29 PM writes...

@22: Is there a single good thing to be said about A Maybe Random Institution? Their Glassdoor reviews are sort of horrid, but I wasn't aware of the problematic issues with equipment.

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26. barry on February 14, 2013 2:40 PM writes...

we have seen that when Pharma organizations are run by marketers rather than by scientists we get more lawsuits (BMS paying competitors not to compete, Merck selling Vioxx to people who would have had better results on ibuprofen...) and less rather than more progress in drug discovery/healthcare advances. Now that we are letting HR rather than the in-house scientists recruit our new colleagues, there is no reason to expect that this will be good for drug discovery/healthcare advances.

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27. Christophe Verlinde on February 14, 2013 2:49 PM writes...

Why are there so many Indian and Chinese post-docs at our universities? Answer: not many Americans are willing to work their asses off (please come in at 8 am and don't leave before 7pm, Saturday included and regularly a Sunday afternoon) for $39,000 a year. In a capitalist society the answer is always the same: MONEY.

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28. Pig Farmer on February 14, 2013 2:51 PM writes...


If there is, I'm not aware of it! Yes, their glass door reviews are pretty bad (apart from the odd glowing one which I suspect are all plants).
Basically the CEO is a tightwad and a tyrant, who brooks no criticism. He has surrounded himself with sycophantic yes-men who know that to cross him is to risk losing their jobs. My guess is that around 70% of the employees are foreign-born. Morale there is still very low. Most of the people who were there with me have left. I am no longer on speaking terms with either of my ex-bosses. By the way, if you want to get more background on the place, check out the Yahoo Finance message board. The hilariously sycophantic posts by a certain amrithebest themselves are worth the visit. My own contributions to said board are probably the reason for my no longer being on speaking terms with the aforementioned. I suspect they considered them ungrateful and disloyal. Quite what they thought I had to be grateful for (my pay-check?) is beyond me. It was/is a truly, TRULY dreadful place to work. But, like the Murphy's , I'm not bitter!

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29. Hap on February 14, 2013 3:21 PM writes...

1) Some references to James Surwiecki articles in Forbes (and an unfound reference from the New Yorker are in moderation. Nutshell: employers wanted a free labor market, and they don't want to pay for training (because their employees might leave for greener pastures), so they hope that someone else will train their employees. Not sure why we should reward their shortsightedness, exactly.

2) There have been lots of "Chemists should unionize" comments, which usually end with "What do you believe it will do?" It can't do anything because there is no political capital to be made in preserving chemists' salaries or jobs through legislation. Companies complain about not having the appropriate labor (at the appropriate price) because they believe that the federal government is likely to do something, and since Congress generally finds political capital in doing something for them, things get done. The complaining is not the real alternative for companies - the real alternative is that Congress will save businesses from their short-sightedness if they complain loudly enough. If their complaining were as likely as ours to be effective, they would in fact have to hire people at the price the market demanded, or cease doing whatever they could or would not train someone to do.

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30. imatter on February 14, 2013 3:32 PM writes...

These companies and professors just does not want to pay. How has that model worked out for them?

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31. hibob on February 14, 2013 4:17 PM writes...

To summarize, the saying "externalize risks and costs, internalize revenues" that is frequently applied to corporations perfectly sums up their relationship to employees and training as well.

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32. Anon on February 14, 2013 4:30 PM writes...

#2 vader

After all that hirng expense, it seems damn easy to lay people off, though.

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33. MIMD on February 14, 2013 6:02 PM writes...

18. newnickname

Merck hired me in 2000 to run the MRL science libraries. I had never run a library before. They allowed time for me to learn.

I guess I was on the tail end of U.S. corporate sanity.

I was laid off in Nov. 2003, after the sanity fluid had all leaked out.

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34. B on February 14, 2013 6:55 PM writes...

@27: Don't think that only applies to Indian and Chinese post-docs. I am a grad student in a mostly American lab in a top 10 university.

M-F 12 hour days are typical, as are another 16 hours on the weekend. All for a measly $30K a year. It's the price of being in a competitive lab (we publish probably better than anyone on campus) and the cost of being in graduate school today.

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35. Anonymous on February 14, 2013 8:56 PM writes...

After being laid off from "big pharma" I had an experience with a "very little pharma" HR person. Interview went well. HR person bent over backward to explain the differences between "big pharma" and "very little pharma". Left it up to me if I wanted to proceed (her words not mine). However, she would never discuss salary and kept avoiding saying anything specific. At one point in the conversation she asked what my last salary was in "big pharma". I told her. I then resumed trying to get her to tell me what salary she would be willing to offer. She would not be specific. In fact she said, "I've seen the hiring manager offer a variety of salaries". I asked her what salary the hiring manager had in mind for the position that I interviewed for and was discussing with her. She danced around the issue and said I should go home and think about it (the job) and call and let her know for sure if I definitely wanted to proceed. I did and called back. She would never pick up. She never replied to multiple voicemails and emails. So its not always the case that no one with the skills wants to accept the salaries being offered.

Here are two other very common responses that I often got after I had been laid off.

You are "overqualified" for the position.

If we hire you, you will leave when the economy turns around.

That last one is particularly rich given that I've read that it is still well used these days even after the "recovery" is allegedly fully underway.

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36. srp on February 14, 2013 10:20 PM writes...

It's a little shocking from the Capelli interview that he doesn't seem to understand some basic labor economics. First, no employer, without indenturing, wants to pay wages above productivity to an employee learning transferable skills. The reason is that other employers can free-ride on his investment by hiring away the people trained. Only in a world where turnover and job-hopping are inhibited--either legally or by custom (as in the olden days among large Japanese firms)--will private employers be willing to make such investments. Capelli's "learn while contributing" model presupposes that that is possible in every business, but consulting firms and law firms are fairly special environments. There's no reason to think that the same system would work with, say, welders.

Second, given this externality problem, one solution is for the worker to pay for the up-front costs of acquiring transferable skills, by working at very low wages or unpaid. Nobody likes that solution, and it is often not legal given minimum wage laws. (Although the growth of unpaid internships is pretty impressive.)

Third, many countries try to address the externality through public policy. In the US, we use taxpayer money to pay for individuals' acquisition of transferrable skills, usually delivered through some academic or quasi-academic entity. The biggest problem with that is that these institutions do a poor job of matching what employers really need. In foreign countries, apprenticeship programs, where tax money is used to subsidize low-productivity workers during their training periods at firms themselves, are more popular.

Fourth, as noted above by a commenter, the risks of hiring people are pretty large, especially in the new age where at-will employment is a dead letter. So there is some option value to waiting until you are completely sure.

Fifth, while there probably is a routine level of hiring incompetence that competition cannot completely eliminate, large systematic errors that reduce profitability would represent a huge entrepreneurial opportunity for any firm that avoided them. So if you believe that the current system is making large systematic errors, you have also identified a business opportunity for any existing or de novo firm to pursue. Good luck!

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37. academic biochemist on February 14, 2013 10:24 PM writes...

''Here are two other very common responses that I often got after I had been laid off.

You are "overqualified" for the position.

If we hire you, you will leave when the economy turns around.

That last one is particularly rich given that I've read that it is still well used these days even after the "recovery" is allegedly fully underway. ''

First of all, I'm sorry to hear about this. I've just finished my PhD and honestly, I'm looking for the first way out. I hate it, but I don't want to be stuck in two expensive parts of the country; I've already lost a girlfriend. I don't know what to do. I (ahem) want to move to management. Not because that's what I really want to do, or what I think that I'm good at, but I think that is the "skill"that will allow me to move back towards my family. I just want a modest life where I can save for retirement.

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38. jbosch on February 14, 2013 10:38 PM writes...

Somebody posted earlier about Merck University - I don't know details about this, but it sounds very German. Let me explain a bit, we tend to train people before letting them on the job market. And that is true for anybody, not just for highly skilled people. A haircutter will have run through 2-3 years of apprenticeship, a technician, depending on the flavor will have received 2 years chemical training etc. The list can be continued until I hit the word limit here.
The point I think is, that in US such a system is overdue. Train the people you have and let them know they are valuable. But I guess that has a negative influence on profit margins etc. As #27 Christophe said, it boils down to money.

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39. Anonymous on February 15, 2013 12:12 AM writes...

Just a question: Is there a demand for US citizens with (extensive) US chemistry/pharma/med chem experience to relocate to China and India and work there? In other words, is that a viable career path for displaced US workers?

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40. donna on February 15, 2013 1:31 AM writes...

Considering we have a perfectly capable new grad UCSD biochemist in the house just waiting to be hired, I know there is no shortage of talent.

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41. donna on February 15, 2013 1:33 AM writes...

Considering we have a perfectly capable new grad UCSD biochemist in the house just waiting to be hired, I know there is no shortage of talent.

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42. Dr Jimbo on February 15, 2013 6:10 AM writes...

To keep skilled employees after having invested in their training, the employer could pay at better rates than the competitors.

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43. Anonymous BMS Researcher on February 15, 2013 7:33 AM writes...

A while back I read about one medium-sized manufacturing company, in a some rather high-tech industry, that does NOT moan about a skills shortage. I forget the name of the company, or even which industry, but I recall vividly how their corporate culture was described:

1. They have *never* had layoffs in thirty-plus years of being in business -- when the market dips, everybody from the CEO on down takes the same percentage cut of hours and pay.

2. In good times they resist the temptation to over-expand.

3. They try to avoid hiring from outside, preferring to retrain somebody who is already embedded in their culture. Everybody is expected to cross-train.

4. Phrases such as "life work balance" and "invest in our people" are almost never SAID but always lived.

5. Whenever they do have an opening, the hiring decision is mainly about how the person will fit their culture: they figure a smart person with a right mindset can always pick up a few specific skills on the job.

The above is easy to describe, much harder to accomplish.

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44. Chemjobber on February 15, 2013 8:37 AM writes...

39: Yes, there are occasional postings for those positions. It is my understanding that they are not particularly lucrative, but can be interesting.

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45. Vader on February 15, 2013 9:39 AM writes...

#32 anon

Yes, laying people off is cheaper than dismissing them for cause. But if you're laying people off, then hiring is not one of your immediate concerns.

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46. Luis Pedro Coelho on February 15, 2013 10:07 AM writes...

I'm at the intersection of biology and CS, so I know that the two worlds are different. In CS, there is a skill shortage; in bio/pharma not so much.

""" a telling statistic from the Silicon Valley tech boom of the 1990s: only 10 percent of the people in IT jobs had IT-related degrees."""

This is true, but I have a different interpretation: most of those people did not know any IT.

Actually, still today many people with IT jobs are completely unqualified to for IT at all. Not uncredentialed with learned-on-the-job-skills (which is often a good candidate and I agree that there is over-credentialing). No, I mean they are just incapable of doing a decent job.

The same comment applies of outsourcing, by the way. There are a few good companies based in India serving the US market. But, in 90% or more of the cases, they are not really competing against anybody who can program well or has a true CS background as the quality of the work is not very good.

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47. alig on February 15, 2013 11:35 AM writes...

As any freshman economics class will teach you, shortages are only caused by artificial price ceilings. As there is no price ceiling for scientific wages, there is no shortage. It can only be employers not liking the price they have to pay. And how do you lower the price? Increase the supply. Economics 101.

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48. DCRogers on February 15, 2013 1:21 PM writes...

@5: " It used to be that when groups were let go (downsized, redundant, laid off, put in the pool...) it was extremely difficult for laid off people to find other jobs within the company, even when there were relevant jobs posted and the workers had the skills needed for them."

Some managers have a bias against in-house transfers (or lowering someone's pay) because they fear the person will have morale problems afterwords. Thus they would rather hire someone new at lower pay than just keeping a current employee even if they agree to work at that lower level.

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49. MDA Student on February 15, 2013 2:45 PM writes...

It frustrates me that Francis Collins (NIH decision maker) also ignores the over supply and is still calling for programs to up diversity in the biomedical sciences. Even administrative/exec levels people with scientific backgrounds are purposely choosing to ignore the signs. I just finished working in a [biological] lab where a Japanese postdoc didn't know the difference between bacteria and virus, an Indian postdoc that can't figure out how to use a basic spectrophotometer, and a Chinese grad student that can't name the cell type she has been working on for the past 2.5 years. Yet we all get paid the same (grad student at 26k tax exempt is about the same as postdoc at 39k paying taxes+insurance). Why would I want to be lumped in with THAT type of skill level? Then beyond a postdoc there aren't any jobs. Yet my clinical colleagues get a decent quality of life. Good hours, good pay. I have yet to meet one that wasn't making six figures.
There is no shortage, they just want to pay people less and less...and honestly I believe I'm seeing the effects of this first hand. It is quickly becoming an irreversible problem and it is ridiculous that as a 25year old I know that the research being done now through my 40s is by...less-than-talented individuals (dare I say oblivious?). When I'm in my 60s looking for a therapy my life will shortened because of the shortsightedness of people like those that wrote this article. It's ridiculous.

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50. Bernard on February 15, 2013 4:19 PM writes...

Derek said-"As I've said here before, the idea that companies here in the US will hire workers here if they're forced to is, I think, a fantasy. They'll keep those positions open and complain about it instead."

You always seem to want to sit on both sides of the fence Derek. That clever statement is both sympathetic and fatalistic. The first part appeals to your average reader, the latter part your industry execs.

So Derek, what's your solution? I hire you as a 'consultant' to the US government. You are no longer an observer, but rather a paid policy maker.

I ask you :How can we increase the career prospects for the US scientist?"

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51. srp on February 15, 2013 9:44 PM writes...

@Dr. Jimbo: Your suggestion is out of equilibrium. Unless there is collusion, rival firms will match salary until the wage is bid up to be equal to the expected marginal productivity of the trained worker. So everyone pays that much, no one has an edge in hiring, but the sucker firm that paid for training (by paying wages above productivity during the training phase) loses the cost of that training. Hence no firm wants to pay for training.

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52. Cellbio on February 15, 2013 10:35 PM writes...

@srp- I have had the good fortune over the last year to hire about 20 people, from brand new and no experience to very seasoned but without specific experience for our tasks. I had to reset the original team's initiative to wait for the perfect fit with all the right skills (that they also wanted to hire at 30% discount to market). By investing in our people, paying them fairly and honestly building a culture that supports personal growth and shares in success (bonus and option plan) we are building loyalty. We are not seen by our colleagues as management of a "sucker firm". The human factor has some good sides too, loyalty and a sense of community, compassion and caring, these are things that used to separate the good from the bad, and there is still no reason it can't work today.

And if we had a rival firm at the other end of the block? Boy what a nice day that would be in biopharma land with all the talent out there getting competing offers!

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53. Anonymous on February 16, 2013 6:09 AM writes...

@48. Some managers have a bias against in-house transfers (or lowering someone's pay) because they fear the person will have morale problems afterwords. Thus they would rather hire someone new at lower pay than just keeping a current employee even if they agree to work at that lower level.

That is just guilt-reducing, feel-good BS. It really pisses me off when managers and HR lackeys screw with peoples lives and financial well-being like this. With the exception of the occasional director or associate director who gets axed, what percentage of laid off medicinal chemists just move on to the next external job at the same or higher pay? I suspect few if any. Most people given the choice between a modest pay cut (with maintenance of existing accrued benefits) and unemployment will have no reservations about which hurts morale more.

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54. Anonymous on February 16, 2013 6:27 AM writes...

@45. Yes, laying people off is cheaper than dismissing them for cause. But if you're laying people off, then hiring is not one of your immediate concerns.

Tell that to the "experienced" laid off chemist who then sees multiple job postings by the former employer for medicinal chemists with 0-5 years experience ONLY. Or even worse, same positions but at an hourly contractor rate with no benefits through one or all of those blood-sucking "scientific staffing" companies.

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55. srp on February 16, 2013 8:01 PM writes...

@Cellbio: I can't evaluate your anecdote without knowing if "paying fairly" means compensation above productivity. If not, then you are not a counterexample.

If you are building loyalty so that people would rather work for you for lower compensation than rivals pay, then you also may be able to avoid the issue.

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56. Cellbio on February 18, 2013 6:52 PM writes...


By paying fairly I mean to the industry benchmarks. Paying at, above or below productivity is not something I can comprehend in a business model where good hard work adds up to great value, or none at all. Is it possible to do such a calculation?

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57. DeanStark on February 18, 2013 10:48 PM writes...

@54: Same story here. Entire group dissolved, then "insourced" with A Maybe Random Institution hires doing our jobs while everyone else sits in endless meetings and teleconferences. Appalling and certainly not cheaper

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58. Rokujolady on February 19, 2013 6:56 AM writes...

I work in Silicon Valley and can attest to a lot of the above. I know several people who have just had their visas be allowed to expire so the company doesn't have to fire them. Visas are a cause of anxiety for a lot of foreign workers and they definitely get used as leverage. Also, there's a sense of disposability of employees that my parents' generation simply didn't have. You annoy the wrong person, you're out. You want career growth at a startup, you're out. You dont self train fast enough, you're out. There are apparently a limitless amount of people who want your job so you get treated accordingly. The same goes for the employees: if I don't like the quality of the code, I quit. If I get a bad peer review I bail. (Not me personally. Looking for work sucks.) I think some of the push for immigrant labor is that immigrants are pretty much guaranteed to stick around until the company tires of them. What are they going to do, quit and loose their visa?
Also, there is a lack of willingness to train and mentor new people. I've managed to avoid this but I've seen it with a few companies especially when I was entering the field where the only positions they offer are senior positions with n years of experience with tech x and o years of experience with technology y. Firstly, you limit your field immensely when you do this and shut out a lot of bright people. Secondly, these techs change so quickly (and often the people writing the specs dont know what all the buzzwords actually mean) that its almost meaningless for the hiring process to filter for expertise in them.

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59. Hap on February 19, 2013 10:31 AM writes...


Items 1, 3, 4 are inherent to running a business - if you do things that few other people do, or that you have a better way of doing, then you're going to have to train people. You want to choose the right people, and getting rid of the wrong ones may be hard (though not in my meager experience). If you don't hire and train people to do your work, then you have no business, or have some business but less than you have the overhead to handle (which lowers your profitability). If businesses didn't want to accept the risks, then working in fields in which they are inherent is not smart. Point 2 is always present, but has probably made hiring easier rather than harder for businesses (the increased NIH funding led to lots of Ph.D.s who need jobs).

The only reasons hesitancy is rational is if waiting makes the risks decrease, or the situation changes so as to lower the risks. Some of the hesitancy is based on a surplus of labor - businesses can wait until they find who they want or wait until people are willing to accept their terms (assuming that the cost of doing so is less than the cost of lost business - which is possible since they can probably work their current employees harder for now). Some of the hesitancy, however, is based on the idea that government will add more visas. The people on visas are not likely to be trained - even if they are trained in your area, businesses will still have to train them in how they do things. The visas increase both the labor supply and add a set of people who can both be worked harder and who are likely to accept lower wages. It also increases the labor supply (at least, as long as there are jobs) with a permanent underclass, providing a credible threat to get employees to accept lower wages, because employers would be more likely to find a person with a visa who they could get to do their jobs at lower wages.

Without the threat of added employees, waiting doesn't benefit employers.

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60. Fred Bosick on April 10, 2013 4:50 AM writes...

I'm in IT. The alleged skill shortage is completely bogus! It's all about inexpensive immigrants whose visas are held by the company. The H-1B quota for this year was exhausted in 5 days. In this economy!

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