From time to time, the claim is made that we need to import indentured servants from Asia, because the STEM fields are short of labor. This is a variation of the old line about crops rotting in the fields for the lack of stoop labor. The fact that no human living in America has ever experienced a food shortage due to crops rotting in the fields underscores the fact that these claims are nonsense. Indentured servants from Asia are cheap and more important, the threat of them depresses wages for American workers in the STEM jobs.

That is the cost of cheap labor that is easy to see. There are other costs that are not so obvious. In the case of the tech fields, indentured servants from Asia have had the perverse effect of discouraging young Americans from going into these fields. When tech firms started filling entry level jobs with foreign labor, they made the field unattractive to young people, who correctly saw that jobs were scarce and the ones available paid low wages. Young Americans were advised to not go into technology, as a result.

Put another way, cheap foreign labor drove out domestic labor from these entry level jobs, thus institutionalizing the use of indentured servants in the low-level tech jobs. Slavery had the same effect where it was practiced. In the case of tech, there is a social element involved. You go to college in order to get a good job. That is a social definition that goes beyond earnings. If your field requires you to work with smelly South Asians for five years until you can be the supervisor of smelly South Asians, that is viewed as a low-status field.

There has been another consequence of the use of indentured servants. People think of tech as coding shops in Silicon Valley, but the vast majority of American business relies on small local firms that bring a combination of technical and business skills to their role as technology consultants. The usual pattern is someone works as a programmer for a developer and then goes out on his own as a consultant, supporting clients that use the software that he worked on as a developer. He becomes their part-time CTO.

The result of flooding the entry level jobs with  Asians on H1-B visas has been a shortage of people in these higher end consulting and development jobs. In many parts of the country, the shortage of people with a mix of business and technology skills that can be used to solve real world problems is acute. You can find plenty of pajeets, who can write code but are useless at solving problems. Locating someone with business and programming skills that can solve real problems is becoming close to impossible.

At the other end of the labor market, the hidden cost of cheap labor has created another problem. The landscaper hiring Mam-speaking tribesman from Guatemala is no longer hiring teenagers on summer break. Retail operators in vacation areas game the system and import Eastern Europeans for service jobs. The availability of cheap foreign labor has made the summer job a thing of the past. It used to be a part of growing up in America, but now it is a rarity. Instead, foreigners do seasonal work.

In general, the part-time job and summer job was when a young person started to learn how to be an adult. They had to show up on time and learn how to get along with strangers. They had to learn how to put up with a crappy boss and perform tasks that seemed stupid and pointless, in order to get paid. They also learned the value of money and its connection to labor. That first check, less taxes, was the great eye opener for every young American. Today, they do not experience that until adulthood.

There is another aspect to this. The summer job for boys was often manual labor, like operating a rake or lawnmower for a landscaper. Maybe it was as a laborer on a job site for a roofer or painter. It was there that a young man got his first taste of being a man, because he was around adult males in their natural habitat. A young man learned that men are not as forgiving as mom and that you had to be earn respect. Young males today do not experience this. Instead, they live like girls.

This is probably why millennials have such a terrible reputation. The girls are spoiled brats, making crazy demands, while the boys are hysterical sissies. One of the things employers will tell you on the side is that they are careful about hiring millennials. They would prefer to overpay for a semi-retired boomer than hire a petulant man-child from the millennial generation. When a millennial takes over a family business from a retiring parent, it is a good bet the company will go through a rough transition.

Public policy is about trade-offs. The cost of cheap labor is not limited to the direct cost to labor markets. There are hidden, long-term social costs. The generations of young people warped by the consequences of not working will show up in the culture long after Sanjay is back in Bombay. What foreign labor does is monetize future social capital and pull it forward. It is a form of debt creation, not a lot different than eating the seed corn. Future social harmony is consumed today, with no way to replace it.