A Blog by Jonathan Low

 

May 1, 2013

The STEM Worker Shortage May Be a Myth

STEM stands for science, technology, engineering and math. Serious people believe that those subjects are the essential occupations that the United States requires to address its serious need for growth and revitalization.

They claim, further, that the US suffers from a deathly shortage of people trained in such skills and that jobs are waiting, unclaimed, for those who can demonstrate the requisite skills.

There is one problem: the shortage appears to be a mirage.

Recent  studies suggest that not only is there no shortage of such people, but that there may, in fact, be a surfeit of them. Detailed census analyses that have consistently failed to uncover the source of these putative deficiencies. Perhaps, even more damning evidence comes from basic economic indicators. The harsh reality for STEM workers is that in those professions requiring such degrees, wages have not risen in almost a generation. This despite the tech boom and the dramatic increase in demand for all manner of information technology talent. As an example, programmers' compensation has been flat for 15 years.

Classical economics dictates that where there is a shortage, prices will rise. The absence of a rise in IT salaries is among the most compelling arguments against the STEM skills deficit.

There are political overtones to this debate. The IT industry is demanding and increase in H1B visas so that it can import more such workers, primarily from Asia and India. However, the wage differential between workers in those regions and the US is such that importing more of them will almost certainly depress demand for increased US wages. There are also those who believe that no more time or education budget allocation should be wasted on frivolous pursuits like literature, history, language, music, art or anything that is not inherently commercial. That belief, fortunately appears to have met with less success as an increasing number of state STEM education initiatives have, at popular insistence, become STEAM programs, with the additional A standing for arts.

Given the current, still fragile, state of the US economy, mis-allocation of resources due to ideological rather than pragmatic policies will further reduce competitiveness and slow future growth. JL

Jia Yang reports in the Washington Post:

The United States has “more than a sufficient supply of workers available to work in STEM occupations.”
If there’s one thing that everyone can agree on in Washington, it’s that the country has a woeful shortage of workers trained in science, technology, engineering and math — what’s referred to as STEM.
President Obama has said that improving STEM education is one of his top priorities. Chief executives regularly come through Washington complaining that they can’t find qualified American workers for openings at their firms that require a science background. And armed with this argument in the debate over immigration policy, lobbyists are pushing hard for more temporary work visas, known as H-1Bs, which they say are needed to make up for the lack of Americans with STEM skills.
But not everyone agrees. A study released Wednesday by the left-leaning Economic Policy Institute reinforces what a number of researchers have come to believe: that the STEM worker shortage is a myth.
Basic dynamics of supply and demand would dictate that if there were a domestic labor shortage, wages should have risen. Instead, researchers found, they’ve been flat, with many Americans holding STEM degrees unable to enter the field and a sharply higher share of foreign workers taking jobs in the information technology industry. (IT jobs make up 59 percent of the STEM workforce, according to the study.)
The answer to whether there is a shortage of such workers has important ramifications for the immigration bill. If it exists, then there’s an urgency that justifies allowing companies to bring more foreign workers into the country, usually on a short-term H-1B visa. But those who oppose such a policy argue that companies want more of these visas mainly because H-1B workers are paid an estimated 20 percent less than their American counterparts. Why allow these companies to hire more foreign workers for less, the critics argue, when there are plenty of Americans who are ready to work?
The EPI study said that while the overall number of U.S. students who earn STEM degrees is small — a fact that many lawmakers and the news media have seized on — it’s more important to focus on what happens to these students after they graduate. According to the study, they have a surprisingly hard time finding work. Only half of the students graduating from college with a STEM degree are hired into a STEM job, the study said.
“Even in engineering,” the authors said, “U.S. colleges have historically produced about 50 percent more graduates than are hired into engineering jobs each year.”
The picture is not that bright for computer science students, either. “For computer science graduates employed one year after graduation . . . about half of those who took a job outside of IT say they did so because the career prospects were better elsewhere, and roughly a third because they couldn’t find a job in IT,” the study said.
While liberal arts graduates might be used to having to look for jobs with only tenuous connections to their majors, the researchers said this shouldn’t be the case for graduates with degrees attached to specific skills such as engineering.
The tech industry has said that it needs more H-1B visas in order to hire the “best and the brightest,” regardless of their citizenship. Yet the IT industry seems to have a surprisingly low bar for education. The study found that among IT workers, 36 percent do not have a four-year college degree. Among the 64 percent who do have diplomas, only 38 percent have a computer science or math degree.

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