What STEM Crisis? There Isn’t One

Hardly a day goes by that policymakers, educational leaders and corporate executives don’t lament the “STEM crisis,” the alleged shortage of American workers trained in science, technology, engineering and math.

These warnings come so often that the “crisis” is now perceived as an uncontested fact. Tapping America’s Potential (TAP), for instance, a group of some fifteen leading business associations from the Business Roundtable to the U.S. Chamber of Commerce, wants to increase the supply of STEM graduates by 400,000 each year.

Many of these lamentations arrive in panic mode. Siemens executives Eric Spiegel and David D. Etzwiler declared earlier this year that if the U.S. doesn’t catch up to our competitors in STEM training “research and innovation will take place in other countries, squandering any potential of advanced manufacturing in the U.S.”

But what if the impending STEM crisis were in fact bogus? Indeed, the evidence suggests that special interest groups have duped Americans thinking that economic disaster looms unless colleges keep churning out more civil engineers, plant biologists and computer scientists The alarmists have done all this to create an illusion of shortage, which helps to push down wages and salaries for STEM workers.  And American students have gotten the hint. Scores chose are shunning STEM fields of study for more lucrative careers.  And even among those who have obtained STEM degrees, large numbers are choosing to work in jobs that don’t even require science or engineering degrees.

Related: A Costly STEM Mistake in Connecticut

“Over the past two decades, lobbying and public relations efforts to convince U.S. political elites that the country faces damaging and widespread shortages in its critical science and engineering workforce can only be described as stunning successes,” according to Michael S. Teitelbaum, a senior research associate at Harvard Law School. In his recently published book, “Falling Behind: Boom, Bust & the Global Race for Scientific Talent,” Teitelbaum says, “This apparently broad consensus prevails notwithstanding almost universal inability by objective labor market analysis to find any convincing empirical evidence to confirm the existence of such generalized shortages.”

One statistic commonly cited by those warning of a STEM shortage comes from a 2011 report by Anthony P. Carnevale, Nicole Smith, and Michelle Melton of the Center on Education and the Workforce. According to that report, the U.S. economy will have some 277,000 vacancies in STEM occupations per year through 2018.

But whether or not that estimate is accurate, the existing pipeline for the STEM workforce is more than sufficient to fill those vacancies, says Robert N. Charette in a 2013 analysis for IEEE, a professional association of technical professionals, engineers and scientists.

Consider, first, that American colleges and universities produce about: 250,000 bachelor’s degrees in STEM fields each year; 80,000 STEM master’s degrees; 20,000 Ph.D. degrees in STEM fields; and 40,000 STEM related associate’s degrees.

Related: About All Those STEM Dropouts…

That total annual production of 350,000 STEM degrees in the United States does not include an estimated 50,000 STEM workers supplied annually from foreign countries under the H-1b Visa program for guest workers.

“Every year U.S. schools grant more STEM degrees than there are available jobs,” Charette writes. “When you factor in H-1B visa holders, existing STEM degree holders, and the like, it’s hard to make a case that there’s a STEM labor shortage.”

But labor supply is just one aspect of the question. When economists look to a variety of market indicators, such as trends in wages, salaries, signing bonuses and training programs there is little evidence of a STEM shortage.  In fact, starting salaries in many STEM occupations have remained fairly flat — or even shown signs of weakness in recent years — indicative of a surplus of STEM labor.

According to the most recent annual survey by the National Association of Colleges and Employers, starting salaries for computer scientists actually declined 2.5 percent in 2013, from about $60,000 to $58,500.  That compares to an average increase of 2.5 percent for all college graduates. For graduates in math and science, starting salaries hardly changed, increasing less than 1 percent in 2013. While some engineering graduates, such as bioengineering, saw starting salaries rise 10 percent, salaries in some engineering fields, such civil, aerospace, and computer engineering actually declined.  By way of comparison, consider that new graduates in sociology saw starting salaries rise 11 percent, while salaries for criminal justice majors shot up 8 percent.

What’s more, the STEM-trained labor force is far larger than the alarmists are willing to admit.  According to a recent study by the U.S. Census Bureau, “The Relationship Between Science and Engineering Education and Employment in STEM Occupations,” the American labor force consists, in part, of several million employees who have been trained in STEM fields, but have chosen to work in non-STEM jobs.

“The vast majority of workers who have been trained in science and engineering are not currently working in a STEM occupation,” the Census Bureau report said. In fact, an average of just 26 percent of science and engineering graduates, aged 25 to 64, worked in a STEM occupation in 2011, instead working in jobs such as management, health care, law, education, social work, accounting and counseling.

The rate of STEM participation for some employees trained in science or engineering was even smaller that year.  While the STEM employment rate for those trained in engineering, computing, math and engineering was almost 50 percent, just 27 percent of those trained in the physical sciences worked in STEM occupations.  For those trained in biology, agriculture and environmental science, only 15 percent worked in STEM occupations.

In total, more than 11 million employees who’ve graduated with STEM-related degrees have chosen to work in occupations that do not require training in math, science, engineering or technology. Were there an actual shortage of labor for STEM jobs, it’s highly unlikely that figure would be so high. To compete for workers to fill STEM jobs, employers would bid up wages and offer such employees other incentives to work for their companies. But that’s not been the case.

“If there was really a STEM labor market crisis, you’d be seeing very different behaviors from companies,” Ron Hira, an associate professor of public policy at the Rochester Institute of Technology, has remarked. “You wouldn’t see companies cutting their retirement contributions, or hiring new workers and giving them worse benefits packages. Instead you would see signing bonuses, you’d see wage increases. You would see these companies really training their incumbent workers.”

That’s not what big employers the information and technology industries have been doing.  In fact, they’ve done just the opposite. Instead of re-working hiring practices, making salary adjustments, offering bonuses, beefing up on-the-job training, or luring STEM-trained employees back into STEM occupations, certain employers and employer groups have maneuvered to effectively make the alleged shortage worse. Instead of beefing up incentives for STEM trained employees, many IT companies have, in essence, helped to expand the existing surplus of the domestically trained STEM workforce by importing employees trained in other countries.

Indeed, IT companies have lobbied Congress heavily to increase the number of H-1 B visas for “specialty workers.”  Teitlebaum notes in his book that, as part of the 1990 immigration law, industry groups persuaded Congress to triple the number of such visas to 192,000 annually.  In practice, he notes, the academic qualifications for such “specialty” workers is actually quite modest. A foreign worker must hold the equivalent of just a bachelor’s degree from a foreign university.

As the evidence suggests, the domestic pipeline of STEM-qualified workers is more than ample to satisfy virtually all employer requirements for such “specialty workers.” But fully employing that expertise might well bid up salaries and wages.  Instead, IT companies such as Microsoft, Intel and Oracle have lobbied aggressively to avoid just that. Tietlebaum notes, for instance, that between 1998 and 2000, Microsoft paid the convicted lobbyist Jack Abramoff a total of more than $1.7 million to lobby for increased numbers of H-1 B visas.

In short, Tietlebaum argues, IT behemoths like Microsoft and Intel have persuaded the American media to gobble up the storyline about widespread shortages for qualified STEM workers. At the same time, more realistic and accurate analyses are ignored or overlooked. He also says that research organizations, academics and other sources of objective information who question the shortage claims “often abjure political advocacy as a matter of principle.”

Another particularly misleading argument alarmists use to “prove” the impending STEM shortage is the alleged weakness of American K-12 system.  Advocates frequently claim that American students’ performance in math and science is weak and getting weaker compared to other industrialized nations.  But the alarmists don’t mention that such comparative academic performance statistics are averages, glossing over the fact that the United States, in particular, suffers from very large gaps in performance between the bottom quartile and the top quartile in academic performance. STEM occupations are just a small fraction of the overall workforce, on the order of 5 percent to 10 percent and these jobs draw from the top quartile of students.  At the top quartile, American science and math students are among the best in the world.

In absolute terms, the United States has more high-performing math and science students than any country. According to data from the Organization for Economic Cooperation and Development, fully 33 percent of top performing science students among OECD nations come from the United States. By contrast, Japan has just 17 percent of top science students; Canada has 5 percent; and Germany has 9 percent.

“The poor performance of the the bottom quartile is a very legitimate cause for real concern in terms of equality of opportunity and the overall education of the future citizenry and workforce, but is has rather less to say than might be supposed about the implications for the future U.S science and engineering workforce,” Tietlebaum says.

What does this mean for American students considering whether to study math, science and engineering. Should they follow the advice of all the “experts?”  In fact, students have already been making choices based on a more realistic assessment of the market. As Tietlebaum notes, “The U.S. education system is in fact producing more than enough graduates to fill available positions in STEM occupations — especially managerial, professional, and healthcare occupations — for which the quantitative skills and cognitive abilities of STEM graduates are being more highly valued and hence potential earnings are higher and more rapidly increasing.”

To encourage an even greater influx of students into STEM fields is indefensible in light of the current evidence.  And to continue to argue for even greater numbers of temporary visas for “specialized workers” from abroad is stunningly cynical.  Doing so serves only to place artificial governor on STEM salaries, which further discourages American students from entering STEM fields in the first place.

It’s weird circle of deception.


8 thoughts on “What STEM Crisis? There Isn’t One

  1. Capital is King. It’s as simple as that. Some poorer folk will always be able to circumvent their situations; however, in most cases it is very hard these days to overcome your upbringing or IQ.

    Degree != American Dream (anymore)

    If you have money though you can afford to take more chances and own the means of production (which is the holy grail). Whether it be stocks, a business or in a lot of cases these days how much you inherit.

  2. All you people who are claiming that STEM crisis is not real should realize that the labor statistics are actually counting the immigrants hired from other countries because the U.S. doesn’t have enough qualified STEM grads. I work for US government labs and a we see the shortage. The stats also don’t demonstrate the abysmal number of PhD degrees of American citizens who often can’t get advanced degrees because of US lack of STEM basic education at secondary level. Learn math, can’t believe you’re an economist!!

  3. Jonathan ,

    There is a huge shortage of US grad students. There is simply not enough reasonable applicants. Most STEM Ph.D. students at top universities are foreigners! At some point they get US citizenship and are counted as US citizens … There are many labs at top universities, where you don’t have a single US-born Ph.D. student ….

  4. Leadership, diversity, sensitivity, ethnic, gender, sex and cultural studies, urban music, – all these majors are not very popular abroad. Math physics, chemistry, biology, engineering, computer science – widely taught at foreign universities.

    1. “Math physics, chemistry, biology, engineering, computer science – widely taught at foreign universities.”

      Widely taught at American universities too, almost universally at decent schools. I know of no unmet demand for such education in the United States, except possibly for a few temporary very specialized, small “hot” fields.

  5. Disagree.

    1. You need a critical mass of engineers to make a project work. Without this critical mass, you won’t have ANY engineering jobs in US. Without H1B foreigners you won’t have Google or Apple in Silicon Valley, you’ll have relocation to Asia.

    2. You can’t employ 100% of people with STEM degrees. Some employees are better, some are just stupid. In the Soviet Union everyone was employed and work efficiency was ridiculous.

    3. Not all STEM educated people continue working in their fields. Because STEM education is helpful in so many areas, that it is easy to find complimentary employment. For example, intellectual property law, or banking, or education.

  6. There is absolutely not a crisis in STEM graduates, unless poor employment prospects constitutes a crisis. The reason is the generally dismal performance and management of our economy.

    STEM graduates generally have better prospects than those in other fields, but that doesn’t mean things are rosy. There are a few fields where there are true shortages. Fine, the market is telling employers they need to offer more to get the workers they need.

  7. Good piece. I certainly wouldn’t encourage my children to pursue careers in computer science, as American workers are just too easily displaced. It’s important to identify exactly which STEM disciplines aren’t widely taught at foreign universities.

    As we’ve seen with regard to the “no-poaching” agreements among Silicon Valley giants, tech companies are absolutely ruthless when it comes to controlling their biggest cost.

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