THE STEM SHORTAGE AND IMMIGRATION: Why High-Tech America Calls for More Foreign Guestworkers and Better Educational Pipelines. Ryan M. Genova, M. Ed.

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1 THE STEM SHORTAGE AND IMMIGRATION: Why High-Tech America Calls for More Foreign Guestworkers and Better Educational Pipelines Ryan M. Genova, M. Ed. September

2 As the United States economy fluctuates from decade to decade, rhetoric tends to remain vigilant against schools, teachers, and a purportedly failing education system. Over a decade ago, author and education leader John Jay Bonstingl observed that the captains of failing U.S. industry were themselves educated in U.S. schools not in the 1980s but in the 1940s and 50s - the supposed golden age of U.S. society and U.S. education. Never mind that implied cause of our country s poor economic and industrial health in the early 1980s was pinned on the educational failure of people who were only kids during the economic decline. 1 Generation after generation, pundits and public leaders axiomatically assert U.S. workforce ineptitudes and declining student scores in international test comparisons. This charge has been accompanied by funding decreases in trivial and quadrivial liberal arts subjects and an increased emphasis on STEM subjects: science, technology, engineering, and mathematics. To some, what ills the nation more than anything is a STEM crisis a failure to produce a viable workforce able to sustain the more dynamic sectors of the U.S. economy. In recent years, the alleged STEM crisis has given rise to myriad national and state organizations, including the Pennsylvania STEM Initiative (PSI), * and the National Math and Science Initiative (NMSI). PSI states, The goal is to dramatically increase the number of students entering STEM-related careers while retraining, recruiting and re-training the incumbent workforce in these critical fields. NMSI s stated purpose asserts that The United States is losing its competitive edge in math and science while the rest of the world soars ahead. Our knowledge capital, which fuels innovation and economic growth, is at risk. Forbes ran an illustrative article 2 in 2012 entitled, America Desperately Needs More STEM Students. Here s How to Get Them, leaving America to wonder why the global leader in GDP is unable to provide a suitable STEM pipeline. Business Insider also published an article in which author Walter Hickey claims it is not the quantity, but the quality of domestic STEM graduates that dissatisfies Silicon Valley. According to Hickey, industry leaders are looking at American colleges and they're seeing a whole lot of foreign born students that are crushing the homegrown talent. 3 Silicon Valley s unique growth in employment is largely due to the late Steve Jobs innovative and heavily marketed showpieces, the iphone and the ipad. 4 But Silicon Valley s success is unrepresentative of the scope of STEM industries, generally stagnant in growth and wages. According to a Georgetown University Public Policy Institute report, Information Systems is the most unemployed field across all industries at 14.7%. 5 And according to the U.S. DOL Bureau of Labor Statistics (BLS), of the top 20 fastest growing occupations between , only one biomedical engineering is STEM- * PSI is instituted by the National Governor s Association and Team Pennsylvania Foundation and is endorsed by Pennsylvania Governor Tom Corbett. NMSI is funded and endorsed by ExxonMobil, Boeing, and Lockheed Martin, the Bill and Melinda Gates Foundation, JP Morgan Chase, AT&T, Marathon Petroleum Corporation. For more information, see: For more information, see: For more information, see: 2

3 related, 6* and of the top 20 occupations with the highest projected numeric change in employment, none are STEM-related. 7 At just 4.4 percent of the total U.S. workforce, STEM unemployment levels received increased attention after a video-chat session in which President Obama expressed confusion over a call-in engineer s joblessness because industry tells me that they don t have enough highly-skilled engineers. 8 Data from the American Community Survey collected by the Census Bureau show that there are 1.8 million U.S.-born engineering graduates who are unemployed, out of the engineering labor market, or not working as engineers. It additionally shows the U.S. currently has approximately: 101,000 unemployed U.S.-born engineering graduates 244,000 U.S.-born engineering graduates who are out of the labor market entirely million U.S.-born engineering graduates working in another field. 25,000 unemployed U.S.-born graduates with either a Master s degree or a Ph.D. in engineering. 68,000 U.S.-born graduates with either a Master s degree or a Ph.D. in engineering who are out of the labor force entirely. 489,000 U.S.-born graduates with either a Master s degree or a Ph.D. in engineering working in another field. 9 A recent Briefing Paper by the Economic Policy Institute (EPI) 10 asserted the STEM glut. According to the report, For every two students that U.S. colleges graduate with STEM degrees, only one is hired into a STEM job. Industry wages have closely followed market trends by remaining generally stagnant over the past decade. At the same time, Information technology (IT), which accounts for 59 percent of all STEM workers, has seen the number of guestworkers sharply increase, currently comprising between one-third and one-half of the total number of new IT jobs. 11 The influx of guestworkers highly-skilled temporary foreign workers creates a suspicious wrinkle in the STEM debate s fabric. Why the need for foreign talent? Americans just don t have an aptitude for STEM? According to the EPI, U.S. students make up a third of the world s highperformers in science, 12 and the Organisation for Economic Cooperation and Development (OECD) reported that the United States in fact harbors 25 percent of all high-scoring students from 30 OECD nations and 28 partner countries in the PISA assessment. 13 Controlling for poverty (a separate and arguably more important matter * For more information, see: For more information, see: PISA evaluates education systems worldwide every three years by assessing 15-year-olds' competencies reading, mathematics and science. Additionally, the U.S. is routinely ranked first in innovation by an annual World Economic Forum consortia of global business leaders and economists. See Global Competitiveness Report. (2013). World Economic Forum. 3

4 entirely), American students outperform all nations in science scores, and rank third internationally in math scores. 14 Shares of OECD countries highperforming students Source: EPI s analysis of Organization for Economic Cooperation and Development (2006) The alleged need for more highly skilled workers in IT-specific fields is all the more suspect when 75 percent of the IT workforce have unrelated degrees, or no degree at all, suggesting that there is a very large domestic pool of potential workers available for the IT industry. 15 According to the Government Accountability Office (GAO), 54 percent of high-tech visas go to entry-level jobs, while just six percent of H-1B Visa Recipients were at the top of the pay grade. 16 Of those with a professional degree (Master s or Ph.D.), there are 50 percent more graduates than the number who enter occupations related to their degree, suggesting a surplus for domestic highly skilled workers as well. Deciphering figures from the Census Bureau, EPI, BLS, and the GAO, the situation seems to have little, if anything, to do with a lack of talent, and much more to do with a carefully crafted unwillingness to pay that talent more money. Business Insider s article goes on to admit that what we really have is a STEM majors who have the skills that Silicon Valley needs, who are willing to work for a price Silicon Valley wants to pay shortage. 17 Indeed, a third of computer science graduates and nearly half of engineering graduates stray from their degree because of better pay, better working conditions, or better career prospects offered elsewhere. 18 4

Courtesy of the Economic Policy Institute To clear the confusion, the Department for Professional Employees, AFL-CIO and The Washington Post found that companies want more of these visas mainly

5 Courtesy of the Economic Policy Institute To clear the confusion, the Department for Professional Employees, AFL-CIO and The Washington Post found that companies want more of these visas mainly because H-1B workers are paid an estimated 20 percent less than their American counterparts. 19 By law, H-1B employers are mandated to pay a prevailing wage, not a market wage, which is approximately 20 percent higher. Cheaply imported labor is not news to some, however: for over a decade, there U.S. General Accounting Office has put forth concerns that some firms pay H-1B workers less than the prevailing wage attested on the labor condition application as well. 20* Foreign workers from developing countries India, for example will emigrate because U.S. pay and career opportunities outperform options back home. 21 New Delhi native Akshay Sharma, President of the Mathematics and Computer Science Society at Drexel University, explains his plans to reside and work in the U.S. after graduation. In India, the population is huge and after the global recession there has been a scarcity of jobs. In the United States, there is a more of a demand for software engineering. Basically, everyone [in India] is studying to be an engineer, software engineer, doctor. Everyone is studying the same thing whether they like it or not. It s just what they re told to do. There are so many software engineers and the pay-scale is dropping. This gives STEM employers, particularly in IT where guestworker inflows have been strongest, a consistent labor pool. * In 2009, the Department of Labor required H-1B employers to pay $11 million in unpaid wages to 1,202 workers and $739,929 in civil penalties, or roughly $9,000 dollars per worker. For more information, see, for example, Guest Worker Visas: The H-1B and L-1. (2013). Department for Professional Employees. 5

6 STEM leaders have also shown a targeted business strategy of circulating offshore workers through impermanent positions in the U.S. ExxonMobil, a corporation with first quarter earnings of $9.5 billion in 2013, 22 offers scholarships to foreign workers to study in U.S. higher education, but concomitantly locks those students into lengthy contracts that all but guarantee cheaper engineers for years. Fitra Mubarak, an ExxonMobil geophysicist from Bandung, Indonesia, states, They have a Master s degree minimum requirement for geoscientists. They hire undergrads, and send them to school [in the U.S.] for two to three years. They will adjust my salary since I finished [my Master s degree], but it will just be like a yearly increase. Fitra recently earned her degree at the Colorado School of Mines, * and is committed to employment at ExxonMobil for at least five years under her contract. 23 At Chevron, a company with 2012 profits of $26.2 billion, 24 foreign engineers on U.S. soil earn, on average, $2000-$6000 less than their American counterparts. 25 Though discounted, those wage levels are top notch in developing economies. As the American Association for the Advancement of Science points out, a steady flow of H1-B workers appears to correlate with stagnating wages in some STEM fields, especially in Information Technology. Those flat salaries, in turn, appear to discourage domestic students from entering fields such as computer science. Echoing the United States need for foreign STEM workers has become "a selffulfilling prophecy," says EPI Vice President Ross Eisenbrey. "When wages are growing, [we] saw a healthy increase in U.S. [STEM] students going into these fields. When wages are falling, they didn't. [If you] discourage good U.S. students from going into these programs until finally you've killed the U.S. supply, that's not much different from moving these jobs offshore." 26 Pro-immigration policies create another derivative for U.S. industry as well: they deplete talent in competing nations. Much like a Division I college basketball coach recruits a surplus of top athletes to milk rival recruiting pools, so too do STEM industries. At an American Enterprise Institute conference in 2011, U.S. Representative Tim Griffin stated we provide valuable education to foreign students and then send them back to their home countries to compete against us. 27 In a similar vein, Dr. Madeline Zavodny asserts her research on immigration: Without a clear path to stay in the United States, these foreign students will fuel innovation and economic growth in countries that compete with the American economy. 28 It is worth noting that the temporal STEM labor overflow is precedented. The cover story for June 2010 s Miller-McCune Magazine details the Sputnik-induced hysteria: Federal money swiftly poured into science and engineering scholarships and so successfully attracted students that, by the early 1970s, the market for young scientists was flooded. The overflow returned in the 1980s after the National Science Foundation (NSF) warned of imminent shortages of scientists. Eventually, the NSF s predictions * The average Indonesian annual salary is approximately $5,000 (Derived from Salaryexplorer.com). Sputnik was the world s first man-made satellite, launched October 4 th, 1957 by the former Soviet Union. It triggered the Space Race a competition for supremacy in space exploration between the USSR and the U.S, in step with a fervent demand for scientific, militaristic, technological, and educational development. 6

7 turned out to be so off-base that the agency was subjected to an investigation by a House subcommittee in Negative reviews of the U.S. public education system have been patterning news reports for decades. Media claims dating back to the 1950s have included U.S. News & World Report interviews We Are Less Educated Than 50 Years Ago 30 (1956) and What Went Wrong with U.S. Schools 31 (1958). Particularly after Sputnik, fearmongerers saturated the public with assertions that lowered academic standards are undermining the U.S. s place among top international competitors. 32 Public education has been similarly discredited for achievements during more prosperous periods of U.S. history. Apollo 11 * may serve as an example. Public schools received no public redemption for NASA s success, though all 53 NASA scientists and engineers captaining the mission had finished high school before As a final précis, the U.S. seems to have a surplus of qualified domestic STEM workers and savvy STEM leaders, as well as a surplus of staunchly ahistorical public figures and media outlets. In general, benevolent pro-immigration reform can help drive the economy and should be encouraged, but STEM-centric reforms seem to deplete the domestic STEM talent pool. With these realities in mind, it is for the American workforce to decide where to go from here. Outstanding Conclusions: U.S. public schools and universities are producing a surplus of top-quality STEM workers. Ad nauseum STEM shortage claims are in part a historically-employed means to engineer public opinion. The more Americans believe in the shortage, the fewer domestic cordons will block foreign recruitment policies. Ad nauseum failing public schools claims are also in part a historicallyemployed means to engineer public opinion. The poorer public school performance appears to the public, the less opposition to unwarranted reform benefiting special interests will be met by policymakers. A steady stream of guestworkers provides lower wages for STEM employers and depletes the domestic talent pool, particularly in IT. * Apollo 11 was the 1969 spaceflight in which Americans successfully landed the first humans on the moon. Benevolent may be emphasized in light of neoliberal immigration policies that, at present, exploit poor and desperate immigrants, as well as serve the corporate, military, and elite interests. For more information, see, for example: Robinson, William I. (September 2013). The New Global Capitalism and the War on Immigrants. Truthout News Analysis. Dr. Madeline Zavodny s recent research on the benefits of immigration has been widely circulated throughout business and conservative media outlets. For more information, see: Zavodny, Madeline. (2013). Immigration and American Jobs. American Enterprise Institute for Public Policy Research & Partnership for a New American Economy. 7

8 Data sources show computer-related H-1B Visa Recipients make up 57.8 percent of the total foreign STEM workforce, and IT employers want to increase that allotment. 34 ENDNOTES 1 Bonstingl, John Jay. (January 2001). Are the Stakes Too High? National Association of Secondary School Principals. 2 Adkins, Rodney C. (July 2012). America Desperately Needs More STEM Students. Here s How to Get Them. Forbes Leadership Forum. 3 Hickey, Walter. (June 2013). Americans Won t Like Hearing the Real Reason Silicon Valley is Pushing So Hard for Immigration Reform. Business Insider. 4 Salzman, Hal, Kuehn, Daniel, and Lowell, B. Lindsay. (April 2013). Guestworkers in the High- Skill U.S. Labor Market. Economic Policy Institute Briefing Paper, pp Carnevale, Anthony P., and Cheah, Ban. (2013). Hard Times: College Majors, Unemployment and Earnings. Georgetown Public Policy Institute, Georgetown University Center on Education and the Workforce. 6 Fastest Growing Occuptions. (March 2012). United States Department of Labor, Bureau of Labor Statistics. 7 Most New Jobs. (March 2012). United States Department of Labor, Bureau of Labor Statistics. 8 Camarota, Steven A. (February 2012). Is President Obama Right About Engineers? Center for Immigration Studies. 9 Camarota, Steven A. (February 2012). Is President Obama Right About Engineers? Center for Immigration Studies. 10 Salzman, Hal, Kuehn, Daniel, and Lowell, B. Lindsay. (April 2013). Guestworkers in the High- Skill U.S. Labor Market. Economic Policy Institute Briefing Paper. 11 Ibid. 12 Salzman, Hal, Kuehn, Daniel, and Lowell, B. Lindsay. (April 2013). Guestworkers in the High- Skill U.S. Labor Market. Economic Policy Institute Briefing Paper, pg Bracey, Gerald. (2009). The Bracey Report on the Condition of Public Education. Boulder and Tempe: Education and the Public Interest Center & Education Policy Research Unit. 14 Bracey, Gerald W. (2007). The 17th Bracey Report on the Condition of Public Education: The First Time Everything Changed. Phi Delta Kappan; Payne and Biddle. (1999). Second International Mathematics Study (SIMS); Binkley and Williams (1996). International Association for the Evaluation of Educational Achievement (IEA) Reading Literacy Study. 15 Salzman, Hal, Kuehn, Daniel, and Lowell, B. Lindsay. (April 2013). Guestworkers in the High- Skill U.S. Labor Market. Economic Policy Institute Briefing Paper, p Hall, Mike. (May 2013). High-Tech s Sketchy Claims for More Foreign Workers. AFL-CIO. 17 Hickey, Walter. (June 2013). Americans Won t Like Hearing the Real Reason Silicon Valley is Pushing So Hard for Immigration Reform. Business Insider. 18 Salzman, Hal, Kuehn, Daniel, and Lowell, B. Lindsay. (April 2013). Guestworkers in the High- Skill U.S. Labor Market. Economic Policy Institute Briefing Paper. 19 Yang, Jia Lynn. (April 2013). Study: There May Not Be a Shortage of American STEM Graduates After All. The Washington Post; Guest Worker Visas: The H-1B and L-1. (2013). Department for Professional Employees, AFL-CIO. 20 U.S. General Accounting Office. (2000). H-1B foreign workers: Better controls needed to help employers and protect workers. Report HEHS Washington, D.C.: U.S. General Accounting Office. 21 Salzman, Hal, Kuehn, Daniel, and Lowell, B. Lindsay. (April 2013). Guestworkers in the High- Skill U.S. Labor Market. Economic Policy Institute Briefing Paper

9 23 Interview with Fitra Mubarak, ExxonMobil employee, conducted on September 17, (alias used by request). 24 Leber, Rebecca. (February 2013). Exxon, Chevron Made $71 Billion in 2012 Profit as Consumers Paid Record Gas Prices. Thinkpress.org. 25 Interview with Tengku Sarif, Human Resources Department, Chevron, conducted on September 17, 2013 (alias used by request). 26 Malakoff, David. (April 2013). Letting In More Skilled Foreign Workers Could Discourage U.S. Talent, Research Argues. American Association for the Advancement of Science 27 Schulz, Nick, and Zavodny, Madeline. (December 15). Creating American Jobs Through Immigration Reform. American Enterprise Institute and the Partnership for a New American Economy. 28 Zavodny, Madeline. (2013). Immigration and American Jobs. American Enterprise Institute for Public Policy Research & Partnership for a New American Economy. 29 Benderly, Beryl L. (June 2010). The Real Science Gap. Miller-McCune Magazine. 30 We Are Less Educated than 50 Years Ago, U.S. News & World Report, 30 November 1956, pp What Went Wrong with U.S. Schools, U.S. News & World Report, 24 January 1958, pp Bracey, Gerald W. (2007). The 17 th Bracey Report on the Condition of Public Education: The First Time Everything Changed. Phi Delta Kappan. 33 Ibid. 34 Zavodny, Madeline. (2003). The H-1B Program and Its Effects on Information Technology Workers. Federal Reserve Bank of Atlanta: Economic Review. 9

Managing the Dynamic Science and Engineering Labor Market in the United States

Managing the Dynamic Science and Engineering Labor Market in the United States B. Lindsay Lowell Georgetown University Philip Martin University of California, Davis The five million workers employed in