Occasional research, such as a report released last week by the Economic Policy Institute, suggests the U.S. has a sufficient supply of science, technology, engineering, and mathematics (STEM) graduates and workers. However, these conclusions are at odds with a growing number of expert analyses that find the U.S. does in fact face significant challenges in meeting the growing needs of our expanding knowledge-based economy. Here is a sampling of the evidence:

STEM degree holders have very low unemployment rates and use their skills in STEM and non-STEM occupations. One of the arguments frequently used to show the absence of shortage is that not all STEM graduates are hired into STEM jobs. However, there is strong evidence that these degree holders are doing pretty well in finding jobs, even if those jobs are outside of STEM fields. The unemployment rates for individuals with advanced STEM degrees are very low: 3.1 percent for U.S citizens with STEM PhDs and 3.4 percent for those with STEM masters degrees, and often much lower for specific occupations. The fact that individuals with STEM expertise are working in non-STEM designated occupations doesn’t mean that they have been pushed out of their field by competition with foreign workers. Similarly, the fact that some STEM degree holders say they are finding better job opportunities outside of IT occupations doesn’t mean that IT opportunities are bad. It may simply mean that opportunities in other areas are better and that more companies are competing for this relatively scarce talent. Specifically, research suggests as many more companies seek to improve innovation or expand technology use, there is a broader competition for STEM competencies – knowledge, skills and abilities such as research, analysis, quantitative and computer skills, and methodologies – among many businesses and occupations far beyond specific STEM-defined fields.

STEM employers report thousands of unfilled positions. Due to geographic spatial and skills mismatches, employers report difficulty recruiting individuals with specific skills, particularly in metropolitan areas where innovation industries agglomerate. In 2010, for example, San Francisco and San Jose had 25 and 19 job openings for every computer graduate, respectively, and in Austin, Des Moines, Washington, Charleston, Seattle, and Charlotte, that gap was nearly as great. Moreover, a 2011 report describes 3,200 unfilled positions at Siemens, and Microsoft reported over 6,000 unfilled job openings in the United States in 2012, over half of which are for researchers, developers, and engineers. Collectively, according to the Silicon Valley Leadership Group, IBM, Intel, Microsoft, and Oracle have 10,000 U.S. job openings. If there is no STEM labor shortage, why are so many good paying innovation industry jobs going unfilled?

Growing evidence shows that the H-1B visa program has a positive effect on wages of U.S. workers, and local economies benefit from innovation industry jobs with strong multiplier effects. A 2013 report of 219 U.S. cities from 1990 to 2010 shows that H-1B driven increases in STEM workers in a city were linked with statistically significant increases in wages for all college-educated native-born workers. Additionally, a one percent increase in the foreign-born STEM worker share of total employment in a city increased the wages of both STEM and non-STEM college-educated workers by 4 to 6 percent. Furthermore, innovation industry and STEM jobs tend to have higher than average multiplier effects. Such effects allow for greater job creation in metropolitan areas with strong innovation industry economies. Indeed, an analysis of 320 of the 381 metropolitan statistical areas in the United States shows that each new high-tech job in a metro area creates five additional long-term local jobs outside of the high-tech sector across the skills spectrum. In many U.S. metropolitan areas, the innovation economy, and the high-skilled jobs related to it, drive prosperity for a broader base of workers living in the region.

In summary, a more precise understanding of the visa programs and employment data is needed for a balanced understanding of the overall labor market for STEM skills in the United States. As the innovation industry is critical to economic growth locally and nationally, ensuring a robust labor force with a strong STEM skills set is important now and in the future.

by Paul McDaniel

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