Sep 18, 2020
Is the STEM Shortage Real?
Before I unpack all of the data, here are two 2014 publications from generally well respected think tanks from both sides that promoted the STEM shortage narrative.
- CATO: I do not know why anyone respects them to be honest. If you are not familiar with CATO, take a gander at their sourcewatch page. Source Bias: Right Center, Factual Reporting: High
- Brookings: Amongst the most well respected think tanks. I am not a fan, but they are considered to be incredibly reliable. Source Bias: Left Center, Factual Reporting: Very High
Here is a brief 2018 article by Emerson News titled “Emerson Survey: 2 in 5 Americans Believe the STEM Worker Shortage is at Crisis Levels” which includes various quotes like that seem to add a little shock value like “Fourth Annual Survey Spotlights Growing Need for STEM Education and Awareness to Fill an Estimated 3.5 Million Jobs by 2025," “Less than 50 percent of parents say their daughter is encouraged to pursue a STEM career,” and “only 1 in 3 adults (33 percent) believe teachers currently have the resources they need to provide a quality STEM education.” If this is the first time that you are hearing of the STEM shortage narrative, look it up on google. There should be limitless content that is fear mongering.
A question to think about is how would the Green New Deal even happen if we had a STEM worker shortage of 3.5 million in 2025? If that 3.5 million projected shortage is true, do you really think that all of these people writing up the bill just did not know about it? I find it unlikely.
Wage Data
I love the BLS data on median hourly wage because it is free of bias. No customer base, no demographic target, no ongoing narrative, nothing. From 2016 to 2019, nominal wage growth in various STEM fields was categorically unimpressive for the most part. This statement is true regardless of the baseline for expected wage growth you pick. In this time frame, there was a 7.11% increase in CPI and the general labor force saw wage growth of 9.81%.
Engineers
Between the BLS 2016 and 2019 data periods, nominal wage growth amongst engineers in general was unimpressive. The cumulative nominal growth in median hourly wage was merely 3.84%. Being mindful of the fact that engineering is a heterogeneous field, we can dig a bit deeper. There were a total of just over 1.73 million engineers in 2019 which is a pretty large 4 year increase from the 1.65 million engineers in 2016. When I broke it down by type of engineer, there were a few types that had wage growth that outpaced both baseline measures of expected wage growth (CPI increase, aka inflation, and the wage growth of the general labor force). The three that had the highest wage growth were: locomotive engineers (16.34%), nuclear engineers (11.01%), and agricultural engineers (9.63%). I decided to give agricultural engineers the benefit of the doubt, assuming that their wage growth would have exceeded a cumulative total above the 9.81% of the general workforce if the trade war did not happen. I am not an economic genius or doing any econometric calculations to justify my generosity, I am just giving the most conservative assumptions so that nobody can say “you should have considered context!” Basically ,CNN told me that the trade war hurt farmers, and I am assuming that the engineers may have also suffered. Anyways, together that is a total of 83,040 engineers, or 4.8% of all engineers.
Speaking of context, part of locomotive engineers’ wage growth is most certainly the fact that the number of them declined from 39,900 in 2016 to 35,520 in 2019. In 2019, the median hourly wage for a locomotive engineer was $34.41, and the annual mean salary was listed at $71,570. This is considerably lower than all engineers being listed at a median hourly wage of $45.43 and an annual mean salary of $100,770. I believe that Elon Musk gives his workers some stock, so I guess that his locomotive engineers are above average.
Technology and Math
From the same source as the data for engineers, I found the data for programmers, software developers, statisticians, operations research analysts, and statisticians. Computer programmers did see 8.839% wage growth from 2016 to 2019 which is very strong growth. This comes with a major caveat, software developers and programmers (as a collective field) only saw 6.79% nominal wage growth over that same time frame. The bridge between technology and math is the operation research analysts, who saw 6.62% cumulative nominal wage growth in that same 4 year period. Statisticians saw a cool 11.7% wage growth, while mathematicians saw median compensation by the hour drop by 0.7%. An interesting note is that the statisticians and operational research analysts had roughly the same in mean annual income in 2016 with an edge of less than $1000 for statisticians who now make about $5,000 more. From 2016 to 2019 the number of operational research analysts decreased by about 10,000 (an 8.67% decrease) while the number of statisticians increased by about 6,000 (a 16.8% increase). This is fairly suggestive of automation beginning to eliminate entry level data mining jobs.
What do STEM Grads do?
I have read people say that only 27% of people get a job in the field that they get a degree in, however, STEM is so heterogenous that using this 27% as a baseline is fallacious and/or just stupid (not sure if being dumb is a fallacy). You would expect nearly a supermajority of STEM graduates to find something to do in the conglomeration of fields under the umbrella of STEM. For example, a degree in accounting has a narrow field doing anything but being an accountant is “outside their field of study,” even if financial planners and accountants are really more similar than chemical engineers are to programmers (both considered “within STEM”).
Only about half of STEM graduates work in the STEM field according to Pew Research Center. It is understandable that many of them work in educating the next generation of STEM workers, but 17% in business will tell you all that you need to know and 20% of them doing other non stem jobs is not something that you would expect to happen in a shortage. I am not alone on this issue, in fact, The American Prospect, says “We are not facing a shortage of STEM-qualified workers. In fact, we appear to have a considerable STEM surplus. Only half of students graduating with a STEM degree are able to find STEM jobs.” (Source Bias: Left, Factual Reporting: High)
H-1B Visa Reform
In the year 1990, Ted Kennedy’s immigration reform was passed to address the issue of a STEM shortage. Protection for American workers was meant to be a part of that, however, a major loophole exists due to various lobbying efforts. In fact, an employer can fire a native born worker and go as far as make them train their foreign replacement, so long as the company pays an average salary of at least $60,000 per employee (this was a lot back in 1990) or the new worker has at least a master’s degree (not all degrees are equal). There are people at Forbes and various other sources who will try to throw together *bad faith* arguments to support the position that the H-1B system is not broken by stringing together non sequiturs and straw men. The key take away should be that since in the The H-1B and L-1 Visa Reform Act of 2020 is sitting in congress right now, and you all of this information, it would be an act of kindness for you to call your congressional representative and senators letting tell them know that you want to protect the dignity of American workers.
Answering the most common (and worst) response
Get it Together About Donald Trump!
The most common retort that I hear to hard data is along the lines of “CPI went up because we do not have enough workers and Trump deported immigrants! You know, undocumented immigrants do X, Y, and Z in terrible conditions to keep your food cheap!” and this is what I call extrapolating grievances. Not everything is this interconnected network of oppression. Anyways, I do not support exploitation of undocumented immigrants, nor do I support deportation of individuals without a criminal record, but that is not related to this issue. It was already stated that the general labor force had a rate of wage growth that exceeded the CPI growth in the given time frame of 2016 to 2019 (but this is not true for most STEM workers). More importantly, this just is not a sound view considering how CPI is calculated. The relative weight that housing holds exceeds domestically produced consumer goods and services that immigrants reduce the price of — generally low skill labor intensive goods and services (and the drop is marginal). Excluding technological innovation, which some immigrants on specific visas do make meaningful contributions to, free trade is the primary locus of increased purchasing power in recent decades.
