National Data | U.S PhDs Have It Tough Enough Without Importing Immigrants

U.S PhDs Have It Tough Enough Without Importing Immigrants

New York Mayor Michael "Billionaire Golfers For Open Borders" Bloomberg is at it again: Michael Bloomberg Calls Inaction on Immigration Reform 'National Suicide', by Devlin Dwyer, ABC News, June 15, 2011.

"Immigration reform", of course, = amnesty and increased legal immigration, this time of "innovators and entrepreneurs"…and foreign students.

 Bloomberg and his fellow immigration enthusiasts are obviously getting really frustrated. Recently, the Washington Post also editorialized in favor of letting foreign students stay:

"Even without a top-to-bottom legislative package, the administration could push for discrete measures for which an overwhelming economic argument can be made. For instance, why not expand the quota of visas available to immigrants who receive PhDs from American universities in science, math and engineering? What sense does it make to educate such promising students, then force them to return to their home countries, where many will take jobs competing against American companies?" - Editorial Board Opinion | What Mr. Obama can do to further immigration reform, Washington Post, May 5, 2011

 Of course, this accepts the conventional wisdom regarding foreign PhDs: they have the science and engineering smarts which are desperately needed by American business—skills which are lacking in most native-born students.

A careless glance at the data might seem to confirm this: [nsf.gov - NCSES Doctorate Recipients from U.S. Universities: Summary Report 2007-08 - US National Science Foundation (NSF)]

In 2008 (the latest year of available data) foreign students accounted for nearly half of all science and engineering PhDs awarded in the U.S. Temporary visa holders earned the majority of doctorates awarded in engineering (60%), and just under half (48%) in the physical sciences, a category that includes mathematics and computer science.

Meanwhile, the number of U.S. citizens receiving PhDs in engineering and the physical sciences actually declined over the 1998 to 2008 period.

And the official unemployment rate for Science and engineering PhDs is significantly below the rate for the general population—1.7% 6.6% in 2008—although it does exist.[Unemployment Among Doctoral Scientists and Engineers Remained Below the National Average in 2008, NSF 11-308,January 2011 ]

Sounds good, until you drill down for details. A more comprehensive measure of PhD unemployment, including those involuntarily employed part time, or in postdoctoral or fellowship positions, or working outside their field, is three of four times the official unemployment rate. [David S. North, Soothing the Establishment: The Impact of Foreign-born Scientists and Engineers on America, 1995. Page 135-136. No more recent study seems to be available—probably because no-one in authority wants to know.]

Overproduction of Ph.Ds, and consequent unemployment and underemployment among new Ph.Ds, especially in the humanities has been a scandal for many years—Peter Brimelow and I wrote about it in Forbes Magazine back in 1999. [Educators's Bad Math, May 21, 1999]It's a result of the massive influx of foreign graduate students deliberately unleashed by a loose alliance of corporate America, academia, and the federal government:

Corporate America: Perpetually warns of a shortage of scientists and engineers even as it replaces U.S.-born S&E PhDs with newly minted, less expensive, foreigners. Harvard economist George Borjas estimates that every 10% rise in foreign-born doctorates in a particular field reduces earnings of equally skilled native doctorates by 3%. [PDF]

Academia: admits far more foreign grad students than are needed to fill U.S. private sector or government job market needs. The surplus students are then obliged to spend years of their graduate school lives teaching introductory classes, conducting discussion groups, or serving as temporary, low-wage research assistants in university research projects.

Government: enables the addiction to foreign PhDs by issuing student visas without limit.

This unholy trinity aims to create a permanent PhD glut in the United States.

A permanent glut? Economists say it can't happen. If markets operate properly the price of something in over-supply will fall. A PhD glut should reduce salaries paid to PhDs, thereby reducing the number of entering grad students and increasing the demand for their services. Eventually the glut will be soaked up.

But the market for doctorates is far from "perfect." Graduate PhD programs enjoy a uniquely powerful market niche: they are both the producers and the major consumers of PhDs. As producers they have no financial stake in whether their product sells—i.e., whether their graduates get jobs.

"In a normal industry," writes Yale professor William Deresiewicz, "if no firm sells more than half of what it produces, then either everyone goes out of business or the industry consolidates. But in academia, if no one does better than 50 percent, then 50 percent is great. Programs have every incentive to keep prices low by maintaining the oversupply."[Faulty Towers: The Crisis in Higher Education, The Nation, May 23, 2011]

Again, this is not a new development. Fifteen years ago a Rand Corporation study found that graduate schools were admitting students based on their own internal teaching and research needs rather than the demand for PhDs outside of academia.  The study suggested too many doctorates were being produced in engineering, math, and some sciences, warning that when the PhD market reached equilibrium, 22% of new science and engineering would fail to find suitable employment. [William F. Massy and Charles A. Goldman, The Production and Utilization of Science and Engineering Doctorates in the United States, RAND Institute for Education and Training and the Alfred P. Sloan Corporation, August 1995.]

Anecdotal evidence suggests the glut is even worse today. This from Deresiewicz in the Nation of May 4, 2011:

"Most professors I know are willing to talk with students about pursuing a PhD, but their advice comes down to three words: don't do it…. You're going to be in school for at least seven years, probably more like nine, and there's a very good chance that you won't get a job at the end of it.

  "At Yale, we were overjoyed if half our graduating students found positions. That's right—half. Imagine running a medical school on that basis. As Christopher Newfield points out in Unmaking the Public University (2008), that's the kind of unemployment rate you'd expect to find among inner-city high school dropouts. And this was before the financial collapse. In the past three years, the market has been a bloodbath: often only a handful of jobs in a given field, sometimes fewer, and as always, hundreds of people competing for each one."

Of course, the PhD market is a boon to foreign grad students in science and engineering. Most are from China and India, where skilled workers make less than a TA's modest stipend in the U.S. Many end up marrying U.S. citizens.

But the artificial glut is bad news for even the best U.S.-born scholars:

"[If] doctoral studies are failing to appeal to a large (or growing) percentage of the best citizen baccalaureates, then a key issue is pay. The relatively modest salary premium for acquiring an NS&E [Natural Science and Engineering] PhD may be too low to attract a number of able potential graduate students. A number of these will select alternative career paths outside of NS&E, by choosing to acquire a 'professional' degree in business or law, or by switching into management as rapidly as possible after gaining employment in private industry. For these baccalaureates, the effective premium for acquiring a PhD may actually be negative. ….." How and Why Government, Universities, and Industry Create Domestic Labor Shortages of Scientists and High-Tech Workers, By Eric Weinstein, (NBER Draft Paper)

Bottom line: Americans increasingly shun science and engineering careers because it's not worth the time and effort. To a considerable measure, we can thank immigration policy for this—and that's even before Mayor Bloomberg's unhelpful suggestions.

Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.