National Data | Looking (In Vain) For the Geek Shortage

The sky is falling! The sky is falling!

For years high-tech corporations have warned of a shortage of scientists and engineers. [See Why Americans Don't Study Science—It Doesn't Pay] The latest (alleged) evidence: the cap of 65,000 H-1b visas for fiscal 2006 was reached in August, 14 months prior to the fiscal year in which the visas would be used.

U.S. corporations love H-1bs. Why shouldn't they? They pay them less, force their American workers to train them, and then fire the U.S.-born employees.

H-1b workers are little more than indentured servants, tethered to their sponsoring employers until they receive Green Cards.

But a high-tech manpower shortage? Rarely have cold hard facts offered less support to this assertion. Just look at the latest figures on science and engineering graduate enrollment as reported by the National Science Foundation (NSF). (Table 1)

In 2003 (the latest year of available data):

  • U.S. citizen S&E enrollment rose 5.8 percent, to 327,332

 

  • Foreign citizen enrollment  rose 0.9 percent, to 146,871

The newly perceived attractiveness of a career in science and engineering is most dramatically seen in the numbers of first-year S&E grad students. In 2003:

  • First-year U.S. citizen enrollment rose 9.4 percent, to 54,770

 

  • First-year foreign citizen enrollment fell -8.1 percent, to 29,574

Foreign students accounted for a smaller share of S&E enrollment in 2003 (31 percent) than in 2002 (32 percent.) For nearly a decade this trend has gone in the other direction.

Obviously, American students believe the demand for scientists and engineers is here to stay, and jobs will pay enough to justify the five or more years spent pursuing graduate study.

Are they cockeyed optimists? Perhaps. The median salary for all S&E doctorate holders was an unspectacular $77,000 in 2001, up just 10 percent from 1995 levels.[ Employment Sector, Salaries, Publishing, And Patenting Activities Of S&E Doctorate Holders , NSF, June 2004 PDF] Many newly minted Ph.D.s accept post-doc appointments in the $25,000 to $35,000 range.

These modest salaries force many S&E graduates to seek employment in other fields. The NSF found, for example, that 4.2 percent of science and engineering PhDs work outside their field of training, chiefly for financial reasons.

This further weakens corporate America's claim of a shortage of high-tech workers.

Things can change quickly, however. A tech sector boom could increase demand for scientists and engineers faster than supply. If market forces are set free, the resulting shortage will be temporary: Demand will drive up S&E salaries, attracting still more U.S. citizens into science and engineering, nullifying the need for "temporary" H-1b workers.

Unfortunately, the H-1b market is driven by politics, not economics. The supply of H-1bs inexorably rises.

The sky, after all, is always falling.

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