The STEM-Shortage Myth



The Economic Policy Institute published a report yesterday on the supposed shortage of professionals in science, technology, engineering, and math (STEM). You've probably heard of the crisis by now. America is not producing enough STEM degrees. This will be the death of innovation and global competitiveness. We must reorient higher education to convert more liberal arts students into STEM students. And so on.

The problem with this alleged crisis is that it is not real. As the EPI report lays bare, the common wisdom about our STEM problem is mistaken: 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. Beyond that, if there was an actual shortage of STEM workers, basic supply and demand would predict that the wages of STEM workers would be on the rise. Instead, wages in STEM fields have not budged in over a decade. Stagnant wages and low rates of STEM job placement strongly suggest we actually have an abundance of STEM-qualified workers.

The EPI report tends to focus on the relevance of these findings to guest worker programs and other immigration issues. The tech industry has long suggested that it cannot find STEM workers in America and therefore needs immigration changes that will enable it to bring in more workers from abroad. Skeptics have rebuffed that the tech industry really is just interested in cheaper STEM labor and that its proclamations about a dearth of STEM-qualified domestic workers is just a convenient cover story. This report provides ammunition to the latter camp to say the least.

Although the report focuses on immigration issues, its findings are also relevant to the ongoing debate about the cause of our persistent unemployment problems. Our present unemployment rate of 7.7 percent is 3.4 percent higher than its pre-recession low. Millions of people looking for work cannot find it. Any sensible country would not stand for this kind of needless suffering and waste of productive potential and therefore do whatever it takes to bring the country back to full employment. In our present situation, that means some combination of monetary and fiscal stimulus.

Opponents of such stimulus have rallied around various excuses for why we should not pursue it. The most notable excuse has been that our present debt levels are too high to pursue more spending, a claim that has been subjected to severe mocking on the heels of the recent debunking of the famed Reinhart-Rogoff paper about the negative growth effects of high government debt.

A less notable excuse has been that our unemployment woes are structural—the skills employees have are not the skills employers want—and therefore economic stimulus wont do much to solve our unemployment problem. The STEM myth has been a major element of this structural unemployment theory, at least when it comes to telling popular stories about it. Everyone loves a story about how our tech employers go out into the labor market, find a bunch of liberal arts majors who can't cut it, and then have to turn abroad to fill the jobs. But it just isn't so.

So strike another blow against the structural unemployment thesis. While there is doubtlessly some skills mismatching here and there—as there always is at any time in any economy—that is not the reason why so many are jobless right now. The STEM crisis is a myth and solving our ongoing unemployment problems will require more than training and credentialing additional STEM workers.


Without taking issue with any points made in this piece, i'd like to point out that the point of the headline suggests the problem at hand is a need for more jobs. That problem is addressed by startup entrepreneurs who, according to the Kauffman Foundation, make up nearly all net new jobs in the nation each year since 1980. That premise is compounded by the fact that in this 21st century knowledge-based, tech-driven global innovation economy it is the STEM-educated high-growth entrepreneurs who create the bulk of net new jobs. It is this ecosystem that lacks a flowing pipeline of STEM-educated innovators.

A competent STEM and STEAM-educated workforce means more innovative problem-solving people in the workforce, whatever job they may hold. A small percentage of those innovative critical thinkers will choose to become risk-taking entrepreneurs. Some others will become intrapreneurs within corporate value chains. Others may become freelancers who dabble in entrepreneurship for side income.

That's the nature of our new economy. We need more innovators. STEM and STEAM education landscapes are needed to produce such a competent pipeline. Such an educational foundation also produces the bulk of today's entrepreneurs, of which we desperately need more.

After 40 years in the IT sector watching the exponential increase in H1B workers, I must agree with the article. If there's a shortage of STEM candidates, it's a shortage at the deflated wages these employers have become used to paying.

Mr. Green seems to think that an MIT computer scientist should embrace entrepreneurship and innovation, avoiding anything like a steady job that will allow him to pay off his student loans, while the salaried jobs go to pleasant, talented chaps from Mumbai.

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