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Is the STEM Shortage a Myth?
 

As many businesses push for expansion of the H-1B program, American IT graduates struggle to find jobs in their field, says a recent study.

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Amid the heated immigration debate, many businesses claim there aren't enough high-skilled, domestic workers to fill the vacancies within the STEM industries.

But is that actually the case? 

Not so, according to a recent a study released by Economic Policy Institute, which found that U.S. colleges do produce a sufficient number of STEM workers to meet the market demand.

The study, which focused only on the IT/Computer Science field, found that for every two American students who graduate with an IT degree, only one is hired into a STEM job. A third of the graduates who did not make it into an IT job said it was because such jobs were unavailable. More than half said that they found a better opportunity outside their field. 

Researchers looked at "the size and the flow of the guestworkers through the different visa programs into the U.S. labor market," said Hal Salzman, professor at Rutger University and one of the authors of the study.

Salzman tells Inc. more: 

Can you tell us what you found while working on this study?

It looks like about 50 percent of new job openings are being filled by guestworkers and the number could probably be even higher, but a conservative estimate would be 30 to 50 percent. It's very large and it's very concentrated in IT labor market. So then the question becomes: Is there a shortage? Is there an inability of U.S. to produce people for these labor markets?

And so is there a shortage? 

We looked at the domestic pool and supply and found that overall the colleges graduate twice as many STEM graduates as are going to STEM jobs. And IT, computer science, only about 65 percent of computer science graduates go into an IT job. When we asked them, those who were employed but didn't go into IT, why they didn't go into IT, third said they couldn't find a job in IT and half said they found a better job elsewhere.

So, then the question becomes is there something wrong with this labor market that we are asking for government intervention? Why all of the sudden does this vibrant, dynamic, entrepreneurial industry look to government to change the market? Is there something wrong with this market that it doesn't work like a normal market?

How does a "normal market" work? 

In high-skill labor markets, there is a slight lag because people are in college so the market doesn't change as quickly. So you expect a lag, but they adjust. 

And has the U.S. IT market adjusted? 

Typically if there is demand, the wages go up, and students respond. That's consistent with all the data. That leads us to what happened to IT wages, where there is shortage.  And what is notable here is how consistent the evidence is, which is that the wages are flat. In these IT fields, the wages went up during the dot com bubble, came down afterwards and have been flat. So the wages are now what they were 14 to 15 years ago.

Why do you think that is? 

Two plus two seems to equal four. There is large inflow of guestworkers, wages are flat, and domestic students are still in plentiful supply, but not as plentiful as they once were. They are going to jobs that pay better.

What should be done about this? 

Most people agree that firms should be held accountable for statements they make about financial markets that would have material effect on markets. So, shouldn't we ask for the same level of evidence, auditing or verification, for claims that would distort labor markets? If they are going to ask the government to come in and change the market, by increasing supply for example, shouldn't we ask that there is some verification behind the claim that the market isn't working?

IMAGE: Stephen St. John/Getty
Last updated: Apr 25, 2013

JANA KASPERKEVIC is a graduate of Baruch College, City University of New York, where she earned a bachelors degree in Journalism and Political Science. She covers start-ups, small businesses, and entrepreneurship for Inc. Her work has appeared in The Village Voice, InvestmentNews, Business Insider, and Houston Chronicle, among others. She lives in Brooklyn.
@kasperka




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