Article 43

 

Thursday, July 31, 2014

Engineers - Education Isn’t Their Answer

Next time somebody tries to tell you the problem with jobs in America is people are too stupid, or education is the answer - maybe you can steer them to this collection of articles.

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Many engineers remain unemployed despite reported tech skills shortages

Tech Journal
February 3rd, 2012

During a recent video chat session, President Obama told a woman that he could not understand why her engineer husband was unemployed because industry tells me that they don’t have enough highly skilled engineers.

However, in an analysis by the Center for Immigration Studies of the data from the American Community Survey collected by the Census Bureau show that there are a total of 1.8 million U.S.-born individuals with engineering degrees who are either unemployed, out of the labor market, or not working as engineers.

This is true for those with many different types of engineering degrees.

For a complete review of the American Community Survey, including a table containing detailed employment figures for specific engineering degrees, visit the Center for Immigration Studies website HERE.

The 2010 American Community Survey shows:

There are 101,000 U.S.-born individuals with engineering degrees who are unemployed.

There are an additional 244,000 U.S.-born individuals under age 65 who have a degree in engineering but who are not in the labor market. This means they are not working nor are they looking for work, and are therefore not counted as unemployed.

In addition to those unemployed and out of the labor force, there are an additional 1.47 million U.S.-born individuals who report they have an engineering degree and have a job, but do not work as engineers.

President Obama specifically used the words ԓhighly skilled. In 2010, there were 25,000 unemployed U.S.-born individuals with engineering degrees who have a MasterԒs or Ph.D. and another 68,000 with advanced degree not in the labor force. There were also 489,000 U.S.-born individuals with graduate degrees who were working, but not as engineers.

Relatively low pay and perhaps a strong bias on the part of some employers to hire foreign workers seems to have pushed many American engineers out their profession.

There are many different types of engineering degrees. But unemployment, non-work, or working outside of your field is common for Americans with many different types of engineering degrees.

The key policy question for the United States is how many foreign engineers should be admitted in the future. Contrary to President Obamas statement, the latest data from the Census Bureau indicate there is a very large supply of American-born engineers in the country. It would be better for the president to seek more diverse sources of information than simply relying on ғindustry to determine what is going on in the U.S. labor market.

Data Source: Figures for the above analysis come from a Center for Immigration Studies analysis of the public-use file of the 2010 American Community Survey (ACS) collected by the U.S. Census Bureau.

Figures on degrees and employment are based on self-reporting in the survey and have been rounded to their nearest thousand.

The survey asks about undergraduate degrees, so some of the individuals who have a Masters or Ph.D. may not have their graduate degree in engineering. Also, those who indicated that they have a professional degree are not included in the discussion of those with Masters and Ph.D.s because a large share have law degrees. The 2010 data is the most recent ACS available.

SOURCE

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Unemployment and the ‘Skills Mismatch’ Story: Overblown and Unpersuasive

By Gary Burtless
Brookings Institute
July 29, 2014

The jobless rate has dipped to 6.1 percent, and businesses are already complaining about a skills shortage. Earlier this month the Wall Street Journal reported rising complaints by small business owners about their inability to fill critical job openings. Their complaints are not new. Two years ago, when unemployment topped 8%, personnel managers in manufacturing companies grumbled that it was impossible to fill positions requiring specialized skills. The Manufacturing Institute claimed that 600,000 job openings were going unfilled.

We shouldn’t be surprised when shrinking unemployment makes it harder for employers to fill job vacancies. If fewer people are trying to find work, fewer job seekers will show up for interviews and a smaller percentage will come with the skills employers need. In some cases, failure to fill job vacancies will limit how much or how fast a business can expand. Even if customers are eager to buy more of a firm’s products, the companys willingness to accept new orders may be weakened by its failure to fill key vacancies.

Throughout the recovery following the Great Recession we saw an abnormally high rate of job vacancies given the level of the unemployment rate. If past experience was a guide, the job vacancy rate we saw was consistent with an unemployment rate that was 1.5 to 2.0 percentage points lower than the one we actually experienced. The high rate of vacancies relative to unemployment suggests either that employers have become less efficient in filling vacancies or are facing more difficulties uncovering applicants with the skills they need. Their hiring methods may need an overhaul. Alternatively, today’s job seekers do not have the mix of skills needed by the nations expanding employers.

So far as I know, few researchers have looked carefully into the efficiency of company personnel departments. There is little information about whether employers nowadays process job applications more slowly or less effectively than they did in the past.

The second theory - the skills mismatch hypothesis - has received greater scrutiny. Economists have examined the skill mix of workers laid off from shrinking industries and compared it with the mix of occupational skills needed in industries that are growing. The available research on this topic is a long way from definitive. For what it is worth, most credible studies do not find a bigger mismatch than what we saw in past recoveries. However, our information about the skills of job seekers is not detailed enough to know whether their qualifications equip them to fill new positions in expanding industries. In the past 10 years, manufacturing companies have cut their payrolls by 2.2 million workers. The manufacturing workers who lost their jobs and are seeking new ones may lack the specific skills needed by expanding companies, even if their former jobs were in occupations closely related to the occupations that are now growing.

Employers who receive few applications from qualified job seekers might consider making an INVESTMENT IN TRAINING. Companies can pay for re-training current employees or training new ones. If the skill needed by the employer is highly specialized, there may be no other practical way to obtain a worker who possesses the needed skill. It makes no sense for unemployed workers to invest in specialized expertise that has no practical value except at one firm. Unfortunately, there is little reliable evidence about employers’ investment in skills or its trend in the current and past recoveries.

To an economist, the most accessible and persuasive evidence demonstrating a skills shortage should be found in wage data. If employers urgently need workers with skills in short supply, we expect them to offer higher pay to prospective new employees who possess the skills. When workers with crucial skills are offered better wages by expanding employers, they are in a strong position to demand better pay from their current employers, even if their own employer is not expanding. Current employers must match the wage offers of growing employers or risk losing their key employees.

Where is the evidence of soaring pay for workers whose skills are in short supply? We frequently read anecdotal reports informing us some employers find it tough to fill job openings. What is harder to find is support for the skills mismatch hypothesis in the wage data. Last week the BLS released its quarterly report on the pay of full-time wage and salary workers. The median full-time worker earned $782 a week in spring 2014 (see Charts 1 and 2). That wage was $6, or 0.8%, more than the median earnings received by workers one year ago. While other wage series show modestly faster gains in pay, there is little evidence wages or compensation are increasing much faster than 2% a year. Even though unemployment has declined, there are still 2.5 times as many active job seekers as there are job vacancies. At the same time, there are between 3 and 3 million potential workers outside the labor force who would become job seekers if they believed it were easier to find a job. The excess of job seekers over job openings continues to limit wage gains, notwithstanding the complaints of businesses that cannot fill vacancies.

It is cheap for employers to claim qualified workers are in short supply. It is a bit more expensive for them to do something to boost supply. Unless managers have forgotten everything they learned in Econ 101, they should recognize that one way to fill a vacancy is to offer qualified job seekers a compelling reason to take the job. Higher pay, better benefits, and more accommodating work hours are usually good reasons for job applicants to prefer one employment offer over another. When employers are unwilling to offer better compensation to fill their skill needs, it is reasonable to ask how urgently those skills are really needed.

SOURCE

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Bill Gates’ Tech Worker Fantasy

Ron Hira, Paula Stephan et al.
USA Today
July 27, 2014

Business executives and politicians endlessly complain that there is a “shortage” of qualified Americans and that the U.S. must admit more high-skilled guest workers to fill jobs in STEM fields: science, technology, engineering and math. This claim is echoed by everyone from President Obama and RUPERT MURDOCH to MARK ZUCKERBERG and Bill Gates.

Yet within the past month, two odd things occurred: Census reported that only one in four STEM degree holders is in a STEM job, and Microsoft announced plans to downsize its workforce by 18,000 jobs. Even so, the House is considering legislation that, like the Senate immigration bill before it, would increase to unprecedented levels the supply of high-skill guest workers and automatic green cards to foreign STEM students.

As longtime researchers of the STEM workforce and immigration who have separately done in-depth analyses on these issues, and having no self-interest in the outcomes of the legislative debate, we feel compelled to report that none of us has been able to find any credible evidence to support the IT industry’s assertions of labor shortages.

Stagnant wages

If a shortage did exist, wages would be rising as companies tried to attract scarce workers. Instead, legislation that expanded visas for IT personnel during the 1990s has kept average wages flat over the past 16 years. Indeed, guest workers have become the predominant source of new hires in these fields.

Those supporting even greater expansion seem to have forgotten about the hundreds of thousands of American high-tech workers who are being shortchanged - by wages stuck at 1998 levels, by diminished career prospects and by repeated rounds of layoffs.

The facts are that, excluding advocacy studies by those with industry funding, there is a remarkable concurrence among a wide range of researchers that there is an ample supply of American workers (native and immigrant, citizen and permanent resident) who are willing and qualified to fill the high-skill jobs in this country. The only real disagreement is whether supply is two or three times larger than the demand.

Unfortunately, companies are exploiting the large existing flow of guest workers to deny American workers access to STEM careers and the middle-class security that should come with them. Imagine, then, how many more Americans would be frozen out of the middle class if politicians and tech moguls succeeded in doubling or tripling the flow of guest workers into STEM occupations.

Redundant reforms

Another major, yet often overlooked, provision in the pending legislation would grant automatic green cards to any foreign student who earns a graduate degree in a STEM field, based on assertions that foreign graduates of U.S. universities are routinely being forced to leave. Such claims are incompatible with the evidence that such graduates have many paths to stay and work, and indeed the “stay rates” for visiting international students are very high and have shown no sign of decline. The most recent study finds that 92% of Chinese Ph.D. students stay in the U.S. to work after graduation.

The tech industry’s promotion of expanded temporary visas (such as the H-1B) and green cards is driven by its desire for cheap, young and immobile labor. It is well documented that loopholes enable firms to legally pay H-1Bs below their market value and to continue the widespread age discrimination acknowledged by many in the tech industry.

When considering the credibility of the industry’s repetitive claims of “shortages,” it is worth recalling its history of misbehavior in hiring and employment. The most recent example was the proposed $300 million legal settlement of a class action against companies such as Google, Apple, Intel and Adobe for anti-competitive collusion to suppress the pay of highly skilled employees, including unlawful agreements to not recruit each others’ workers.

IT industry leaders have spent lavishly on lobbying to promote their STEM shortage claims among legislators. The only problem is that the evidence contradicts their self-interested claims.

Ron Hira is a professor of public policy at Howard University. Paula Stephan is a professor of economics at Georgia State University.Hal Salzman is a Rutgers University professor of planning & public policy at the J.J. Heldrich Center for Workforce Development. Michael Teitelbaum is senior research associate at the Harvard Law School’s Labor and Worklife Program. Norm Matloff is a professor of computer science at the University of California-Davis.

SOURCE

Posted by Elvis on 07/31/14 •
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