Industry Market Trends

Supply of American STEM Graduates Is Far from Lacking, Study Finds

May 29, 2013

The accepted rhetoric has been that American schools aren't producing enough science, technology, engineering, and math (STEM) graduates to fill the jobs in the burgeoning IT sector. Thus, employers are forced to bring in overseas workers in order with the skills they need. But new data is telling a different story.

A recent report from the Economic Policy Institute (EPI) finds that, contrary to popular wisdom, the U.S. education system actually produces more than enough graduates with STEM degrees to amply staff the IT industry's open jobs. Unfortunately, they are struggling to compete against foreign workers for those jobs, and many end up unable to find work in their chosen field.

According to the EPI report, only half of all U.S. college graduates with STEM degrees are hired into STEM jobs. In IT/computer science and engineering, the report finds, "of the computer science graduates not entering the IT workforce, 32 percent say it is because IT jobs are unavailable, and 53 percent say they found better job opportunities outside of IT occupations."

That counters the mentality behind the current immigration bills proposed in Congress, which, according to the EPI, "include various provisions to increase the supply of guest workers for STEM employers," such as "expanding the current temporary visa programs by increasing the H-1B visa cap and providing permanent residency to nonresident foreign students who graduate from a U.S. college in a STEM field."

The EPI's research, which focused on the IT/computer science field, concluded that "the supply of [STEM] graduates is substantially larger than the demand for them in industry."

Taking a close look at the STEM job market itself doesn't support the notion that IT companies struggling to fill positions. If that were the case, they would be bidding up salaries in an effort to attract scarce talent.

But, as American Prospect noted, "[W]ages 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."

Hal Salzman, a professor at Rutgers University and one of the authors of the EPI study, told Inc. that "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."

The EPI report finds that real wages in IT are, in fact, "hovering around their late 1990s levels," after the dot-com bubble burst in 2001, and as a result "a declining number of both guest workers and U.S. students entered the IT pipeline." But since then, the number of IT college graduates has recovered modestly, while the number of guest workers has increased sharply.

And, it turns out, foreign workers are not necessarily better qualified than American applicants. As the EPI study finds, "among IT workers, 36 percent do not have a four-year college degree. Among the 64 percent who do have diplomas, only 38 percent have a computer science or math degree."

In other words, while the U.S. is producing more and more graduates capable of taking the jobs, even in times of high unemployment, employers are using more and more foreign workers. So why, asks the Washington Post, is the Obama administration preparing to approve an increase in the temporary work visas for IT-skilled foreigners... which the tech industry claims "are needed to make up for the lack of Americans with STEM skills?"

The answer, the Post goes on to explain, is that H-1B workers only earn about 80 percent of what Americans do in similar jobs. So while the number of qualified STEM graduates represents a relatively small percentage of American college graduates, there are still plenty of them for the available jobs. But many are being overlooked because of less expensive foreign workers, or are finding better jobs outside of IT.

The long-term ramifications pose frightening prospects for U.S. STEM graduates. An increase in H-1B visas could further crowd American STEM graduates out of work. A bleak job market for STEM graduates would entice fewer and fewer Americans to study those disciplines. Eventually, companies really might have to look elsewhere for employees as American capacity for technological innovation weakens.