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A Complex Portrait: Immigration, Jobs and the Economy

  • Written by Joe Rojas-Burke & Kim Moore
  • Published in Politics

 Is Skills Gap about Immigration—or Education?


For all the talk about America’s shortage of scientifically skilled workers, the nature of this “skills gap” is hard to pin down.

Are U.S. schools cranking out too few graduates in the STEM fields of science, technology, engineering and mathematics? Or do more attractive jobs lure too many U.S. students away from these fields? Should the government expand immigration to pump up the labor supply with foreign-born talent? Or should it allow market forces to work while investing more in education and training?

“There’s a lot of debate over whether there is a STEM shortage or not. It’s pretty unclear,” says Neil Ruiz, a senior policy analyst with the Brookings Institution, a nonprofit think tank in Washington, D.C.

At first glance, colleges and universities appear to be producing more than enough graduates. But Americans with technical training often pursue other careers. Half of college grads with engineering degrees don’t work in that field a year after graduation, and the same is true for about a third of computer science grads, according to Rutgers University professor Hal Salzman’s analysis of National Center for Education Statistics

1114immigration fig4 211pxAmerican science and math graduates who choose non-STEM careers may be doing so for good reasons. The offshoring of technology jobs, which seems to make headlines every month, is not a reassuring trend. High-paying Wall Street firms and other employers are eager to snap up brainy graduates for jobs outside of their science majors. Jobs in science and engineering are projected to grow by about 1.3% a year over the next decade, a bit faster than the 1% projected growth for all jobs, the Congressional Research Service reported. But average wages for science and engineering jobs aren’t growing any faster than the average for all occupations. After adjusting for inflation, life scientists’ earnings actually fell between 2008 and 2012, and overall wages for science and engineering jobs grew by less than 1%.

In Oregon there is evidence of an acute shortage. High-tech entrepreneurs and executives say it can take months to fill high-paying jobs. “It’s extremely difficult — it’s impossible — to recruit all the talented engineers we need just in the U.S.,” says Wally Rhines, CEO of Mentor Graphics Corporation, a maker of software tools for designing computer chips and circuits. Firms that hire foreign guest workers typically say it’s an option of last resort, not an ideal long-term solution. In a survey last year by the Technology Association of Oregon, 86% of CEOs of local tech companies said they were facing a moderate or significant shortage of skilled workers.

About a third of Oregon’s STEM graduate degrees, and 60% of engineering Ph.D.s, go to foreigners on temporary student visas. Many who would like to go to work here can’t. Demand for H-1B visas, a temporary permit for workers with technical expertise, far outstrips the 85,000 the U.S. allows each year, including 20,000 reserved for guest workers who have earned a master’s or doctoral degree from a U.S. school.

Cloudability Inc., a rapidly growing software firm, hired Oregon State graduate student Anushree Sharma, a native of India, and tried to secure her full-time but couldn’t obtain a visa. “She was an amazing employee,” says CEO and founder Mat Ellis. “There was just no way to keep her.” Sharma was snapped up by a company in India,  and Cloudability spent seven months trying to fill the job. “These jobs are not getting filled, and that money is not being spent in this community,” says Ellis, himself an immigrant from the United Kingdom.

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 Mentor Graphics received 68 approvals for H-1B visa positions in 2014.

Rhines, the Mentor Graphics CEO, says his company recruits globally for the best people, not the cheapest. The company advocates for expanding immigration to make it possible to fill key positions in the U.S. “It’s about putting people with critical skills to work for your company,” Rhines says. “If we can’t hire them in the U.S., we have to hire them somewhere.”

Critics of expanding guest worker visas say that doing so would drag down wages and dissuade even more American students from pursuing engineering and scientific training. They argue that market forces can do an adequate job of boosting labor supply. Salzman, the Rutgers professor, says that when the rapidly expanding oil industry ran short of petroleum engineers, companies boosted the pay for new graduates by 40% over five years, and the number of new graduates more than doubled. 

But technology employers say guest workers aren’t suppressing wages, because they have to pay more for foreign talent, not less, in hard-to-fill jobs. Testing that claim, Ruiz, the Brookings Institution analyst, compared 2010 wage data and found that H-1B workers earn more than Americans matched by job type and age. 

Importing foreign talent isn’t the only option. In fact, less than a quarter of Oregon tech CEOs said they would be “very likely” to pursue temporary foreign workers if the supply became more available, according to the Technology Association of Oregon survey. Companies are interested in working with colleges and universities such as Portland State to offer applied learning experiences and to align curricula with the skills companies are looking for, says Skip Newberry, president of the Technology Association. Oregon firms also are focusing on stepping up marketing and recruiting to attract talent from other cities.

But such efforts can only go so far, says entrepreneur Kanth Gopalpur, founder of the software company Monsoon. The long-term solution, he says, is a sustained investment in the state’s chronically underfunded education system. “But this is a decades-long process, and there is a lack of leadership in both private and public sectors to make that long-term investment.”

That may be true, but alarm about America’s skills gap is also a reflection of national anxieties, just as it was in the 1950s after Russia launched its Sputnik satellite into orbit, and in the 1980s when Japan’s manufacturing prowess seemed unstoppable. A shortage of scientifically trained people may not be the root of the problem, and if it isn’t, immigration can’t be the whole solution. The issues run deep: structural changes in the world economy, what’s really driving companies to offshore operations and the cultural values that shape young Americans’ career choices.

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