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News from EPI No evidence of worker shortage in STEM fields, new EPI study finds

For Immediate Release: Monday, November 19, 2012
Contact: Phoebe Silag or Donte Donald, 202-775-8810

No evidence of worker shortage in STEM fields, new EPI study finds

The recent Microsoft study that found current and future shortages of workers in computer-related occupations and projected shortages in the broader science, technology, engineering and math occupations in the U.S., “A National Talent Strategy,” is flawed, a new EPI report finds. In fact, creating new green cards for STEM workers and increasing the number of H-1B visas now will exacerbate STEM unemployment rates, which are already higher than they would be if the labor market were at full employment, and suppress wages in STEM fields. In Stem Labor Shortages? Microsoft report distorts reality about computing occupations, EPI immigration policy analyst Daniel Costa explains that there is currently no labor shortage in computer-related and STEM occupations and that Microsoft’s methodology for projecting a future shortage is flawed. He points out that increasing STEM workers in the U.S. is in Microsoft’s interest, as a larger pool of workers would prevent wages in STEM fields from rising.

The Microsoft report bases its labor-shortage projection on the assumption that U.S. universities are not graduating enough students in computer science to fill computer-related occupations. However, workers in computer-related occupations come from a variety of educational backgrounds. Data show that less than one-fourth to less than one-half of workers in computing occupations have a computer science degree.  In fact, even in the occupation where one would most expect workers to hold a computer science degree, computer and information science research, only 43 percent hold one.

Citing the current unemployment rate of 3.4 percent for workers in computer-related occupations, the Microsoft report says a labor shortage already exists, as this rate is less than the accepted national full-employment rate of 4.0 percent. Yet, since the end of the recession that ended in November 2001, whenever the national economy has been at full employment (with an unemployment rate between 4 and 5 percent), the unemployment rate of workers in computer occupations has not surpassed 2.4 percent; for college-educated workers in the occupation, it did not go above 2.2 percent. And when all STEM occupations are taken into consideration, for 16 out of the past 17 years, unemployment rates of college-educated STEM workers during periods of full employment have averaged between 1.2 and 1.7 percent. In other words, the actual full-employment rate for computer-related and STEM occupations is closer to 2 percent.

Finally, while a labor shortage would normally result in sharp wage increases, the average hourly wage for workers possessing a bachelor’s degree or above in computer and math occupations rose less than half a percent per year from 2000 to 2011. Microsoft’s proposal to increase the supply of workers in computing and STEM occupations during times of high unemployment and insufficient job creation will drive STEM unemployment rates even higher, further suppressing wage growth.

“The metrics Microsoft uses to gauge employment trends for computer-related occupations fly in the face of other rigorous studies that show no labor shortages exist,” Costa said. “The unemployment rate for computer-related occupations remains much higher than both its pre-recession level and what it would be under full unemployment. When there are more than 141,000 unemployed workers in computer occupations who are actively looking for work, adding more STEM workers to the job pool than visa programs currently allow is exactly what we should not do, as it would keep unemployment rates high and prevent wage growth.”