The STEM Glut

by Dave Schuler on May 19, 2014

I rarely read anything at Breitbart.com and I don’t know that I’ve ever linked to anything there before but this article on the phony shortage in science, technology, engineering, and math workers is so on the money I thought I’d pass it on:

Four prominent scholars on Friday questioned why the high-tech industry gets a free pass to perpetuate the myth that there is a shortage of American workers in jobs related to science, technology, engineering, and math (STEM).

Unlike industry lobbyists and politicians who have repeated that claim in an attempt to secure more high-tech visas that would lower the wages of American workers, the scholars presented firm evidence to debunk the notion that the high-tecn industry is suffering from a lack of qualified American workers.

On a Friday conference call that was organized by the office of Sen. Jeff Sessions (R-AL), who has been relentless in standing up for American workers and their interests during the amnesty debate, Hal Salzman, a Rutgers University public policy professor, said current wages in the high-tech and information technology (IT) industries do not reflect a labor shortage.

If there were actually a shortage of such workers you’d expect wages for them would be rising, new grads would find it easy to find jobs, post-docs in those fields would be short, and there would be little or no unemployment among workers in those areas. Since none of those is the case, why do large tech employers keep pushing for more H-1B visas?

The answer, obviously, is that it’s to their benefit to push their workers’ wages down and their chosen strategy is a continuous stream of foreign workers. They routinely pay these workers less than the prevailing wage, have a hook on them because of the terms of their visas, and, since they’re frequently young and far from home, they don’t have lives or commitments outside the company and will put up with more abuse than native workers might.

I have no objection to companies getting the technology workers they need but lower pay, indentured servitude, and abuse are not legitimate reasons to import workers when there are already suitable workers available. It’s time to put the burden of proof on the companies rather than on the workers.

{ 23 comments… read them below or add one }

Gawaine May 19, 2014 at 8:53 am

Agreed with all you say – as a US Citizen, it bothers me the way they play both sides – H1B visa holders are abused, but put up with it, which pulls the salaries down artificially.

Where I have found a problem, though, is with finding people who are qualified. Having a number of graduates does not imply having people who know anything, and many STEM programs have been defining down what you need to graduate in order to push more people through.

I don’t mean to compare these disciplines unfairly, but think of the press they put on the military to get more Spec Ops people through training; there are a limited number of people who have the temperment to be a SEAL. Similarly, there are a limited number of people who can be trusted to program, although there are more Krispy Kremes and less bullets involved in that career path, so it’s harder to dissuade the truly lazy or cowardly.

... May 19, 2014 at 9:06 am

Yes, but if they don’t keep suppressing wages in the tech field, Zuckerburg might only be worth ten figures instead of eleven, and if you want that then you’re a communist.

PD Shaw May 19, 2014 at 11:15 am

I was surprised to learn last year that the largest employer in my building appears to be an engineering firm. Surprised because the relative small footprint of its offices. Apparently, a large portion of their business is contracting out engineers to businesses, including at least one on the Global 500. Engineers take lower salary and benefits with the hopes of being offered a permanent job. Sounds like a professional temp agency.

Jimbino May 19, 2014 at 11:29 am

The problem of foreign engineering workers would end if engineers instituted the nonsense of licensing that is so common (around 50% of workers in the USSA) in fields as diverse as medicine, law, cosmetology and coffin-making. Engineers have wisely rejected licensing and unionism for decades.

Besides being underpaid, Amerikan programmers and engineers aren’t considered for a job if they haven’t worked in the specific area (like Linux) within the past 3 years. Programmers, moreover, being libertarian, often won’t accept a position that requires drug screening. Foreigners are more easily cowed into giving up their civil rights.

I’m all in favor of free world trade in labor and products, but free trade implies opening up the borders to persons of all occupations, including leaf-blowing, and at the same time requiring corresponding lowering of barriers to Amerikans seeking work overseas.

michael reynolds May 19, 2014 at 1:09 pm

I have a crazy idea. What if tech workers got together, decided on their most important issues, formed an organization to promote their agenda, and had that organization negotiate on their behalf?

We could call it, oh, I don’t know, a union?

The middle class in this country barely existed before unions. Unions gave us workplace safety and minimum wages and fair wage practices, and pensions, and bid up the value of things like coal mining and manufacturing work.

But Republicans in the states – those wondrous laboratories of democracy – killed unions (with admittedly some help from some of the unions themselves) and now we’re down to Roger the Code Monkey having to bargain on his own against corporate masters who can replace him with Rajiv the Half Price Code Monkey.

When you don’t have a union, you have only your own resources plus your vote. That weighs nothing in the balance. No power means no bargaining leverage means shut up and take whatever crumbs they give you.

... May 19, 2014 at 1:55 pm

Unions largely exist to give cushy jobs to union leadership. Many companies have successfully mastered the union negotiation game by offering deals that are sweet to very senior people in the union (who are small in number and usually their number hold the leadership positions) at the expense of pretty much everyone else in the union. It was one of the first things I saw when I started working for Disney.

In the negotiations happening then, pension benefits were greatly increased for people with 25+ and 30+ years experience, at the cost of treating hourly people the same as salaried people on medical benefits. The union (leaders) said, “This is a great deal! Pass it!” and the members duly did.

The next January, when they realized they had to pay a helluva lot more for their health insurance (Hourly workers were heavily subsidized, salaried workers much less so; thus when they got the same deal as salaried workers they lost a lot of take home pay.), they were outraged and even picketed just off property for a while. But they voted for it so that’s how it went. By the time the next set of negotiations rolled around they were used to it and it wasn’t really an issue.

And of course, particular circumstances were such that most of the union leadership didn’t really get hit that hard by the increased costs of healthcare. And given that Disney World opened in 1971, the company really didn’t have to worry about that many hourly food service workers or hotel maids who were going to get the extra pension benefit.

Watching carefully I’ve seen that happen at other places since then. (Not just Disney but elsewhere.)

As long as the unions get run by either crooks or people that look at it as their own personal fiefdom, unions aren’t going to accomplish shit for workers. Well, outside the government sphere, of course.

... May 19, 2014 at 2:00 pm

And if Dems weren’t so eager to crush wages by importing Rajiv the Half-Price Code Monkey, Roger the Code Monkey would have a bit more leverage.

I don’t see how Dems in particular can complain about falling wages when they vote for it every single time.

Jimbino May 19, 2014 at 2:10 pm

Yo Michael Reynolds:
“The middle class in this country barely existed before unions. Unions gave us workplace safety and minimum wages and fair wage practices, and pensions, and bid up the value of things like coal mining and manufacturing work.”

1. Most all economists and all sensible folks want a minimum wage of 0. Anything higher just puts folks out of work and sends jobs overseas.

2. Union “workplace safety” led to OSHA and the rule that you can’t take a cup of coffee to your desk. That also sends work overseas.

3. What is “fair wage”? And what does it give that mere publishing of all wages wouldn’t?

4. “Pensions” based on seniority are just vehicles for rewarding loyalty and putrefaction. A lot of engineering is based on short-term contracts, 1099s, independent consulting and corp-to-corp arrangements that don’t carry pensions apart from IRAs and 401Ks.

5. When you say “bid up the value of things” you mean “raise the costs and prices of things.” How can a union raise the value of a coal mine? Indeed, when the workers of the mine unionize, raising the cost of labor and production, the value of the mine and all its coal drop considerably, since overseas competitors are rendered instantly more profitable.

Where did you learn your econ?

jan May 19, 2014 at 2:24 pm

“Unions largely exist to give cushy jobs to union leadership.”

That’s how it seems to work out — more on behalf of the bosses than the workers. Workers are so often at the mercy of their leaders, who call the shots, make demands that often needlessly stretch out labor disputes. During these negotiations and strikes the leaders continue to get paid their ‘cushy’ salaries, while workers just try to make ends meet, until their differences are resolved. IMO, it doesn’t really empower an individual employee, but rather creates a collective crisis which is governed by union bosses.

A better kind of unionization, a “Company Union,” is one that is more in-house, combining the interests of management and workers in the same company, in reaching some kind of more mutually-derived resolution — one that is less arbitrary and more consistent with the needs of a company rather than the political interests of an outside trade union. Other countries have these kind of unions. They, unfortunately were outlawed in 1935, via the National Labor Relations Act — when FDR was intent on increasing union power/prominence to the point of absolute intolerance for the welfare of a business enterprise.

Ben Wolf May 19, 2014 at 2:50 pm

Don’t call it a union, Michael. Call it something similar to the American Medical Association, which seems to get a free pass even though it actively works to represent the economic interests of doctors.

michael reynolds May 19, 2014 at 3:23 pm

Ben:

Exactly. Or the American Bar Association – the union of lawyers.

I love it when people “death to unions!” followed some years later by, “Where’d the middle class disappear to?”

PD Shaw May 19, 2014 at 4:11 pm

“The middle class in this country barely existed before unions.”

But that wasn’t because engineers were unionized. Engineers were middle management; they were the ones (like my uncle) that went to work on the assembly lines when the working man was on strike. If we’ve reached the point that a professional needs the assistance of compulsory union power, we’ve gone off the track somewhere else.

Of course, a professional making six figures can be required to join a state union, but the person getting screwed-over then is the kid going to a substandard public school, the sick person waiting for a doctor who will accept Medicaid, or an elderly person whose nursing home is closed. Where did all the money go?

michael reynolds May 19, 2014 at 6:16 pm

PD:

The typical wage negotiation is big company vs. individual. Individual is unlikely to prevail given the balance of forces.

In my world it’s big company vs. individual plus agent or lawyer. That’s somewhat more even. But some engineer doesn’t even have that.

I think it’s nuts to expect that random individual is going to prevail as often as random individual backed up by 10,000 others like himself. Even if one were to credit the libertarian/conservative notion in the abstract, we have the evidence right in front of us demonstrating that random individuals have in fact not done very well. Wages down while productivity rises. Money funneled into the pockets of the bosses, while the workers get screwed.

I’ve negotiated probably 50 different contracts now and my experience is that you don’t get anywhere trusting the company to treat you fairly. They not only lie about what they can afford, they lie all the way down into the nitty-gritty of the contract language. You have to be ready to take big risks, to piss people off, to manipulate and threaten, and to throw lawyers at them. How much of that applies to some young engineering school grad?

They get screwed because management picks them off one by one.

michael reynolds May 19, 2014 at 6:57 pm

As a matter of fact, probably the single best idea I’ve heard for redressing the imbalance of income, is to repeal all right-to-work laws. The unions would come back and they would drain the money out of the pockets of the CEOs and the boards and the big stockholders, and put it into the pockets of working people – people who can be relied on to spend said money and put it right back into the community.

11% of American workers are in unions, 6% round numbers in private industry. Compare that with Canada or Germany, both about 18%.

During the decade, the median per capita income in Canada rose 20 per cent to reach the U.S. equivalent of $18,700 US after taxes – or about $75,000 US for a family of four. At the same time, median income remained stagnant in the United States between 2000 to 2010.

http://www.calgaryherald.com/news/Canadas+middle+class+likely+eclipsed+report+says/9766269/story.html

We did what the Drews of the world told us to do: killed unions. Canada did not. They go up 20%, we go nowhere. But all the Drews out there in the US got a whole lot richer.

michael reynolds May 19, 2014 at 7:16 pm

I think the big blame for Democrats goes to the fact that they never had any heart for regulating unions. Union money went into the party, and the party duly turned a blind eye. But that’s an argument for better enforcement going forward.

As for H1B visas, I don’t think I ever thought about it in years gone by. I assumed the companies must be right. Which was dumb on my part.

Guarneri May 19, 2014 at 7:37 pm

I have no problem with the concept of workers banding together to maximize their negotiating power. But that’s a completely sanitized version. I watched an industry kill off 2/3rds of their workers through rigidity. Try changing a light bulb without a union electrician. Those stories aren’t apocryphal; but you can set your grievance date if you try it. And as has been pointed out, those left standing were the union bosses and older workers who sold out their younger “brothers” in a heart beat. And I ran a small business where the Teamsters drove the trucks. Don’t get me started.

Its fine if you want to negotiate, but don’t be surprised if companies do what they must to survive, because customers talk service, quality etc, but so many buy on price. Instead of pissing at the companies, ask what has gone wrong with competitiveness.

Of course, if you want to base your labor policy on some cult burger joint, knock yourself out.

Guarneri May 19, 2014 at 7:40 pm

Oh, and using the AMA and saying “well, they do it too,” is just pissing up a rope. The AMA must have better lobbying / regulatory capture……… Doesn’t make it “right,” for the AMA or UAW.

And unless I’ve missed something, the AMA hasn’t gotten a pass ’round this here parts.

Andy May 19, 2014 at 8:58 pm

Michael,

You are talking about unions in theory and it’s the theory I can largely agree with. However, unions in this country – in practice – are broken and it’s not because of Republicans. It’s because of the policies and strategies unions choose to pursue along with the legal structure that supports them. Like many of our institutions, unions have not changed with the times and are still living in the 1970′s.

michael reynolds May 19, 2014 at 9:15 pm

Andy:

As I mentioned above, the unions surely contributed to their own demise. But it’s right-to-work that killed them, made it impossible for them to reform or revive.

Unions have often behaved badly. I don’t think many people know, but some American unions were exceedingly unhelpful even during the run up and all through WW2 when we were all supposedly pulling together in some happy fantasy. But corporations also behaved very badly in many cases, often behaving almost treasonously.

In more recent years both unions and corporations have screwed up, though the unions have yet to cause a complete meltdown of the financial system via widespread fraud. The difference is: we did not outlaw corporations. There is no corporate equivalent to right-to-work laws.

We are endlessly indulgent of the rich and powerful in this country, and love to scold and denigrate working people and the institutions of working people. When you’re rich you get chance after chance after chance, and when you work for a living you get one and done.

If you can’t have a closed shop you can’t have a union. If you can’t have a union you will be forever at the mercy of the corporate overlords. You cede all economic and political power to capital. Which is where we are now, with the only counterbalance being government – a government as Ice reminds us frequently that is controlled by the rich. Unions are vital, which is why the corporations and their GOP servants killed them. The resultant imbalance of power shouldn’t be a surprise.

michael reynolds May 19, 2014 at 9:24 pm

Guarneri:

I agree that unions are often extremist in their approach. At least in this country. In other countries they have a different culture between management and labor. In this country management met union organizing with head-busting and murder.

It’s very hard to change a culture. But the war wasn’t started by labor, it was started by capitalists who were not objecting to rigid work rules but were rather objecting to paying people a living wage to go down into unsafe mines – all to protect their own class prerogatives and power. 19th century capitalists treated workers like slaves, enforced their dictates with hired thugs and paid-for cops. The unions changed that at a very high cost in broken heads.

With that start it’s hardly surprising that unions took a fuck you attitude toward management. Obviously we don’t want to renew that kind of relationship. But a new start is not exactly helped by Republican greed-heads using government, especially in the south, to kill unions altogether. That’s more strong-arm management behavior.

Dave Schuler May 20, 2014 at 6:21 am

I agree that unions are often extremist in their approach. At least in this country. In other countries they have a different culture between management and labor. In this country management met union organizing with head-busting and murder.

The laws governing unions are very different in Europe and Japan than in the United States. We’ve designed things to ensure that the management-labor relationship remains adversarial rather than collaborative.

I have no objections to unions, particularly for negotiating working conditions. However, the actual evidence that unions were causative in having the effects you suggest is quite weak.

That’s been studied extensively and they’ve found that during the period of union strength wages rose in non-unionized sectors as fast or even faster than in unionized ones. That suggests that a tight labor market had more influence on fostering middle incomes for blue collar workers than unions did. A tight labor market produced middle income wage, not unions.

That’s why so many of the things that I propose are intended to tighten the labor market. Unfortunately, neither Democrats nor Republicans agree with me.

... May 20, 2014 at 12:14 pm

Today the Obama Administration put out another call for increasing the labor supply, this time through the SecLabor.

Why am I supposed to believe the Dems are on the side of labor and higher wages for working people when they have spent the last 50 years undermining both? And yet I’m supposed to be crazy for noticing that what Dems do is in sharp contrast to what they say.

Andy May 20, 2014 at 8:31 pm

Michael,

That’s a pretty weak defense of unions. If the best that can be said is that unions aren’t as bad as those who caused the financial meltdown then the future of unions isn’t bright.

Rather than blaming outside forces which don’t, by the way, exist in a vacuum, union supporters and unions themselves need to reform and become relevant and attractive to the modern workforce. Expecting some miracle where capitalists stop being capitalists and Republicans stop being Republicans is no strategy to save unions. Unions need to save themselves.

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