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What High Tech Skills Shortage? New Study Casts Doubt on Tech Industry Claim

BY Sarah Lai Stirland | Wednesday, April 24 2013

A new study published Wednesday by the Economic Policy Institute, a left-leaning think tank, challenges the technology industry's constant complaint that there's a shortage of available high-skilled labor in the United States.

The research, authored by a trio of academics in the fields of workforce development, labor economics and immigration studies, said that for every two students who graduate from U.S. colleges with a degree in science, technology, engineering and mathematics, only one is hired into a related job. In a survey, the authors of the study found that 32 percent of computer science graduates said that they didn't get jobs in the field of information technology because there weren't any available. More than half of those surveyed said that they found better opportunities outside of the IT industry.

"Those responses suggest that the supply of graduates is substantially larger than the demand for them in the IT industry," wrote Hal Salzman, a professor of workforce development at Rutgers University, Daniel Kuehn, an economics PhD candidate at American University and B. Lindsay Lowell, director of policy studies at Georgetown University.

The authors also argue in their 35-page economic survey that if demand for tech-related talent were so strong, then the market would respond and wages in the tech field would rise. However, the authors found that current wage-levels in the field have remained stagnant at 1990 levels. And as for the shortage of domestic tech workers, the authors note that it's not as if the supply of computer science graduates has declined. They note that there are now double the number of graduates in this field today than there were just over 14 years ago.

The authors conclude that increasing the number of guest-workers in an environment of stagnant wages will discourage more graduates from going into STEM-related fields. Fifty-nine percent of the STEM field is made up of IT-related jobs, they said.

"Either these are the best and brightest workers that we're bringing in, and we're underpaying them, or if that's not the case, we're bringing in a lot of entry-level workers, and I don't think that's the argument that the tech industry has made," said Daniel Costa, an immigration policy analyst at EPI.

The publication of the findings forwards some awkward statistics as the Silicon Valley non-profit FWD embarks of a major national publicity campaign to push for support for comprehensive immigration reform, which would include reforms that would increase the number of H-1B visas granted annually, as well as provide startup visas for foreign entrepreneurs.

A representative for FWD did not respond to a request for comment on the research.

The current bill, S. 744, proposes to increase the annual number of available H-1B visas to 135,000 from the current 85,000.

The Senate Judiciary Committee held two immigration hearings this week, and The House Committee on Small Business will hold one examining the STEM Workforce and immigration issues on Thursday.

Costa said that the think tank isn't "against" the H-1B program. Its analysts just think that the program shouldn't be abused by large tech companies as a way to exploit cheap high-skilled labor from abroad. A ComputerWorld analysis published this February showed that the largest H-1B employers are tech companies outsourcing work to India. Costa said that the current proposal tweaks the H-1B wage formulas, but really should require employers to pay H-1B employees average industry rates. The current proposal also requires companies to look for American talent first by posting job openings before they employ foreigners. Costa said EPI thinks that's a good first move, but would like to see stricter domestic recruitment requirements. The group also wants the bill to conduct random audits of tech companies' employment practices.

Those who live in Silicon Valley might raise their eyebrows at the idea that the cost of hiring talent hasn't gone up over the years. The authors address that by noting that wage patterns in San Jose, Sunnyvale and Santa Clara are the exception to the rule.