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Is There a U.S. Engineering Shortage? It Depends Who You Ask

Is There a U.S. Engineering Shortage? It Depends Who You Ask

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Some U.S. companies claim there is an engineering shortage and the country should continue the H-1B visa program to bring in engineers from Europe and Asia to fill the void. An August 2 article by Michael Hiltzik in the Los Angeles Times entitled “Tech industry's persistent claim of worker shortage may be phony” covers some of the issues related to the use of the H-1B visa program.

The H-1B is a non-immigrant visa program in the U.S. under the Immigration and Nationality Act that allows U.S. employers to employ foreign workers temporarily in specialty occupations. Regulations define a “specialty occupation” as requiring theoretical and practical application of a body of highly specialized knowledge in a field of human endeavor including but not limited to engineering, and requiring the attainment of a bachelor’s degree or its equivalent as a minimum.

H-1B work-authorization is strictly limited to employment by the sponsoring employer.The normal duration of stay is three years, extendable to six years. In special cases, the maximum duration of the H-1B visa can be 10 years.

Previously, the law limited the total number of foreign nationals to 65,000 who may be issued a visa or otherwise provided H-1B status each fiscal year (FY). However, if these reserved visas are not used, then they are made available in the next fiscal year to applicants from other countries. Due to these unlimited exemptions and roll-overs, the number of H-1B visas issued each year is significantly more than the 65,000 cap, with 117,828 having been issued in FY2010, 129,552 in FY2011, and 135,991 in FY2012.

Hiltzik says visa issuance is now capped at 85,000 per year, including foreign holders of U.S. advanced degrees. However, a bill sponsored by Sen. Orrin G. Hatch (R-Utah) would raise the limit to as many as 195,000.

An example of a “phony plea” described by Hiltzik was a statement from a lobbyist for Qualcomm that “companies like hers face a dire shortage of university graduates in engineering. The urgent remedy she advocated was to raise the cap on visas for foreign-born engineers.” However, the lobbyist didn't mention that Qualcomm must have more engineers than it needed because a few weeks later the company announced that it would cut its work force 15%, or nearly 5,000 people. Two-thirds of the company’s work force are engineers, so some will certainly be cut.

Hiltzik points out that “the mismatch between Qualcomm’s plea to import more high-tech workers and its efforts to downsize its existing payroll hints at the phoniness of the high-tech sector’'s persistent claim of a ‘shortage’ of U.S. graduates in the STEM disciplines (science, technology, engineering and mathematics).”

It depends on who you want to believe as to whether there really is a shortage of engineers. Jonathan Rothwell of the Brookings Institution said the high-tech industry contends that U.S. universities simply aren’t producing enough graduates to meet demand, leading to a “skills gap” that must be filled from overseas if the U.S. is to maintain its global technical dominance. Low unemployment rates among computer workers imply that demand has outpaced supply. He says, “Companies struggle to fill job vacancies for skilled programmers and other STEM fields.”

Another study suggested that the STEM shortage is a myth, says Hal Salzman, an expert on technology education at Rutgers. “The supply of graduates is substantially larger than the demand for them in industry.” Qualcomm is not the only high-tech company to be aggressively downsizing. The computer industry, led by Hewlett-Packard and Microsoft, cut nearly 60,000 jobs last year, according to the outplacement firm Challenger, Gray & Christmas. The electronics industry pared an additional 20,000 positions.

The chairman of MIT’s physics department lamented that an entire generation “had been told that this was a great national emergency, that we needed scientists,” at the time. “Now they are out on the street and naturally they feel cheated.” California aerospace workers in the 1980s and high-tech engineers after the dot-com collapse in 2000 felt the same dizzying sensation.

Hiltzik says that nailing down the demand and employment in STEM fields is difficult because there’s no single accepted definition for a STEM job. Estimates of the number of STEM jobs range from 5 million to 19 million, according to the National Science Foundation, depending on what's included. Many are technical jobs that don't require even a bachelor's degree.

Michael Teitelbaum, a demographer at Harvard Law School and author of the 2014 book "Falling Behind? Boom, Bust, and the Global Race for Scientific Talent," challenges claims of a STEM shortage in the U.S. Teitelbaum and others observe that the tech industry's lobbying to hire more foreign engineers is at cross purposes with its call to encourage more U.S. students to acquire STEM degrees. After all, why should students labor for four or six years to enter industries in which they can be suddenly replaced in an outsourcing campaign?

Hiltzik notes that “raising the visa limit exploits a loophole in immigration law to save money—workers on these temporary visas are typically paid less than U.S. employees doing the same work, and more complaisant with American bosses because they'll be deported if they lose their jobs. Companies such as Google and Qualcomm do benefit from H-1B visas, but on a lower scale than the outsourcing firms. In 2013, Qualcomm secured visa approvals for 909 new workers, according to government figures compiled by Computerworld. Infosys got 6,300.”

It’s unlikely that such hard numbers will silence the drumbeat for more high-tech immigration, Teitelbaum says, as long as big tech companies have the attention of Congress. “The lobbying opposition is weak,” he said. “There’s no interest group that’s as well organized and financed to say otherwise.”

The Immigration and Nationality Act (INA) requires that the hiring of a foreign worker will not adversely affect the wages and working conditions of U.S. workers comparably employed. To comply with the statute, regulations require that the wages offered to a foreign worker must be the prevailing wage rate for the occupational classification in the area of employment. However, if you replace a worker who has 20 years of experience with a new employee, how do you determine equal pay? The worker who has worked in a company for 20 years would certainly have been paid more than a new employee. Obviously, there are ways to manipulate the “prevailing” wage to benefit the company.

Using H-1B workers could be just another way to replace older, more expensive workers with lower wage earners. With wages making up the highest percentage of a company’s operating expenses, this serves to improve profits. Still, the company can lose its technical expertise by cutting experienced employees.

Another question that arises is whether foreign workers have better engineering backgrounds than their foreign counterparts. That’s a hard question to answer.

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