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.

Discuss this Blog Entry 15

on Aug 19, 2015

Yeah, there's a shortage of 25 yo engineers with 10 years experience.

on Aug 19, 2015

and depends what kind of engineer are you looking for

on Aug 19, 2015

One challenge is to distinguish between international students who have come to the U.S. for engineering study and want to stay -- a huge resource for the nation -- and outside foreign engineers. It is a mixed issue to invest in talented students and send them home even if they are ready to make major contributions. Maybe it would be useful to reserve most H1Bs for people with US advanced degrees who would otherwise be eligible for residency?

on Aug 20, 2015

guy you are naïve if you think corporate America will try to distinguish between your parameters

on Aug 23, 2015

What's hard to understand about the fact that 74% of people with bachelor's degrees in engineering aren't even working in engineering, which is presumably mostly because there aren't jobs available for them? How on earth can you contort facts like that to claim that there's a shortage of available workers? All that people like Facebook's founder Zuckerberg (who also founded fwd.us to lobby for larger quantities of cheap and docile H-1B workers to inexpensively feed his corporate code writing machine) care about is a race to the absolute cheapest labor pool anywhere in the world he can find it, and feeding unreasonable lies to the media 24/7 in support of that goal doesn't begin to bother him or the other technoplutocrats who will buy as many politicians as will sell themselves to them, which is why it is absolutely imperative that we support Mr. Trump's effort to reverse this country's degenerate immigration policy so engineers can once again have a standard of living they can be proud of!

on Aug 20, 2015

agree

on Aug 20, 2015

Perhaps if the companies who are requesting H-1B visas were denied the request if they've laid off engineers in the past 2 years and have not attempted to contact them for employment then the 'shortage' will dry up almost immediately.
I'm still "contracting" back to the organization (part time) which I was laid off from in 2013 and I'm pretty sure they would be in line for additional H-1B visas if the number were increased.

on Aug 25, 2015

Although I agree that recent layoffs of engineers indicate that the company doesn't need more engineers (such as H-1B visa holders), I suspect that the companies would only manufacture more excuses to justify their behavior. They will claim that the laid off engineers were not technically up-to-date or productive enough... they will ruin the reputations of past employees in order to justify their own agendas.

But still, it would be worthwhile to question these companies when they display such behavior.

on Aug 25, 2015

It depends upon who you ask? Notice who the article lists as being asked... and who isn't asked. The glaring omission is that they don’t ask the engineers themselves.

When you ask companies with vested interests in obtaining talent by the cheapest means possible, what do you expect to hear? When you ask universities that sell engineering degrees what do you expect to hear? When you ask politicians who are paid by lobbyists what to you expect to hear?

Several engineering journals and websites periodically poll readers (mostly engineers) about their situations. Although this can miss engineers who have dropped out of engineering, it still can provide a better barometer. It is also not hard for universities to track job placement success of graduates. But we don't often hear from sources like these because they don't paint the picture that the vested interests want to sell.

There is no doubt that we need more engineers - to solve the many technical problems we face. But engineers need support - they cannot invent solutions without resources. Without jobs with adequate technical resources we cannot expect much productivity from engineers.

Generally you get what you pay for. Pay bottom dollar and you generally get bottom productivity and high turnover - neither of which is very beneficial in the long term. But companies think a long term plan only reaches to the next statement quarter anyway. So companies strangle their own technical talent, and then blame that same talent for their lack of long term success. Go figure.

on Aug 26, 2015

I am a degreed Physics major working with an engineering title. I don't really do much engineering either, though.
I don't quite understand the last statement of the article: "Another question that arises is whether foreign workers have better engineering backgrounds than their foreign counterparts. That’s a hard question to answer." What does it mean foreign workers and their foreign conterparts?
Did you mean to say something like: domestic employees and their foreign counterparts?
The idea that H1B workers are brought in to lower the cost of doing business is a hotly debated subject no just in "engineering" circles. I agree, that if a company lays off employees and then turns around and hires foreign workers then the laid off employees should have rights of return before the foreign workers are hired. I have been laid off twice myself over the last 35 years, for different reasons than this, but it gives me perspective.

on Aug 26, 2015

I am a degreed Physics major working with an engineering title. I don't really do much engineering either, though.
I don't quite understand the last statement of the article: "Another question that arises is whether foreign workers have better engineering backgrounds than their foreign counterparts. That’s a hard question to answer." What does it mean foreign workers and their foreign conterparts?
Did you mean to say something like: domestic employees and their foreign counterparts?
The idea that H1B workers are brought in to lower the cost of doing business is a hotly debated subject not just in "engineering" circles. I agree, that if a company lays off employees and then turns around and hires foreign workers then the laid off employees should have rights of return before the foreign workers are hired. I have been laid off twice myself over the last 35 years, for different reasons than this, but it gives me perspective.

on Aug 26, 2015

If there was a shortage of engineers, then renumeration would be commensurate. Supply and demand.
But that isn't happening. In fact engineer's compensation packages are getting smaller.
My advice to young engineer wannabes would be to do a double degree if you must: eng/commerce, eng/business, eng/ marketing, or eng/law or eng/medicine, etc, or pick another profession, and have engineering as a hobby.
My impression of the engineering profession is pretty chastened - I think collectively engineers aren't demanding enough of the market. As an example, there is a supposed glut of lawyers, yet I haven't heard of lawyer's renumeration diminishing. We're happy so long as we get our little cubicle with a well-populated equipment lab, and we burrow away oblivious to the forces of commerce, till we get presented with the pink slip, and wonder what happened.
Time to go for the jugular, or forever be pushed around.

on Nov 17, 2015

Cheap engineers are what corporate is looking for...and we are told that it's part of our job to train them up...BS...

on Feb 6, 2016

There's not a shortage of Engineers, just a shortage of Engineers willing to take on short no benefit contract work or work in unstable work environments for cheap.

on Mar 28, 2016

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