Back in February, I wrote about the situation with H1-B visas. These are visas that allow highly educated workers in science and technology (STEM) to come to the United States to work. High tech companies are always pushing for more of these visas. But as I pointed out then, this is not a form of immigration; it is more like indentured servitude. But most important from a policy standpoint, it is yet another example of how companies who are well connected can get unfair advantages from the government.
I also noted that company requests for H1-B workers did not represent the fact that there were not qualified workers in America; they represent the fact that companies don’t want to pay the going rate for workers with these skills. Well, on Wednesday, the Economic Policy Institute released a report by Salzman, Kuehn, and Lowell (SKL), Guestworkers in the High-Skill U.S. Labor Market. Their conclusion, “Our examination of the IT labor market, guestworker flows, and the STEM education pipeline finds consistent and clear trends suggesting that the United States has more than a sufficient supply of workers available to work in STEM occupations” (italics in original).
There is one fundamental economic fact about the supposed lack of STEM workers: there is no unusual growth in wages. If there really were a high demand for workers and a low supply, wages should increase to push more people into the field. This is not happening so there really isn’t any reason to think there is a huge unfulfilled demand. As SKL noted, “Employment and wage levels in IT jobs have been weak, trends that are not consistent with strong demand.” What’s more, they showed that there is more than enough supply of STEM workers coming out of college. The United States graduates 50% more college educated workers than go into the field. Most of these graduates go into other fields because they can make more money, but roughly a third just can’t find jobs in their fields.
Meanwhile, guestworkers make up a large and increasing part of the workforce. In IT, as many as one-half of the new hires are guestworkers. In addition, a good one-third of the workforce doesn’t have college degrees at all. This isn’t to say that college degrees are necessary to do this kind of work. Rather, there are a lot of people who can fill the positions that these firms claim they need guestworkers for.
So we are left with a very bad situation. SKL conclude, “The supply of IT guestworkers appears to be growing dramatically, despite stagnant or even declining wages.” This is at a time when corporate profits are sky high. And even this explosion of guestworkers is not enough; the industry wants more. But let’s be clear: they want more because they want to keep wages as low as possible, not because they can’t find the workers.