GUESTWORKERS IN THE HIGH SKILL U S LABOR MARKET:

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GUESTWORKERS IN THE HIGH‐SKILL U.S. LABOR MARKET:Analysis of Supply and Employment Trends

of the IT WorkforceApril 24, 2013

Hal SalzmanJ J H ld i h C t f W kf D l tJ.J. Heldrich Center for Workforce DevelopmentE.J. Bloustein School of Planning & Public Policy

Rutgers UniversityHSalzman@Rutgers.edu

Daniel KuehnDepartment of Economics

American Universitydan.p.kuehn@gmail.com

B. Lindsay LowellInstitute for the Study of International Migration

Georgetown Universitylowellbl@georgetown.edu

This report is based on research funded by the Alfred P. Sloan FoundationFindings and conclusions are those of the authors.

Full report available at: 

http://bit.ly/guestworkersOR:

http://www.epi.org/publication/bp359‐guestworkers‐high‐skill‐labor‐market‐analysis

Key Questions:Key Questions:

• Is there a shortage of STEM workers in the U.S.?

• What is the impact of high skill guestworker• What is the impact of high‐skill guestworkervisa programs?

Th IThe Issues

Are there enough high‐performing/ STEM educated students?STEM‐educated students? 

H l i h fl f hi h killHow large is the flow of high‐skill  guestworkers? And what are the h i i f h k ?characteristics of these workers? 

What are the employment and wage trends in the IT labor market? 

FindingsgAmple supply of STEM graduates

Only one of every two STEM graduates  employed in a STEM job

Computer Science and Engineering produce 50 percent more graduates than hiredp g

Supply is responsive to demandSupply is responsive to demandWhen  wages increase, so does the  number of 

d tgraduates

When wages stagnate, so does the number of graduates

Does the U S la kDoes the U.S. lackSTEM‐potentialSTEM potential 

Students

’ d h l hDon’t students in the U.S. lag the world in performance?world in performance?

U.S. Has Largest Shares of Global Supplyof High‐Performing Students

Science Math Reading

U.S.33 7%K

Canada5 0%

France5.0%

Turkey5.0%U.S.

14 1%Canada

5.1%France5.1%

U.K.5.1%U.S.

33 0%Germany

9.0%

Canada5.0%

33.7%

Germany

Korea6.9%

5.0%14.1%Germany

11.1%

5 %33.0%U.K.11.0%

Other OECD Japan

Germany7.9%

Other OECD Japan15.2%Other OECD

t iJapan17 0%

Source: These figures are reproduced from: Salzman and Lowell, 2008; “Making the Grade” Nature 453, 28-30].

countries24.8%

Japan11.9%countries

28.3%Korea16.2%

15.2%countries25.0%

17.0%

But do STEM labor markets k?work?

Can STEM employers really find workers?

Graduates Respond to Wages:Computer Science Graduates

9.00%$85,000.00

7.00%

8.00%

$80,000.00

5.00%

6.00%$75,000.00

3.00%

4.00%

$65,000.00

$70,000.00 Programmer  salary

Programmer unemployment rate

1 00%

2.00%

$60,000.00

0.00%

1.00%

$55,000.00

Graduates Respond to Wages:Computer Science GraduatesComputer Science Graduates

90,000

209%

190%

210%

70,000

80,000

1998

2004

150%

170%

50 000

60,000

Percentage Increase from 1998

116%

130%40,000

50,000

101%

90%

110%

20,000

30,000

72%

50%

70%

0

10,000

C S i G d BS C S i MS C S i AA C S iComp Sci Grads (Domestic; all degrees)

BS Comp Sci MS Comp Sci AA Comp Sci

2

2.25 Comp Sci‐U.S. Grads

Comp Sci‐U.S. Grads

1.75

1.5

1.25

0.75

1

Petroleum Engineering Starting Salariesg g g

$90,000

$86,220

$70,000

$80,000

,

$55,987$61,516

$50 000

$60,000

$70,000

$43,674$50,400

$30 000

$40,000

$50,000

$20,000

$30,000

$0

$10,000

1997 1999 2003 2005 2010

Source: IPEDS; Tabulations: Kuehn & Salzman, 2010Salary data from BLS & NACESource: IPEDS; Tabulations: Kuehn & Salzman, 2010Salary data from BLS & NACE

Petroleum Engineering GraduatesTotal and U.S. [citizen & perm. resident] grads

700

800

600

400

500

200

300

Total BS US BS

100

200

12Source: IPEDS; Tabulations: Kuehn & Salzman, 2010Salary data from BLS & NACE

What is the Impact of High‐Skill Guestworkers?

• How many?• How many?  – H‐1B….but also L, OPT, OPT STEM‐extension, and others

• Concentrated in IT industry

Guestworker visas issued annually, by program or visa category, 1991–2011

160,000

180,000

H-1B

120,000

140,000

visa

s

L-1

OPT80,000

100,000

umbe

r of v

L 1

L-240,000

60,000

Nu

OPT-STEM extension

0

20,000

99 993 99 99 999 200 2003 200 200 2009 201991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Note: Optional Practical Training (OPT) visa numbers for 2009, 2010, and 2011 are estimated based on the 2008 total reported by the Department of Homeland Security. The initial OPT estimates use the OPT-extension ratio to initial OPT in 2008, and the OPT-STEM extension statistics for 2007–2013 are used to estimate 2009, 2010, and 2011 initial OPT visas.

Source: Department of State (2012) and Department of Homeland Security (2008 and unpublished DHS data)

Annual Guestworker Population:Estimated Total and Certified for Employment in IT, FY2010‐2011

100%

65,858 36,07148,724

3,396

80%

90%

160,75557,712

60%

70%

11,10340%

50%

63,276 34,65719,237

32,48220%

30%

0%

10%

Total NewGuestworkers 

Not‐IT For IT Employment For IT employment

Guestworkers and New Hires in IT

450,000

500,000 Total Annual New IT Hires

350,000

400,000 Guestworkers (low estimate)

k (h h

250,000

300,000Guestworkers (high estimate)

49.85%

150,000

200,000

49.85%

33.23%

50,000

100,000

0

New Hires in IT (2010) and Qualified IT Guestworkers

500,000

400,000

450,00030 + years old

< 30 years old65.7%

300,000

350,000

200,000

250,000

34 05%

50 000

100,000

150,000

34.3%

34.05%

65.95%

0

50,000

New Hires with Bachelor's & above New IT Guestworkers

New IT Hires/GuestworkersAges 30 and below

160,000

180,000

120,000

140,000

80,000

100,000

20 000

40,000

60,000 64%

0

20,000

New Hires with Bachelor's & above New IT Guestworkers

What’s happening pp gin the IT labor market?

IT guestworkers 2.25Change in programmer salaries and in numbers of U.S. STEM-related graduates and IT

g(estimated)

2

998=

1)

Computer science U.S. d

1.75

sala

ries

(19

graduates

1 25

1.5

num

bers

/s

Programmer salaries1

1.25

Chan

ge in

n

0.751998 2000 2002 2004 2006 2008 2010

C

Are there enough IT graduatesAre there enough IT graduates for industry?y

100%

Occupational Field of STEM College Majors One Year After Graduation, 2009

80%

90%

100%

67.8% 76.2%

Job in Field of Major

Job in Any STEM Field

60%

70%

64.5%74.4%

63.7%

30%

40%

50%53.9% 38.7%

10%

20%

22.5%

0%

Computer & Information Sciences Engineering and Eng. Tech

Biology, Physical Sci, Sci Tech, Math & Agriculture Health

Primary reason not working in field of college degree 

60%

y g g g(for those working in job outside their field of major one year after graduation,  2009)

50%

60%

53%

Pay, Promotion, Working Conditions Job Not Available

30%

40%

31%32%26%

Other Reason Job Location

10%

20% 30%

10%

26%

5%12%

0%

Computer &Information Sciences

Engineering & Eng Tech

ConclusionsConclusions

STEM l i i t k t i l ( )• STEM supply is responsive to market signals (wages)• Guestworker flows are large and increasing• Wages stagnate in labor markets with large• Wages stagnate in labor markets with large guestworker in‐flows

• Two labor markets:Two labor markets:– Domestic – increase/decline in response to wages– Guestworker – plentiful at wages too low to significantly 

d lincrease domestic supplyQUESTIONS: online, on phone, by email: HSalzman@Rutgers.edu / lowellbl@georgetown.edu/ dan.p.kuehn@gmail.com

Full report available at the EPI website:

http://bit.ly/guestworkers

http://www.epi.org/publication/bp359‐guestworkers‐high‐skill‐labor‐market‐analysis