The Tech Shortage Myth, Again
Growth is slow, unemployment is still high, and there are recurrent fears of a double-dip recession. There are many reasons for that, perhaps chief among them the deficit mania which is deterring government spending, but one of them popped up on yesterday's This Week with George Stephanopoulos (transcript, here). Google Executive Chairman Eric Schmidt has been a huge Obama donor and informal Obama economic adviser, and now sits on the President's Council of Advisors on Science and Technology And he actually said this yesterday
Our industry is growing ra-rapidly. We are unable to hire the technically trained people we need. There are shortages not just in my industry, but in many technical industries. There are shortages of sophisticated manufacturing engineers in America because the sum of our educational system is not producing enough.
If I go back to the question of why is this recession different, there's at least two good reasons. One is the -ever-present nature of globalization is now much stronger, so it makes everybody more competitive. And also because of advances in automation are making it less needy to hire more people.
In our political system of today, this stuff is actually taken seriously- so seriously, in fact, that no one bothers to ask such Wise men what they mean when referring to "making everybody more competitive" or what the implications of that are. Nor is there much enthusiasm for questioning the claims that American workers are just not smart enough, though Dean Baker points to the headline "skilled workmen in Demand Despite Vast Unemployment."
That headline appeared in The Washington Post. In 1935. The sub-headline read "technological progress has been so rapid during the depression that welders and other experts, idle since 1929, are outmoded." Even back then, American workers were being blamed for awful economic times. And today, we still have the Establishment moaning about jobless and then blithely maintaining that their fellow Americans are responsible. There are shortages "in many technical industries," Schmidt says, just as others are claiming. But it's just not so, as this graph from economicpopulist.org (from BLS statistics) indicates as of 2010:
Economicpopulist.org helpfully broke those numbers down (emphasis theirs) by profession for the fourth quarter of 2010, the latest period for which such statistics were available:
Surely, few if any Republicans are any more concerned than the President about outsourcing, offshoring, and bringing to the U.S.A. foreigners to perform jobs Americans are qualified to perform. That is not only a problem short-term, but a larger one long-term.
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“Our industry is growing rapidly. We are unable to hire the technically trained people we need,” Schmidt said. “There are shortages not just in my industry, but in many technical industries … because the sum of our educational system is not producing enough.”
The problem isn't a lack of engineers; it's a lack of companies willing to hire engineers without job experience. Lack of experience is the biggest job barrier young people have today! You need the experience to be highly trained and highly sort after; education teaches you how to learn and gives you the fundamentals, but you cannot get really good without having someone give you the opportunity to continue to learn while paying you a salary. What companies are really asking for is a pool of candidates that have an engineering degree plus many years of employment experience in the area they need help with. And here lies the problem, employers can hire a person out of college, give them a job for a couple years, then that employee leaves and take his/her expertise to another company, so it becomes a cost that in this economy companies aren’t willing to spend enough on – it’s easier to look and look for that person with 5 years of experience, and then complain to the media when they cannot find them. My advice – our government needs to incentivize companies everywhere (they won’t do it on their own) to make the investment in people that don't have experience, but are passionate and smart, and in a few years you will have a big pool of American candidates to choose from, and you won’t have to resort to H-1Bs.
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