There they go again. Claiming they can't find enough skilled Americans, the high-tech industry has browbeaten Congress into allowing them to bring in another 20,000 foreign workers. The little-noticed legislation, inserted into an appropriations bill required for the government to continue normal operations, expands the number of foreign workers eligible for H-1b visas from 65,000 to 85,000 in 2005.
And the Davos crowd—Bill Gates and GE's Jeffrey Immelt in particular—have beaten the drums for visa "reform."
They and their shills point to dwindling enrollments of U.S. citizens in science and engineering programs as "evidence" for a high-tech worker shortage. (See, for example, the Hudson Institute's recent report Can Foreign Talent Fill Gaps in the U.S. Labor Force, funded by Compete America, a high-tech trade association.)
But, contrary to what the high-tech industry claims, American enrollments in science and engineering (S&E) programs have risen and fallen in almost exact correlation with the job market in those fields:
Between 1983 and 1993: [Table 1]
The job market cooled off in the 1990s. Potential S&E students were seeing the end of the Cold War, corporate restructuring, and layoffs.
But the response of U.S. and foreign students was markedly different:
Between 1993 and 2001:
The foreign born share of graduate S&E students has risen inexorably through hiring booms and busts.
But native enrollment in graduate S&E programs peaked at 330,148 in 1993. Not coincidentally, 1993 was also the year in which S&E unemployment spiked at 3.5 percent. And, although unemployment fell during the 1990s boom, salaries in S&E occupations lagged those of other professional fields.
The reason Americans hesitate to study science and engineering is simple: pursuing an advanced degree in these fields is a bad investment.
For PhDs for example, the salary premium is not high enough to compensate for the five or more years of foregoing an industry salary while pursuing graduate study.
For U.S. citizens a doctorate in science or engineering causes a net lifetime LOSS in earnings.
For foreigners, of course, an American S&E degree remains attractive—relative to their options at home.
Allowing the importation of cheaper foreign workers is simply a form of corporate welfare for the high-tech industry—and it's a solution that, by flooding the S&E market and discouraging potential native-born students, makes the problem worse.
Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.
