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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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September 3, 2013

The Myth of the STEM Shortage, In Detail

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Posted by Derek

I see that the IEEE Spectrum has also come out saying that there is no shortage of scientists and engineers. I agree with him, as longtime readers will know. The market for people who do these things does not look like a market facing any kind of shortage:

What’s perhaps most perplexing about the claim of a STEM worker shortage is that many studies have directly contradicted it, including reports from Duke University, the Rochester Institute of Technology, the Alfred P. Sloan Foundation, and the Rand Corp. A 2004 Rand study, for example, stated that there was no evidence “that such shortages have existed at least since 1990, nor that they are on the horizon.”

That report argued that the best indicator of a shortfall would be a widespread rise in salaries throughout the STEM community. But the price of labor has not risen, as you would expect it to do if STEM workers were scarce. In computing and IT, wages have generally been stagnant for the past decade, according to the EPI and other analyses. And over the past 30 years, according to the Georgetown report, engineers’ and engineering technicians’ wages have grown the least of all STEM wages and also more slowly than those in non-STEM fields; while STEM workers as a group have seen wages rise 33 percent and non-STEM workers’ wages rose by 23 percent, engineering salaries grew by just 18 percent. The situation is even more grim for those who get a Ph.D. in science, math, or engineering. The Georgetown study states it succinctly: “At the highest levels of educational attainment, STEM wages are not competitive.”

Given all of the above, it is difficult to make a case that there has been, is, or will soon be a STEM labor shortage. . .

The article's author, Robert Charette, has done a lot of digging through the archives to trace the history of this whole idea. There's an entertaining sidebar with looming-shortage-of-science-and-engineering quotes going back to the 1930s. No era seems immune. (Thanks to another alert reader, I can add, though, that in 1972 an article in Science actually forecast an overabundance of PhD holders on the horizon. No one seems to have believed it then). And he also has what I think is a clear view of why this alarm keeps on being sounded:

Clearly, powerful forces must be at work to perpetuate the cycle. One is obvious: the bottom line. Companies would rather not pay STEM professionals high salaries with lavish benefits, offer them training on the job, or guarantee them decades of stable employment. So having an oversupply of workers, whether domestically educated or imported, is to their benefit. It gives employers a larger pool from which they can pick the “best and the brightest,” and it helps keep wages in check. No less an authority than Alan Greenspan, former chairman of the Federal Reserve, said as much when in 2007 he advocated boosting the number of skilled immigrants entering the United States so as to “suppress” the wages of their U.S. counterparts, which he considered too high.

The idea of a shortage also benefits the funding of all levels of education, so what's not to like?

Comments (37) + TrackBacks (0) | Category: Business and Markets


1. The Iron Chemist on September 3, 2013 10:49 AM writes...

Our wages are too high? Might I recommend that we start allowing skilled foreign-born CEO candidates to immigrate more easily?

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2. Anon on September 3, 2013 10:54 AM writes...

Glad I'm not a landscaper or such, the US gov floods those markets with cheap labor, both legal and illegal. I wonder how much a cashier would make if not for Immigration? 30$ an hour? More? The US has a long history of keeping wages low through immigration. Sorta the American way.

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3. Puff the Mutant Dragon on September 3, 2013 11:24 AM writes...

I think Greenspan's wages were too high

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4. Anon on September 3, 2013 11:33 AM writes...

What's not to like? The difficulty in finding a job after you obtain your PhD.

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5. johnnyboy on September 3, 2013 11:53 AM writes...

"Clearly, powerful forces must be at work to perpetuate the cycle. One is obvious: the bottom line. Companies would rather not pay STEM professionals high salaries..."

Well, companies are not forcing students into PhDs, are they. I think a more powerful force would be academic professors and advisors who urge BSc and MS students to continue on to PhDs, so as to insure their own supply of slave labor.

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6. David on September 3, 2013 12:07 PM writes...

I agree with johnnyboy to a certain degree. I certainly felt that was the case in my situation. Every student in my class either went to graduate school or to medical school. But I think the industry has some blame to share. When I looked for jobs back in to 2004/2005, every job seemed to indicate that for a good salary and a chance to move up the ladder, you needed a higher degree. I think if industry did a better job of indicating to students where the jobs will be and what skills they can gain in school, students will adjust. However, that would require keeping their promise on wages and showing some loyalty if they desire loyalty in return.

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7. Bell4 on September 3, 2013 12:47 PM writes...

@5 -
Not the point at all, is it? It's the *government* that has been regularly issuing bulletins about a yawning gap in STEM. These 'objective' reports encourage naive students to pursue advanced degrees for jobs that aren't there, or that have no security and pitiful renumeration. Whether the companies or the academics who benefit from these fabrications are more to blame is hard to know (probably a conspiracy of convenience), but blaming the students is disingenuous.

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8. johnnyboy on September 3, 2013 1:14 PM writes...

@7: Who is blaming the students ? Certainly not me, if you read my comment with both eyes.

When I went to grad school, my main sources of information concerning post-graduation employment options were academic supervisors, for better or worse (mostly worse). Don't know about you, but as a student I certainly didn't spend a lot of time looking at government-issues bulletins. And if I had, I certainly wouldn't have given much weight to them - even a sleep-deprived grad student knows that information from the government will be vague, piss-poor and based on numbers from years back.

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9. paperclip on September 3, 2013 1:24 PM writes...

Much appreciation for Robert Charette -- he said what was on many scientists' minds.

I think the politicians themselves also benefit from the "shortage of STEM" myth. They can tell their constituents that, under their watch, the job situation in this country is actually peachy keen. The problem is that the constituents pursued the wrong careers. Let them study science.

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10. Electrochemist on September 3, 2013 1:32 PM writes...

Another point of intervention would be to decrease the number of state universities that offer graduate degrees in Chemistry (for example). More often than not, there is only one public university in each state with a medical school. Why should there be 5 or more universities that offer graduate degrees in Chemistry in the same states?

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11. anon on September 3, 2013 1:52 PM writes...

why does everyone hate on the prof's who think grad school is a good idea? most of the profs I know love where they are, so why wouldnt they, honestly, encourage other people whom they consider bright to follow in their path? its not all about "slave labor" cynicism...

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12. captaingraphene on September 3, 2013 2:21 PM writes...


Why is it 'hate' if the criticisms are legitimate? It's a matter of properly weighing costs and benefits of the action of pursuing a PhD. And it doesn't look too bright. The smartest ones do their own research and realize they have a better chance at winning the jackpot in the local casino than winning the 'prize' of tenure, postdoc. Here lies the danger of it all: that the brightest ones opt not to play the game, and try their luck elsewhere.

And of course they love where they are, as they are firmly established in the academic community.

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13. NMH on September 3, 2013 3:27 PM writes...

Limiting PhD programs in the US would probably be useless. The niche left somewhat empty by non-applying americans will be rapidly filled by PhD's from China, a country that is setting up a university system to mimic that of the US. According to a recent letter to the Ed in Science, there are far more PhD's being produced in China than positions that they can occupy.

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14. Richard A. on September 3, 2013 3:38 PM writes...

During the 70-71 recession, when Nixon was President, it was a popular fad in the MSM to portray engineers and scientists as unemployed. The MSM would imply that mass unemployment existed among E & S because between 50,000 and 65,000 are unemployed. What they conveniently left out was that this meant that between 2% and 3% of the E & S were unemployed.

The unemployment rate for engineers was almost twice as high under the Obama recession as under Nixon during the 70-71 recession as measured by the Household survey. Yet the MSM now claims shortage.

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15. captaingraphene on September 3, 2013 3:45 PM writes...


True, and it's not sustainable in the long run.

One may award advanced credentials to every other man and women on the planet, but ultimately, the question is whether these people will be thinking up new theories (creating new 'land' for science to explore) and whether they will be innovating something novel and radical, something that creates new markets and jobs for others to fill.

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16. mad on September 3, 2013 4:08 PM writes...

The real problem is perception.

If you have a MS and read a paper a week they are amazed at your initiative and want to hire you. $70K

If you have a PHD and read only 1 paper a week you are a slacker. No Hire

But the PhD cant apply to the MS job becuse its a step down, while the exact same person with a lower degree would be a real catch!

Its a dregree twist on the age old story really.
Under promise and over deliver / Big fish small pond ...whatever you want to call it.

So STEM means maybe:
(E)ducation at a

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17. Anonymous on September 3, 2013 4:14 PM writes...

What's the point of training everyone up to do cutting edge research and innovation, when there is no longer any risk appetite and capital in either industry or academia to fund such cutting edge research and innovation?

I wish I had done my PhD in "BS powerpoint slides and buzz words with no substance", that's where the real demand and skill shortage is. Oh wait, it's called an MBA.

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18. Anonymous on September 3, 2013 4:29 PM writes...

Why is it that all the really thick people end up working in Recruitment/HR and get overpaid for their "skills" in being able to identify who the bright people are?

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19. Fred on September 3, 2013 5:24 PM writes...

The media have (largely) ignored the larding of recent immigration "reform" bills with H1B visa increases to "benefit" shady companies like Microsoft who would rather hire marginal foreign techies cheap than competent domestic techies at a living wage. I' m ok with children of illegal immigrants getting a better shot at citizenship, but I'm NOT ok with blatant wage suppression of domestic STEM talent by talentless business types.

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20. James on September 3, 2013 6:45 PM writes...

Protecting capital is sacred in the US. The thinking goes a bit like this: Capital investments in plant and equipment and intellectual property are the lifeblood of the economy and the return to the stockholder dwarfs all else. So in spite of a history of talent in the US, both native and immigrant, your US Congress has deemed it vital that the jobs that demanded engineers and scientists must go overseas to where labor (and very little else) is cheap. This ignores the investment that both the individual has made in terms of cash outlay and earning power as well as the investment that society has made in terms of educating all thosse little brats in STEM areas. It used to be popular for US-based corporations to locate near universities as much to tap into their grads as to support society. No more. Wall Street could give a rip about the cost that exessively greedy corps transfer to society. Blame the US Congress and their Chicago School of Economics slavemasters.

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21. Anon on September 3, 2013 8:22 PM writes...

From the front page of CNN

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22. Anonymous on September 3, 2013 9:14 PM writes...

I lived through the 1970's collapse in STEM jobs. Most of my friends' parents were aerospace engineers and electrical engineers. Their stories became life tragedies as so many were laid off or forced into early retirement. Some bounced back many never worked in the STEM professions again. I had an uncle who worked as a physicist and was laid off in that era. He ended up tuning pianos for the balance of his career. It got so bad a made-for-TV movie "A Great American Tragedy" told the story of the sad plight of an aerospace engineer manager who lost his job, career and nearly everything he had work for in his career. It was broadcast in 1973. During a summer job at Pepsi in 1972, I worked on the bottling line next to a telemetry expert who was a player on several major defense system contracts in the Cold War. There he was in his late 40s working in his soiled, tattered white-collar shirt pulling trash out of carton boxes on the production line. Look at the last page of November 1971 Life Magazine if you want to get a feel how employment opportunities were for new PhD chemists in that era.

Fortunately, I would graduate with a PhD ten years later, by which time far fewer students were going into chemistry. I saw things improve a lot in the 1980s because chemistry was out of fashion for US students. That positive trend was washed away when vast new foreign pools of scientific labor and trainees for profs became available at the end of the Cold War. US born STEM workers are now competing with a global labor pool of STEM talent. Unfortunately we have a tax subsidized system in place that maximizes production of STEM workers no matter what the real world demand is for those workers. This devalues whatever specialness was associated with a STEM degree. The system is of value only to the over producers and users of cheapened STEM talent. No one with any economic gain in the current system cares about the economic wellbeing of those hyper trained workers in the end. The system is all about cheap labor and damaging bright, talented young peoples' futures for what?

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23. lennyjoels on September 3, 2013 10:35 PM writes...

I'm the owner of a small business in a small town. I hired a PhD chemist last year and had to go through the H1B visa process for him because no US chemist wanted to work in a small town (six figure salary, low cost of living). Hiring another chemist this year. Only 1 US citizen was interested after hearing that it was in a small town. I don't think that the STEM shortage is a myth.

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24. Lu on September 3, 2013 11:00 PM writes...

23. lennyjoels on September 3, 2013 10:35 PM writes.... Hiring another chemist this year. Only 1 US citizen was interested after hearing that it was in a small town. I don't think that the STEM shortage is a myth.

Where do I send resumes?

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25. gippgig on September 4, 2013 12:26 AM writes...

It seems like the terms "scientist", "STEM worker", & "PhD" are being used interchangeably. They are definitely NOT the same thing. I'd say there are too few scientists, too many workers (not just in STEM), & too many PhDs.

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26. RD on September 4, 2013 8:11 AM writes...

Lennyjoels, I have no idea where you're located but one of the biggest problems I saw in nj in the midst of Pharmageddon is that many people are too stunned to know what to do or where to live. They have families, maybe a spouse who has a job (at least temporarily) and houses and kids in school. Maybe they're in denial. A lot of people don't want to move. It's very risky no matter what they do so they stay put. I moved back to my hometown, bought a house cash and am working for much less than I was in nj. My cost of living is about the same, ironically. There are jobs in the heartland. Now, would I take a job in east Bumscrew, Indiana? Not if I didn't have some kind of personal connection there. If Pharmageddon taught me anything it was that you really need a support system when the corporate MBA gang decides to bug out and leave you stranded.
There are a ton of people looking for jobs. If you didn't find any, you must be located in a swamp in some really remote place in the country.

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27. BrentN on September 4, 2013 8:52 AM writes...

@16 - your salary level for MS is on the high side.

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28. Stephanie on September 4, 2013 8:59 AM writes...

@lennyjoels, JOC, what type of chemist are you looking for? Even if it falls under the umbrella of chemistry, PhDs aren't interchangeable...

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29. Chemjobber on September 4, 2013 9:03 AM writes...

@23: Not to put to fine a point on it, but I'm very skeptical. I moved to a small town to take my first position as a PhD chemist, as did 5-10 other colleagues.

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30. The Aqueous Layer on September 4, 2013 9:17 AM writes...

@16 - your salary level for MS is on the high side.

Depends on the industry and level of experience.

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31. Joe Tuna on September 4, 2013 11:13 AM writes...

@26, 28, 29,

I won't call it a myth. But speaking from my experience, finding a very good chemist/pharmaceutical scientist at BS and MS is a challenge when we try to fill a few positions last and this year. I am in a similar boat as lennyjoels except my company is in a far suburb of a big city. Got lots of PhDs applying to these positions though (both US and foreign).

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32. just some guy on September 4, 2013 11:19 AM writes...


So you can't find candidates at BS/MS.
Have you raised the salary level?
Still can't find candidates,
then the skill you're looking for doesn't exist at the level.
Hire the PhD at the raised salary point.

The skill doesn't exist at BS/MS level, unless you find the purple squirrel that fell into a particular job directly out of college.

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33. a. nonymaus on September 4, 2013 12:12 PM writes...

Looks like it's time for us scientists who don't own at least 1/(number of employees) of voting stock in our firm to acknowledge that we're part of the working class. This means it's time to act like the working class and unionize. Do you hear politicians talking about a plumber or welder shortage? What about a lawyer shortage (bar associations are effectively unions in terms of effect on labor supply)?

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34. srp on September 5, 2013 12:26 AM writes...

The U.S. government has a significant interest of its own in suppressing the cost of research. Between the biomedical and defense areas alone, the government is the ultimate buyer of much STEM output. Research by Austen Goolsbee, Obama's former chief economic advisor, claims that increases in federal research spending largely resulted in higher salaries for researchers rather than more research output because the labor supply of researchers is highly inelastic in the short to medium run.

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35. Biotech Prof on September 5, 2013 6:54 AM writes...

I'm with @33 and want to ask with respect to salaries and job stability- are you considering that no one who actually works has had a raise or stable job in this country since Reagan? It isn't just us. I have trained many PhDs and MSc students and all work in the biotech industry quite happily.Since I worked there myself I give them a realistic view of how to negotiate, stay current and not get trapped. My colleagues are a bit snobbish that I don't train my students to be academics, but there have never been a lot of jobs in that area.

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36. Alex on September 5, 2013 8:45 PM writes...

"slave labor"
"would rather hire marginal foreign techies than competent domestic techies"
"foreign pools of scientific labor"

I understand the points you all are trying to make but do you really need to dehumanize and diminish us scientists who didn't have the luxury to be born in the United States? Do you really believe that "home-grown" scientists are always better than foreign scientists? Or that only Americans are capable of creativity and talent? That's what your statements insinuate at least.

As far as I'm concerned, I wanted to be a scientist since I was 13 and I worked and studied as hard as I could and made sacrifices to achieve that goal. I had research interests and I'm following them and the path led me to the U.S. I'm sorry if I took someone else's place, but I never saw science as bound by country limits. I don't see much compromise in terms of creativity or talent. It's a choice between those who want to be paid decent salaries (which I completely agree with and think that scientists should get paid more and maybe there need to be efforts to maintain a high number of Americans in science) and those who are willing to accept the low salaries in exchange for being able to follow their dreams. The quality is about the same.

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37. Joseph Hertzlinger on September 8, 2013 10:52 PM writes...

It sounds like there's an employer shortage.

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