critical eye

It doesn’t add up

A science writer questions the conventional wisdom of US-born STEM workers
May 1, 2013

Homegrown President Obama, seen here visiting at technical college in North Carolina, supports bringing more foreign STEM workers to the US, despite high unemployment among US workers. (Saul Loeb / AFP / Getty Images)

In late February, Christine Miller and Sona Shah went to the Capitol Hill office of Miller’s senator, Barbara Mikulski, a Maryland Democrat, to talk about immigration reform and the job market for science, technology, engineering, and mathematics (STEM) workers. Miller, an American-born MIT grad with a PhD in biochemistry, had 20 years of research experience when Johns Hopkins University laid her off in 2009 because of funding cuts. Shah, an Indian-born US citizen with degrees in physics and engineering, had been laid off earlier by a computer company that was simultaneously hiring foreign workers on temporary visas. Proposals to increase admission of foreign stem workers to the US, Miller and Shah told Erin Neill, a member of Mikulski’s staff, would worsen the already glutted stem labor market.

According to Miller, Neill told them this is not the argument “she normally encounters on this issue.” The conventional wisdom is that tech companies and universities can’t find enough homegrown scientists to hire, so they need to import them from China and India. Neill suggested to Miller and Shah that “we would have more impact if we represented a large, organized group.”

Miller and Shah are, in fact, part of a large group. Figures from the National Institutes of Health, the National Academies, the National Science Foundation, and other sources indicate that hundreds of thousands of STEM workers in the US are unemployed or underemployed. But they are not organized, and their story is being largely ignored in the debate over immigration reform.

The two main STEM-related proposals currently part of that debate in Congress would increase the number of temporary high-skill worker visas (also called guestworker visas), and give green cards to every foreign graduate of an American college with a master’s or PhD in a STEM field. Media coverage of these proposals has generally hewed, uncritically, to the unfounded notion that America isn’t producing enough native talent in the science and engineering fields to satisfy the demands of businesses and universities–and that foreign-born workers tend to be more entrepreneurial and innovative than their American-born counterparts. Allowing more stem immigrants, the story goes, is key to adding jobs to the beleaguered US economy.

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It is a narrative that has been skillfully packaged and promoted by well-funded advocacy groups as essential to the national interest, but in reality it reflects the economic interests of tech companies and universities.

High-tech titans like Bill Gates, Steve Case, and Mark Zuckerberg are repeatedly quoted proclaiming a dearth of talent that imperils the nation’s future. Politicians, advocates, and articles and op-eds published by media outlets–including The New York Times, Forbes, CNN, Slate, and others–invoke such foreign-born entrepreneurs as Google’s Sergey Brin or Yahoo’s Jerry Yang, as if arrival from abroad (Brin and Yang came to the US as children) explains the success of the companies they founded . . . with partners who are US natives. Journalists endorse studies that trumpet the job-creating skills of these entrepreneurs from abroad, while ignoring the weaknesses that other scholars find in the research.

Meanwhile, The National Science Board’s biennial book, Science and Engineering Indicators, consistently finds that the US produces several times the number of STEM graduates than can get jobs in their fields. Recent reports from the National Institutes of Health, the National Academies, and the American Chemical Society warn that overproduction of STEM PhDs is damaging America’s ability to recruit native-born talent, and advise universities to limit the number of doctorates they produce, especially in the severely glutted life sciences. In June 2012, for instance, the American Chemical Society’s annual survey found record unemployment among its members, with only 38 percent of new PhDs, 50 percent of new master’s graduates, and 33 percent of new bachelor’s graduates in fulltime jobs. Overall, STEM unemployment in the US is more than twice its pre-recession level, according to congressional testimony by Ron Hira, a science-labor-force expert at the Rochester Institute of Technology.

And yet, a bill introduced in Congress last year that would have heeded the NIH recommendation by limiting visas for biomedical scientists was attacked in a Forbes article that suggested it could delay progress on the search for a cure for cancer by keeping out able researchers.

* * *

Foreign-born scientists and engineers have, of course, contributed significantly to American society as innovators and entrepreneurs–and the nation’s immigration policy certainly needs repair. But many leading STEM-labor-force experts agree that the great majority of stem workers entering the country contribute less to innovative breakthroughs or job growth for Americans than to the bottom lines of the companies and universities that hire them.

Temporary visas allow employers to pay skilled workers below-market wages, and these visas are valid only for specific jobs. Workers are unable to take another job, making them akin to indentured servants. Universities also use temporary visas to recruit international graduate students and postdoctoral scientists, mainly from China, to do the gruntwork for professors’ grants. “When the companies say they can’t hire anyone, they mean that they can’t hire anyone at the wage they want to pay,” said Jennifer Hunt, a Rutgers University labor economist, at last year’s Mortimer Caplin Conference on the World Economy.

Research by Hira, Norman Matloff of the University of California-Davis, Richard Freeman of Harvard, and numerous others has shown how temporary visas have allowed employers to flood STEM labor markets and hold down the cost of tech workers and scientists doing grant-supported university research. Wages in the IT industry rose rapidly throughout the 1990s, but have been essentially flat or declining in the past decade, which coincides with the rising number of guestworkers on temporary visas.

In his new book, Why Good People Can’t Get Jobs, Peter Cappelli, a human-resources specialist at the Wharton School, concludes that companies’ reported hiring difficulties don’t arise from a shortage of qualified workers, but from rigid recruitment practices that use narrow categories and definitions and don’t take advantage of the applicants’ full range of abilities. Companies so routinely evade protections in the visa system designed to prevent displacement of American citizens that immigration lawyers have produced videos about how it is done. For instance, tech companies that import temporary workers, mainly recent graduates from India, commonly discard more expensive, experienced employees in their late 30s or early 40s, often forcing them, as Ron Hira and other labor-force researchers note, to train their replacements as they exit. Age discrimination, Hira says, is “an open secret” in the tech world.

The temporary-visa system also facilitates the offshoring of STEM work, particularly in the IT field, to low-wage countries. Outsourcing companies use the temporary visas to bring workers to the US to learn the jobs that the client company is planning to move to temp workers’ home country. The 10 firms with the largest number of H-1B visas, the most common visa for high-skill workers, are all in the business of shipping work overseas, and former Indian commerce minister Kamil Nath famously labeled the H-1B “the outsourcing visa.”

These practices have helped to reduce incomes and career prospects in STEM fields drastically enough to produce what UC Davis’s Norman Matloff calls “an internal brain drain” of talented Americans to other, more promising career opportunities such as Wall Street, healthcare, or patent law.

The proposal before Congress to automatically grant green cards to all STEM students with graduate degrees–regardless of field, origin, or quality–would exacerbate the problem of already overcrowded markets, according to new research by Hal Salzman of Rutgers University, Daniel Keuhn of American University, and B. Lindsay Lowell of Georgetown University. It also would benefit universities facing tough financial times by dramatically increasing the allure of American graduate schools, and thus the income potential to universities. And, as Republican Senator Chuck Grassley said at a 2011 hearing, it would “further erode the opportunities of American students. Universities would in essence become visa mills.”

Academic departments generally determine how many graduate students they admit, or postdocs they hire, based on the teaching and research workforce they need, not on the career opportunities awaiting young scientists. Unlike companies, universities have access to unlimited temporary-worker visas. This allows universities to hire skilled lab workers and pay them very low, “trainee” wages. Postdocs are an especially good deal for professors running labs because they don’t require tuition, which must be paid out of the professors’ grants, notes Paula Stephan, a labor economist at Georgia State University, in her book How Economics Shapes Science.

* * *

Immigrants constitute the nation’s “only shot at getting a growing economy,” because they “start more jobs than natives,” declared New York Times columnist David Brooks on Meet the Press in February. “Every additional 100 foreign-born workers in science and technology fields is associated with 262 additional jobs for US natives,” he had written in the Times, adding that “a quarter of new high-tech companies with more than $1 million in sales were also founded by the foreign-born.”

These claims, cited by Brooks and many others, arise from a body of research that has been the subject of scholarly dispute–though you’d never know it from the media coverage of this issue. The overwhelming majority of coverage presents the conclusions reached in studies like the one conducted by Duke University’s Vivek Wadhwa, who publishes widely in popular media and speaks frequently on immigration issues. About a quarter of the 2,054 engineering and technology companies that responded to Wadhwa’s telephone survey said they had a “key founder”–defined as a chief technology officer or a CEO–who was foreign-born. Extrapolating from that figure, the study credits immigrant-founded companies with employing 450,000 people nationally in 2005.

But a nationwide survey by political scientist David Hart and economist Zoltan Acs of George Mason University reached a different conclusion. In a 2011 piece in Economic Development Quarterly, Hart and Acs note that between 40 and 75 percent of new jobs are created by no more than 10 percent of new businesses–the so-called high-impact firms that have rapidly expanding sales and employment. In their survey of high-impact technology firms, only 16 percent had at least one foreign-born founder, and immigrants constituted about 13 percent of total founders–a figure close to the immigrant share of the general population. But the more fundamental problem with Wadhwa’s study, Hart and Acs suggest, is that it does not report the total number of founders at a given company, making conclusions about immigrants’ overall contribution impossible to quantify.

Evaluating the issues of statistics and sample selection that divide the academic researchers is beyond the purview of most general media, but informing readers that reputable researchers reached different conclusions is not. Though real, the immigrant role in high-tech entrepreneurship could be considerably less dramatic than many writers claim. Research on Silicon Valley entrepreneurs in 1999 by AnnaLee Saxenian, for example, found that 36 percent of high-tech companies owned by Chinese immigrants were doing nothing more groundbreaking than putting together computers for sale from components.

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As Erin Neill, of Senator Mikulski’s staff, pointed out, no one in the immigration debate speaks effectively for US-born STEM workers. The IT world’s libertarian ethos, the relative poverty among young scientists and their unemployed and underemployed peers, and a fear of antagonizing present or potential employers all hamper efforts to organize these workers. National scientific associations and advocacy groups sponsored by industry and universities, meanwhile, represent the interests of those who benefit from the system–tenured faculty, university administrators, and company executives, including those at companies whose donations support scholarly conferences and other association activities. These organizations and their lobbyists frame their policy arguments with feel-good abstractions about the inherent value of science and research and innovation, suggesting they are a panacea for America’s economic ills.

Which brings us to the story of Xianmin Shane Zhang, a software engineer in Minnesota. According to his LinkedIn page, Zhang earned his BS in engineering in his native China, one MS in physics at Southern Illinois University, and another in computer science at the University of Houston. His profile next lists a series of IT jobs at US companies. In 2005, 43-year-old Zhang was one of a group of workers over 40 who sued their former employer, Best Buy, for age discrimination, when the company laid them off after outsourcing their jobs. The suit ended in an undisclosed settlement.

After being laid off by Best Buy, Zhang eventually fulfilled the rosy forecast of those advocating increased STEM-worker immigration by becoming an entrepreneur, though hardly following the innovation and jobs-for-Americans script. His Z&Z Information Services in St. Paul helps US companies outsource their IT and programming needs to China. “Giving green cards to foreign students can lead to offshoring as well,” notes Norman Matloff, who uncovered this tale. That’s because young scientists and engineers from abroad get older, and wind up facing the same age discrimination and glutted market as their native-born colleagues. Why isn’t that reported, too?

Beryl Lieff Benderly is a fellow at the American Association for the Advancement of Science.