Report finds little evidence to support expansion of guest worker programs

Apr 25, 2013

A new report from the Economic Policy Institute (EPI) says there is little evidence to support the expansion of high-skilled guest worker programs, like those proposed in the immigration bill being debated in the Senate.

The study shows there are more than enough U.S. graduates in the STEM fields – Science, Technology, Engineering, and Math - to meet industry demand, but only one in two are actually getting hired.

This is a conclusion that flies in the face of many industry claims. The STEM sector has long served as a case study for the immigration debate, with many companies arguing that guest workers are the solution for a shortage of domestic STEM graduates.

But co-author of the study Hal Salzman says the numbers paint a different picture. Here are some of the reports key findings.

  • Guest workers may be filling as many as half of all new IT jobs each year
  • IT workers earn the same today as they did, generally, 14 years ago
  • Currently, only one of every two STEM college graduates is hired into a STEM job each year
  • Policies that expand the supply of guest workers will discourage U.S. students from going into STEM, and into IT in particular

Stagnant wages in the sector coupled with a steady stream of guest workers are the reasons behind the decrease in the number of US graduates being hired in STEM fields, Salzman says.

STEM students responsive to market demands

According to the study, students in these fields have traditionally been very responsive to the demands of the labor market.

“When wages were growing, you saw a healthy increase in the number of students going into these fields, and when wages were falling, they didn’t go into the field,” says Ross Eisenbrey, Vice President of EPI.

But, with wages able to remain static in the sector because of the abundance of foreign employees willing to work for a lower pay-rate, U.S. grads are being displaced, and taking up jobs in unrelated sectors as a result.

“It’s basic econ 101. If you bring in a lot, flood the labor market, it depresses wages, lowers job quality,” Salzman says.

“We’ve certainly seen that in interviews we’ve done over the years where people think what used to be good jobs, particularly in IT, are no longer high quality jobs.”

Displaced graduates head to other sectors

Salzman says guest workers account for up to two thirds of under-30 hires in STEM jobs. And although STEM graduates are traditionally associated with low unemployment rates, the study cautions that this does not take underemployment into account – where graduates take jobs in fields that do not require their level of education.

Salzman says there’s no problem with foreign employees contributing to the nation’s workforce, but a lack of US graduates shouldn’t be used as the rationale by companies wanting to bring in lower-paid workers on temporary visas.