The New STEM Labor Market Segmentation: Implications for Meeting Workforce Needs of DoD and the Industrial Base

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The New STEM Labor Market SegmentationImplicatio
ns for Meeting Workforce Needs of DoD and the
Industrial Base
Hal Salzman Rutgers University E.J. Bloustein
School of Planning Public Policy J.J. Heldrich
Center for Workforce Development Presented
at Science Technology Engineering Mathematics
(STEM) workforce needs for the U.S. Department of
Defense (DoD) and the defense industrial
base National Academy of Engineering and
National Research Council Rosslyn,
Virginia August 1, 2011
The research was supported through grants from
the Alfred P. Sloan Foundation (with Lindsay
Lowell) and the National Science Foundation
(Human and Social Dynamics Program, SES-0527584
Social Dimensions of Engineering, Science and
Technology 0431755), with Leonard Lynn.
Research assistance was provided by Daniel Kuehn
(for analysis of the IPEDS data) and Purba Ruda.
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STEM Workers WantedIs there a market failure?

• The DoD SE Problem
• Not enough?
• Overall size of the STEM pool relative to demand?
• Defense/security clearance eligible?
• Interested in defense-related work?
• Why?
• Lack of student interest?
• Lack of student ability?
• Weak market demand?
• The Solution
• A New Sputnik Moment ..or Markets?
• A new STEM workforce segmentation
• limitation or opportunity for DoD?

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Size Trends of the STEM-Qualified Pool
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U.S. trends in student mathematics performance
National Assessment of Educational Progress (NAEP
2008)
Changes since 1973 Changes since 1973 Changes since 1973
Age Group White Black Hispanic
Age 9 ? 25 points ? 34 points ? 32 points
Age 13 ? 16 points ? 34 points ? 29 points
Age 17 ? 4 points ? 17 points ? 16 points
Source NCES The Nation's Report Card Trends in
Academic Progress in Reading and Mathematics
2008 http//nces.ed.gov/nationsreportcard/pubs/mai
n2008/2009479.asp
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U.S. share of all OECD high-performing students
Science, math and reading
Math
Science
Reading
Source These figures are reproduced from
Salzman and Lowell, 2008 Making the Grade
Nature 453, 28-30.
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Transition Rates Yield
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Transition Rates Yield
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Intersection of highest degree in science
engineering and SE occupation 2006
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What is changing?Workforce Segmentation(I)
Who stays in the pipeline
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STEM Retention at three transition pointsby
school performance

• Track individuals from
• (1) High school to college completion
• (2) College to first job
• (3) College to mid-career job
• Track individual transitions x performance
• High school SAT/ACT score, and
• College GPA,
• by performance quintile

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High school graduates and college outcomes
(five years later)
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College graduates and their mid-career job
outcomes (ten years later)
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Notably, STEM graduates far exceed number of STEM
jobs each year

• Most students remain interested in STEM studies
• Percent of High School students studying STEM in
  college generally constant since the1970s.
• lt50 of STEM graduates STEM job
• However, starting in the 1990s many of the top
  performing HS students dropped out of the STEM
  college pipeline
• And, in the mid-1990s fewer of the top STEM
  performers stay in STEM jobs at mid-career

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What is changing?Workforce Segmentation(II)
Who gets a STEM degree
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Education Segmentation (II)
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Education Segmentation (II)
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What is changing?Workforce Segmentation(III
) STEM job career type
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Workforce Segmentation (III)
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Is supply-side strategy needed?Government
intervention or the market?
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Do Labor Markets Work (I)?
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Do Labor Markets Work (II)?
Engineers in the Petroleum IndustryA Case of a
Responsive Market?
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Why the increase in demand?

• Exploration
• New pipelines/Natural Gas
• Demographics aging workforce
• Retirements and company policies
• Recruitment barriers in U.S./AK

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Petroleum Engineering Starting Salaries
Source IPEDS Tabulations Kuehn Salzman,
2010 Salary data from BLS NACE
Source IPEDS Tabulations Kuehn Salzman,
2010 Salary data from BLS NACE
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Petroleum engineering graduates Total graduates
Source IPEDS Tabulations Kuehn Salzman,
2010 Salary data from BLS NACE
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Petroleum engineering graduates Total and U.S.
citizen perm. resident grads
Source IPEDS Tabulations Kuehn Salzman,
2010 Salary data from BLS NACE
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Implications for DoD/Defense Industry
Supply?Opportunities Challenges of the New
STEM Segmentation
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The New STEM Labor Market Segmentation

• (1) Segmentation/degradation narrows market for
  high quality/domestic supply (and also supply)
• (2) Challenges/limitations advantage if not
  counter cyclical to IT industry (40 of STEM
  workforce)
• but creating oversupply could be a larger
  threat than cyclical or lagged tight labor
  markets (cf. life sciences, disequilibria
  analysis)
• (3) Need to better understand demand be
  cautious about interference in markets and
  oversupply

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Questions?
Hal Salzman Rutgers University E.J. Bloustein
School of Planning Public Policy J.J.
Heldrich Center for Workforce Development Hsalzma
n_at_Rutgers.edu
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Immigration yield for Top 10 H-1B employers
FY07-09
H-1B Rank Company H-1Bs FY07-09 Greencard Apps FY07-09 Immigration Yield
5 Tata 2,368 0 0
3 Satyam 3,557 37 1
2 Wipro 7,216 125 2
10 Accenture 1,396 28 2
1 Infosys 9,625 476 5
9 Intel 1,454 163 11
8 IBM 1,550 382 25
6 Deloitte 1,896 588 31
7 Cognizant 1,669 702 42
4 Microsoft 3,318 2,214 67
Source DHS USCIS Initial H-1B I-129 Petitions
FY07-09 PERM Data FY07-09/ Ron Hira RIT, 2011.
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The Global Engineering Race?
Growth of infrastructure between 1997 to 2007 Growth of infrastructure between 1997 to 2007 Growth of infrastructure between 1997 to 2007
Length, Miles United States1 China2
Interstate/Expressway 608 30,519
Navigable Channels (680) 8,510
Rail (4,030) 7,436
(From Lynn and Salzman, 2010) Sources
1. National Transport Statistics, 2009. Bureau of Transport Statistics, U.S. Department of Transportation. 1. National Transport Statistics, 2009. Bureau of Transport Statistics, U.S. Department of Transportation. 1. National Transport Statistics, 2009. Bureau of Transport Statistics, U.S. Department of Transportation.
2. China Statistical Yearbook, 2008. National Bureau of Statistics of China. 2. China Statistical Yearbook, 2008. National Bureau of Statistics of China. 2. China Statistical Yearbook, 2008. National Bureau of Statistics of China.
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The Global Engineering Race?
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Solving the SE ShortageAre Markets the
Problem?
Is government market intervention the response to
the price of a free-market solution?
Source IPEDS Tabulations Kuehn Salzman,
2010 Salary data from BLS NACE
Source IPEDS Tabulations Kuehn Salzman,
2010 Salary data from BLS NACE
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Non-STEM college degree holders in STEM jobs
College/Job Transition Non-STEM majors entering
STEM jobs 1977/80 2.5 1997/00 7 Of
total STEM workforce Non-STEM majors in STEM
jobs 1987/90 16 1993/96 35 1997/00 40
significant share of STEM growth from non-STEM
immigrant workers
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