The Silicon Valley STEM Hoax

Excerpt from:

Immigration Handbook for the New Republican Majority

January 2015

A Memo For Republican Members From Sen. Jeff Sessions (Link to Entire Document at End of Article)

The false claim that has gained the most acceptance is the notion that there is a shortage of qualified Americans with degrees in science, technology, engineering, and mathematics (STEM). Therefore, the fallacious reasoning goes, the United States must expand the already-substantial annual influx of foreign guest workers to fill these jobs. But the evidence proves the opposite: not only is there no shortage of qualified Americans ready, able, and eager to fill these jobs, there is a huge surplus of Americans trained in these fields who are unable to find employment.

It is understandable why large technology firms push the discredited STEM myth—a loose labor market for IT and STEM jobs keeps pay low, allows for substantial turnover without having to retain older employees with increased compensation, and provides a PR basis for the industry’s immigration lobbying campaign. What is not understandable is why they have gotten away with it for so long.

The facts are stark, and overwhelming.

Recent data from the Census Bureau confirmed that a stunning 3 in 4 Americans with a STEM degree do not hold a job in a STEM field—that’s a pool of more than 11 million Americans with STEM qualifications who lack STEM employment. This is a constantly growing number: Rutgers Professor Hal Salzman, a top national expert on STEM labor markets, estimates that “U.S. colleges produce twice the number of STEM graduates annually as find jobs in those fields.”22 Many of the students, no doubt choosing to pursue STEM degrees in part due to bogus claims of STEM labor shortages, now find themselves with massive amounts of debt and no prospects of a good-paying job. Salzman goes on to report this shocking fact: “guest workers currently make up two-thirds of all new IT hires”— so even as half of Americans with STEM degrees can’t find STEM work, 2 in 3 new jobs in the information technology field are going to labor imported from abroad.

Salzman continues: “but employers are demanding further increases. If such lobbying efforts succeed, firms will have enough guest workers for at least 100 percent of their new hiring and can continue to legally substitute these younger workers for current employees, holding down wages for both them and new hires.”

In fact, even as IT firms clamor for more guest workers, they are laying off their existing workers in massive quantities. Bill Gates coauthored an op-ed demanding more foreign labor for companies like Microsoft the same week that Microsoft announced plans to lay off 18,000 of its employees. Perhaps before lobbying Congress for more H-1B workers, Mr. Zuckerberg could phone Mr. Gates and ask for the resumes of some of the 18,000 who have been sent packing. “Stem Grads Are at a Loss,” Professor Hal Salzman op-ed in U.S. News and World Report, Sept. 15, 2014, available at .

Sadly, this phenomenon is far from uncommon. Many companies that employ IT workers and lobby for expanded guest worker admissions have been slashing jobs. As Byron York reported, large companies ranging from Hewlett-Packard to Cisco to American Express to Procter and Gamble to T-Mobile laid off more than 50,000 employees collectively over the last few years—yet each joined a letter in 2013 asking congressional leaders for more guest workers.

One of the largest, most powerful, and most well-funded lobbying groups in the country is the coalition of corporations lobbying Congress for expanded foreign worker admissions for technology and STEM jobs. They secured massive increases in the Senate immigration bill—championed by the President—whose primary effect would be to deny millions of Americans a shot at a good-paying middle class job.

Nor have they relented: senior Republicans have indicated a desire to push through the Obama-backed increases in the H-1B foreign worker visa for large IT corporations. Again: it is understandable why these corporations push for legislation that will flood the labor market and keep pay low; what is not understandable is why we would ever consider advancing legislation that provides jobs for the citizens of other countries at the expense of our own. Who do we work for?

Every Member of Congress should read the incredibly important USA Today op-ed penned by five of the nation’s most esteemed academics who specialize in labor markets and guest workers.

Excerpts from the op-ed follow:

Legislation that expanded visas for IT personnel during the 1990s has kept average wages flat over the past 16 years. Indeed, guest workers have become the predominant source of new hires in these fields.

Those supporting even greater expansion seem to have forgotten about the hundreds of thousands of American high-tech workers who are being shortchanged — by wages stuck at 1998 levels, by diminished career prospects and by repeated rounds of layoffs.

The facts are that, excluding advocacy studies by those with industry funding, there is a remarkable concurrence among a wide range of researchers that there is an ample supply of American workers (native and immigrant, citizen and permanent resident) who are willing and qualified to fill the high-skill jobs in this country. The only real disagreement is whether supply is two or three times larger than the demand.  “Bill Gates’ Tech Worker Fantasy,” July 27, 2014, available at

Authorship credits: “Ron Hira is a professor of public policy at Howard University. Paula Stephan is a professor of economics at Georgia State University. Hal Salzman is a Rutgers University professor of planning & public policy at the J.J. Heldrich Center for Workforce Development. Michael Teitelbaum is senior research associate at the Harvard Law School’s Labor and Worklife Program. Norm Matloff is a professor of computer science at the University of California-Davis.”

Unfortunately, companies are exploiting the large existing flow of guest workers to deny American workers access to STEM careers and the middle-class security that should come with them. Imagine, then, how many more Americans would be frozen out of the middle class if politicians and tech moguls succeeded in doubling or tripling the flow of guest workers into STEM occupations. Another major, yet often overlooked, provision in the [Senate immigration bill] would grant automatic green cards to any foreign student who earns a graduate degree in a STEM field, based on assertions that foreign graduates of U.S. universities are routinely being forced to leave. Such claims are incompatible with the evidence that such graduates have many paths to stay and work, and indeed the ‘stay rates’ for visiting international students are very high and have shown no sign of decline.

The most recent study finds that 92% of Chinese Ph.D. students stay in the U.S. to work after graduation. The tech industry’s promotion of expanded temporary visas (such as the H- 1B) and green cards is driven by its desire for cheap, young and immobile labor. It is well documented that loopholes enable firms to legally pay H-1Bs below their market value and to continue the widespread age discrimination acknowledged by many in the tech industry. IT industry leaders have spent lavishly on lobbying to promote their STEM shortage claims among legislators. The only problem is that the evidence contradicts their self-interested claims.” The true number of guest workers admitted to the U.S. each year solely for the purpose of filling coveted jobs in the IT and STEM fields is actually much larger than news reports would suggest. In addition to the supposedly “capped” 85,000 annual H-1B visas, there are many employers exempt from the cap, including those renewing past H-1B’s. Employers also receive an exemption when they hire a new worker who was previously employed by a capped employer. So, in FY2012, there were about 263,000 H-1B visas approved. But, due to overlapping admissions and other factors, the total number of H-1B workers physically present in the U.S. is actually much higher—it has been estimated to fall somewhere in the range of 650,000 to 750,000. But even that figure does not capture the entire foreign labor pool of temporary workers available to employers in these industries.

The L-1 visa allows employers to transfer employees from abroad to fill jobs domestically. The stock of L-1 workers is estimated to be around 350,000. There are other programs as well, such as the controversial Optional Practical Training program for F-1 visa holders. Frustrated in their attempts to pass legislation, the IT industry succeeded in getting the President to decree foreign worker expansions by fiat. From Science Careers magazine: “Three of the president’s proposals target tech, [UC Davis Professor Norm] Matloff notes: providing work permits for H-1B workers’ spouses; expanding the Optional Practical Training (OPT) program, which allows foreign students to work in the United States; and allowing green card applicants more freedom to change jobs. Matloff expects the resulting increase in the number of foreign workers competing for domestic jobs to hurt American applicants and reduce pay. “This is especially true in that the foreign workers are overwhelmingly young, thus exacerbating the rampant age discrimination that we already have in the tech world,” he writes. The OPT program has been singled out by critics because some tech companies advertise jobs specifically to those with OPT status, seemingly excluding domestic workers.”

In one of the most thorough papers on the subject, the Economic Policy Institute notes the large disparity between how many qualified students that the U.S. graduates for specialized fields and the number that receive jobs in those fields: “U.S. employers have access to the world’s largest body of STEM students. U.S. students make up one-third of the entire global population of high-performers on tests of science knowledge for STEM graduates, the supply exceeds the number hired each year by nearly two to one, depending on the field of study. Even in engineering, U.S. colleges have historically produced about 50 percent more graduates than are hired into engineering jobs each year [while] that share [is] even higher in recent years. Of those graduates with the most IT-relevant education, a large share report they were unable to find an IT job while others found IT jobs to be paying lower wages or offering less attractive working conditions and career prospects than other, non-STEM jobs.” In summary, Washington policy has created a system that locks many of America’s best and brightest out of a career in their chosen field of study, and is actively pursuing measures that will make those hardships worse. The word “DREAM” features prominently in the immigration debate; what about the dreams of American children and college graduates?