Engineering schools wager that the job market will keep pace with swelling enrollments. Some economists aren’t so sure.
When President Obama, his Jobs Council in tow, issued an “all-hands-on-deck” call in June 2011 for 10,000 more engineers a year, he evinced no doubt that good careers awaited the graduates. “The businesses represented here tell me they’re having a hard time finding high-skilled workers to fill their job openings,” he declared at Cree Inc., a growing LED technology manufacturer in North Carolina’s Research Triangle. Six months later, he sounded puzzled when a young mother in Fort Worth told him during an online town hall that her husband, an experienced, patent-holding semiconductor engineer, was still looking for work three years after Texas Instruments laid him off. “The word we’re getting,” he told Jennifer Wedel, “is that somebody in that kind of high-tech field . . . should be able to find something right away.”
Obama’s seeming certainty about “a huge demand for engineers” is being put to a high-stakes test as a number of engineering schools across the country add buildings, programs, faculty, and students. To name just a few, the College of Engineering at Texas A&M, aims to boost enrollment from the current 11,000 to 25,000 by 2025; Purdue University’s College of Engineering intends to expand its faculty by 100; and the University of Tennessee, Knoxville, its enrollment up by 37 percent in five years, plans to add more than 20 faculty.
But some labor-market economists urge caution, adding their voices to a long-running debate about the country’s capacity to absorb many more scientists and engineers. These experts say the purported demand is not supported by wage data, varies markedly among disciplines and regions, and is vulnerable to economic cycles and marketplace trends. And they argue that simply graduating more engineers will not, in itself, stimulate innovation and development of the transformative technologies and successful new products that keep America competitive.
Prominent among these skeptics is Rutgers University public policy professor Hal Salzman, who has extensively researched the engineering labor market. In an April 2013 paper released by the labor-backed Economic Policy Institute in Washington, D.C., he and coauthors Daniel Kuehn and B. Lindsay Lowell point out that U.S. colleges have historically produced about 50 percent more graduates than are hired into engineering jobs each year. Except in a few relatively small specialties, Salzman argues, demand for larger numbers of engineers does not exist. A notable exception is petroleum engineering, which in the past few years has experienced dramatic spikes in job openings, salaries, and numbers of students enrolled and graduating. In a typical year, Salzman says, “about 60 to 70 percent of engineering graduates get an engineering job,” a figure that fell to 52 percent in 2009, following the economic collapse.
The Bureau of Labor Statistics projects that the entire science and engineering workforce will have added 1.1 million jobs between 2010 and 2020 as the economy, overall, adds 20.5 million new jobs. An additional 1.3 million scientists and engineers will be needed to replace those who are expected to exit S&E occupations during this period due to retirement, death, or career change. Thus the bureau projects a total of 2.4 million job openings in S&E occupations, 4.4 percent of the nationwide total of 54.8 million.
Labor shortages in particular occupations tend to cause a rise in wages. Yet over the past 30 years, wages for engineers and engineering technicians grew at a much slower pace – 18 percent – “than all other STEM occupations—and even slower than non-STEM occupations,” reports a 2011 study by Georgetown University’s Center on Education and the Workforce. Authors of that study explain the slow growth by pointing out that “in the beginning of the 1980s they had higher salaries than any other category of STEM worker.” In contrast, however, workers in the “professional and managerial” category saw their salaries climb by 54 percent over the period; healthcare professionals’ wages rose by 53 percent.
Cycles of Change
Further grounds for doubt about a constantly increasing demand for engineers appear in a March 2013 paper published by the National Bureau of Economic Research. A “great reversal” in the U.S. market for technical workers occurred around 2000, observe University of British Columbia economists Paul Beaudry and David Green, and Benjamin Sand of York University, all in Canada. The reversal, which resulted in markedly softened demand, is a predictable stage in a natural evolution of labor markets that often accompanies epoch-making technological change, such as the spread of computer-based information technology that began in the 1980s, they argue.
“Skill-based technological change can cause a boom and bust in the demand” for technically skilled workers, they write. The early phase of the shift, when the new technology is gaining ground against older methods, creates “high and growing demand for cognitive tasks to build the new” system, a phase that coincided with the tech boom of the 1990s. Once the new technology is widely disseminated and well established, however, skilled workers are no longer needed in such large numbers to create entirely new infrastructure and methods. Instead, they are needed in smaller numbers only to maintain the newly established system. Once this “maturity stage” arrives, which the authors say happened about the turn of the millennium, the former high demand for technological skills begins to fall off.
In the first decade of the 2000s, artificial prosperity fueled by the housing boom masked the onset of the “maturity” phase of the current technological cycle, they write. Once the bubble burst in 2008, demand for highly skilled workers turned sluggish. A nation that had grown accustomed to ever increasing opportunities for technically trained workers during the 1980s and 1990s erroneously interpreted that era’s dynamic labor market as the cause rather than an effect of technological change. But today, the authors write, “even as the supply of high education workers continues to grow,” the post-reversal, low-demand “maturity” period slogs on.
Manufacturing and construction employ about 50 to 60 percent of all engineers, Salzman notes. In addition to private companies, government is a significant employer of engineering talent, especially of civil, environmental, and structural engineers involved in building and maintaining public infrastructure and improving and inspecting private construction. Others, including a wide range of aeronautical, electronic, and other engineers, work either as government employees or contractors on often highly specialized defense, space, communication, and intelligence and other projects. Large numbers of engineering graduates also hold jobs not designated as engineering per se, especially as managers in a wide range of companies and organizations.
Given the work engineers do, most of their employment opportunities are “heavily dependent” on the economic or budgetary health of particular industries and government agencies, Salzman notes. In recent years, major sectors that employ large numbers of engineers – construction, manufacturing, and government — have been anything but robust.
Job Duration Varies
The structure of demand within specific industries influences more than the availability of jobs. The “dynamics of product cycles” also shape the careers of the engineers who work on them, says Stan Sorscher, labor representative for the Society for Professional Engineering Employees in Aerospace. Contrasting how long it takes to design and create products, plus how long they are supposed to last, in three industries that depend heavily on engineers – information technology (IT), biotech, and aerospace – he explains that “the IT product cycle is 18 months. For biotech it’s probably four or five years, and for us in aerospace the product cycle is 20, 25, or 30 years” because purchasers of fighter jets, airliners, or the space station expect to “use that product for 15 or 20 years…or in the case of the B-52 [bomber],70 years.”
Because of this, says Sorscher,“the value of judgment and experience is higher in some industries than it is in others, and the market discipline that you’re going to face from failure is different in some industries. Some industries are very forgiving of failure, and some industries punish you very severely.” Buyers of inexpensive electronics expect quick obsolescence and will tolerate imperfections, he notes. As the Boeing corporation’s recent experience with defective batteries in its 787 Dreamliner aircraft shows, however, errors can have dire consequences in a product that takes years to design, costs millions of dollars, faces stringent safety and performance standards, and must perform reliably for decades. That is why in such industries “there’s a competitive advantage to cultivating knowledge, skills, and experience over a long period of time…retaining them,” and therefore to keeping effective employees for many years, Sorscher says. In biotech, where standards of performance and safety are exacting and the route to market can take “four to five years, the specific knowledge is very specific,” he continues. “When you look at the employment dynamics of scientists and engineers in biotech, there’s a certain amount of labor mobility, but not that much.”
By contrast, in the “Silicon Valley model,” based on the short life and relatively easy replacement of IT products, “the competitive advantage is [on] how fast you move and how marketable you can be rather than the specific skills that you’ve acquired,” Sorscher says. Projects are short, movement among jobs is frequent, and employers therefore tend to favor young people rather than more senior engineers like Jennifer Wedel’s husband, Darin. The bulk of the supposed difficulty hiring qualified engineers that employers and politicians cite occurs in this sector. Companies using this model, says human resources expert Peter Cappelli at the University of Pennsylvania’s Wharton School, want to hire — not train — people with exactly the knowledge needed for their current short-term project, then lay them off when the project ends.
The plight of engineers like Wedel, who finally found a job as a quality engineer in the pharmaceutical industry six months after his wife’s videotaped encounter with the president, worries Mark Thies, a Clemson University chemical and biomolecular engineering professor who is witnessing the “biggest enrollments in my 28 years” of teaching there. Thies points to a “very talented” computer engineer in his 50s who “did some real cutting-edge things a few years ago,” but who has been “having a heck of a time” finding work after a layoff. He also mentions a very able mechanical engineer in her 40s who lost a $100,000 job “helping build airports and hospitals and things like that” in the 2008 economic crash, when her company’s business went through a two-year collapse. As with Darin Wedel, family reasons kept her from relocating. Eventually she “had to take a job for $30,000 a year . . . a safety engineering kind of job.”
Offshoring of both work and facilities has taken a toll in many engineering fields, Thies adds, although the impact varies by industry and, therefore, by engineering discipline. “It’s hard to move a chemical plant,” he says, “but what they’ll do is build the new plants overseas.” A “nontrivial” number of his former students have taken overseas assignments.
What are promising industries for today’s engineering graduates? Certainly, energy is one – everything from petroleum extraction and solar and wind power to grid modernization and carbon capture, use, and sequestration (CCUS). A 2013 National Research Council study of the energy workforce, subtitled “A Call to Action,” concluded: “The present and future are bright for those in or seeking energy and mining jobs. . . . Strong international demand for energy and mineral resources and the workers to provide them also will keep the market for qualified domestic workers robust” – and high paying.
Engineers and Innovation
These jobs depend in part, however, on government energy policies that can shift with political forces – pipelines and offshore drilling being just two examples – and on continued innovation in areas such as renewable fuels and CCUS. Indeed, the new petroleum abundance itself results from fracking advances. President Obama cited the key role of engineers in innovation in February 2012 when he lauded deans at the White House for their commitment to producing more engineers. However, relatively few engineers – Salzman says under 10 percent – are actually involved in innovation, specifically in creating new products. Small numbers of engineers are also involved in “process” innovation, mostly improving existing production methods, Salzman adds. “I don’t want in any way to undervalue process innovation,” which can be very significant, he says, “but most of it is not the kind of innovation that gets noted” in statistics. Salzman argues – and President Obama presumably would not disagree – that to stimulate innovation, the country must invest more in research and discovery. “Having a good supply of engineers, that’s not what drives innovation,” Salzman says. “Are firms investing in R&D? Are they hiring? Creating engineers without jobs is not what leads to innovation.” Instead, “if you want innovation, put money into innovation.”
By Beryl Lieff Benderly
Illustration by Nicola Nittoli
Beryl Lieff Benderly is a Washington writer and a fellow of the American Association for the Advancement of Science.