2009 November 04 Wednesday
US Scientist, Engineering Labor Down More Than Overall

Guess which occupations have suffered more decline in employment than the overall labor force.

Over the past year, U.S. employment of scientists and engineers—the people who create the next generation of products and make the U.S. more competitive over the long term—has fallen by 6.3%, according to a BusinessWeek tabulation of unpublished data. Yet overall employment has fallen only 4.1%.

Is this due to outsourcing?

One can't move some types of jobs abroad. Police, firemen, nuclear power plant workers, road workers, sewer workers, and other people who do jobs where the labor must be done within a nation's borders. But manufacturing workers and designers (e.g. most engineers, computer programmers) do work that in theory can be done anywhere. So are their jobs leaving?

You might think engineering and scientific research are the lifeblood of a modern economy. Knowledge work produces products that substitute for manual labor. If a national economy can't produce as much demand for such knowledge workers as it did in the past is something seriously going wrong? Is this a sign that nation has peaked?

Share |      By Randall Parker at 2009 November 04 10:07 PM  Economics Labor


Comments
Clarium said at November 4, 2009 11:31 PM:

If all the engineers could do is produce certain labor saving devices that have deletarious effects on the labor market, then I say good riddence. Of course, they do design other things.

Labor saving devices are not generally bad as they do benefit net consumers of labor. For example, a cheap driverless car would benefit most people since they consume their own labor of driving their own car. If most people are net consumers of a type of labor, then labor saving devices are a good thing.

Bob Badour said at November 5, 2009 7:34 AM:

Clarium,

I have spent 20 years making labor saving software. In every case, adoption of the labor saving software has increased employment while improving the jobs and lives of the folks who use the software. Naive intuition often leads people astray. Human brains are ill-equipped to understand chains of events, equilibriums and homeostatic systems making a lot of reality counter-intuitive.

For example, I started out writing estimating software for electrical contractors. Not one contracting company ever laid off an estimator after buying the software. Instead, they hired more electricians to keep up with all the new business the estimators were then able to bid on.

Labor saving devices never have a deleterious effect on the market. By increasing productivity, everyone ends up benefiting from labor saving devices.

Bob Badour said at November 5, 2009 7:49 AM:
Is this due to outsourcing?

Ultimately, it's due to H-1B.

not anon or anonymous said at November 5, 2009 11:20 AM:

I second Bob Badour. Labor-saving technology may have deleterious effects on people with specialized skills (when these are made obsolete by the technology), but their effect on the general labor market is unambiguously positive.

Of course, resource-saving technologies (e.g. energy conservation) are even better since most everyone is a consumer of natural resources. But it's just untrue that knowledge work has deleterious effects.

GS said at November 5, 2009 2:13 PM:

Labor saving technology has always been in the best interests of society in aggregate. Obviously some individuals are made worse off, and some are made better off. Imagine if labor saving technologies were outlawed - we'd all be subsistence farmers.

Anonymous said at November 5, 2009 7:50 PM:

The culprit is the flood of millions H-1B unskilled cheap labors. For more details, go visit www.endh1b.com

Wolf-Dog said at November 5, 2009 8:08 PM:

The cause is that with an annual trade deficit of $60 billion, close to 5 % of the GDP every year, we are no longer competing seriously in any industry other and a few elite areas that are very small. If we had a buy American policy, there would be more employment for scientists and engineers here. Here is why buying cheap foreign goods is NOT so beneficial for the American people: Although the wholesale manufacturing cost of many foreign goods happens to be much lower than competing goods made in the US, the reality is that at the consumer level, the final sales price of these foreign goods is only slightly lower than competing American goods, so that the retailers are pocketing the enormous profits, not the consumers in the United States. Thus a buy American policy will not cause a terrible inflation in America, and also there will be more income to buy things when there is less unemployment.

In any case, in most other countries, science and engineering is a lot more sponsored by the Governments.

Wolf-Dog said at November 5, 2009 8:11 PM:

I meant that the annual trade deficit is over $600 billion, noy $60 billion.

Jerry Martinson said at November 5, 2009 10:49 PM:

I've filled out surveys of things like this both for myself and on behalf of organizations. It's difficult to categorize employees in simple boxes - especially since the definition of those boxes was developed in the 1970's by people who don't know what engineers do. Are they engineers? Salesmen? Marketing? Managers? The labor department probably thinks I go around wearing a hard hat and carry blueprints around. I think this is mostly just a survey fluke on top of a recession. Some work has gone overseas... but this is not a zero sum game.

A lot of engineer/scientists are underemployed because they are doing IT support work that a history major or DeVry tech could do. A lot of this is that they happen to live in an area of the country where the engineering jobs dried up. If the dollar was lower (which it eventually will be) there would be more engineering work in the US.

not anon or anonymous said at November 6, 2009 5:58 AM:

The trade deficit is a big problem, but it's mostly caused by the lack of private and government savings. The U.S. is incurring a sizeable debt which will have to be repaid by future generations.

Mercer said at November 6, 2009 12:17 PM:

"trade deficit is a big problem, but it's mostly caused by the lack of private and government savings."

The trade deficit is a big problem but is mostly caused by oil and China keeping its currency undervalued. Japan has a bigger government debt than the US and a trade surplus.

Daniel said at November 6, 2009 5:49 PM:

Off topic, but it is reported that the Orlando shooter, Jason Rodriguez, had close to $55,000 of student debt. Debt that he couldn't pay. A debt that led him to file for bankruptcy.

The enormous debt that college graduates face in pursuit of their worthless degrees has been a concern of this blog. Rightly so, too. Of course I am not justifying Rodriguez's actions, but I wonder how much more violent acting out we will see down the road due to the crushing debt that graduates have on their back. Oh yeah, Rodriguez had an engineering degree.

not anon or anonymous said at November 7, 2009 1:44 AM:

"Japan has a bigger government debt than the US and a trade surplus."

Japan also has a huge level of private savings. Coincidence?

Engineer-Poet said at November 7, 2009 6:57 AM:
it is reported that the Orlando shooter, Jason Rodriguez, had close to $55,000 of student debt. Debt that he couldn't pay. A debt that led him to file for bankruptcy.
He was dismissed from his job after 11 months when his work failed to improve.

It's true that an engineering degree is essentially a learner's permit, but this begs the question of why someone who was so poor at learning got the degree in the first place.  Examination of his SAT scores and academic record could be very revealing here.  Was Rodriguez admitted and passed along because of affirmative action, only to fail after receiving a degree which amounted to a certificate of attendance?  If so, affirmative action now has on its record not just millions of opportunities denied to people of greater merit, but one confirmed fatality.

This sounds like a job for Steve Sailer.

Dan Morgan said at November 7, 2009 9:09 AM:

I work at one the largest US electronics companies. We are making plenty of money again but there is a hiring freeze. We are shorthanded, that hiring will have to begin again soon. I haven't seen any uptick in sending product development work offshore.

Over the last few years we went through a phase of sending a lot of our software development to India. Also, we hired numerous field engineers to help customers hands on in countries locally. However, I haven't seen any push to move the core development engineering out of the US (excluding software). And even the software development is all directed by US-based engineers who have the systems expertise.

I would venture that there is is a similar model at most high tech companies. There is a certain synergy in keeping the technology develpment people together in one place. Whether this model will hold up long term, I don't know. If not, then the US will start losing its edge in new technology development. For now, the US engineering and manufacturing base is actually much stronger than people realize.

averros said at November 12, 2009 2:37 AM:

"Millions of H1Bs"... what a moron. H1-B visas are severly constrained by annual caps... 115000/year recently, and used to be 65000/year. Year or more of waiting, and $5000-8000 in legal and government fees. Plus you have to prove that you can't hire a local for the position. No company would go through that if they had anybody qualified to hire locally.

What H1-B did is increasing IQ of high-tech work force in US by getting smart people from all over the planet in. No wonder, idiots are complaining. Go flip some burgers, loser.

Bob Badour said at November 12, 2009 6:05 AM:
No company would go through that if they had anybody qualified to hire locally.

Averros, you clearly lack a clue and possibly a place to put one. Anybody who has spent any amount of time looking for a high tech job in the US will quickly learn how the H-1B game is played. Yes, the employer has to advertise the job to try to fill it with an American.

Anyone who has worked for any length of time--creating software for example--will have an entire alphabet soup of specific products and languages etc. on his or her resume. The H-1B ads basically enumerate the foreign worker's entire resume regardless whether half the stuff on it will get used on the job in question. Given the vast number of possible combinations, the chances that an American will match everything is very slim. To cap things off, the ads often include requirements like "must have knowledge and experience with the internal workings and culture at" or include the H-1B candidate's mother-tongue as a job requirement.

I have been asked in the past to help identify technical skills from a colleague's experience to include in the H-1B job ad that would essentially guarantee no American could match, and I have picked out the H-1B ads for colleagues that enumerated shit that would never get used on the job.

In the remote chance that a qualified American actually applies, if the American is good, the company might actually hire him or her -- for a different position.

As a Canadian who has worked a lot in the US, I learned long ago not to bother with newspaper ads in the US. Essentially, the high-tech job ads in US newspapers are all H-1B ads. Before I realized what was going on, I actually applied to a couple positions where I would have been an ideal candidate due to peculiar combinations of rare skills or products that I had recently used extensively at the time. Because I am Canadian not American, I didn't even get a call back or sometimes even so much as an acknowledgment email.

It might cost $8,000 to apply for an H-1B; I don't know. I do know that H-1B employees often start at salaries from $20,000 to $50,000 lower than Americans with comparable skills and experience so $8,000 sounds like a bargain. Very often, the H-1B employees are not even direct hires. American companies can get an employee of a sub-contracting firm for the same price as an American worker's salary only without all those pesky benefits and other overheads.

The entire off-shoring fad was fueled by H-1B. When the dotcom bubble burst, tens of thousands of H-1B employees were given 10 days to vacate the country, which allowed the big H-1B employers to save even more money by hiring tons of employees with US experience in 3rd world shit-holes at 3rd world prices.

Randall Parker said at November 13, 2009 4:58 PM:
Plus you have to prove that you can't hire a local for the position.

You have to pretend to prove it. What constitutes proof in the government's eyes is a joke. You can always spot advertisements aimed at proving a green card application or other attempt to get foreign labor is necessary. The job requirements end up listing all sorts of unimportant but very company-specific skills. You'll see things like experience with a particular statistics package or a particular assembly language or other minutiae that a new hire could learn in a hurry.

No company would go through that if they had anybody qualified to hire locally.

They go thru it all the time in order to save money. I've seen it up close.


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