STEM Education Falls Short: The Problem is Too Few Jobs, Not Too Little Education

SOURCE ITEMS

According to new statistics from the 2012 American Community Survey, engineering and computer, math and statistics majors had the largest share of graduates going into a STEM field with about half employed in a STEM occupation. Science majors had fewer of their graduates employed in STEM. About 26 percent of physical science majors; 15 percent of biological, environmental and agricultural sciences majors; 10 percent of psychology majors; and 7 percent of social science majors were employed in STEM.

 Census Bureau Reports Majority of STEM College Graduates Do Not Work in STEM Occupations, U.S. Census Bureau, July 2014.

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Since cohort-wage profiles display a similar pattern, these findings appear to fit with a strong increase in demand for cognitive tasks in the 1990s followed by a decline in the 2000s.

 Paul Beaudry, David A. Green, and Benjamin M. Sand. The Declining Fortunes of the Young since 2000, American Economic Review, 2014

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Chart-Labor Force Participation Rate Trend

The labor force is anticipated to grow by 8.5 million, an annual growth rate of 0.5 percent, over the 2012–2022 period. The growth in the labor force during 2012–2022 is projected to be smaller than in the previous 10-year period, 2002–2012, when the labor force grew by 10.1 million, a 0.7-percent annual growth rate.

 Labor force projections to 2022: the labor force participation rate continues to fall, Monthly Labor Review, December 2013.

 COMMENTS

We now live in a world economy in which economic processes and trends are global. Global economic growth is constrained and will continue to be into the foreseeable future. As a consequence, current patterns of investment, domestic and global, will not generate a sufficient number of jobs to produce anything near global full employment at living wages.

Economic activity in the U.S. does not constitute a separate economy, so U.S. economy policies cannot produce full employment and high wages in the U.S. while the rest of the world is stuck with high rates of unemployment and low wages.   Investment follows profits.  Profits are maximized by producing in low income places in the world economy and selling in high income places.  Unfettered transnational flows of capital and commodities combined with preventing low-skill working people from easily crossing national boundaries in search of work gives the world’s investors the legal framework with which to manage the world’s labor supply to their advantage.

Global Shortage of Skilled Workers is a Myth; Global Failure to Create Jobs is the Reality

SOURCE ITEMS

Chart-Global Working Age Population, 2000-2010

Data Source: World Population Prospects: The 2010 Revision, Population Division, Department of Economic and Social Affairs, United Nations.

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Last May I wrote about Coursera — co-founded by the Stanford computer scientists Daphne Koller and Andrew Ng — just after it opened. … When I visited last May, about 300,000 people were taking 38 courses taught by Stanford professors and a few other elite universities. Today, they have 2.4 million students, taking 214 courses from 33 universities, including eight international ones.

 Thomas Friedman, Revolution Hits the Universities, New York Times, January 26, 2013.

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According to UNESCO data, 177 million students participated in formal tertiary education around the world in 2010, an increase of 77 million students since 2000, or 77% (UNESCO Institute for Statistics, 2011).

Education at a Glance 2012, OECD indicators. OECD Publishing, September 2012.

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The Washington-based bank yesterday projected the world economy will expand 2.4 percent, down from a June forecast of 3 percent, after growing 2.3 percent in 2012. It halved its forecast for Japan, cut the U.S. projection by 0.5 percentage point and predicted a second year of contraction in the euro region. It also lowered projections for emerging markets led by Brazil, India and Mexico.

Sandrine Rastello, World Bank Cuts Growth Forecasts as Developed Nations Lose Steam, Bloomberg News, January 16, 2013.  

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In recent years, the proportion of high-skill migrants has been rising – from 19 percent in 1980 in the United States, to 26 percent in 2010, for example – as immigrants filled demand that domestic supply alone could not match.

The World at Work: Jobs, Pay, and Skills for 3.5 Billion People, McKinsey Global Institute, June 2012.

COMMENTS

The world economy has no shortage of workers and no shortage of well educated and skilled workers.  It has a devastating shortage of jobs for people of working age.

The brutal reality is that insufficient global job creation is the problem.

Flooding the world’s labor force with more and more highly educated and skilled workers will not solve that problem.  It will only expand the population of underemployed and inappropriately-employed college educated workers.

If a shortage of skilled workers really did exist, the world’s global corporations, which are awash in record profits and holding large amounts of cash, would be spending much more on worker training and aggressively lobbying governments to increase investments in higher education.  Instead, it’s only lip service for investments in education and training and, in richer countries like the U.S., lobbying for more visas for the world’s growing supply of skilled workers.

A new governmental approach to job creation is the solution.

Governments must shift from passively accepting private sector job creation failure to actively driving private sector job creation decisions.  To begin, they must stop competing with each other for the investment attention of global corporations and start working together to demand more job creation from those corporations.