Another Article on Engineering Shortage?

Posted on June 25, 2006  Comments (0)

Shortage or surplus?

And the number one topic on everybody’s mind was, ‘Where we are going to find the staff to do the work that we have to do?’ ” said Doyle. “There might be rumors that there’s not a shortage, but you’re going to have a hard time convincing the CEOs of all these firms that there’s not a shortage.”

Doyle attributed the shortage to a number of forces. An expanding economy has created more jobs, he said. “The demand is high. The need is greater.” Baby boomers are retiring. Fewer engineering graduates seem to be entering the work force, especially in the architecture and engineering industry. Foreign-born engineers educated in the U.S. are now likely to return home to countries such as India and China where economies are growing exponentially.

During a forum last month, William Wulf, president of the National Academy of Engineering, said starting salaries for engineers seem generally stable — neither rising dramatically, implying a shortage, nor falling, implying an oversupply. Wulf said the U.S. probably has enough engineers in sum, counting 70,000 to 75,000 graduates each year and foreign-born engineers on H-1B visas.

Looking at engineering salaries is a good indicator to use, but it is not the only item to look at for an answer to the question whether we have a surplus or shortage. The shortage or surplus calculation is a multivariate and interrelated equation. The appropriate number is related to many factors.

Lets say GE wants to have 20,000 engineers do work for the company. If they look in the United States and see that GE is having trouble filling our current jobs and feel filling those new jobs would be difficult, they have at least 3 choice. They could raise pay, by say 20%, to try and lure engineers from other American companies. They could go to Europe, Mexico, India, China… to fill those jobs. Or they could decide the work cannot be done given current resources and abandon the plans.

If they decide to go to India (or abandon the plans) then salaries in the USA do not increase but the shortage of engineers still cost the USA 20,000 jobs. In reality, there is interplay between the options and it is not as obvious as this oversimplified example, but this is essentially what happens.

There is competition globally for winning these engineering jobs (Science, Engineering and Technology Graduates Paid WellSingapore woos top scientists with new labsAlarm as white-collar jobs vanish overseas …). Countries realize the benefits of gaining science and engineering jobs go beyond those well paying jobs themselves and provide large benefits to the economy. The more of those jobs an economy gains, the better off it will be. And the USA’s share of those jobs is decreasing. That will likely continue, but that share will fall even faster if the USA does not increase the number of engineers available for those jobs. Other countries are making significant investments to gain make sure they have a pool of such workers.

To me the most important factor in determining whether there is a shortage is what the long term effects on the economy will be. And I think the USA should invest in adding more scientists and engineers to our future workforce.

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