This is a Guest Blog Post by Anthony P. Carnevale, Director and Research Professor, and Nicole Smith, Research Professor and Senior Economist, at the Georgetown University Center on Education and the Workforce
Our report shows that if we were to mechanically match every STEM graduate to a STEM job, then we can in fact arrive at the conclusion that we produce about enough STEM majors for every job. We also explain why this mechanical analysis is not enough to disprove shortages. We present a general market-based analysis of the demand for STEM workers. The market for STEM workers is not a monolith. There are many cases of oversupplied workers such as PhDs in academia, but these exceptions do not a rule make. Overall, the demand for STEM competencies far exceeds the proportion of strictly defined STEM jobs that exist. Few of these STEM graduates work in a STEM field. STEM students are continuously competed away by higher or competitive salaries in business and health, (we argue that the competition is for STEM competencies - math, critical thinking, analytics). Since 1980, the number of workers with high levels of core STEM competencies has increased by almost 60 percent. Further, the rate of growth in demand for these core STEM competencies has increased at far greater rates than the growth in employment.
Thus, even where PhD STEM workers, for example, may be shown to currently have limited opportunities in academia, these very STEM workers embody a set of competencies that are demanded in the private sector as well. The evidence of persistence ‘shortage’ in the market lies in rising real STEM wages and salaries across the economy. A dynamic market for STEM competencies also allows for a number of STEM workers who did not graduate from college with STEM degrees and certifications, but who were high performing math and science students in high school.
We also have an ongoing discussion regarding when we should define the start and end point for wages to really get a clear picture of what's been happening. Certainly if you highlight STEM wages during the recession, you will see a fall - as with most other professions.
STEM, wages, however, start off higher than most other categories of majors and tend to have high earnings potentials and provide high lifetime earnings, http://cew.georgetown.edu/whatsitworth/
. It remains an equal opportunity employer with lower gender-wage gaps than any other field.
The demand for STEM competencies outside of STEM jobs makes the credential highly marketable even in non-STEM fields. In their words "For every two students that U.S. colleges graduate with STEM degrees, only one is hired into a STEM job." -- and compensated at relatively higher rates since their competencies are highly valued.
Regarding the immigration question, there is certainly enough anecdotal evidence out there that H-1Bs make the initial short-term sacrifice in wages in order to enter the US labor market. We do not have specific comparisons on H-1B wages versus US born wages in STEM. On downward wage growth, at least among engineers, there is some evidence that off-shoring has also played into this. By the time these initial H1-Bs are converted to green card holders or citizens (if they are), we do know that there is no distinction in wage outcomes by country of origin for US citizens as a whole. And we also know that the STEM premium is substantial and continues to rise --- which is a fair indicator of a shortage in the supply of STEM competencies.
 We use the term shortage loosely here as labor markers do tend to clear resulting in either:
the bidding up of wages by employers to woo workers in their direction when markets are tight, or
decisions by individuals to reduce their reservation wages when competition amongst workers is fierce.