President Obama’s Google Plus ‘hangout’ claims about engineering demand
"There's a huge demand around this country for engineers. . . . Where you’re seeing a lot of specialized demand is in engineering that’s related to the high-tech industries.”
-- President Obama, during a Google Plus video conference, Jan. 30
Obama’s comments came in response to a question from Fort Worth resident Jennifer Wedel, who asked why the government has extended and continues to issue H-1B visas when people such as her engineer husband, Darin Wedel, can’t find work.
The president said that not all engineering fields have equal demand at the moment but that “what the industry tells me is that they don’t have enough highly skilled engineers” for work in the high-tech domain.
Obama seemed perplexed after Jennifer mentioned that her husband was a semiconductor engineer. He asked her to forward his resume and said he was interested in “finding out exactly what’s happening there.” We decided to look into the matter as well.
To clarify, H-1B visas allow U.S. employers to hire a limited number of foreign workers each year on a temporary basis, generally for jobs that require specialized knowledge. The government hasn’t increased the cap on such visas since 2005, when it raised the limit to 85,000. Jennifer Wedel told ABC News on Wednesday that the government should reduce that number by 30,000.
In terms of demand for engineering, the economy has taken a toll on that profession just like most others. Data from the Bureau of Labor Statistics show that unemployment “for engineering and architectural occupations” has risen since 2006, but the overall economy has fared worse.
The 2011 unemployment rate for “architecture and engineering occupations” was 5.1 percent, compared with 8.9 percent for the nation overall. Architecture and engineering unemployment stood at a lowly 1.7 percent in 2006, so the situation has clearly deteriorated. (The BLS doesn’t publish this information online, so we can’t provide a link.)
Darin’s work falls under the category of electrical engineering. The unemployment level for that field has risen by 1.7 percentage points since 2006.
The president was right to point out that “there are different kinds of engineers.” Civil engineering had a 2011 unemployment rate of 4.8 percent, which was the second highest behind only industrial engineering at 5.5 percent. Electrical engineering, which represents the type of engineering Darin does, hit 3.4 percent, while mechanical engineering had a rate of 2.4 percent.
The jobless rate for computer engineering has risen just 0.8 percentage points since 2006. It jumped by 1.7 percentage points for electrical engineers.
BLS job-growth projections show even more disparity within engineering. The bureau estimates that civil engineering jobs will increase by a robust 19.4 percent between 2010 and 2020, while electrical engineering is expected to gain just 7 percent.
The BLS projects employment numbers for very specific job categories, so we were able to drill down to Darin’s exact profession. The bureau projects that engineering jobs within the field of “semiconductor and other electronic component manufacturing” will drop nearly 11 percent by 2020 — bleak expectations compared with the overall engineering sector.
We talked to Darin, who holds a bachelor’s degree in electrical engineering from Texas A&M. He said he lost his job with Texas Instruments three years ago after spending nine years with the company. His layoff resulted from a plant closing, he said.
Darin said he found nine months of engineering work through a temp agency, but nothing permanent came of the job because the plant he worked at was shutting down.
So what’s going on with this industry? Have semiconductor materials gone the way of the buggy whip? Hardly. They’re an essential part of computer chips, so demand has only increased with the explosion of computing and mobile devices.
A 2010 report from the Center for Public Policy Innovation suggests that the industry has just moved abroad, with the U.S. share of global semiconductor production capacity dropping 11 percent between 2005 and 2009. (The New York Times provided an excellent analysis last month of how the U.S. has lost manufacturing opportunities).
Darin blames part of his industry’s job-loss problem on the increase in H-1B visas through the years. The government raised the number in 2005 to address a supposed shortage in highly skilled talent.
Darin sees other motives driving the nation’s H-1B policies besides filling a talent void. “There’s a lot of lobbying to raise the immigration-cap level, but there are plenty of engineers here who are American citizens,” he said. “It’s a good way for companies to keep their costs down.”
Economist Jared Bernstein witnessed some of those lobbying efforts firsthand while serving as a member of President Obama’s economic team. “They want all the engineers they can get at the lowest price,” he said. “They say they can’t find enough talent, but what they really mean is that they can’t find enough people at the rate they want to pay.”
Visas and outsourcing aren’t the only factors that affect a laid-off engineer’s job prospects, according to University of Michigan business professor Robert Kennedy, who serves as director of the William Davidson Institute, a business-policy think tank that specializes in emerging-market economies. He explained that some American companies are simply shrinking.
That doesn’t appear to be the case with Texas Instruments, which consistently ranks among the top three globally in semiconductor sales.
We learned that Darin has focused his search efforts on areas close to Forth Worth. He and his wife are constrained to that area as part of a custody agreement from a previous marriage. But Jennifer works full time selling insurance, and the couple have paid off their home, meaning their situation is relatively stable.
Darin said his wife’s interview with the president generated a wave of interest in his resume. He told us several CEOs have called him since the “hangout.”
“It’s been a blessing for our personal life and our family,” he said.
We asked the White House for comment about Jennifer’s exchange with Obama. A spokesman pointed us to a Jan. 31 White House briefing in which Jay Carney, the president’s press secretary, said that “the exchange reflected the president’s sincere interest and concern in the experiences of folks out in the country and how they’re dealing with what remains a very tough economy, even as we continue the recovery that we’ve been engaged in now for 10 months.”
The Pinocchio Test
Demand for engineers remains relatively high compared with most other professions, but it’s not what it was before the recession. We don’t expect Obama to have enough detailed information to know that electrical engineers such as Darin Wedel fared worse than computer-hardware engineers in recent years, but he probably should have known that unemployment has risen for such high-tech fields on the whole.
Job prospects within the semiconductor industry look bleak heading into 2020, and the president should have known that as well. It’s one of the more important industries of the future.
Jennifer Wedel suggested that the nation needs to lower its cap on H-1B visas, and she may be correct. But the president never suggested that this wasn’t the case. He just said the visas “should be reserved only for those companies who say they cannot find somebody in that particular field.”
On the whole, Obama earns one Pinocchio for suggesting that demand remains high for engineers in high-tech industries. He can’t gloss over this area of unemployment.
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