Balancing STEM training and retraining needs

As the National Science Foundation announces awards for five new regional academic centers to encourage underrepresented populations to pursue and attain college degrees related to science, technology, engineering and mathematics (STEM), a recent working paper from two Harvard researchers finds an explanation for the popularly perceived persistent shortage of STEM workers: changes in technology.  The rapid pace of technological change is making the skills of the existing STEM workforce obsolete in much shorter time than previously, flattening their wages and reducing opportunity for advancement after seeing an initial high wage premium at the beginning of their careers. 

Despite the steady growth of STEM-related occupations and technology-related jobs, 58 percent of STEM graduates leave the field within 10 years after receiving their degree, previous research has found. As David Deming and Kadeem Noray conclude in the new “STEM Careers and Technological Change,” “[f]aster technological progress creates a greater sense of shortage, but it is the new STEM skills that are scarce, not the workers themselves” [emphasis original].

There has been increasing support for retraining and life-long learning for workers over the past decade. The authors’ findings, however, may lead to questions for policymakers about whether the current balance in workforce programs and budget allocations between attracting new STEM workers and upgrading skills for existing engineers, technologists and scientists is adequate. An obvious exception to any priority rebalancing between training and retraining is the need to broaden the initial participation of a more diverse STEM workforce, as is the goal of the NSF Louis Stokes Alliances for Minority Participation and its new awards.

The Deming/Noray paper reveals some facts about STEM jobs over the first decade of employment that some Digest readers may find startling. For instance, the widely touted earnings premium enjoyed by STEM majors in engineering and computer science “is highest at labor market entry and declines by more than 50 percent in the first decade of working life.” STEM grads in the “pure” science and math fields do not see the same fall in relative value of their skills, perhaps because their disciplines are more likely to build on previous knowledge rather than disrupt through technological change.

Wages flattening for STEM workers within the first 10 years of their careers in the field corresponds with the faster pace of exits of STEM majors from STEM jobs:the wage premium STEM majors enjoy applies to STEM occupations, not STEM majors in non-STEM jobs.

Competition for STEM grads with the most current skillsets may explain the wage premium at entry level, but the rapid pace of change in job tasks for STEM jobs – Deming and Noray found STEM jobs experienced the highest rate of task change of all occupations during the past decade – may mean retraining investment of existing workers to bring them up to speed in such as fast-changing work environment isn’t economical for companies. The researchers conclude on-the-job training is not sufficient to accommodate the pace at which their existing skills are becoming obsolete.

The pace of change in the skill requirements of certain STEM jobs, then, creates challenges for policy makers, workforce development programs, training program designers, the communities building their innovation strategies around STEM, and, of course, the workers and their families.

The long-term value of youth-focused apprenticeships and school-to-work programs as a policy approach for sustained competitiveness also comes into question for Deming and Norway. While possibly helpful for moving targeted populations into specific STEM occupations in the short run, the authors contend new workers from apprenticeships in rapidly changing jobs, such as engineering and computer sciences, may find their skillsets less valuable fairly quickly and opportunities for advancement few. 

Churn, the continuing opening and closing of small businesses, is widely considered an important measure of entrepreneurship. But is it beneficial from a public policy perspective when the subjects in the churn are maturing STEM workers finding themselves obsolete and unable to simply start anew with a slightly different business model or product? For workforce and economic development policymakers, retraining within STEM for the latest technological advances may buy some of these workers as much as another decade in their chosen, high-paying careers – careers with spillover benefits for the competitiveness of their employers and regional economies.