Study highlighting worker shortage worries tech executives
BYLINE: Timothy Roberts
While senators argue in Washington, D.C., about the fate of mostly low-skilled undocumented immigrants, tech executives in Silicon Valley worry that their need for highly educated engineers will not be met.
A shortage of workers in coming years is expected to reduce the economic potential of the valley and of California, ending an era in which a steady flow of talent from the nation and the world made a path to the state and the valley.
A study from the Public Policy Institute of California released on May 23 warns that it is increasingly difficult for California to attract the employees it needs from other states and it isn't plausible to think that the state could make up the difference with immigrants from other nations.
"It seems unlikely that a substantial number of college graduates will migrate to California (from other states)," the authors of the study report, which was released May 23. In fact, says Hans Johnson, a demographer for the Policy Institute, "Recently, California has lost more college-educated residents than it has gained." The likely reason, he says, is the high cost of housing.
According to the Policy Institute study, titled "Can California Import Enough College Graduates to Meet Work Force Needs?," the state required 158,400 U.S. or foreign immigrants a year to allow businesses to meet economic projections between 2000 and 2005. But on average the state lost 9,200 more college graduates to other states than it gained. The annual net immigration from outside the country came to 55,760.
Based on these numbers, the state would have to triple the number of highly educated foreign immigrants to meet the state's economic demands. Such increases are not contemplated in the current immigration proposals being debated in Congress.
"Even if the legislation increased the quotas it might not be possible to attract all the workers we need because of increased competition for those graduates from employers around the world," Johnson says.
No one is more concerned about the potential employee gap than solar energy companies. With state law pushing utilities to use renewable energy sources for 20 percent of their energy generation and offering $3 billion in incentives for consumers to install solar panels, the industry is expected to need as many as 10,000 new workers over the next decade, says Justin Bradley, director of energy programs for the Silicon Valley Leadership Group.
"Until now, the solar industry has been a niche, a fraction of the load," Bradley says. "Now it's going to be growing by percentage points."
The workers needed won't just be the electrical engineers with Ph.D.s but people to install solar systems in homes and businesses and to build, test and maintain the solar panels. Much of this work could be done by people with two-year degrees, Bradley says.
"We want to make sure we are not starved for talent at the point of solar energy's greatest expansion," Bradley says.
A retirement wave is expected to add more stress. Machinist are one example cited by Michael Curran, director of the NOVA Workforce Board in Sunnyvale.
The total number of machinist jobs has declined over the last two decades, but because of retirements the number of job openings is on the rise right now.
"Because of a decline in vocational training, we have lost the technical pipeline that used to supply workers for these kinds of jobs," Curran says.
Some technology companies are trying to improve the domestic education system in hopes of finding home-grown employees.
Intel Corp. gave $63.2 million last year to schools, says spokesman Mark Pettinger. Intel works with individual schools, helps develop curricula that is relevant to the workplace and holds an international science fair that brings together 1,500 science-oriented high school students every year.
It also is working with teachers.
"The average K-6 teacher has had 1.3 college courses in math," says Julie Dunkle, U.S. Education Project Manager and herself a former math teacher at Mission High School in Fremont. She is working with the Massachusetts Dept. of Education and the SVLG to create a professional development program for elementary school math teachers. "We are very serious about U.S. competitiveness," she says.
Silicon Valley companies are also pushing for improvements to the immigration system. They were disappointed by the recent compromise in the Senate immigration bill, which does little to increase the number of highly skilled tech workers.
"We would like to see a plan that is more market-based," says John Palafoutas, Washington, D.C.-based chief lobbyist for the AeA technology association.
The bill has no provision to increase the number of H-1B visas aimed at the well-educated workers that tech companies seek. The proposal would give points to educated workers. The points would increase the chances that an applicant will get a visa.
A more market-based system would contain a mechanism that would adjust the number of visas offered to meet the demand for workers. The applications for H-1Bs this year opened on April and closed 24 hours later. Only 65,000 are issued each year. U.S. Department of Labor statistics show that there were more than 65,000 applications filed by California companies alone last year.
U.S. Rep. Zoe Lofgren, D-San Jose, says the immigration system should include a market-based approach.
"I think Soviet-style economic planning didn't work well for the Soviet Union, and it's unlikely to work for America either," she said in an interview.