Silicon Valley is lying about the state of U.S. tech education

When a Soviet rocket launched Yuri Gagarin into space on April 12, 1961, America freaked out. How could the uncouth Russians beat us into space? It didn’t take long for scolding fingers to point at the American educational system. “Why Johnny Can’t Read” was a typical newsmagazine headline of the time. Pretty soon after, we were asking why Johnny couldn’t do arithmetic or perform a simple science experiment.

That turned out to be nonsense. Once the United States decided to spend the money, the space race was won — without a fundamental reform of the educational system. Now we’re hearing a new version of the same old story: America is being out-innovated by other countries, and Silicon Valley is in danger of withering as restrictive immigration policies lead to a drought of highly skilled workers.

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A big part of the problem, say the tech billionaires and credulous pundits, is our higher education system, which somehow can’t turn out nearly enough science-savvy grads. The buzzword of the year is “STEM,” which stands for science, technology, engineering, and math. When it comes to STEM grads, we’re falling behind the rest of the world, they say.

Don’t believe it. There is no shortage of STEM graduates, and as I wrote ln February, Silicon Valley is pretending there is a labor shortage as it relentlessly lobbies to let in thousands of additional foreign IT workers under the H-1B visa program.

Although STEM sounds like a precise term, it turns out that different organizations tracking such info use different definitions for it. But the bottom line is clear: We’re producing more and more scientists, mathematicians, and engineers every year. And we’re innovating at a breakneck pace.

The United States leads the world in STEM grads, producing 348,484 in 2008, according to a report by Congress’ Joint Economic Committee. The number of grads in engineering and science has grown enormously, increasing from just under 400,000 in 2000, to 494,000 in 2008, according to the National Science Foundation.

With the exception of Japan, the United States also holds a huge lead in the number of patents granted — 224,505 in 2011, compared to 172,000 in China, the country supposedly eating our lunch — according to the World Intellectual Property Organization.

STEM grads not flocking to Silicon Valley, as tech wages stagnate According to the conga line of tech pundits and tech billionaires, half a million STEM grads (certainly more by now) is still not enough.

If that’s the case, you’d assume that those STEM grads would be pouring into the technology industry. But they aren’t, says Ross Eisenbrey, the vice president of the Economic Policy Institute. “Two out of three people who have a STEM degree in the U.S. are not working in a STEM field,” he told me. It’s hard to know why that’s the case, but “I suspect that if wages were higher, they’d be headed in that direction.”

Salaries in computer- and math-related fields for workers with a college degree rose only 4.5 percent between 2000 and 2011, says Eisenbrey. “If these skills are so valuable and in such short supply, salaries should at least keep pace with the tech companies’ profits, which have exploded.”

What happened as the recovery kicked in last year? Not much. IT salaries inched up by less than 2 percent in 2012, pushing compensation back up to January 2008 levels, according to a study by Janco Associates, a research company.

There’s something else going on here — and it’s pretty ugly, says Ron Hira, a public policy professor at the Rochester Institute of Technology and researcher of tech immigration issues: “Large companies are collaborating with each other to keep salaries down.”

A conspiracy to restrain tech wages Sound extreme? Maybe paranoid? The U.S. Department of Justice doesn’t think so. On Nov. 16, 2012, the DoJ’s Antitrust Division filed suit against eBay, alleging that its senior executives entered into a “handshake” agreement with Intuit execs not to solicit each other’s employees.

The complaint (filed in federal court in San Jose, Calif.) alleges that eBay’s most senior officers “were intimately involved in forming, monitoring, and enforcing” an agreement with Intuit not to hire one another’s employees, and this alleged agreement “harmed employees by lowering the salaries and benefits they might otherwise have commanded, and deprived these employees of better job opportunities at the other company.”

Tellingly, this eBay/Intuit case isn’t unique. In 2010, the DoJ filed a similar action against Adobe Systems, Apple, Google, Intel, Pixar, and Intuit. The defendants quickly settled without admitting wrongdoing. The DoJ noted in a press release that “cold calling” employees of a competitor is a widespread practice in the tech industry. By agreeing not to do that, the companies were working to keep wages down.

What’s more, these wage-fixing schemes are closely related to the push for more H-1B visas. As I pointed out in my February post, most workers brought to the United States on H-1B visas work for outsourcers like HCL Technologies, Infosys, and Tata Consulting Services, as well as foreign affiliates of nominally U.S. companies such as Accenture, Deloitte, and PwC. Because they are here on the sufferance of their employers, those workers tend to be compliant and willing to work for wages that are lower than those paid to citizens. Because they have H-1B visas, they can’t change jobs — unlike a foreigner with a green card.

When confronted with statistics proving that the United States is producing a bumper crop of STEM grads, the apologists for Silicon Valley reply that in other countries a higher percentage of college graduates hold degrees in STEM-related fields. But that argument proves nothing, says Hira.

India’s economy, for example, is very different than ours. Technology is one of the few areas that offer opportunities for the educated, so naturally Indian students flock to it. That’s not at all the case in the United States, which, by the way, has a much higher percentage of the population going to college than India does, Hira adds.

We don’t have a labor shortage or a STEM-grad shortage in the technology industry. What we have is a shortage of tech companies willing to play by rules that would reward their employees with a fair share of their enormous profits.

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This article, “Silicon Valley is lying about the state of U.S. tech education,” was originally published by InfoWorld.com. Read more of Bill Snyder’s Tech’s Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.