Last week, a long-simmering, intra-conservative debate flared on X. What might be called the “tech Right,” led by Elon Musk and Vivek Ramaswamy, argued for more visas to fill STEM jobs, while Trump-aligned populists called for limiting those visas in order to favor American workers and slow cultural change.
One stumbling block in this debate is the uncertainty surrounding the type of foreign STEM worker that advocates desire. While hardly anyone would object to recruiting 10,000 genuine Einsteins each year, the case for bringing in hundreds of thousands of immigrants simply because they have STEM degrees is much weaker. Indeed, there is no general “shortage” of STEM workers in the U.S.
How do I know that? Because if technology companies were as desperate for STEM workers as advocates insist, then compensation would soar as employers compete to recruit and retain scarce talent. The Employer Cost for Employee Compensation survey, published by the Bureau of Labor Statistics, offers a test of that prediction. It shows that real total compensation (meaning inflation-adjusted wages and benefits) for STEM workers in the U.S. has not been soaring at all, but has instead been essentially flat, with an average annual increase of just 0.15 percent since the data became available in 2008.
Needless to say, demand for STEM labor cannot be outstripping supply. If anything, it’s the opposite. Analysis of the American Community Survey shows that there were 17.2 million working-age Americans in 2022 with STEM degrees, but only 8.6 million were actually employed in STEM jobs. Subsequent waves of layoffs in the technology industry suggest the gap is even larger now. Elon Musk himself famously eliminated a large fraction of Twitter’s workforce after buying the company.
Could it be that foreign workers are still in demand because they are more talented than the average American with a STEM degree? No. In an article for the academic journal PLOS One, I showed that foreign-degree holders are paid less than their U.S.-trained counterparts, in large part because they are less skilled. Furthermore, the “high-skill” H-1B program does not seem to attract top talent. According to an analysis in the Journal of Political Economy, firms that win the lottery for an H-1B visa experience an increase in innovation that is “insignificant and at most modest” compared with firms that lose.
Again, there is widespread agreement that the U.S. should recruit immigrants of extraordinary ability. Unfortunately, advocates for high-skill visas often speak of Einsteins but then support policies that bring in ordinary college graduates instead. Musk, for example, praises the H-1B program while also claiming to want only “the top ~0.1% of engineering talent.” The former does not produce the latter.
A compromise position, outlined by my colleague Mark Krikorian last week, is to embrace a reform similar to Senator Tom Cotton’s RAISE Act. The bill would create a points system aimed at improving the selection of high-skill immigrants that the tech right desires, while at the same time reducing the overall number of (mostly low-skill) immigrants, as traditional immigration skeptics advocate. Both sides should find value in that approach.