Question to Be Addressed

Assess the limitations in meeting the above workforce needs [refers to the question addressed by Panel 2] and the forces shaping those limitations.

Summary of Lead-off Presentation

Harold Salzman, professor and senior faculty fellow, John J. Heldrich Center for Workforce Development of Rutgers University, introduced the topic of Panel 3—limitations to meeting the workforce needs of DOD and the industrial base—with his presentation entitled “New STEM Labor Market Segmentation: Implications for Meeting Workforce Needs of DOD and the Industrial Base.” He began by attempting to define the problem and asked the following questions: (1) whether there has been a market failure leading to an insufficient labor pool, (2) why there might be such a shortage (e.g., lack of interest at the college level), and (3) what the solution to such a shortage might be—for example, a new, Sputnik-like initiative or the workings of market forces. Salzman reviewed the size of the STEM labor force vis-à-vis recent trends, noting that student performance since 1973 has been rising in mathematics, for example.15 He also noted that the United States has a bimodal distribution in educational performance. Compared to other countries of the Organisation for Economic Cooperation and Development, the United States has a high percentage of high-performing students in science, reading, and mathematics (see Figure 4-6).16

Salzman next turned to the subject of transition rates and yields in the “STEM pipeline.” He noted that the retention rates—related to those who stayed in STEM fields after graduating—have been improving, although the number graduating with degrees in engineering has been flat, at 72,000, for the past 6 years. Salzman then offered his analysis of what has been changing in the pipeline. He discussed the transition from high school graduation to 5 years later (i.e., college outcomes), noting a slight decline since 1977 in the percentage who graduate from college with STEM degrees. Significantly, the number of such graduates who were most prepared (defined as the top quintile of the Scholastic Assessment Test [SAT] or American College Testing [ACT] Assessment) at the time they entered college has declined by roughly half since its peak in 1997. By the next transition point, 10 years after high school graduation, roughly 45 percent of those who graduated from college with STEM degrees remained in the STEM workforce. The data also show increasing retention for most STEM graduates from the 1980s through the early part of this decade. The percentage of the top performers in STEM jobs at that point actually declines, particularly beginning in the mid-1990s through today.

Salzman also discussed the segmentation in STEM education and identified some trends. There has been a decline in the obtaining of STEM degrees by white males but increases in all other demographic groups from 1985 to 2006. He also identified a large increase in the number of temporary-visa holders receiving degrees. He noted, however, that since the STEM definition used in the analysis excludes medicine and patent law, if one were to broaden the definition of what STEM includes, one would find that the gap between native- and foreign-born degree recipients would narrow.

Finally, Salzman posed the question of whether labor markets work to address shortages. He gave the example of the IT labor market, in which, in response to increases in demand, the numbers of persons graduating with IT degrees peaked in 2000, coinciding with the dot-com bust. He also gave an example of the petroleum engineering labor market, which has recently experienced an increase in demand following nearly flat hiring for much of the past 30 years (see Figure 4-7). Evidence of a “temporary” shortage had been exemplified in the increased difficulty in recruiting for jobs in the Alaska North Slope. The market has responded with a sharp increase in annual salaries since 2005. Indeed, salaries for petroleum engineers are now $22,000 above those for chemical engineers, for example. Concurrently, there has also been a sharp increase in the numbers of persons graduating


15B.D. Rampey, G.S. Dion, and P.L. Donahue. 2009. NAEP 2008 Trends in Academic Progress. NCES 2009–479. Washington, D.C.: National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education.

16H. Salzman and L. Lowell. 2008. “Making the Grade.” Nature 453:28-30.

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