Do we have too many engineers?

John Tierny on the so-called shortage of engineers and scientists in America:

Now, I'm all in favor of American technological innovation, and I'm glad to see Mr. Obama promising to review the export restrictions that have been so damaging to the aerospace industry (and that were promoted by John McCain because of what he called national-security risks). I'm also all in favor of American scientists and engineers, especially the ones in my family. (My father is a chemical engineer; my brother is an electrical engineer.) I'd love to see American corporations and universities frantically competing to offer them the kind of salaries paid to M.B.A.'s and lawyers.

But employers don't have to throw around that kind of money because there's no shortage of workers -- and they won't be increasing their offers if the federal government artificially inflates the labor supply with an extra 100,000 graduates. As Daniel S. Greenberg wrote in the Scientist magazine in 2003: "Despite the alarms, no current or impending shortage exists, and never did. Instead, we're glutted with scientists and engineers in many fields, as numerous job seekers with respectable credentials can attest."

The only "shortage" is of American-born scientists and engineers. But with so many talented foreigners competing for positions here in schools and laboratories, it's entirely rational for American students to head into fields where their skills are in more demand -- and harder to replace with foreign labor.

The pay for engineers certainly does not reflect a large scale shortage of labor. If there were an extreme shortage of labor, the pay for talented engineers would be on par with the creme of the legal and business school graduates. It might even be higher because of the fact that it takes engineers to actually build products and get technically complicated services up and running. In many lines of work, the engineers are absolutely critical to the company's very existence as a viable entity.

There are some good, albeit cynical, explanations for why people on the "business side" and in the legal profession often make more money. As a contract software engineer, one thing I've discovered is that management often treats engineers like they're a type of well-educated laborer, rather than a key part of the business' ability to execute contracts and bring in more business. It's common for management staff--the MBAs--to work under the assumption that they will be rewarded in part based on how much they do for the business to help it grow, but such incentive programs are often shut off from engineers, even those who have a desire to help the company win new business. Usually, the closest thing that engineers get to an incentive program is some sort of general stock option program that's open to most of the company.

The one obvious flaw to Tierny's argument is the professions that are ostensibly more hospitable to young Americans looking to make a good salary are professions that have an artificially high barrier to entry. Most of them, no matter how good, simply won't be able to get into them and then make it from there because there are only so many slots at well-connected law firms and so many seats in medical schools. Then you have the basic problem that more and more of America's young best and brightest are headed toward fields which simply don't produce any wealth. It takes engineers and scientists to make new products to sell in the global economy, and an American economy that is largely divided between American management and foreign wealth-producing labor will be a precarious balance indeed. After all, you can stuff a company with the best and brightest MBAs in the world, but if it doesn't have people that can build a new product among them, all of their business school training won't be able to bring a new product to market.