California’s Demand for a Science and Technology Workforce

Abstract:

From March 2001 to May 2001, the number employed in California’s communications equipment industry decreased by 2.3%; the number employed in electronic components manufacturing decreased by 1.8%; and the number employed in computer programming services decreased by 0.2%. In this environment, one might forget that just a year ago employers complained of a shortage of skilled labor and lobbied Congress for expansion of the H-1B visa program to expand recruitment of workers from overseas. Yet, California’s science and technology sector still employs a large number of workers and the long-term trend in employment is positive. Furthermore, although complaints of shortages of skilled labor have receded, they are unlikely to disappear completely. Employers have complained periodically about a deficit of skilled science and technology labor since at least the 1950s. Examining these complaints in 1959, economists Keith Arrow and William Capron concluded that the shortages of scientists and engineers reflected the lag between a shift in demand and a shift in supply. (Arrow and Capron, 1959) The market works, they argued, it just takes time. Lerman (1998) and Conrad (1999) reached similar conclusions about the contemporary labor market for science and technology workers. This paper is part of a larger study of the factors that contribute to this lag between shifts in demand and shifts in supply – the California Council on Science and Technology’s Critical Path Analysis Project. The other components of this critical path analysis examine bottlenecks in formal education. This paper focuses on what happens once formal education is complete. It asks four questions. What is the level and geographic distribution of employment? What is the trend in employment and earnings? What are the required skills? What obstacles, if any, delay adjustment to equilibrium or lead to an inefficient allocation of labor resources?