I learned this from a reporter in the India media, interestingly. The whole STEM shortage gig was created by an NSF model that was flawed. This in turn, though, was used to create the H-1B temporary visa program. Even though the model was ripped to shreds within years, the H-1B program continued on for 35 years.
🧠 The 1986 NSF Report: Origins of the STEM Shortage Narrative
In 1986, the National Science Foundation (NSF) released a report based on a labor market forecasting model that predicted a severe shortage of scientists and engineers in the coming decades. The model projected that U.S. universities would not produce enough STEM graduates to meet future demand, especially in high-tech industries.
This forecast became a key justification for the creation of the H-1B visa program in the Immigration Act of 1990, which allowed U.S. employers to hire foreign workers in specialty occupations, particularly in science, technology, engineering, and mathematics.
🔍 What Went Wrong: Debunking the Model
The NSF model was later heavily criticized and largely discredited for several reasons:
- Flawed assumptions: It assumed linear growth in STEM demand without accounting for economic cycles, automation, or shifts in industry needs.
- Overestimated retirements: The model predicted mass retirements of older scientists that didn’t materialize at the expected scale.
- Ignored labor market adaptability: It failed to consider how wages, training, and career shifts could rebalance supply and demand.
- No empirical validation: Subsequent labor market data showed no sustained STEM shortage, and in some fields (e.g., biology, chemistry), there was a surplus of PhDs.
📚 Scholarly Critiques
- Norm Matloff, a computer science professor at UC Davis, has extensively documented how the shortage narrative was manufactured to justify expanding the labor pool and suppress wages.
- A 2013 Brookings analysis found that while some STEM jobs were hard to fill, many H-1B hires were concentrated in lower-wage IT roles, often displacing domestic workers.
- The White House and Department of Labor have acknowledged that the H-1B program has been exploited by outsourcing firms, leading to wage suppression and job displacement in tech sectors.
🧠 Why It Matters
This episode illustrates how policy can be shaped by flawed modeling, and how narratives of scarcity can be used to justify structural labor changes. It also underscores the importance of empirical validation and longitudinal labor data in workforce planning.
Sources:
Brookings – H-1B Visas and the STEM Shortage
White House – Restriction on Entry of Certain Nonimmigrant Workers
