We need stimulus, not STEM

In my last two posts, I argued that the national push for STEM—that is, using education policy to push students toward careers in science, technology, engineering, and math—is a form of corporate welfare. But isn’t it possible that pushing STEM might reduce unemployment and help us get out of this recession?

Don’t bet on it. The argument for pushing STEM is not only dubious, it’s part of a larger dubious argument about what’s wrong with our economy and how we should fix it. Here’s Paul Krugman discussing research by economist Edward Lazear:

Lazear’s question is whether a large part of the rise in unemployment is “structural”, that is, reflecting supply factors, or whether it’s mainly simple lack of demand. The Keynesian view is, of course, that it’s demand, and that fiscal and monetary policy should be acting to provide the missing demand. On the other side you have either supply-side views a la Mulligan claiming that taxes and benefits are discouraging people from working, or more or less Austrianish views that it’s about maladaption of the structure of production that left too many workers and too much capital stuck in the wrong industries.

Lazear goes through the data, and finds overwhelming evidence of inadequate demand, little if any evidence of structural problems.

In other words, the argument for pushing STEM is brought to you by the same people who brought you fiscal austerity, and who—as Krugman never tires of reminding us—have been wrong about everything.

If the problem is inadequate demand, the fix is fiscal stimulus, not education policy. Funny how often education proposals function as substitutes for addressing real economic ills.

More from Freddie deBoer here.
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The myth of “unfilled STEM jobs”

Yesterday I posted about a study arguing that the shortage of qualified job applicants in science, technology, engineering, and math (STEM) is a myth. I can’t vouch for that study’s analysis, but isn’t the whole concept of “unfilled positions” inherently suspect?

Just as every house sells if you price it low enough, every job opening gets filled if the salary is high enough. To say that there are “unfilled openings” is to say that employers would happily hire more people if only the prevailing market wage were lower. But that is not peculiar to STEM; it is generally true in any industry.

To say that there are “not enough qualified applicants” is no different. I promise: if you offer enough money, you’ll find a qualified applicant. Yes, the total number of qualified applicants is limited by how attractive a given career path is relative to others. If the salaries are only so attractive, only so many people will go into that field. To complain about it is to complain that market forces are limiting your profits. Poor you!

If accountants were willing to work for minimum wage, it’s a safe bet that accounting firms would increase their hiring. Think of all those “unfilled positions”! That is not an argument for government intervention to increase the supply of accountants.

I’m counting on someone with a more sophisticated understanding of economics than mine to let me know where I’m going wrong here—though at least this guy seems to agree with me.
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Is the push for STEM just corporate welfare?

The Washington Post reports on a study arguing that the STEM worker shortage is a myth—that in fact there are lots of STEM grads and not enough STEM jobs for them to fill.

I remain puzzled by the national push for STEM (that is, increased emphasis on education in science, technology, engineering, and math). Regardless of that study’s accuracy, won’t government intervention to increase the supply of labor in a particular industry inevitably lead to lower wages in that industry? Who benefits?

If you’re a liberal, shouldn’t you be bothered by government interventions that seem designed to lower wages in a particular industry?

If you’re a conservative, shouldn’t you oppose government interventions like these, and put your faith in the invisible hand of the market?

If you like big-government corporate welfare, though, this sounds like the program for you.
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