U.S. Manufacturing Needs Immigrant Engineers

Speaking with manufacturing executives after the election, their first topic of discussion was not protection from imports but access to engineers. For American manufacturing to thrive, products must be invented and production methods optimized. That means engineers.

For every engineer working in manufacturing there are 20 other jobs, according to the federal government’s tally of employees by occupation. Engineering is largely complementary to production and maintenance jobs, which account for a majority of factory employees. That is, availability of one type of worker spurs demand for the other type. Engineering can also substitute for production workers, as when an engineer automates a manual function. Generally, though, a limitation on engineers will limit employment of other manufacturing jobs. When engineers are in short supply, a company finds it more advantageous to outsource production or shift activities to a location with a more plentiful supply of engineering talent.

The general talk about STEM degrees—science, technology, engineering and mathematics—covers up significant surpluses and shortages within these fields. Biology, bioengineering and chemistry tend to be in surplus, according to a 2015 analysis by the Bureau of Labor Statistics, while computer-related people are in strong demand. With products and production processes becoming more computerized, it makes sense to lump many computer professions in with engineering. The programmers at Facebook may not be enabling manufacturing jobs, but most every factory has somebody with strong computer skills involved in design and production.

Manpower’s annual list of the ten hardest jobs to fill puts engineers in 9th place but rising in the rankings.

migration

Immigrants make up a substantial portion of these engineers, as the chart shows. (Thanks to Migration Policy Institute for permission to reprint.) Among college-educated workers in U.S., 15% were foreign born. In science and engineering, 27% are foreign born, according to an NSF report in 2014. The percentage is even higher in computer science. The Trump administration hasn’t issued any rules (as of the afternoon that this is being written) about broad immigration, but it could come directly or in response to some other international issue.

I won’t argue about immigration policy here, but stick with my focus on business concerns. Companies that rely on engineers should be prepared for that market to tighten up. Work hard at employee retention (first priority) and recruitment (second priority). My understanding of U.S. immigration rules is that it’s relatively easy for companies to rotate foreigners who work at an offshore location into the United States. That becomes an additional advantage to setting up facilities in countries where engineering talent is readily available.

Businesses might also consider outsourcing some research and development to countries where talent is relatively plentiful. Unfortunately, many countries produce engineers who do not match U.S.-educated talent. Take that into account.

Finally, companies whose supply chain includes products heavily dependent on engineering should ask their vendors about how they intend to deal with a tightening of the engineering market.

Disclosure: Learn about my economics and business consulting. To get my free monthly ...

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