Geeks Don't Need Welfare
The multibillion-dollar
computer industry is adamant about doing things its own way, insisting that the
government stay out of its business. So why is the Clinton administration
spending $28 million to remedy an alleged shortage of "information technology"
workers?
The
info-tech worker shortfall cited by the government is documented in a recent
Virginia Tech study, which claims that 346,000 computer-related jobs are going
begging for lack of trained people. This shortage, said Secretary of Education
Richard Riley, "translates into billions of dollars in unearned wages and
unrealized corporate earnings." According to the Bureau of Labor Statistics,
the volume of vacant high-tech positions will increase fivefold in the next
decade--but the number of college students majoring in computer science is
shrinking. "Today," said Vice President Al Gore mournfully, "many employers
report difficulty in recruiting enough workers with these skills."
Assuming that there is a shortage of info-tech
workers, the administration's $28 million remedy, announced in January, won't
fix it. The Clinton plan is an amalgam of several modest programs divided among
the Commerce, Education, and Labor departments. (For comparison's sake, Sun
Microsystems spends $50 million a year on education and training.) Much of the
effort is little more than exhortation, like the Commerce Department's plan to
hold four town hall meetings to examine the shortage and discuss ways to
alleviate it. Other elements are only coincidentally helpful. The Education
Department touts Pell grants and HOPE scholarships, and calls for national
testing and better teachers--which are no more helpful to computer-related
businesses than to banks, breweries, or oil companies.
Much of
the administration's program is mere packaging--the rest is well-meaning
chatter, notably a plan to launch an advertising campaign to convince kids that
computer jobs are not just for geeks anymore. There is a little meat on these
bones, including $3 million to fund local efforts to retrain dislocated workers
for information-technology jobs and $8 million for a computer job bank on the
Internet. But neither promises to make a dent in the supposed shortage.
I keep writing about a "supposed" or "alleged"
shortage, because the dearth of info-tech workers is an illusion. Translated
into English, what the academics and bureaucrats are saying is that businesses
can't hire all the computer specialists they want at prevailing rates. They're
saying that businesses could make use of more of these trained workers if they
were abundant and cheap--just as I could drink Dom Perignon every night if it
were priced like Old Milwaukee. When the unemployment rate is below 5 percent,
as it has been since last July, a lot of industries find that hiring is not
quite as easy as it used to be. In a fast-growing industry that requires
technical skills, it's no shock that demand for workers is rising faster than
the supply. (The cheapest way to close the "gap" would be to increase the
number of essential-skilled immigrants--currently fixed at a maximum of 65,000
each year--but the administration rejects that proposal.)
Fortunately, there is a simple solution to the shortage: higher pay. Since last
September, salaries for new college graduates with computer science degrees
have jumped by 8.6 percent, reports the Information Technology Association of
America. That may be painful for the companies signing the paychecks, but it's
good for the youngsters who had the foresight to enter the field. It also
advances the goal of encouraging kids to consider computer careers. What's more
likely to dispel the nerdy image of programmers and software
writers--public-service commercials on TV or a big pile of cash? Even if higher
pay doesn't improve the image of computer jockeys, it will doubtless provide
sufficient consolation to enable more young people to live with it. Rising
salaries will also encourage midcareer adults to enroll in the nearest
community college to retool for a second career. It should also induce firms to
provide more computer training for existing workers.
The ITAA, which advocates raising the visa limit, says the
industry it represents can't wait for the market to fix the problem. "We
operate on Internet time," ITAA President Harris Miller told Congressional
Quarterly . Well, everybody operates on Internet time these days. The notion
that the computer industry is uniquely important is common but groundless. All
sorts of industries are important to national prosperity, yet the federal
government doesn't take on the responsibility of monitoring and adjusting the
flow of workers into each one. Riley claims that all those unfilled jobs
represent lost wages and profits. But the money that would be spent doesn't
vanish up the chimney--it ends up in paychecks and dividends in other
industries whose products are also valued by consumers.
As with
most Clinton proposals, this one's modesty is meant to disarm. The natural
response is: Oh, what could it hurt? Not much. But some students will be
induced to study computer science rather than some other subject, and each one
of these gains for computer-related businesses is a loss for other businesses.
A lot of the money is likely to be simply wasted, though.
Despite Clinton's infatuation with the idea,
the federal government's record in training people for better jobs is not
studded with triumphs. The Job Training Partnership Act, a decades-long federal
program, appears to be almost entirely futile. "It's been a failure overall,"
says University of Chicago economist James Heckman. A 1994 survey by the
Organization for Economic Cooperation and Development, an international
association of market economies, found "remarkably meager support for the
hypothesis that such programs are effective." The best programs, nearly
everyone agrees, are those conducted by companies for their own workers. Why?
Because employers have strong reasons to tailor the training to assure its
practical value and to avoid wasting funds on feel-good exercises.
If it makes cold economic
sense to invest more in training computer workers and attracting more people to
high-tech jobs, we can sleep easy knowing that the relentlessly rational
propeller-heads who run computer-related businesses will do so, eliminating the
need for taxpayers to do it for them. Corporate welfare is a bad enough idea
without adding the Silicon Valley gang to the rolls.
