Employer searches for workers with skills in science, technology, engineering and math remain slow and expensive.
Meanwhile, unemployed workers lacking those so-called STEM skills are finding it tougher to resume their careers, according to a nationwide report by the Brookings Institution’s Metropolitan Policy Program.
A different Brookings report last year ranked Baton Rouge first and New Orleans third among large metro areas for the percentage of STEM jobs in their economies.
Employers this year, however, have expressed concerns that there are insufficient numbers of such qualified workers for future industrial expansions that are expected to top $60 billion statewide.
Brookings’ latest report shows both Baton Rouge and New Orleans are in the bottom half of the top 100 metro rankings for pay listed in companies’ online postings of STEM-related jobs.
And the growing annual pay gap between STEM and non-STEM jobs is significant, nearly $7,000 in Baton Rouge and more than $5,000 in New Orleans.
Economic development leaders in both cities are aware of those gaps.
“The Brookings ranking confirms that there is still work to be done in STEM training in order for our region to meet the rapidly growing demand for STEM jobs,” said Michael Hecht, president and chief executive officer of Greater New Orleans Inc.
Hecht said tremendous STEM job demand is expected in the New Orleans area for years into the future.
From now until 2023, Hecht said, STEM job openings in the New Orleans metropolitan area are projected to total 89,572.
“With this in mind, GNO Inc. is working to increase STEM training options by partnering with our two- and four-year higher education institutions to connect them to STEM industry leaders and to help them communicate the opportunities in STEM careers to parents and educators,” Hecht said.
“An early example of our success here is the public-private education and training partnerships we have facilitated between Laitram, a local STEM-driven advanced manufacturing company, and Delgado (Community College in New Orleans), UNO (University of New Orleans) and Southeastern (Louisiana University at Hammond).”
Michael DiResto, senior vice president for economic competitiveness at the Baton Rouge Area Chamber, said, “The top priority for BRAC with regard to education is working with regional partners, businesses and educators to align the metro area on a regional STEM education strategy.”
Through its education- and workforce-issue councils, DiResto said, “BRAC is developing a STEM strategic plan out of recognition that a model for education and workforce readiness” could help match student skills to industry’s needs.
For STEM jobs that require more than a high school degree, but less than a bachelor’s degree, DiResto said, “triple-digit growth will be necessary in order for supply to satisfy workforce demand. Locally, STEM-related jobs are the fastest-growing because of the industry mix of construction, health care, and computer and mathematics occupations.”
Louisiana’s recently adopted Workforce and Innovation for a Stronger Economy Fund, or WISE Fund, may help ease the current shortage of skilled STEM workers, DiResto said.
The $40 million state fund provides money to universities, community colleges and technical colleges in amounts based on the degrees and certificates those schools award in high-demand fields, such as computer science and engineering.
As for the Brookings study, DiResto said: “We know there is STEM job demand in the capital region that is outpacing supply, so the job advertisement might not be the most reliable indicator, since a company could have only a single ad to describe an occupation with several open positions.”
Explained DiResto: “An engineering company may be looking to hire 10 engineers, but only release one ad, because the skills are the same. Likewise for an industrial construction company, you may need 70 pipefitters, but only place a single ad.”
Current opportunities are diverse.
STEM jobs aren’t limited to physicists, engineers and medical doctors, according to Brookings. They include those of plumbers, nurses, accountants, computer machine programmers and many others, such as industrial designers.
“STEM jobs are highly valuable, in part because they often are associated with economic-driver organizations … meaning that a greater supply of engineers and computer scientists, for example, can lead to faster job growth overall,” said Stephen Moret, secretary of the Louisiana Department of Economic Development.
Moret said examples of economic-driver organizations include “software development centers, engineering firms, R&D (research and development) centers and manufacturing facilities that generate most of their sales from out-of-state customers, bringing wealth to the areas in which they are located.”
In Louisiana, only Baton Rouge and New Orleans are among the nation’s 100 largest metropolitan areas, all of which were analyzed and identified in the Brookings report this month. In total, Brookings tracked 3.3 million corporate online job advertisements across 52,000 companies.
The Brookings study shows the New Orleans area ranked 66th among the top 100 metros for overall pay last year with an average annual salary of $55,949. But advertised STEM jobs averaged $59,233, or 9.5 percent more than average non-STEM pay of $54,119.
Baton Rouge ranked 67th, at $55,865, for average annual pay attached to all categories of job vacancies advertised on company websites in the first quarter of 2013. But STEM jobs in the Baton Rouge area paid an average of $60,237. That was 13.1 percent more than the $53,263 wage attached to the area’s average non-STEM job.
“When comparing salaries across markets in the U.S., it is important to adjust for cost of living,” Moret said of the Brookings report.
For example, Moret said, “A job paying $55,000 in Baton Rouge would be roughly equivalent to one paying around $90,000 in parts of (New York City) or San Francisco.”
Nationally, San Jose, California, had the highest average annual pay for all company-advertised jobs in the metros studied by Brookings — $68,128. STEM jobs advertised in the San Jose area averaged $73,070, about $12,500 more than that area’s average non-STEM pay of $60,511.
Employers in the McAllen, Texas, area paid the lowest average of $50,456 for jobs they advertised. The average STEM job in McAllen paid $55,134. The average non-STEM job paid $49,358.
Jonathan Rothwell, the Brookings associate fellow who wrote the report, said evidence shows “hiring difficulty is a serious problem for many employers seeking workers with STEM skills.”
In blunter terms, Rothwell said: “There is a national relative shortage of workers with STEM skills, and the shortage is roughly as severe now as before the recession. Generally, more valuable STEM skills — measured by salary offers — are more difficult to fill. The problem is particularly acute in specific regions with few STEM workers or few unemployed STEM workers.”
“The shortage of STEM workers means that the gap in earnings and unemployment between STEM and non-STEM workers will worsen, exacerbating income inequality across all demographic groups,” he said.
Moret said the problem is being addressed in Louisiana.
Over the past several years, Moret said, “We have secured economic-development projects that are creating many thousands of new STEM jobs in Louisiana, such as Bell Helicopter (Lafayette), Benteler Steel (Shreveport), CenturyLink (Monroe), CGI (Lafayette), CSC (Bossier City), GE Capital (New Orleans), IBM (Baton Rouge) and Sasol (Westlake). More such announcements are on the way.”
In an interview, Rothwell explained that students in high school or community college can enhance their earning capabilities if education and legislative officials in their states focus on STEM skill programs.
For example, Rothwell said, students at high schools in Virginia Beach, Virginia, can earn certificates in STEM skills that enable them to grab higher-paying STEM jobs upon graduation.
The state of Florida, Rothwell said, allocates funding for state universities in relation to how well those four-year schools teach their STEM students.
Louisiana, Moret said, has “committed $37.5 million over 10 years to at least triple the annual number of bachelor’s graduates in computer science at LSU, Louisiana Tech University, the University of Louisiana at Lafayette and UNO.”
Added Moret: “All of these universities will benefit from the engagement of top (information-technology) companies in the modernization of their curriculum, ensuring their graduates are prepared with cutting-edge knowledge to be successful in the marketplace.”
STEM knowledge can provide a significant financial boost over the course of an employee’s career, according to the Brookings report.
“In 1970, workers earned 12 percent higher earnings if they worked in an occupation that was significantly more STEM-oriented,” the report notes. “By 2012, that premium was up to 21 percent.”
Today, the job market is shrinking for people seeking employment in non-STEM careers, according to Brookings.
“There were just 0.7 openings for those (seeking employment in) legal occupations, 0.2 for production workers and 0.1 for construction workers,” Brookings analysts found earlier this year.
Those numbers translate into 10 unemployed construction workers for every advertised construction job and five unemployed production workers for every vacant production job.
Brookings added that the March unemployment rate for construction workers was 8.8 percent, 4.2 percentage points higher than the national unemployment rate for 2007.
Conversely, the Brookings report notes: “Job vacancy data for the United States in early 2014 reveal five job openings for every unemployed computer worker, 3.3 for every unemployed health care practitioner.”
Nationally, at the midpoint for duration of job vacancy advertisements, Brookings reported, “STEM job postings last over twice as long as non-STEM jobs (11 vs. five days). At the mean, the difference is proportionately smaller, but still highly significant (39 vs. 33 days).”
Moret said a new state website, launched last month, is expected to decrease the time necessary to fill job vacancies with workers whose skills match employer needs.
Moret said the site is open only to employers now.
“We expect to open it up to job seekers later this summer,” Moret added.