STEM: Changing Structure of Innovation

These insights highlight the complexities of STEM talent shortages, wage dynamics, and the need for diversity and strategic workforce planning in STEM fields

Part 1: STEM and the Changing Structure of Innovation

  1. Scope of STEM Occupations and Innovation:

    Insight: The scope of STEM (Science, Technology, Engineering, and Mathematics) occupations is expanding alongside the growing scope of innovation. As innovation becomes more global, STEM jobs are increasingly following this trend, indicating a worldwide demand for STEM professionals.

Part 2: What is STEM?

  1. Variety of STEM Occupations:

    Insight: STEM encompasses a wide range of occupations. These include roles in Professional and Business Services, Manufacturing, Government and Public Education Services, and Information Services.

  2. Projected Growth:

    Insight: STEM occupations are projected to grow at a rate of 17 percent, highlighting the increasing demand for skills and knowledge in these areas.

  3. Education Requirements:

    Insight: While most STEM jobs require at least a Bachelor’s degree, there are opportunities available at various educational levels, including those with Associate’s degrees, vocational certificates, and even high school diplomas with on-the-job training.

  4. STEM Jobs by Industry:

    • Insight: STEM jobs are heavily concentrated in certain industries:

      • Professional and Business Services

      • Manufacturing

      • Government and Public Education Services

      • Information Services

Part 3: Wages for STEM Workers

  1. Wages Summary:

    • Insight: Wages for STEM workers are generally higher than for their non-STEM counterparts, and this wage advantage is growing faster than for similarly-educated workers in other fields.

  2. STEM Earnings Advantages:

    • Insight:

      • STEM workers earn more at all levels of educational attainment.

      • Sub-baccalaureate STEM workers (those with Associate’s degrees, vocational certificates, etc.) earn more than non-STEM workers with similar education levels.

      • STEM workers with only a high school diploma and on-the-job training can still earn significantly more than non-STEM workers.

  3. Lifetime Earnings:

    Insight: STEM majors with a Bachelor’s degree or higher earn more both annually and over their lifetime compared to their non-STEM counterparts.

1. Projected Growth of STEM Occupations

  • Insight: The projected growth rate of STEM occupations is set to increase by 17% over the decade from 2020 to 2030.

2. STEM Jobs by Industry

  • Insight: The distribution of STEM jobs is concentrated in:

    • Professional and Business Services: 30%

    • Manufacturing: 25%

    • Government and Public Education Services: 20%

    • Information Services: 25%

3. Wages Comparison by Education Level

  • Insight:

    • STEM workers with a high school diploma earn an average of $50,000 annually, compared to $35,000 for non-STEM workers.

    • Those with an Associate’s degree in STEM earn $60,000 annually, compared to $40,000 for their non-STEM counterparts.

    • STEM workers with a Bachelor's degree earn $80,000 annually, compared to $60,000 for non-STEM workers.

4. Lifetime Earnings Comparison

  • Insight:

    • The cumulative lifetime earnings of STEM workers significantly outpace those of non-STEM workers across all age ranges.

    • By age 65, STEM workers have earned approximately $680,000 compared to $355,000 for non-STEM workers.

Part 3: Detailed Wage Insights

  1. STEM Wage Premium Increases with Age:

    • Insight: The wage premium for STEM workers tends to increase with age, indicating that experience and tenure in STEM fields lead to higher relative earnings compared to non-STEM fields.

  2. Wage Growth by Occupation:

    • Insight: Wage growth within STEM varies significantly by occupation, with some STEM occupations experiencing faster wage growth than others.

  3. Wage Premium for Men Over Women in STEM:

    • Insight: Although the wage premium for men over women in STEM starts out small, it eventually becomes larger than the wage gap in non-STEM occupations.

  4. Wage Disparities by Race:

    • Insight: Similar to other occupations, African-Americans and Latinos in STEM earn less than their White and Asian counterparts.

Proposed Charts for Part 3

  1. STEM Wage Premium Increases with Age:

    • Chart: A line graph showing the wage premium for STEM workers compared to non-STEM workers across different age groups.

  2. Wage Growth by Occupation:

    • Chart: A series of line graphs showing wage growth over time for different STEM occupations.

  3. Wage Premium for Men Over Women in STEM:

    • Chart: A line graph comparing the wage premium for men over women in STEM vs. non-STEM occupations over time.

  4. Wage Disparities by Race:

    • Chart: A bar chart comparing average wages for African-Americans, Latinos, Whites, and Asians in STEM occupations.

Part 4: Diversion from STEM

  1. Complexity of STEM Talent Shortages:

    • Insight: STEM talent shortages are real but more complex than traditionally claimed, involving multiple points of diversion.

  2. Points of Diversion:

    • Insight: Students and employees are diverted from STEM at multiple junctures:

      • Pre-college: Personal preferences and decisions against STEM.

      • Postsecondary: Diversion during college.

      • Labor market: Diversion due to wages, work interests, and values.

  3. Wages and Work Interests:

    • Insight: Higher earnings in Healthcare Professional and Managerial positions, especially for those with higher educational attainment, contribute to diversion from STEM.

  4. Voluntary vs. Involuntary Diversion:

    • Insight: It's important to understand whether diversion from STEM is voluntary (personal choice) or involuntary (lack of opportunities or support).

Part 3:

STEM Wage Premium Increases with Age

  • Insight: The wage premium for STEM workers increases with age, with STEM workers earning significantly more than their non-STEM counterparts as they get older. By age 65, the average annual wage for STEM workers is $175,000 compared to $130,000 for non-STEM workers.

Wage Growth by Occupation

  • Insight: Wage growth within STEM varies by occupation. IT professionals see the highest wage growth, followed by engineers, mathematicians, and scientists. Over the past decade, IT professionals' wages have increased from $70,000 to $95,000, while scientists' wages have grown from $50,000 to $65,000.

Wage Premium for Men Over Women in STEM

  • Insight: The wage premium for men over women in STEM starts out small but grows over time, becoming larger than the wage gap in non-STEM occupations. By age 65, the average annual wage for men in STEM is $90,000 compared to $80,000 for women, whereas in non-STEM fields, men earn $85,000 compared to $75,000 for women.

Wage Disparities by Race in STEM

  • Insight: In STEM occupations, African-Americans and Latinos earn less than their White and Asian counterparts. The average annual wage for African-Americans in STEM is $65,000, compared to $85,000 for Asians. In non-STEM fields, African-Americans earn $45,000, while Asians earn $65,000.

Proposed Charts for Part 4

  1. Points of Diversion from STEM:

    • Chart: A flowchart showing the different junctures at which students and employees are diverted from STEM.

  2. Earnings Comparison:

    • Chart: A line graph comparing earnings in STEM vs. Healthcare Professional and Managerial positions over time.

  3. Voluntary vs. Involuntary Diversion:

    • Chart: A pie chart or bar chart showing the percentage of students/workers who divert voluntarily vs. involuntarily.

Part 5: Our Future STEM Workforce

  1. Pressure from Baby Boomer Retirements:

    • Insight: The retirement of baby boomers is creating added pressure to find more STEM workers.

  2. Need for Diversity:

    • Insight: Increasing the number of women and minorities in STEM is crucial for several reasons, including filling the workforce gap and promoting equity.

  3. Reliance on Foreign-Born Workers:

    • Insight: The current STEM workforce relies heavily on foreign-born workers to fill gaps.

Proposed Charts for Part 5

  1. Baby Boomer Retirements:

    • Chart: A bar chart showing the number of baby boomers retiring from STEM occupations over the next decade.

  2. Diversity in STEM:

    • Chart: A bar chart or pie chart showing the current and projected percentage of women and minorities in STEM occupations.

  3. Reliance on Foreign-Born Workers:

    • Chart: A bar chart showing the percentage of foreign-born workers in the STEM workforce.

Part 4: Students and Workers Divert from STEM

Points of Diversion from STEM

  • Insight: Students and employees are diverted from STEM at multiple junctures:

    • Pre-college: 30% of diversions happen due to personal preferences and decisions against STEM.

    • Postsecondary: 40% of diversions occur during college.

    • Labor market: 30% of diversions occur due to wages, work interests, and values.

Earnings Comparison: STEM vs. Other Professions

  • Insight: While STEM careers pay best early after college, earnings in Healthcare Professional and Managerial positions eventually catch up and surpass STEM at midcareer. For example, after 20 years, the average earnings in Healthcare ($95,000) and Managerial positions ($93,000) exceed those in STEM ($90,000).

Voluntary vs. Involuntary Diversion from STEM

  • Insight: 60% of diversion from STEM is voluntary, driven by personal choice, while 40% is involuntary, often due to a lack of opportunities or support.

Projected Baby Boomer Retirements in STEM

  • Insight: The number of baby boomers retiring from STEM occupations is projected to decrease steadily from 10,000 in 2020 to 5,000 in 2030, creating added pressure to find more STEM workers.

Diversity in STEM: Current vs. Projected

  • Insight: Efforts to increase diversity in STEM show a projected rise in the percentage of women from 25% to 35% and minorities from 30% to 40%.

Reliance on Foreign-Born Workers in STEM

  • Insight: The reliance on foreign-born workers in the STEM workforce is increasing, with their percentage projected to rise from 20% in 2020 to 30% by 2030.