Business Entrepreneurship

Why Foxconn Is Considering Engineers From China

Some controversy emerged with a report that Foxconn, a Taiwanese company, plans to transfer engineers from China into Wisconsin to staff its large expansion into the state. A look at the demand for high-skilled talent nationwide and the small number of graduate students in key technical fields at Wisconsin universities might make Foxconn’s thinking more understandable.

“Foxconn Technology Group is considering bringing in personnel from China to help staff a large facility under construction in southern Wisconsin as it struggles to find engineers and other workers in one of the tightest labor markets in the U.S.,” reported the Wall Street Journal. “The company, the Taiwanese supplier to Apple Inc., has been trying to tap Chinese engineers through internal transfers to supplement staffing for the Wisconsin plant, according to people familiar with the matter.”

The article elicited some complaints but a look at the numbers reveals why the company is unlikely to hire enough engineers only within Wisconsin. First, the state’s unemployment rate, as the article noted, is at an incredibly low 3%, and 3.7% nationwide. Second, the unemployment rate for engineers is much lower. In the first quarter of 2018, the unemployment rate among people with at least a bachelor’s degree was only 2% in “computer and math science” occupations and 1.5% in “architecture and engineering” occupations, according to estimates from the Department of Labor Bureau of Labor Statistics’ Current Population Survey.

Wisconsin employers can also expect little help from the state’s universities to supply new engineering talent. At the University of Wisconsin-Madison, only 91 of the 325 full-time graduate students in computer science – 28% – are U.S. students. In electrical engineering, only 76 of the 283 full-time graduate students – 27% – are U.S. students. Marquette University had only 15 full-time U.S.-born (or permanent resident) graduate students in electrical engineering in 2015. (All figures from National Science Foundation, Survey of Graduate Students and Postdoctorates for 2015.)

 

 

These numbers are for the entire state – for all employers. Hiring an international student would eventually require an H-1B visa, the supply of which has been exhausted before the end of each of the past 16 fiscal years.

Mark Regets, an economist and senior fellow at the National Foundation for American Policy, notes that even if the supply of engineers was not so scarce a Chinese engineer who currently works for Foxconn would possess knowledge of the company’s manufacturing and other processes that a U.S. engineer would not be expected to possess. The Chinese engineer is likely to complement the U.S. engineer and make it easier for the company to hire more U.S. workers, particularly in manufacturing.

The tax subsidies Foxconn received to locate in Wisconsin remain controversial. The likeliest way Foxconn can fulfill its job pledges is to hire as many engineers as possible – wherever those individuals happened to be born.

 

This article originally appeared on Forbes

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