Demand for Engineers, Essay Example

A recent online article talks about the huge gap between demand and supply of engineers in the shale gas industry (Petroff, 2013). The intense competition between the companies to recruit engineering talent has been leading to record salaries. The shortage has even forced companies in the shale gas industry to lure energy talent from other sectors.

The engineers who are particularly in demand are those with five to fifteen years of work experience. The demand for engineers has not only been growing in the U.S. but on a global scale. The salaries have also risen due to the significantly longer time duration it takes to hire an engineering talent as compared to other professions.

The current supply shortage has also stemmed from the tech boom of the 1990s when many would-be engineers opted for a career in IT. The shortage is so severe that even retired engineers are being lured back. Higher salaries are not only being enjoyed by experienced engineers but even entry-level engineers as well. Other countries such as Germany, U.K., and Australia are also faced with shortage of engineering talent.

This article uses several concepts learnt in the course. One concept addressed by the article is the determination of price through the interaction of supply and demand forces. The article makes it clear that the supply of engineers is significantly less than the demand for engineers. As a result, there is an upward pressure on the price (wages) of labor. The huge rise in salaries only tell us how severe the shortage is. The rise is also huge because it is not possible to significantly increase supply of engineers in the short term. Similarly, engineers do not have many substitutes in terms of professional skills which also explain the premium wages being enjoyed by them. In graphical terms, the entire demand curve for engineers has moved significantly to the right, hence, the reason for high salaries.

Reference

Petroff, A. (2013, July 25). Engineers get rich as talent war heats up. Retrieved October 16, 2013, from http://money.cnn.com/2013/07/25/news/economy/engineering-jobs-pay/