Offshoring and U.S. Biotech Labor Shortages
Guest content contributed by Agnes Shanley, Editor in Chief, Pharmaceutical Manufacturing
Every day we read about severe shortages of skilled biotech workers in the U.S.. At the same time, the trend to pharma offshoring and outsourcing is becoming more pronounced, and is moving from traditional pharma to biopharma.
We recently touched on some of these issues in Pharmaceutical Manufacturing. One question is whether today’s skills shortages reflect a lack of alignment between biotech training and industry requirements.
We would welcome any comments, critiques and responses from the biotech community.
Here is the article (which includes, on the last page, a very brief and informal poll)
http://www.pharmamanufacturing.com/articles/2007/100.html
Thank you!
With PhD level postdoc salaries in the biosciences well below $50k on average the labor shortage is clearly a myth. The article states that some companies in California have multiple ‘senior’ slots open. It’s a given that these jobs remain open due to a salary that’s far to low given the cost of living in that region. The companies complaining about about a lack of talent are really complaining about a lack of talent below $100k a year.
But the above conflicts with the stories of thousands of postdocs who are unable to find permanent employment. It seems that after five years of working as a postdoc you’d be willing to work for Banglore rates, but this clearly isn’t the case. So how to reconcile the paradox of too many postdocs and not enough labor? One theory:
The bioscience industry in the US is heavily concentrated in the areas with the highest cost of living. Housing prices in the bay area are stratospheric. This problem also exists in Boston and to some extent in D.C. Companies in these areas are trapped: they can’t move because these are the only regions with a high concentration of labor, which they need. Most biotechs are small and strapped for cash, so the prospect of six figure incomes isn’t an option. On the other hand, they can’t convince folks to move into the region due to their low salaries in the land of $500k starter apartments. New postdocs evaluate their options and realize that a $30k position in Iowa is better than $60k in San Diego even if Iowa means another year of misery.
Meanwhile, American undergraduates see the dismal opportunities and flee to greener pastures. Graduate science slots are then filled with students from overseas, to whom the employment market is secondary to the prospect of immigration or a free education from an American university. Upon graduation these same folks see the high cost of living and low opportunities presented to them and many return home where they’ll compete against US companies.
Bottom line, there are too many funded graduate slots in the US and the biotech industry is being strangled by its centralization in high cost areas. Rather than offshore to China perhaps corporations should consider Alabama.