Immigration has long been a political football in the United States. But If you’re wondering why America’s labor shortage persists nearly three years into the Covid pandemic, it’s in part because America doesn’t have enough immigrants.
Immigrants are vital to the US economy and fill thousands of US jobs – jobs many Americas don’t want to do. In 2020, the processing of legal immigrant worker visas stopped and only picked up towards the end of 2021.
And by the end of last year there were close to 2 million fewer working-age immigrants in the United States than there would have been if pre-pandemic immigration continued unchanged, according to new research from the University of California, Davis.
“Part of the reason why there are so many vacancies and unfilled jobs in the US is that we are missing a whole lot of immigrants who regularly were coming before Covid,” said Giovanni Peri, the author of the UC Davis research and Director of the Global Migration Center.
The immigration debate has been reignited because of a surge at the US-Mexico Border. In March 2020, President Trump invoked Title 42 – a law enacted during the pandemic to prevent the spread of Covid – that has kept migrants and would-be asylum seekers out of the country.
Asylum seekers are legally able to work in the United States while they await their asylum cases. During that waiting period, those seeking asylum can apply for work permits — a process that usually takes 180 days before they are authorized.
But the decrease in legal immigration over the last two years has hurt American businesses. Especially in industries that require lower skilled labor: construction, agriculture, and hospitality.
“We don’t make up the losses unless we really change immigration laws and we allow more people every year to come in,” said Peri. “The way in which we are catching up is that we are processing visas at the speed that it was done before Covid. So for a while there will be this gap.”
The lack of available workers has pushed wages higher – fueling higher inflation. Federal Reserve Chairman Jerome Powell said that in addition to an aging workforce there is a lack of foreign labor contributing to labor shortages.
“The combination of a plunge in net immigration and a surge in deaths during the pandemic probably accounts for about one-and-a-half million missing workers,” said Jerome Powell, Chairman of the Federal Reserve last month.
The ‘big impact’
The biggest impact comes to industries like construction, agriculture, and especially hospitality – which are reliant on immigrant workers. Those types of industries had higher rates of unfilled jobs last year – adding to existing labor shortages, according to UC Davis research. There are currently 10.3 million open jobs in the US – 377,000 in construction and 1.6 million in hospitality. That number has been on the rise in recent months.
“The hospitality [sector] was employing a very large number of immigrants, 30%- 40% of the labor force in that sector was foreign born. And so you’re missing a lot of them, and potentially that is a big impact,” said Peri.
The restaurant industry has borne the brunt of the downturn in immigration. Slower service, restaurants closed for lunch, higher prices – are all a result of labor shortages. And the restaurant industry is on track to grow by 14% in the next decade – while the US-born workforce is expected to grow by just 10%, according to the National Restaurant Association. There will be more restaurant jobs than the US workforce can fill. Sixty percent of restaurant operators are facing staffing shortages limiting their operating capacity, according to National Restaurant Association.
But a new piece of legislation, “The Essential Workers for Economic Advancement Act,” was introduced in the House earlier this year. The law would create a new visa program for workers in industries like hospitality.
“Immigration reform is an economic necessity for the restaurant industry,” said Sean Kennedy, EVP of Public Affairs at the National Restaurant Association. “Allowing more legal immigration would be a win-win for employers in desperate need of employees and individuals seeking new opportunity.”
About 1 million of the 2 million potential immigrants who were lost during the pandemic were college educated, according to the UC Davis research. These workers would be considered “high-skilled workers,” potentially coming to the US on H-1B specialty visas.
Those high-skilled workers are job multipliers. For each high-skilled worker – 2.5 additional jobs are created, according to a report by UC Berkeley.
“High skilled immigration is incredibly important,” said Adam Ozimek, chief economist at the Economic Innovation Group. “We shouldn’t think of it as something that addresses short-term shortages – although it can help – but something that is really important for long run: innovation, productivity, growth, and health of the economy.”
Earlier this month, the American Farm Bureau Federation, along with 350 other agricultural groups, called on the Senate to pass an agricultural reform bill already passed by the House to address the farm labor crisis. Skilled foreign farm workers are the backbone of US agriculture and are traditionally in the US on H-2A seasonal visas, which saw its highest ever utilization rate this year, according to the Farm Bureau. But many in agriculture says it’s not enough and they still can’t find workers.
“The farm labor crisis is hindering production and contributing to food price inflation. We must address this workforce crisis threatening farms across the United States so our producers can continue to feed, clothe, and fuel our nation,” the letter to Senate leadership read.
But, according to the Department of Labor, 317,000 temporary H-2A jobs were certified last year, more than six times the number in 2005. But only 80% of those jobs certified resulted in a visa.