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The infrastructure bill and our labor shortage crisis

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The House Ways and Means Human Resources Subcommittee will discuss the nation’s labor shortage this week.

As it does so, members must think about the shortage and the effect it will have on our ability to rebuild our crumbling infrastructure.

{mosads}The start of the next hurricane season is coming quickly. For those of us in the Atlantic basin, it’s less than two months away. The nation already is facing $800 billion in unmet needs for roads and bridges alone. Even without disaster, we don’t have the manpower we need to address infrastructure demand.

President Donald Trump made a cursory nod to the labor shortage when he released his infrastructure plan earlier this year. His proposals—Pell Grants for short-term certification and credentialing; improved access to technical education; expanded work-study; and new licensing requirements—weren’t nearly enough.

We need immigration reform. We also need to address declining mobility and help Americans who’ve dropped out of the workforce or are underemployed.

At the construction season peak last summer, there were more than 200,000 unfilled industry jobs. According to the Associated General Contractors of America, 86 percent of construction companies can’t find qualified workers. Eighty percent can’t fill hourly jobs and half can’t fill salaried positions.

The manufacturing industry, which supplies the tools contractors need to build, faces a similar crisis. In January, there were 427,000 jobs open in manufacturing. 

These industries cannot keep up with current infrastructure construction demands. New ones will submerge them.

The solution begins with an immigration reform bill that gives law-abiding and taxpaying immigrants the chance to contribute to our economy permanently. About 5 percent of the nation’s workforce is undocumented. Losing these individuals would devastate U.S. productivity and growth. To be eligible for citizenship, individuals would need to demonstrate that he or she will work or go to school and pay taxes. They’d also have to pass security and background checks. 

After ensuring workers already here can stay, Congress must consider other reforms. President Trump has proposed to cut legal immigration in half. Arbitrarily slashing visa and green card programs would be a mistake. What we need is a rebalancing, and perhaps even an expansion, of legal immigration programs.

According to the Migration Policy Institute, about 1.2 million people received green cards in fiscal year 2016. Of those, only 12 percent received that benefit due to employment. The vast majority of visas also are not allotted based on skill or employment. That has to change.

Our federal government also must do a better job of matching the supply of labor with demand. Last summer, the Canadian government implemented a system that ranks foreign workers against jobs that are open. I like this kind of entrepreneurial thinking.

In their efforts to rebalance, lawmakers must avoid focusing only on high-skill positions. While construction and manufacturing employ thousands of engineers and programmers, employers in those industries still prize work ethic. To rebuild American infrastructure, we need grit. We need individuals hungry for the American Dream, and that includes workers at ALL skill levels.

Combined with the president’s workforce development measures, immigration reform still won’t be enough to fill the United States’ 6.3 million available jobs.

Our labor force participation rate is near an historic low. We’ve got to get more Americans back to work—now. That means addressing the opioid epidemic that’s driven millions from the workforce and reforming our criminal justice system so we give more non-violent offenders a second chance and a job. The Work First Foundation Baltimore Re-Entry Program has a recidivism rate of 20 percent—compared to 67 percent nationally—because it focuses on preparing prisoners to work after they’re released. 

The country also is suffering from a mobility crisis. Migration within the United States has been declining since the 1970s. People aren’t moving to where the jobs are. As part of the tax cut package, Congress got rid of the relocation deduction. We must bring that back and create additional mobility incentives.

I’ve argued many times that, because of the tax cuts, our economy is on the brink of big growth. But tax policy is only one pillar of expansion economics. Addressing the labor liquidity crisis is another.

Without that, not only will we not be able to rebuild, we’ll keep millions from realizing the American Dream.

Todd Hitt is an American businessman and investor whose assets span real estate, construction, energy, finance, and hospitality. Follow him on Twitter @ToddHitt.

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