Economic challenges creating odd, effective bedfellows in the Midwest

Economic challenges creating odd, effective bedfellows in the Midwest
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The Midwest finds itself in the seemingly enviable position of low unemployment rates combined with higher-than-average rates of labor force participation. 

Indeed, this combination bolsters economic output, increasing consumer spending, which makes business owners happy while also providing material for elected leaders to broadcast as we race toward July. 


If we make it to July without experiencing a recession — and nearly all signals suggest we are much more likely to make it to July unscathed than not — we will have experienced the longest economic expansion on record in America during the post-WWII era.

While the output is nice, and the numbers look strong, the flipside for businesses operating in the Midwest is that labor markets there are tight. Workers — particularly skilled workers — are challenging to find and keep. 

Furthermore, states like Iowa, Wisconsin, Indiana, Kentucky, Michigan and Ohio are not only wrestling with unusually tight labor markets, but many of their relevant labor pools are marginalized by the national opioid epidemic, which has hit harder than average across many Midwestern communities, exacerbating tight labor markets.

Immigration anyone?

Currently, issues revolving around the U.S.-Mexico border are of considerable interest to many across the country. Trump and his supporters advocate for a border wall, while many others support alternative forms of immigration reform.

Given the labor shortages, many stakeholders across the U.S. would benefit tremendously if we could improve the process and speed of granting work visas to the good people who strive to come to America and make it their home. 

Businesses across the Midwest would be delighted to have the opportunity to hire hard-working, enterprising people who bring so much value. Given they could come here and work for our companies legally, they could then spend their money here and add an additional economic impact to our communities as well.

Short of sweeping immigration reform, the Wall Street Journal reported on Feb. 14 that certain companies in Ohio have been hiring people from Puerto Rico who were displaced previously by hurricanes and their associated fallout.

This is an excellent idea in principle, and a win-win for those involved: the hiring companies and Puerto Rican citizens. The only caveat is that the good folks moving to the Midwest may be experiencing some culture shock. After all, Sidney, Ohio is a far cry from San Juan. 

While a move to Chicago, Philadelphia, Miami or New York would be relatively easy given the larger Puerto Rican communities in those cities, moving to small Midwestern towns provides a set of challenges. 

Providing cultural awareness events, celebrations and training for Midwesterners at the local level may foster improved assimilation, assuring a smoother transition for those moving from Puerto Rico or other faraway places.

The idea may seem trivial, but formally accommodating those from alternative cultures can result in large gains for all people and organizations involved.

With respect to immigration reform, the story goes beyond a need for Midwestern businesses to hire blue-collar workers from far-away places.

American technology companies would benefit from an enhancement of entry opportunities for international students, as well as post-graduation work options for every graduate. 

The last three years have seen declines in new international students matriculating into American universities, with reasons for the declines attributed to an unwelcoming U.S. social and political climate, as well as challenges with the student visa process. 

Ultimately, large losses of bright, capable students from abroad will catalyze additional intellectual competition from foreign nations, further threatening the economic and structural stability of the U.S. 

While this issue is considered by some to be a long-term concern — or perhaps not of any concern at all — the idea that we are creating strength abroad at the growing expense of American universities and companies cannot be overstated.

In the end, the solution to the problem of our current labor shortage is congruent in both cases of production workers and educated workers. With both types of labor, America will benefit economically now and in the future from more efficient immigration and a welcoming international influence.

For production workers, America would be strengthened by the significant improvement of sweeping immigration reform. Shy of fixing that, bringing U.S. citizens in from Puerto Rico is an excellent strategy. 


Companies and communities doing this are to be commended. Further improvement to this strategy would be to provide cultural awareness training to the applicable groups of local Midwesterners so that they can better welcome their fellow citizens from the U.S. island.

As for the case of international students matriculating into American colleges, the solution is clear. American businesses need more managers, engineers, analysts and other professional leaders from a diverse set of backgrounds — the best and brightest from around the world. 

We must welcome them in, educate them and encourage them stay in America. Here, they can work and live, adding to our economic strength and robust depth of multicultural understanding.

They can develop cutting-edge innovations, which can be leveraged by our companies, expanding occupational opportunities for everyone, which will continue to pay dividends for many years to come.

Ryan Brewer is an associate professor of finance at Indiana University—Purdue University Columbus.