Labor shortfall will become a labor crisis unless Biden acts on immigration
As the pandemic subsides, too few workers are returning to jobs. The Bureau of Labor Statistics announced last week that in April U.S. employers reached the highest number of open jobs on record, nearly 9.3 million. This shattered the previous record of 8.3 million set one month earlier. April saw the largest ever recorded one-month increase in job openings, which have increased by 2.5 million since December.
While lawmakers debate the causes and the solutions, the problem has only grown worse. Every month that these jobs remain unfilled costs the country tens of billions of dollars in economic growth. Many businesses are unable to serve customers, reducing hours or even shutting down. The ones that can open are passing along the higher costs of operating to patrons.
While President Biden’s team is looking at many options to draw workers back, immigration may well be the only way to get these jobs filled before this labor shortfall becomes a full-blown labor crisis. Immigrants can quickly enter, fill available positions, boost economic growth and lead to more jobs in other sectors — sectors that may be more attractive to U.S. workers on the sidelines.
Biden can take four executive and administrative actions on immigration to help U.S. businesses in the short-term. First, many immigrants are ready to travel to help the U.S. economy right now. President Trump’s policies of blocking nearly half of all immigrants during the pandemic caused a backlog of 500,000 immigrants at U.S. embassies and consulates overseas. These workers could enter the country tomorrow and give the economy the lift it needs, but the Biden administration will need to act faster than it has so far.
In May, nearly three-quarters of embassies and consulates remained closed. The new president has also maintained pandemic travel bans on dozens of countries, even though all travelers need negative COVID-19 tests to enter the country. Even if opening U.S missions might not be possible in some countries with COVID-19 outbreaks, team Biden will have to think up bold and expansive ideas such as conducting any required interviews remotely or waiving them outright for low-risk travelers given the emergency economic circumstances. They could even surcharge visa applicants to boost much needed revenues for visa processing.
Second, immigrant visa numbers are “use it or lose it” in that if they are not used, they are lost each year. Due to the pandemic, those 500,000 backlogged visa numbers, including many eligible workers, will go to waste and be counted in the following year’s count. If, by September, it appears there is no dent in the backlog, Biden should sign an executive order reusing these numbers so that they are not lost and, better still, recapturing old numbers that were lost over the previous years. This could add hundreds of thousands of additional eligible workers, who could enter through the legal immigration process.
Third, Biden should sign an order removing dependents and children from the numbers of employment-based immigrants who are counted. Under our immigration system, the number of immigrant visas that can be issued in a single year is capped at 366,000. About half of the cap currently goes to the spouses and children of immigrants. But the fact that these dependents are even included in the count is a quirk of interpretation that should be remedied via immediate executive action. That would free up even more visas that can go to willing workers from abroad and lessen the pressure to enter via other routes such as asylum at the border.
Fourth, to Biden’s credit, the administration did increase the number of H-2B temporary workers permitted to enter the country by 22,000. But Congress gave him the authority to permit nearly three times as many. All H-2B jobs must be extensively advertised to U.S. workers first, yet the Biden administration is choosing to let 42,000 seasonal jobs go unfilled and the visas wasted.
America’s demographic trends are shifting, and failure to act now could permanently stunt America’s economic growth. We need look no further than our competitor nations to see the cost of inaction. Japan’s economic miracle turned into a lost decade, in part, because of its restrictive immigration policies, and China is under threat of growing old before it grows rich due to its shrinking workforce and rapidly aging population.
America’s goal should be to have the most competitive immigration policy in the world, yet the United States ranks in the bottom third of wealthy nations in terms of its foreign-born share of the population. The country’s restrictive policies were already causing businesses to offshore their operations to other countries before the pandemic. The rise of remote work is likely only to increase this trend.
Biden cannot sit back while millions of jobs (representing tens of billions of dollars in production) remain unfilled. He needs to act now to curb further losses and seize the great economic opportunity that legal immigration could provide for the country.
David J. Bier is a research fellow with a focus on immigration at the Cato Institute. Christopher M. Richardson is a former U.S. diplomat who served in Nigeria, Nicaragua, Pakistan and Spain.