Without Immigration Reform, America's Labor Shortage is Here to Stay
Without quick, decisive, and comprehensive action by policy and business leaders to address the United States’ labor shortage crisis, the gaps will continue to fuel inflation. And left unaddressed, they will hinder the nation’s growth, productivity, and innovation.
Across the nation, nearly 10 million jobs remain unfilled. The signs of workforce shortages are everywhere: Restaurants leave tables unused due to slimmed down kitchen and wait staffs. Burnout of healthcare workers during the pandemic has exacerbated critical staffing shortages. Even the country’s ambitious plans for infrastructure and reshoring manufacturing face challenges in finding workers to build facilities and others to eventually operate them.
These historic shortages are colliding with the aging US population and declining fertility rates, which will continue to produce widespread labor scarcities across a range of industries and skill levels. Rebuilding the US labor force will require policymakers and business leaders to collaborate on a two-pillar approach that consists of increasing American workers’ participation rate and enacting comprehensive immigration reform.
The first pillar — getting Americans’ workforce participation rate higher — is imperative to our central mission: ensuring that all Americans have equal opportunity to share in prosperity. Business leaders and Congress must provide and incentivize more training opportunities, supporting older workers who wish to remain working, expanding workforce flexibility, lowering barriers to participation, and diversifying talent pools.
But, even if all currently unemployed workers could fill today’s job openings, the nation would still have a shortfall of more than five million workers due to the troubling long-term demographic trends. We can expect some relief from digital breakthroughs like AI, although even these breakthroughs will require new skills from the current tech workforce. The resulting productivity gains will likely be insufficient to meet demand both in the short and long term.
To address the nation’s widespread gaps and position the economy for further growth, comprehensive bipartisan immigration reform must be a top national priority. We must recover control of the flow of immigrants and secure our borders and strategically consider how to align admittance policies with labor shortages. Reform efforts should include boosting the entry of employment-based green cards and visas at all skill levels by raising the caps to match labor demand, while maintaining the nation’s commitment to families, refugees, and lottery-based admissions.
Pathways also need to be opened to retain productive workers. Relaxing the provisions that require workers to leave the country during periods of unemployment and streamlining pathways to H-1B visas for high-skilled workers and for F-1 international students to stay in the country after completing their education are just two examples of needed reforms.
Too many international students graduating from US universities are unable to find employers willing to sponsor them, forcing many to take their training and work experience back to their home countries or other welcoming destinations. Recent layoffs in Silicon Valley show the challenges facing even technology workers on H-1B visas; they have 60 days to find a new job or face deportation.
Yearly limits on temporary visas for high-skill workers leave more than half of applications unaddressed. The resulting lottery system benefits neither workers nor companies. The current backlog for employment-based green cards sits at 1.4 million cases, 10 times the number typically available annually.
Canada, Australia, and the UK have redesigned their immigration systems to bolster their economies. Building on their experience, the US should consider pilot programs such as points-based programs that measure an immigrant’s work experience, educational background, family ties, and language skills. Other ideas include expediting entry for workers filling occupations facing shortages, providing certainty with built-in pathways to residence, and permitting localities to sponsor immigrants to address specific local needs.
In order to attract talent, the US immigration system must also compete on efficiency. Legal immigration channels are plagued by delays, uncertainty, and administrative burdens that deter companies from sponsoring foreign workers while talent finds opportunities elsewhere.
The country must also find a bipartisan solution to recognize unauthorized immigrants currently residing in our communities. The vast majority of those immigrants have lived in the US for 10 years or more; many of them are raising children and performing crucial roles in the economy. One estimate found that during the pandemic 74 percent of undocumented individuals in the labor force worked in jobs that were deemed “essential.”
But policies to reform immigration must come with extensive screening. Employers must do their part through a mandatory E-Verify system for all workers. If implemented fully, verification would help deter future illegal entry by effectively eliminating undocumented workers’ job opportunities while also helping enforcement by shrinking the pool of potential offenders.
Inaction is no longer an option. The workforce shortages of today and the looming ones of tomorrow make it an imperative that policymakers and business leaders take strategic action. The challenge requires policies that will both raise participation of the American workforce and modernize the immigration system as an indispensable part of the solution.
Paul Decker is the President and CEO of Mathematica. Camille Olson is a partner at Seyfarth Shaw LLP. Howard Fluhr is Chairman Emeritus of Segal. They are co-chairs of the Committee for Economic Development of The Conference Board’s Workforce Committee.
