Wednesday, September 22, 2021
Sept. 22, 2021

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As labor shortage gets worse, why not tap more immigrants?

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The U.S. had over 9.2 million job openings in May, the highest monthly number on record, and many employers complain about the difficulty of finding candidates.

So why aren’t we boosting immigration to ease the labor shortage?

Foreign-born workers have been crucial to Texas’ rapid growth for decades, keeping the great jobs machine cranking. In May, they accounted for nearly 23% of Texas’ nonfarm workers, almost 6 percentage points higher than the share nationwide.They’re more heavily concentrated in certain sectors, including manufacturing and hotels and restaurants. Those fields also have seen the largest numerical increases in job openings since the pandemic.

Together, hotels, restaurants and manufacturers had over 2 million openings in May, up by 853,000 since February 2020. Immigrants already hold a disproportionate share of jobs in those industries, and one local restaurant owner says they’re needed to staff up and get business growing again.

“We’re having tremendous difficulty recruiting people, and the younger generation is not applying for our jobs,” said Jim Baron, CEO and co-owner of North Texas restaurants Blue Mesa Grill and TNT/Tacos and Tequila.

He has about 170 employees and wants to hire 25 more. He raised pay rates by about 25%, he said, and many competitors have closed, yet workers haven’t come back in large numbers. He cited the hard work required and employees’ sense of betrayal over layoffs in the early days of the pandemic.

“If we want to fill all these jobs in restaurants, hotels, construction, landscaping — then immigration is the solution,” said Baron, who estimates that half his workers were born outside the U.S.

Economists often cite the mismatch in the labor market, referring to the gaps between the skills of job-seekers and the skills employers want. While the U.S. had 9.2 million job openings in May, it also had 9.3 million people unemployed that month.

Foreign-born workers can fill those gaps — and help companies grow and add more jobs for native-born residents.

“Immigrants are much more likely to have different skills, both on the high end and the low end,” said Jeremy Robbins, executive director of New American Economy, a bipartisan research and advocacy group fighting for immigration policies to grow the economy.

In 2019, Dallas-Fort Worth had nearly 1.5 million immigrants, just over 19% of the population, according to the group’s research that maps the impact. Nearly a third have less than a high school diploma compared with 7% of the native born, and that makes them more likely to take jobs that require less education.

That includes roles in grocery stores, transportation, cooking and cleaning, Robbins said.

But 14.4% of foreign-born residents in North Texas have a graduate degree, a higher share than in the native population, the group said. More of them have degrees in science, technology, engineering and math, the so-called STEM fields.

In Texas, 59% of medical scientists were foreign-born, according to 2014-16 data from the Federal Reserve Bank of Dallas. Among software-makers, the share was 45%. And a third of engineers and physicians in Texas were foreign-born.

Immigrants played major roles in developing COVID-19 vaccines, both in the U.S. and Germany. The researcher who headed Operation Warp Speed in the U.S. is also an immigrant, born in Morocco.

In addition, 84% of immigrants in D-FW are 16 to 64, the prime working age. That’s 23 percentage points higher than the share of native born in the age group and one more reason they’re attractive to employers.

“Immigrants are more likely to move for a job, and they’re more likely to work odd hours, like nights and weekends,” Robbins said. “And every one of these 9.2 million jobs that we can fill helps our economy function better and makes it more likely we’re going to create the jobs that people do want.”

Pia Orrenius, senior economist at the Federal Reserve Bank of Dallas, has focused much of her research on the two extremes in the immigrant workforce. The greatest need, she said, is for immigrants at the bottom of the educational ladder and at the top.

“Demand has continued to grow on the bottom, but at the same time, that native labor force has been shrinking in absolute size — not just in share, but in actual numbers,” Orrenius said.

More Americans are graduating from high school and college, which is a great achievement, and most aren’t willing to do manual jobs. More young people want internships or educational activities instead of summer jobs at amusement parks or restaurants.

Among native-born college graduates, too few are specializing in STEM fields, especially health care, she said.

“That’s where immigration really fills that surplus demand,” Orrenius said. “The pandemic has not changed these two scenarios.”

The share of immigrants in the labor force has been flattening, and it fell last year during the pandemic. The number of foreign-born workers in June increased since last year but was still lower than in 2019, 2018 and 2017.

Businesses have long pushed for comprehensive immigration reform, including a path to citizenship for undocumented workers and a simpler way for temporary workers to come to the U.S.

On Wednesday, business and political leaders in Utah urged their U.S. senators to back reform efforts. Unemployment is so low — 2.7% in May, less than half the U.S. rate — that Utah companies are desperate for workers, they said.

Some big Republican donors are complaining publicly about lawmakers in Washington, D.C., not making progress on immigration. Two threatened to withhold financial support, according to Politico.

In Texas, over 90 business leaders have signed a compact to push lawmakers to act on immigration. They want permanent state for “Dreamers” — young immigrants brought to the U.S. as children — and those with temporary status, and make broader reforms.

Those sentiments contrast sharply with Gov. Greg Abbott calling for a border wall with Mexico and promising a $250 million down payment of taxpayer money.

Attorney General Ken Paxton also amped up the response. In a news release Wednesday, he touted his latest lawsuit, which aims to expel unauthorized immigrants at the border to protect public health. Paxton said he’s sued the Biden administration 11 times since January with five of the lawsuits related to immigration.

That doesn’t sound too business-friendly. There are many ways to address the labor shortage in the U.S., including boosting wages, increasing education, retraining workers and encouraging people to reverse the country’s declining birth rate.

“We need to do all those things, but they’re going to take time,” said Orrenius, the Dallas Fed economist. “To get the workers we need in the places we need them — and in the most rapid way possible — there’s no comparison to immigration.”

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