Visa Bottlenecks Creating Problems for Employers, Workers
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According to reports, U.S. embassies and consulates are experiencing record backlogs, visa delays, and wait periods. These visa bottlenecks are creating problems for employers and workers, especially those who employ temporary workers who must renew their visas outside the United States.
For example, visa waiting periods in Istanbul, Turkey surpass 16 months. In New Delhi, India, waiting times for thousands of highly skilled temporary workers traveling to the United States on H-1B and L-1 visas hover around nine months. Chilean business visa processing might take up to three years.
The delays are believed to be the consequence of increasing travel demand owing to the COVID-19 outbreak, staffing challenges at embassies and consulates, and the Trump administration’s two-year ban on processing guest worker visas. To alleviate backlogs, several business organizations and immigration lawyers support solutions such as allowing remote interviews or allowing people with expiring visas to reapply in the United States rather than forcing them to leave the country.
If you have any concerns regarding a pending immigration benefits request or petition, contact the experienced Florida US immigration attorneys at AmLaw Group now! We can solve any of your immigration concerns and questions. We help you file the relevant documentation so your request may be processed as quickly and efficiently as possible.
The American Labor Shortage: How Immigration Can Help Fix It
The U.S. is now experiencing a labor shortage. There is a persistent disproportion between employers’ demand for workers and the number of workers available in the American labor force. In the previous seven months, the number of job openings has continuously exceeded 10 million while hiring has averaged just 6.6 million and turnover rate of employees has averaged 6 million. These figures are explained in part by a drop in the labor-market. America today has 3 million lesser workers than at the beginning of 2020, a 2% decrease.
According to official statistics, just 62.2 percent of Americans of working age were active in the labor force in January 2022.
While this figure has increased from the Covid-19-related low point in 2020, companies continue to struggle to fill job vacancies, both in recruiting and retaining personnel. Presently, there are 60 jobless employees per 100 job vacancies, showing that labor shortage persists.
Low Levels of Immigration Aggravated the Labor Shortage
Although the main reasons for the shortage of workers are complex – accelerated retirement rates, America’s aging population, the Covid-19 outbreak, demands for better salaries and working conditions, a lack of childcare services, and other things – one crucial and under-discussed factor stands out. Despite these trends, net international migration (NIM) to the United States increased by just 247,000 from 2020 to 2021, the lowest number in decades. This is partly due to the Covid-19 pandemic, but it is also mostly due to Washington, DC officials’ decision to limit immigration numbers.
The Census Bureau reports that compared to the 2015–2016 peak, when the number of immigrants in the United States increased by more than one million, last year’s NIM marked a considerable decline. These latest stats represents a substantial decrease from the 477,000 additions from 2019 to 2020, demonstrating both Covid-19’s effect and the previous president’s restrictive immigration policy.
According to the statistics, California, Florida, Massachusetts, New York, and Texas — states that normally get the highest number of migrants from overseas and account for almost half of all the international migration – showed drops in NIM from 2015 to 2021, with a close to 50% drop from 2020 to 2021. California has the biggest decline among these states, decreasing in 2015 from 148,000 to 15,000 in 2021. The decline has lowered the amount of potential foreign workers, putting further strain on the country’s severe labor shortages.
Similarly, Covid-19-related immigration restrictions have resulted in around 2 million fewer working-age immigrants in the US, according to Reem Zaiour and Giovanni Peri, two economists from the University of California, Davis. Close to a million of these “lost immigrants” would’ve earned a college education and might have worked in a diversity of fields.
According to the report, “this sharp decline in foreign worker supply increase is undoubtedly a cause to existing job shortages,” and it has the potential of “slowing down employment growth and recovery while the economy catches up pace”. As a result, business organizations, like the U.S. Chamber of Commerce, have stressed the positive effect that immigration reforms can make in reversing these trends and boosting the labor-force to help the country’s economy thrive and compete.
The Negative Effects of Workforce Deficit
The continuing labor shortage has a detrimental effect on American companies and hampers economic progress.
At least 3 repercussions of such a labor shortage have been identified by economists:
Firstly, economists have found a link connecting workforce shortage and inflation.
They say that when companies struggle to keep and recruit workers, they raise wages to compete in the job market. Employee hourly wages in the United States, for example, increased by more than 4% in just nine months, from $29.97 in March 2021 to $31.31 in December 2021.
Wage fluctuations and labor shortages are simply one of many reasons contributing to the continued rise in inflation, consumer spending habits, supply chain issues, and various related aspects. Even as increasing wages are undeniably a good sign for the common worker, they have been followed by wider inflation, which has consumed most of these gains in real terms, where inflation grew 7% in the past twelve months, which is greater than the typical increase in nominal wages. This indicates that, although workers are generally earning better, their expenses are growing as well, eating the progress they otherwise would experience.
Reduced Production and Missed Opportunity Costs
America’s labor shortfall also lead to lower production and missed opportunity costs.
When businesses are unable to function at full capacity due to a lack of workers, their production output suffers, resulting in lower production, fewer earnings, and inadequate performance. Though it is impossible to gauge the actual impact of the lack of workforce on GDP, the latest estimates indicate that the labor deficit has cut sales profit by 2.1%, or $740 billion. For example, FedEx stated that higher costs of labor and network problems caused by labor shortages had a detrimental impact on business profits, predicting a possible yearly reduction of $450 million year over year.
The Effect on Supply Networks
Labor shortages also have had negative effects on supply chains, causing inflation and bottlenecks in the US economy.
The “generally invisible trail of production, transportation, and logistics that takes commodities from the place they’re made, mined, or cultivated to where they’re going” is referred to as the supply chain. Supply chains have been encountering significant bottlenecks due to chronic lack of port workers, warehouse workers, and truck drivers resulting in unpredictable costs and delays in delivery. This supply chain bottleneck has been very disrupting in the US such that the International Monetary Fund thinks it will have a 1.2% negative effect on America’s expected 6% growth in 2022.
Key Industries that are Under Strain Due to Labor Shortage
Worker shortages caused by the factors mentioned above have affected several vital economic sectors that depend on immigrant workers. Agriculture, food, technology, healthcare, transportation, and hospitality have all been severely impacted.
Shortage of Food and Agricultural Workers
The agriculture and food industries in the United States rely largely on migrant work. Immigrant workers account for up to 73% of farmworkers in the United States. Furthermore, roughly 3.8 million immigrants labor in the food industry in the United States, accounting for more than one in every five food laborers. Farmworkers who are foreign nationals are vital to the country’s food supply and agricultural economic growth. They not only enable the United States in maintaining a self-sufficient food supply, yet they also enable our country to be the world’s largest food exporter.
The effects of labor shortages are especially severe in the agricultural and food industries. A shortage of farmworkers, food processing line workers, grocery workers, and meat packaging workers has resulted in a scarcity of a wide variety of food items.
In 2021, the agricultural labor gap in the United States hit all-time highs. According to Purdue University’s Ag Economy Barometer, which evaluates agricultural workforce trends, 66% of agricultural companies had “some” or “great difficulty” employing adequate labor in 2021, up from 30% in 2020. The Farm Bureau has also expressed alarm about the increasing labor shortage in the agricultural industry, stating that our nation needs more immigrant farmworkers than ever before.
Farm labor shortages have led to higher food costs for consumers, which has contributed to inflation, and up to $3 billion in lost GDP growth. Attracting and maintaining immigrant farmworkers would alleviate these shortages, allowing the industry to fulfill its full economic potential while bolstering food security in the United States.
Workforce Shortage in STEM (Science, Technology, Engineering, and Mathematics)
America’s ability to attract foreign talent to boost its entrepreneurial and technological competitiveness has been one of its greatest strengths. Despite this, the United States has had a STEM workforce shortage in recent years, even before the pandemic. Covid-19 only further exacerbated this shortage, with the latest estimates suggesting that the country’s STEM job opportunities outweigh qualified workers around 3 million. This disparity is expected to increase to 6 million in 2030.
This persistent imbalance results from America’s outmoded and low H-1B ceiling, failure to retain foreign students, lack of a specific entrepreneur visa, and foreign travel restrictions imposed by the previous presidential administration. Despite these challenges, immigrants have become an increasingly important part of the high-tech industry, accounting for more than 25% of STEM workers in the US.
Immigrant workers have played a significant role in technological start-ups, on top of the increased dependence on STEM workers. Both first and second-generation immigrants have started 46% of the Fortune 500 high-tech companies. But even with these major contributions, the U.S. would be more competitive if it committed to giving more jobs in this sector to immigrant workers. This would also help with labor shortages that have worsened in recent years.
In order to address the current skills gap in the tech industry, it is essential to increase the number of foreign-born STEM workers. One way to solve the problem would be to exempt international students with master’s degrees and PhDs in STEM fields from U.S. universities from the annual green card limit. This proposal is one of several in the America COMPETES Act of 2022, which aspires to outcompete China in the fields of development, innovation, and development.
Shortage of Healthcare Workers
The healthcare industry in the United States is significantly reliant on foreign-born workers. Immigrants account for up to 25 percent of personal caregivers, 38 percent of home healthcare aides, and 28 percent of all highly qualified medical professionals, which include doctors and surgeons. The US has been experiencing a shortage of physicians, dentists, nurses, as well as other medical practitioners in recent years.
The Health Resources and Services Administration determined in 2018 that the country needed 14,900 additional primary care personnel and 6,894 more mental health workers to meet the requirements of the population. Worryingly, the Association of American Medical Colleges predicts that if all other factors stay constant, physician demand will outpace supply, resulting in an overall deficit between 54,100 and 139,000 doctors by 2033.
Also, it is expected that there will be 35,000 fewer doctors than needed because a significant number of them are getting close to retirement age. Within the next decade, over two in five actively practicing doctors will be 65 years of age or older. Furthermore, current estimates reveal that the healthcare industry has lost approximately 500,000 workers since the Covid pandemic’s outbreak. Worryingly, recent surveys reveal that 31% of the remaining healthcare professionals have considered quitting their employment. Furthermore, 66% of nurses who work in acute and critical care have considered leaving nursing completely.
Supply Chain Labor Shortage: Ports, Transportation, and Warehouses
Truck drivers who are foreign nationals, like those in many other sectors, make up a significant part of the trucking industry.
The most recent United States Census Bureau data on truck driver demographics states that immigrants account for around 16% of truck drivers. According to current estimations, the US faced a record 80,000 driver shortage in 2021. Given that trucks move 70% of all freight inside the US, equivalent to about $10 trillion in American products each year, the truck driver crisis, along with a serious lack of warehouses and port laborers, is having a significant effect on supply chains countrywide.
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