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Labor Shortages Don’t Work for the Economy – Can Immigration be a Solution? Labor Shortages Don’t Work for the Economy – Can Immigration be a Solution?

Labor Shortages Don’t Work for the Economy – Can Immigration be a Solution?

The Lack of People Problem:

Companies across all sectors of the U.S. economy cannot fill their workforce needs. Period. Full-stop. But, not end of story. The U.S. needs 10 million low-wage and high-skilled workers to fill the 10 million job openings nationwide. Unfortunately, only 8.4 million Americans are looking for work, leaving many businesses in a lurch. To make matters worse, we are deep in the throes of what has been coined the “Great Resignation,” as evidenced by the 4.3 million people that left their jobs by choice in August 2021. 

The issue is one of supply rather than demand and it has touched every facet of our economy. Our favorite restaurants have limited hours, and some have closed permanently. Customers are there, but owners can’t find the workers to run their businesses. The global supply chain is in shambles. Transporting goods from container ships anchored near U.S. ports and waiting for weeks or months to unload goods is highly problematic and increasingly a mammoth task. While U.S. ports are at capacity, transportation and warehousing shortages persist, making it impossible to offload container ships. The supply chain needs drivers, forklift operators, and manual workers to move product from point A to point B. 

Airlines and air transportation companies need pilots, engineers, and ground and flight crew. Flight cancellations have reached endemic levels (American Airlines cancelled more than 1,700 flights – 1 in 5 scheduled flights – from October 29 - 31, in part, due to labor shortages). 

And, if the Grinch needed any assistance, transportation experts are warning the U.S. public that we may encounter some of the worst travel, shipping, and courier delays during the holiday season. Bah humbug!

Our manufacturing clients tell us that they have more than enough demand to expand production. Unfortunately, supply chain and workforce concerns are challenging them to maintain the status quo. Simply put, the labor isn’t there.

The industries facing the worst labor shortages include: (1) restaurant and hospitality; (2) construction; (3) transportation and warehousing; and (4) businesses performing personal services including repair services, dry cleaning, salons, etc. A pro-immigration think tank, New American Economy, performed an analysis for Vox and concluded that these industries have increased job postings by more than 65% (comparing April/May 2019 to the same period in 2021). When you add in the manufacturing sector and its labor shortages, the need for a solution to this problem comes into sharp focus. Waiting it out is not a solution, as these shortages are expected to last well into 2022 and beyond.

Why Not Look to Immigration as a Solution? – Global Strategies to Meet Local Problems

It is widely accepted that there are many millions of foreign workers abroad with a strong desire to participate in the U.S. workforce – in both high-skilled and low-wage occupations. Below are some strategies and visa options for employers who may choose to look beyond our borders to find solutions to their labor needs.
  1. Look within the Company’s Global Footprint: Intra-company transfers: For employers that have offices or production/manufacturing facilities abroad, shifting employees within the corporate family may be an option to address U.S. labor shortages. Companies can transfer employees to the U.S. who have gained experience abroad that is valuable to the U.S. entity. This visa option can be used for a wide variety occupations, including  engineers, technicians, supply chain professionals, project managers, and other specialized workers, to impart their highly specialized and advanced knowledge of the company’s products, services, proprietary or unique systems to the U.S. workforce. Employers can also transfer highly placed managers or executives to U.S. operations to foster continued growth. 
  2. Look Past Our Northern and Southern Borders: Treaty nationals under the U.S.-Mexico-Canada Agreement (USMCA), which replaced NAFTA in July 2020, provides the same visa framework that existed under NAFTA. These visa options open to Mexican and Canadian citizens in a wide variety of occupations typically require, at a minimum, a bachelor’s degree (from architect to zoologist, and a myriad of occupations in between, such as IT-related positions, graphic designers, management consultants, even sheepherders). Notably, engineers and technologists do not require a 4-year bachelor’s degree. Instead the applicant must demonstrate the acquisition of expertise. 
  3. Look to the Nationality of the U.S. Enterprise: If the U.S. entity is owned by foreign entities and foreign nationals of certain countries, there may be an opportunity to employ foreign nationals of that same country pursuant to a Friendship, Commerce and Navigation (FCN) Treaty. The treaty may permit U.S. employment of foreign owners of the U.S. entity’s treaty nationals in executive/supervisory positions, or other workers seeking to fill positions in the U.S. requiring their essential skills. This visa classification is referred to as Treaty Trader/Treaty Investor classification and can be used for business leaders, highly skilled technicians, engineers, etc., as well as for investors/owners who are creating a new business in the U.S.
  4. Look to the Old Standards: The H-1B visa has been available to employers seeking to employ highly skilled workers in the U.S. Unfortunately, the demand for the visa (more than 300,000 positions were sought to be filled using the H-1B visa program in fiscal year 2021) far out-paced the supply (due to annual cap, only 85,000 H-1B visas are available to most employers each year).   
  5. Look Down Under: There is a unique visa opportunity that allows Australians to come to the U.S. This visa category is reserved for specialty occupations. Similar to the H-1B visa program, these jobs generally require a specific bachelor’s degree, but there are industries looking at the E-3 visa category for certain occupations that are not permissible under the H-1B. For example, certain airlines and air transportation companies are using the E-3 visa to attract Australian pilots to work in the U.S. There is an annual cap of 10,500 E-3 visas that can be granted every year. In 2019, the U.S. only used half the available visa numbers, and since the E-3 came into existence, the U.S. has never reached the annual quota.
  6. Look to Address a Peak or Seasonal Need: If a business is experiencing a peak or seasonal shortage, the H-2B visa can provide temporary, low-skilled immigrant workers. However, due to the limitations of this visa category, this is not often a great option for most employers with year-round needs. 

Employers considering some targeted immigration options to help alleviate workforce shortages should obtain competent employment law advice to ensure their recruitment and hiring practices are consistent with the legal obligations to not discriminate based on national origin, immigration status, or citizenship.  

Companies are going to need to use every tool in their toolbox to address their labor needs, and while immigration options won’t always be available to address work shortages, there may be immigration options that can serve as a workplace solution. 

Please reach out to Ken Robinson, Radha Desai or the Labor, Employment and Immigration attorney you regularly work with if you have any questions or concerns regarding these matters. 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
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