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Immigration and a Tight Job Market

We can boost growth and job creation by, among other things, welcoming immigrants, and temporary workers as we have done for most of our history. American workers and their families and all of our communities will be better off when we do.

Article by Matthew Rooney August 19, 2021 //   5 minute read

On my summer vacation, I took two road trips: one from Seattle down the Pacific coast to Oregon wine country and back through Portland, and one from Dallas to Washington, D.C., and back. In addition to being reminded what a majestic country we live in and how fundamentally decent Americans are, I was struck by one thing: “help wanted” signs. 

And slow service. Our trip to D.C. only became a road trip because the airline we had booked flights with informed us two hours before our departure that they didn’t think they would be able to get us to Washington in less than three or four days. We waited 45 minutes for a hamburger at a fast-food restaurant in Arkansas. In Oregon, we were turned away from a restaurant at 1 p.m. because they couldn’t seat us in less than two hours. In Virginia, we found a line of cars stretching down the street at a fast-food drive-thru and the dining room locked. 

Everywhere we went, people said the same thing: We just can’t hire enough staff. The people we had before COVID-19 haven’t come back. People schedule interviews and then just don’t show up. We advertise and nobody responds. 

How can this be, in a country with millions of people still unemployed after the COVID crash of the past year? 

Some people blame the supplementary unemployment payments funded by the federal government over the past year. That extra $300, they say, means too many people are better off staying at home than going to work; eliminate those payments and folks will go out and get a job. Others point to lingering public health concerns or lack of reliable transportation or affordable childcare 

Intuitively, all of these factors are plausible and may play a role. With supplemental benefits, most states’ weekly unemployment payments are around $800. That is $41,600 per year – not a path to wealth, but not bad (especially when you plus it up by working “off the books”).  

Still, those extra payments began to expire in some states almost a year ago, and there don’t seem to be differences in employment levels across states that correlate to the presence or absence of the supplemental benefit. Transportation and childcare are certainly factors, but they were issues long before COVID appeared. And, with the arrival of the vaccine and all we have learned about how to prevent and treat COVID, the public health worry really should be fading. Yet, even in the early months of this year as COVID cases plummeted, business reported the same difficulty finding the staff they needed. 

One possible explanation that doesn’t get enough attention is immigration – or, more precisely, the lack of immigrant labor. Immigration to the United States was almost completely halted in March 2020, as the United States, and the rest of the world, aimed to restrict the movement of people to stop the spread of COVID-19. In 2020, immigration to the United States decreased 42.9% from 2019. Less people in the United States means fewer workers to fill key roles.  

This might sound counterintuitive, but the fact is that immigrants and temporary workers play an important role in our country’s labor markets – one that complements American workers more than it competes with them.  

Consider the role of temporary workers in the service industries I encountered on my summer road trips: They tend to fill entry level jobs, like servers, line cooks and baggage handlers. If you are running a restaurant and can’t hire key staff, you can’t prepare and serve food fast enough to meet the demand of the number of customers you have.  If you are running an airline and you can’t find the cleaning crews and baggage handlers you need, you end up canceling flights. 

There is obviously no one explanation for the disconnect we are seeing in labor markets as the economy rebounds from COVID, but a lack of immigrant and temporary workers is certainly among the factors.  

Before the onset of the pandemic, the United States’ immigration system was not serving the needs of our economy, and COVID-19 has only exacerbated the impact. The United States needs an immigration system that enhances our economic growth – instead of hindering it.  

We can boost growth and job creation by, among other things, welcoming immigrants, and temporary workers as we have done for most of our history. American workers and their families and all of our communities will be better off when we do.