THE ECONOMIST: Essential employees

Although the numbers are temporarily decreasing as growth moderates and uncertainty rises, there remain about 9.6 million job openings across the country. Employers of all types and sizes are affected by labor shortages, with major challenges in leisure and hospitality, professional and business services, and health care and social assistance. We presently need 1.6 million health care and social assistance workers and 1.3 million accommodation and food services employees.

These notable shortfalls are causing ongoing economic losses. Businesses that can’t hire enough people often must forego potential growth, shorten hours of operation, reduce services, overwork existing employees, or otherwise attempt to cope with less-than-optimal staffing levels. The situation would be infinitely worse if not for one crucial source of labor – foreign-born workers!

More than 18% of people working in the United States today were born in another country (with neither parent being a US citizen) according to the US Bureau of Labor Statistics. That’s 28.7 million of the 158.3 million people aged 16 and older who have jobs. By region, the foreign born (both legally admitted and undocumented) comprise an even larger share of the labor force in the West (23.5%) and Northeast (21.6%). The current percentage is the highest since records have been kept, despite recent efforts to limit immigration.

The unemployment rate for foreign-born persons was 3.4% in 2022, down from 5.6% in 2021. For native-born persons, the jobless rate was somewhat higher (3.7%). The labor force participation rate of the foreign-born group was 65.9%, well above that of the native-born population (61.5%). Hispanics account for nearly half of the foreign-born labor force, with Asians representing one-quarter.

Foreign-born workers are more likely to be employed in services, natural resources, construction, maintenance, production, transportation, and material-moving occupations. They are less likely than native-born workers to be found in management, professional, sales, and office occupations. Across the spectrum – scientists, physicians, engineers, carpenters, farm workers, and cleaning crews – the US needs more labor.

For the foreseeable future, demographic patterns undeniably indicate that the demand for workers will not be met by natural expansion in the native population. Baby boomers continue to retire, and the numbers of people in younger age groups are falling pretty dramatically. Birth rates are near historic lows, and the participation rate is on a definitive downward trajectory. Simply stated, we are not making enough workers!

Despite this situation, the US has curtailed the number of workers allowed in, even as workforce needs become increasingly more acute. Although the current situation at the southern border is clearly chaotic and must be addressed, sensible immigration reform is also essential to providing the human resources required to sustain growth and prosperity. This is not rocket science! Stay safe!