Economists estimate that ‘two years of lost immigration’ is responsible for close to half of the 3.5 million workers missing from the labor force
“It’s been three years of trying absolutely everything,” said Arteaga, who has raised pay by about $3 an hour and offers discounted monthly rates to employees. “It feels like the workers really aren’t there.”
A shortfall of immigrants is worsening widespread labor shortages and hobbling the U.S. economy at a time when more than 10 million jobs remain unfilled, particularly in low-paying and physically demanding industries such as hospitality, agriculture, construction and health care.
While the slowdown in immigration began well before the pandemic, the covid crisis intensified the process as the Trump administration effectively halted the flow of foreign-born workers into the United States. Although legal immigration has rebounded somewhat since then, particularly in the last six months, major shortages remain, rippling through the economy at a time when the labor force is also missing workers from early retirements, ongoing health problems and caregiving challenges. Labor force shortages are also contributing to higher prices for some goods and services, as companies raise wages to compete for a smaller pool of workers and to keep existing staff.
The crisis had prompted senators on both sides of the aisle to try to strike a deal that allowed more legal immigration in the weeks before Republicans take control of the House. But those proposals never got off the ground, making an immigration overhaul far less politically feasible.
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“Immigration is something almost everyone agrees needs to be fixed, but it’s become a political wedge issue,” said Tara Watson, an economics professor at Williams College and fellow at the Brookings Institution. “There have been huge bureaucratic delays since the Trump administration. And of course covid really put a wrench in the gears. But this is a long-term structural problem that has not been addressed.”
Economists say it’s difficult to quantify exactly how many foreign-born workers are missing from the labor force, particularly when it comes to undocumented immigrants. By one estimate, the United States is shy of about 1.7 million legal immigrants based on pre-pandemic migration trends, according to Giovanni Peri, director of the Global Migration Center at the University of California at Davis.
Even though immigration rates have picked up in recent months, Peri says it could be another four years before the country makes up for current shortfalls. Even then, it won’t be enough to catch up to the rapidly aging workforce that is projected to leave millions more positions unfilled.
Economists estimate that the lack of immigration is responsible for close to half of the workers missing from the labor force, a deficit Federal Reserve Chair Jerome H. Powell recently estimated to be about 3.5 million workers.
“There is no question: We need more immigration,” said Adam Ozimek, chief economist at Economic Innovation Group, a nonpartisan business organization. “Immigrants aren’t just workers, they are particularly flexible, mobile workers, who help address acute labor shortages wherever they emerge. And that’s particularly important in this constrained economy we’re facing right now.”
Visas for college students and highly skilled science and tech workers have bounced back relatively quickly, Peri said. But immigration rates for people without a college education have been slower to make up for lost ground.
“If someone doesn’t have much education and doesn’t have a close relative in the U.S., there is virtually no legal pathway for them to get a green card,” said Watson of Williams College. “There is a pool of untapped talent out there.”
Worker shortages are fueling America’s biggest labor crises
The drop-off in foreign workers began soon after President Donald Trump took office, largely on an anti-immigrant platform. Although his administration didn’t make legislative changes, it slowed down visa processing through “a culture of extreme vetting and extreme delays” that was enough to deter immigration in all forms, especially among those without college educations, Peri said.
The number of new immigrants entering the country legally each year, which peaked in 2016, fell by 6 percent in 2017 and another 9 percent the following year, according to data from the U.S. Department of Homeland Security. But the pandemic dealt the biggest blow: New arrivals plunged 50 percent between 2019 and 2021.
“Covid caused two years of lost immigration,” Peri said. “Embassies and consulates that release visas were mostly shut down. The processing of green cards in the U.S. was mostly shut down. Even international travel was mostly gone.”
Many of those situations have since improved, but business owners say it hasn’t been enough to make up for years of lost workers.
Early in the pandemic, Mariama Lowe lost nearly three-quarters of the employees at her home health-care business in Alexandria, Va., to covid illnesses, career changes and early retirements. She’s since gone from 100 nurses and personal care aides — almost all of them immigrants — to 27.
“We’re in a very difficult position, because there is nobody to hire anymore,” Lowe said. “Tech companies can go recruit from anywhere; they have all of these avenues available to them. But a home health agency like me? I don’t have that opportunity. I just have to go with whoever’s here and whoever’s available. And right now, it’s not a lot.”
Beyond creating wider avenues for immigrants to enter the country, business owners, economists and policymakers say there also needs to be a focus on retaining foreign-born workers already in the United States. That includes “dreamers,” undocumented immigrants brought to the United States as young children; recently laid-off tech workers on H1-B visas who may have to leave the country if they don’t find new work within 60 days; and the adult children of highly educated legal immigrants awaiting permanent residency.
U.S. lawmakers are not expected to address these issues before Congress breaks for the holidays as all their attention is focused on funding the government. Sens. Kyrsten Sinema (I -Ariz.) and Thom Tillis (R-N.C.) had discussed creating a pathway to citizenship for Dreamers in exchange for $25 billion to strengthen border security. That proposal could be pushed into the new year, with even slimmer chances of succeeding.
“A border proposal is a critical component to Congress’s ability to move anything,” said Dane Linn, senior vice president at Business Roundtable, an industry lobbying group. “If we don’t have the border, we don’t have a deal on anything else on immigration.”
Immigration policy remains a divisive topic among Republicans, as anti-immigration sentiment is a tenant of the far right wing of the party and played well with Trump’s base in 2016. Some Republicans say new paths to legal immigration should not be implemented until the border is secured enough that undocumented migrants cannot make it into the country. With Republicans taking over political control of the House in January, refusal from some conservative members to pass any reforms could prevent progress on legislation.
“Before anything else is done or any legislation passed, the border must be secured, the laws currently on the books must be enforced,” said John Fonte, a senior fellow at the Hudson Institute, a right-wing think tank. “The bigger problem we face [than declines in immigration] is the large number of America-born citizens not in labor force.”
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Roughly 100 millions Americans are not in the labor force — meaning they don’t have a job or aren’t looking for one — according to government data, although it is unclear how many of those people are American-born.
Undergirding many of the current challenges is a tangle of decades-old quotas, experts say. Visas for highly skilled tech workers, for example, have been capped at 85,000 a year since 2006. Business lobbying groups are pushing for a number of changes, including doubling the annual allotment of employment visas, creating more ways for international students who attend U.S. colleges to stay longer and asking the State Department to make it easier for immigrants to renew their work visas.
Also high on their list: Getting more farmworkers into the United States to pick, process and package a range of crops, meat and poultry.
In Napa Valley, Calif., grape growers can’t find the immigrant workers they once relied on to cultivate the region’s hallowed vineyards. Many farmworkers have retired to their native villages in central Mexico, vineyard managers said, and millennial and Gen Z workers never arrived to fill their shoes.
“A younger generation from Mexico never came,” said Michael Wolf, a vineyard manager for nearly 50 years in Napa Valley. “A lot of [vineyards] are struggling. People are using local farm labor contractors to transport workers to Napa from Stockton a couple hours a day in each direction. But that’s not sustainable.”
Declines in immigration to the region have been exacerbated by devastating wildfires, the pandemic and inflation that has contributed to the region’s soaring cost of living. Forty-four percent of vineyard businesses in Napa reported a labor shortage in 2021, according to a joint study by UC Davis and a wine industry nonprofit in Napa. Meanwhile, the region lost 7 percent of its adult immigration population between 2015 and 2020 compared with the previous five years.
Wolf has managed to fill open roles by hiring workers from Mexico on H-2A visas, a seasonal program for guest workers in agriculture.
Labor shortages are not new to the agriculture industry but have been worsened in recent years, according to farmers and industry experts in California. The reasons for the declining availability of farmworkers are complex and debated, ranging from improved educational opportunities in Mexico to heightened border security.
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“We have long known that Americans do not want to do these jobs,” said Brett Erickson, senior vice president at Little Bear Produce, which grows 5,000 acres of greens, onions, cabbages and melons on the Mexico border in Edinburg, Tex. “We’ve been struggling with labor shortages for decades, but now it’s come to a crisis point. The labor force has completely dried up.”
He would’ve liked to have planted 15 percent more crops this year, but says labor constraints made that impossible. Little Bear has begun using temporary workers from Mexico to fill in employment gaps, though it’s so costly that it’s become difficult for the company to keep turning a profit. The family-run business is also doubling down on automation and investing in machines that can wash, cut and bag vegetables. Crops still have to be picked by hand, which is becoming more expensive as labor shortages persist.
“This is a plea to Congress that they stop kicking this can down the road. It’s not just farmers who are being affected,” he said. “Consumers are ultimately paying the price — and we’re all consumers; we all have to eat.”
Marianna Sotomayor, Liz Goodwin, and Camila DeChalus contributed to this report.
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