Less immigrant labor in the United States contributing to higher prices
After immigration to the United States dwindled under the Trump administration — then came to an almost complete halt for 18 months during the coronavirus pandemic — the country is waking up to a partly fueled labor shortage by this slowdown.
According to some estimates, the United States has, by some estimates, 2 million fewer immigrants than it would have if the pace had remained the same, helping to fuel a desperate rush for workers in many sectors, from packing meat to building homes, which is also contributing to supply shortages and rising prices. .
“These 2 million missing immigrants are part of the reason we have a labor shortage,” said Giovanni Peri, an economist at the University of California, Davis, who calculated the shortfall. “In the short term, we will adjust to these labor market shortages by raising wages and prices.”
Labor issues are among several contributors to the highest inflation in 40 years in the United States – from supply chains crippled by the pandemic to a spike in energy and commodity prices after Russia invaded Ukraine.
Steve Camarota, a researcher at the Center for Immigration Studies, which advocates for less immigration, believes a spike in illegal immigration under President Joe Biden will make up for the shortfall from the pandemic. He also argues that wage increases in low-wage sectors like agriculture are minor contributors to inflation.
“I don’t think raising wages is bad for the poor, and I think mathematically it’s not possible to lower inflation by limiting wages to the lowest,” Camarota told the Associated Press.
Immigration is rapidly returning to pre-pandemic levels, researchers say, but the United States would need a significant acceleration to make up its shortfall. Given the steep decline in births in the United States over the past two decades, some economists predict that the overall pool of potential workers will begin to shrink by 2025.
The shortage of immigrant workers comes as the US political system shows less appetite for increased immigration. The Democrats — who control all branches of the federal government and, more recently, have been the most pro-immigration party — have not tried to push through major legislation allowing more new residents into the country. A recent Gallup poll showed concerns about illegal immigration at a two-decade high. With a difficult election for their party looming in November, Democrats are increasingly divided over the Biden administration’s bid to end pandemic-related restrictions on seeking asylum.
“At some point, we either decide to get older and downsize or we change our immigration policy,” said Douglas Holtz-Eakin, an economist and former administration official for President George W. Bush, president of the center-right American Action Forum. He acknowledged that a change in immigration policy is unlikely: “The bases on both sides are so locked in.”
That’s certainly the case in Republican-dominated Texas, which includes the longest and busiest stretch of the southern border. The 2017 legislature forced cities to comply with federal immigration officers looking for people who are illegally in the United States. Governor Greg Abbott sent the Texas National Guard to patrol the border and recently created traffic problems by ordering more inspections at border ports.
The turn against immigration is plaguing some Texas business owners. “Immigration is very important to our workforce in the United States,” Correa said. “We just need it.”
He is seeing two to three month delays on his projects as he and his contractors – from drywallers to plumbers to electricians – struggle to find field crews. Correa increased the standard price of his homes from $500,000 to around $650,000.
“We feel it, and if we ultimately feel it as builders and developers, the consumer pays the price,” said Correa, who spoke from Pensacola, Florida, where he brought a construction crew as a favor to a client who was unable to find workers to repair a beach house damaged by Hurricane Sally in 2020.
The share of the US population born in another country – 13.5% at the last census – is the highest since the 19th century. But even before Donald Trump won the 2016 presidential election by promising to cut immigration, migration to the United States was slowing. The Great Recession dried up many jobs that brought workers into the country, legally or illegally. Rising living standards in Latin America have prompted more people to stay put or return from the United States.
Flores, who runs a chain of Mexican restaurants as well as his barbecue restaurant, said while the COVID-19 pandemic has been a bigger shock to his industry, the downturn in immigration has hit it hard — and not only for the meatpackers who supply the brisket for his restaurant. “You have a lot of positions that are not filled,” he said.
He has steadily increased his salary, up to $15 an hour recently. “It’s the culmination of years and years,” said Flores, who serves as president of the Greater Houston Restaurant Association.
Helle, who grows onions, cabbage, melons and kale just outside the border town of McAllen, Texas, also pays more to her workers, who are almost exclusively immigrants. People born in the United States, he says, will not work in the fields, regardless of their salary.
Before you can find farmhands just in the area. Now he has joined a federal program to bring farm workers across the border. It’s more expensive for him, but he says it’s the only way to prevent his crops from spoiling in the ground.
Helle, 60, has been farming the area for decades. “I live 10 miles from the Rio Grande River and never in my life thought we would be in this situation.”