As the U.S. economy expands, critical shortages in skilled and unskilled workers continue, hampering further growth. Most states report more jobs than workers available to fill them. States are offering various incentives to attract and keep workers, but it remains difficult overall for employers to hire foreign workers to fill gaps. Despite the buzz around developments in artificial intelligence, robotics, and self-driving cars, such technology hasn’t yet ripened in the short term and full automation of certain occupations hasn’t taken place as fast as predicted.
Affected sectors experiencing worker shortages include education and health services; professional and business services; financial activities; mining and logging; government; information; leisure and hospitality; wholesale and retail trade; durable goods; transportation, warehousing, and utilities; manufacturing; nondurable goods; and construction. A shortage of 175,000 truck drivers is expected within six years, according to the American Trucking Association.
The House of Representatives passed a bill in December 2019, the Farm Workforce Modernization Act, to alleviate labor shortages for farmers and ranchers by granting legal status to undocumented farmworkers, but its chances in the Senate appear dim. The bill would also mandate E-Verify participation in the agriculture industry. Many farm industry groups support the bill, but some said they are hoping for changes such as an additional expansion of the H-2A visa program in the Senate version.
Meanwhile, for international students and high-skilled foreign nationals hoping to work in the United States, H-1B visas continue to face restrictions. According to the National Foundation for American Policy, the 12 percent denial rate for continuing employment, mostly for existing employees, “is also historically high,” and denial rates for new H-1B petitions have risen from 6 percent in fiscal year (FY) 2015 to 24 percent through the third quarter of FY 2019.
Recent research by Britta Glennon, of Carnegie Mellon University, notes that the debate over whether high-skilled immigration is critical for U.S. competitiveness and innovation or whether it should be reduced or avoided because it displaces U.S. workers and drives down wages “has largely overlooked the secondary consequences of restrictions on high-skilled hiring of immigrants: multinational firms faced with decreased access to visas for skilled workers have an offshoring option, namely, hiring the foreign labor they need at their foreign affiliates.”
The research documents the impact of restrictive high-skilled immigration policies on the globalization of high-skilled activity by multinational corporations. Ms. Glennon found that restrictions on H-1B immigration “caused increases in foreign affiliate employment at both the intensive (US multinationals employed more people at their foreign affiliates) and the extensive (US multinationals opened more foreign affiliate) margins.” The effects were concentrated among “highly H-1B-dependent firms and R&D-intensive firms operating in offshorable services sectors and the expansion of activity was concentrated in Canada, India, and China.” Restrictions also caused increases in foreign patenting, suggesting that there was also a change in the location of innovative activity, she noted.
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