New Data; the Lack of Immigrant Workers is Undermining the Economy & it May Get Worse
Two new reports strongly suggest that the anti-immigration policies of the Trump administration and America's cratering fertility rate are undermining the short and long-term economic prospects of the United States.
The current labor shortage is driven by multiple factors such as the lack of affordable child care, early retirements, and Covid fears. However, a new report from the Bureau of Labor Statistics and the Federal Reserve Bank of St. Louis documents how the immigration policies of the Trump administration exacerbated the problem.
Washington Post: "Immigration inflows slowed sharply during the Trump administration and then collapsed under the combination of Trump-era policies and pandemic-driven closures. The number of visas issued by the State Department’s Foreign Service posts, for example, fell by more than 60 percent between fiscal years 2016 and 2020. There are millions fewer immigrants here today than would have been the case if pre-Trump trends in immigration had continued."
The Biden administration is in the process of reversing Trump-era policies by making it easier for essential foreign workers to obtain or renew work permits but there are nearly 1.4 million employment authorization applications pending, three times as many as there were before Donald Trump took office. The Biden administration needs to ramp up efforts to clear the backlog faster because many immigrants, already working in the United States, face the prospect of losing their legal status if their permits expire.
Washington Post: "The problem, says Cato Institute research fellow David Bier, is that the administration has "done a lot of the reversing of the bad stuff that Trump did to slow things down even more, but not enough to go above and beyond that necessary to get rid of the backlogs and added delays that the Trump policies originally created.”
Moreover, America badly needs to increase the pace of issuing new immigrant visas to address the current labor shortages in industries critical to the nation's economic growth. And, a second report released this week suggests that this isn't going to be just a short term problem.
Even before the Covid crisis, birth rates in the United States had already dropped to record lows. The pandemic and economic concerns exacerbated the situation and new data from the Pew Research Center suggests the trend will continue for the foreseeable future. They found that for a variety of reasons a rising share of adults who are not already parents say they are unlikely to ever have children.
Pew: "Some 44% of non-parents ages 18 to 49 say it is not too or not at all likely that they will have children someday, an increase of 7 percentage points from the 37% who said the same in a 2018 survey."
Bringing children into the world is a very private decision, but it also has important public policy implications for the labor market. As we have noted before, if America's baby bust continues, as the Pew research suggests, it will lead to an aging population, slower growth, an extremely tight labor market, and fewer workers to fund entitlements like Social Security and Medicaid for seniors.
However, America could escape the worst effects of population decline because it still attracts many talented immigrants from across the globe. Nativists within the GOP will continue to oppose efforts to increase legal immigration. If their efforts succeed, they will hobble America's competitiveness in the global economy.
By: Don Lam & Curated Content