Thursday, February 10, 2022

Why I was Correct - In Hindsight- In Emphasizing Need For Foreign Workers' Permanent Residency To Address Labor Shortages

 Just imagine that it turns out (in retrospect) my idea (Dec. 23 post) to remedy the  ongoing holes in the U.S.  supply chain was a good one.    As I noted then:  

In the U.S. currently we are looking at nearly 3 million jobs in the service industry and farm agriculture which will likely never be filled by Americans.  The service industry 'hole' has been ongoing for nearly four months now -  one reason our local Burger King and barber shop has had to go to restricted hours.  Meanwhile, certain veggies and fruits (like corn, oranges, applies, grapes etc.) are in short supply because no one can be found to harvest them.  You can take away all the unemployment benefits you want but it is doubtful it will drive people to work for $8.50/ hr. at the BK, or $10 an hour at Safeway.  Or even $12 an hour harvesting onions or soybeans.  Hell, the state of Maryland can't even find enough crabbers, e.g

Border crisis affects Maryland crab industry: Here's how |

What to do?  ...

As I've noted in previous posts (on productivity) the problem is not too few people in the world (which also implies too few workers) but rather redistributing existing workers from labor-rich nations to labor-poor ones, like the U.S. and Germany...That means the only practical solution may well be to imitate Canada and issue permanent resident visas or documents 

Now, further info bolsters that solution, of bringing in more foreign labor and even allowing for permanent residency.  For example, from the WSJ editorial (Feb. 8, p. A16,  The U.S. Legal Immigration Shortage)  We note:

"Immigration restrictionists say employers could attract more American workers if they raised wages, but they need to get out of their think tanks and talk to employers. Few Americans are willing to relocate every few months for physically demanding seasonal jobs such as shucking oysters in the Gulf Coast or cleaning rooms at Rocky Mountain ski resorts, no matter how much employers pay. 

So employers year after year rely on the H-2B program. 

Demand for visas exceeded the cap even before the pandemic, but the mismatch has grown as millions of U.S. workers have left the labor force, enabled by generous welfare payments."

First, let me note that barely 1 day after this editorial we read a WSJ op-ed from Dan Alman ('See No Labor', p. A17) that these workers  (6 million according to Alman) didn't just vanish from the labor force.  As he writes:

"They didn’t just vanish. Many found ways of working that expose a blind spot in government policy while transforming the economy. They signed up for flexible working apps such as DoorDash, Amazon Flex, Trusted Health and the one from my company, Instawork— apps that match hourly workers with local businesses on a shift-by-shift or task-by-task basis. Yet despite the apps’ popularity, the Labor Department rarely publishes statistics on flexible work"

So contrary to the WSJ editors' take, these "missing" workers weren't just loafing around on gov't checks, binge-watching reruns of 'Bonanza' or soaps on TV. They were actually out hoofing it in assorted gigs,  time-flexible gigs.  So no, they weren't about to be locked into an 8 to 6 schedule flipping burgers, shucking oysters or changing sheets, but doing Amazon Flex and Instawork.  At least according to Alman, who correctly dings the Labor Dept. for not getting these stats out into the public sphere.  

But the WSJ editors did get it right that tens of thousands more foreign workers are needed, e.g.

 "As of Dec. 1, the Labor Department certified that employers needed 65,717 H-2B workers for the first half of the 2022 fiscal year. Last month the Administration said it had received 136,555 visa applications from employers for April through September—four times the cap."

Wouldn't such an allowed influx of legal immigrant workers be taking jobs from Americans? Again, no, because Americans born and bred don't want them!  As the WSJ said earlier, "no matter how much employers pay".  And then even more revelations:

"with millions of Americans losing jobs during lockdowns, employers that typically hire foreign workers on H-2Bs might have been expected to hire more Americans."

Why would they if Americans don't want those jobs, i.e. that typically are done by foreign workers? So, predictably, from the WSJ editors (ibid.):

"The opposite happened. "

Of course the opposite happened, because all those Americans were flocking to flexible gig jobs instead, as Alman noted.  The last thing they wanted was to be mired in an 8 to 5 or 9 to 6 flipping burgers, packing meats, or doing any other rigid drudge job that locked them into a routine.  The WSJ again:

The economists examined employment trends in labor markets based on their reliance on the H-2B program, controlling for state and industry. They found unemployment rates were significantly higher in labor markets where employers traditionally relied more on the H-2B program. When fewer H-2B visas are issued, U.S. workers also have fewer job opportunities."

Again, why?  Well, as Alman pointed out in his op-ed the BLS stats dropped the ball on reporting shift by shift or task by task flexible hour gig work.  So, having not properly reported such jobs it would appear that "unemployment rates" were significantly higher - but they actually were not. If the BLS had the competence to capture the relevant stats for flex work, the "significantly higher" unemployment rates would vanish.   It wasn't a case that U.S. workers had "fewer job opportunities" it was just that they didn't want the typical limited task variety, 8 -to- 5 drudge work opportunities!  The editors finally come to their senses in the next line, actually a question and answer:

"Wonder why hotels no longer change sheets daily? They can’t find enough workers, domestic or foreign."

Well, doh!  Of course they can't because: a) there aren't enough H-2B visas being issued for the foreign workers who WOULD do the job, and b) there are next to NO American workers who want to change sheets in a hotel daily!  They are flocking to flex work jobs that likely pay more.  The final proof of my point is in a WSJ Business News piece from yesterday (p. B3) noting:

"Tyson and other U.S. meatpackers are under pressure to keep up with surging demand from supermarkets and reopening restaurants. A nationwide labor shortage has left many processing plants understaffed and unable to keep up, leading to higher prices and shortages of some products, industry officials have said."

Again, there you have the whole inflation-supply side issue in a nutshell: not enough foreign workers to avert shortages and still very high demand which spikes inflation.  Want to solve the problem?  Then, given no one can force Americans to do these jobs, we need the Biden administration to be bold and issue indefinite numbers of H-2B visas with the promise of permanent residency at the end of the temporary visa expiration. 

I stand by that now as I did then, and let the immigration "restrictionists"  suck lemons. Or dried turds. 

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