Last week, the Bureau of Labor Statistics announced that there are a record 7.3 million unfilled jobs in the country. That’s not only significantly more than the number of unemployed Americans but also more than the combined number of unemployed and “discouraged workers” who have given up looking for work.
According to multiple surveys of small business owners, finding workers is the biggest obstacle they face. Most employers struggle to fill job vacancies within 12 weeks. As a result, businesses across the country are operating below capacity, artificially reducing national economic growth.
It’s an exaggeration to call this labor shortage a national emergency. But it’s a more pressing issue than President Trump’s recently invoked “national emergency” at the southern border. Illegal crossings are down about 80 percent since the beginning of the century. The vast majority of migrants voluntarily turn themselves over to authorities to claim asylum. And net illegal immigration is negative. Even Trump admitted at his press conference last Friday, “I didn’t need to do this. But I’d rather do it much faster.”
While Trump fights a judicial battle to save his seemingly unconstitutional national emergency, which is being challenged by Texas landowners and 16 states, congressional Republicans should craft an immigration compromise that addresses this labor shortage. In practice, this means introducing legislation to expand work visas.
Absent congressional action, the labor shortage is set to get worse. The Labor Department estimates that more than one million home health care aides will be needed over the next decade, in addition to millions more low-skill jobs that can’t be automated. Meanwhile, 10,000 baby boomers turn 65 every day, and American birthrates are well below replacement levels.
But wouldn’t guest-workers dampen wage increases for existing employees? That’s the contention made by the Breitbart and Ann Coulter crowd. Over at National Review, Steven Camarota, executive director of the radical environmentalist-funded Center for Immigration Studies, argues “there is no labor shortage when real wages are no higher now than they were in 1978.”
Setting aside the fact that there has been significant growth in employee compensation and the consumptive power of wages over this period, this argument overlooks that the economics of these jobs generally won’t allow for meaningful wage increases. If the jobs cannot be filled at market wages, they won’t be filled at all.
Consider nursing homes. These are already nearly unaffordable for the middle class. The median bill for a nursing home private room is about $100,000 per year. As the population ages, affording such assisted living services will only become more difficult. These establishments operate on razor-thin profit margins and can’t afford to raise employee wages without passing along the cost to their patients, which would throw some out on the street.
The same dynamic exists in other less-skilled industries like food service, where profit margins in the 3 to 5 percent range mean wage hikes are passed on to consumers in the form of higher menu prices, leading some diners to opt to stay home.
Think of the calculation you go through when you get your car washed. If the price is $7 you’ll do it. But If it’s $10, suddenly a little dirt on the rims doesn’t matter.
This dynamic explains why there are so many jobs that have been open for so long. If employers could simply profitably raise wages and fill them, they would have already.
To address this labor shortage, congressional Republicans should follow in the party’s proud tradition of supporting guest-worker programs and introduce legislation to this effect. In addition to alleviating their business constituents’ biggest challenge, such reform would boost economic growth. It would also counter Republicans’ Trump-induced anti-immigrant reputation that contributed to the party’s biggest midterm loss since Watergate.
Immigrants on work visas would immediately contribute to the economy through their work and taxes. By providing economic migrants with a meaningful legal option, the pressure at the southern border would be reduced, allowing border agents to focus on true national security threats. At the moment, every agent looking for a would-be home health aide is one fewer looking for a member of MS-13.
The alternative is perpetual illegal immigration pressure and a massive black market of illegal labor of the kind that Trump employed to wash his underwear and polish his trophies at his New Jersey golf club. There are just some jobs that the American workforce won’t do.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.