Immigration is a little talked about subject, but over the last administration, legal immigration was contracted pre pandemic. This is on top of 40 years of illegal immigration being a hot political topic and specifically the last 10 years of state level enforcement creating worker shortages.
But you combine that with
1. Baby Boomers retirement surge was forelorned prior to the pandemic, and accelerating at the beginning of the pandemic.
2. Boomers, GenX, and Millennials were culturally trained to a 2 child policy for environmentalism.
3. Pandemic job shifts for logistics for technology (Amazon warehouse)
4. Over Stem and glorification of college prep.
If we want to look at this globally, Japan is an example of how a decreasing population decreases economic growth; but China is appearing to be the most policy active; they had 1 child policy, then they were let's up it to 2, and now they're really afraid and wanting more than 2.
The US government would more effectively fight worker shortages, wage inflation if it increased legal unskilled immigration - to target a higher unemployment rate rather than have the fed control it with the money supply. That is until we work on policy to keep the birth rate closer to >2.0
WOODS: So remember when we said that there's a yearly cap on H-2B visas of 66,000? Well, that limit was put in place in 1990 when there were far fewer H-2B workers in the country, around 20,000 workers. So the cap of 66,000 seemed really generous at that time.
CLEMENS: That number was seen as so high that it would never be reached.
WONG: Well, the number was reached and then some. In 2019, employers requested triple the number of H-2B visas available for half a year. By 2022, the number of requests was four times the quota.
WOODS: And the government's tried some stopgap measures. Like, in the law, they are allowed to extend the number of visas by up to around 65,000 extra visas, and that's what they're going to do in the coming year.
...
WONG: Last month, Michael and a fellow economist published a working paper that studied the businesses that won and lost the 2021 lottery for H-2B visas. And here's what they found. Businesses that were able to hire foreign workers, the winners, produced 17% more stuff than the losers. The winners also spent triple the amount on investing in their business.
WOODS: In other words, just being able to hire H-2B workers unlocked productivity, not just for the foreign workers coming in but for the entire company. And Michael says businesses that are expanding tend to create more jobs for Americans.
CLEMENS: If a restaurant can operate because there is a dishwasher, that means not just more jobs for people who are waiting tables. It also means more jobs for the accountants who keep the books of the restaurant. It means more jobs for the people at the businesses from which things are bought by the owner of the restaurant with the revenue they get because the restaurant can operate because there is a dishwasher. There are all kinds of ripple effects.
WOODS: Michael's analysis found that businesses who couldn't hire H-2B workers, the losers, weren't able to hire American workers for the unfilled positions either. And the result was that these businesses' output and investment fell.
Consider things like "landscaper isn't able to get H-2B visa for summer jobs" (one of the examples). Well, now they have to raise prices and turn down jobs.
The H-2B isn't wide open. Its a 6 month maximum contract - seasonal and short term work.
Look at the "Who May Qualify for H-2B Classification?" section.
The reauth period:
> Generally, USCIS may grant H-2B classification for up to the period of time authorized on the temporary labor certification. H-2B classification may be extended for qualifying employment in increments of up to 1 year each. A new, valid temporary labor certification covering the requested time must accompany each extension request. The maximum period of stay in H-2B classification is 3 years.
As to some of the effects described in the paper:
> Why are the effects so uniformly positive despite widespread priors of a harm to natives? Our model and additional evidence suggest that it is because there are simply few substitutes for the labor provided by legally authorized low-skill workers. First, pushing our estimates (of either the employment or revenue response) through a standard model of the labor market used in the immigration literature, we find that U.S. workers do not substantially substitute for foreign workers on H-2B visas. Second, unlike in other low-skill industries like agriculture (e.g. Clemens et al. 2018; San 2022) or manufacturing (e.g. Lewis 2011) there appears to be little potential to simply “automate away” labor shortages. Indeed, we find that H-2B hires are associated with an increase in capital investment (elasticity +1.03), suggesting that capital is a complement, rather than a substitute for H-2B workers. Finally, a simple forensic analysis shows little sign that lottery losing firms turn to unauthorized labor, suggesting that the unauthorized are not a viable substitute for legally hired workers, either.
Normally these companies have been able to hire (2018) the number of people who are willing to work for six months - but as the H-2B visa program has hit its cap, it is uncertain if the company will be able to hire...
> 2. Boomers, GenX, and Millennials were culturally trained to a 2 child policy for environmentalism.
I’ve never met someone in real life who’s restricted how many kids they want for environmental reasons.
It’s always always for practical reasons - money, space, time, effort, and interest. What lifestyle do you want to live, and what are you willing to sacrifice.
I think culturally parents have shifted to spending more resources on each child, so having more children is infeasible.
“I understood during Covid, people staying home, some still do for this reason, but most do not. So where are they? Any store I go to there are empty sections of products. Business, including my own have almost doubled wages and still can’t find semi qualified workers. In socal, local small cafe/bakery has a sign for counter help, swiping credit cards, and putting croissants in a bag, starting pay $23 per hour $47,000 per year, with medical insurance as well. Seems a bit out of hand. Certainly contributing to inflation, and by the shops own admission, they state they increased their prices for it. It seems a slight recession is necessary to get unemployment numbers a bit up to balance this out?” [0]
15 comments
[ 1.4 ms ] story [ 42.5 ms ] threadBut you combine that with
1. Baby Boomers retirement surge was forelorned prior to the pandemic, and accelerating at the beginning of the pandemic.
2. Boomers, GenX, and Millennials were culturally trained to a 2 child policy for environmentalism.
3. Pandemic job shifts for logistics for technology (Amazon warehouse)
4. Over Stem and glorification of college prep.
If we want to look at this globally, Japan is an example of how a decreasing population decreases economic growth; but China is appearing to be the most policy active; they had 1 child policy, then they were let's up it to 2, and now they're really afraid and wanting more than 2.
The US government would more effectively fight worker shortages, wage inflation if it increased legal unskilled immigration - to target a higher unemployment rate rather than have the fed control it with the money supply. That is until we work on policy to keep the birth rate closer to >2.0
Planet money did an article recently on it: Could foreign workers unlock America's tight labor market? https://www.npr.org/transcripts/1134417921
---
WOODS: So remember when we said that there's a yearly cap on H-2B visas of 66,000? Well, that limit was put in place in 1990 when there were far fewer H-2B workers in the country, around 20,000 workers. So the cap of 66,000 seemed really generous at that time.
CLEMENS: That number was seen as so high that it would never be reached.
WONG: Well, the number was reached and then some. In 2019, employers requested triple the number of H-2B visas available for half a year. By 2022, the number of requests was four times the quota.
WOODS: And the government's tried some stopgap measures. Like, in the law, they are allowed to extend the number of visas by up to around 65,000 extra visas, and that's what they're going to do in the coming year.
...
WONG: Last month, Michael and a fellow economist published a working paper that studied the businesses that won and lost the 2021 lottery for H-2B visas. And here's what they found. Businesses that were able to hire foreign workers, the winners, produced 17% more stuff than the losers. The winners also spent triple the amount on investing in their business.
WOODS: In other words, just being able to hire H-2B workers unlocked productivity, not just for the foreign workers coming in but for the entire company. And Michael says businesses that are expanding tend to create more jobs for Americans.
CLEMENS: If a restaurant can operate because there is a dishwasher, that means not just more jobs for people who are waiting tables. It also means more jobs for the accountants who keep the books of the restaurant. It means more jobs for the people at the businesses from which things are bought by the owner of the restaurant with the revenue they get because the restaurant can operate because there is a dishwasher. There are all kinds of ripple effects.
WOODS: Michael's analysis found that businesses who couldn't hire H-2B workers, the losers, weren't able to hire American workers for the unfilled positions either. And the result was that these businesses' output and investment fell.
---
The Michael spoken of in the episode is https://www.cgdev.org/expert/michael-clemens
Some of the articles on papers written recently:
U.S. economy loses billions of dollars a year due to the sharp decline in refugee admissions, economist says - https://www.marketwatch.com/story/u-s-economy-loses-billions...
Another Study Concludes Immigration Critics Are Wrong (this appears to be the one about the H-2B visa) https://www.forbes.com/sites/stuartanderson/2022/10/26/anoth...
Digging further... the actual article is The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery https://www.nber.org/papers/w30589 (the PDF of it is https://www.nber.org/system/files/working_papers/w30589/w305... )
The summary of the paper from the aut...
The H-2B isn't wide open. Its a 6 month maximum contract - seasonal and short term work.
https://www.uscis.gov/working-in-the-united-states/temporary...
Look at the "Who May Qualify for H-2B Classification?" section.
The reauth period:
> Generally, USCIS may grant H-2B classification for up to the period of time authorized on the temporary labor certification. H-2B classification may be extended for qualifying employment in increments of up to 1 year each. A new, valid temporary labor certification covering the requested time must accompany each extension request. The maximum period of stay in H-2B classification is 3 years.
As to some of the effects described in the paper:
> Why are the effects so uniformly positive despite widespread priors of a harm to natives? Our model and additional evidence suggest that it is because there are simply few substitutes for the labor provided by legally authorized low-skill workers. First, pushing our estimates (of either the employment or revenue response) through a standard model of the labor market used in the immigration literature, we find that U.S. workers do not substantially substitute for foreign workers on H-2B visas. Second, unlike in other low-skill industries like agriculture (e.g. Clemens et al. 2018; San 2022) or manufacturing (e.g. Lewis 2011) there appears to be little potential to simply “automate away” labor shortages. Indeed, we find that H-2B hires are associated with an increase in capital investment (elasticity +1.03), suggesting that capital is a complement, rather than a substitute for H-2B workers. Finally, a simple forensic analysis shows little sign that lottery losing firms turn to unauthorized labor, suggesting that the unauthorized are not a viable substitute for legally hired workers, either.
Note the increase in capital investment.
These companies are things like the restaurant in a tourist economy driven town that hires some dish washers for six months of the year. Or ski resorts that are closing because of lack of workers there for the winter season ( https://coloradosun.com/2021/12/31/labor-shortage-vail-resor... - https://www.axios.com/local/denver/2021/11/15/labor-shortage... - "Another is recruiting international employees as seasonal workers on visas. The suspension of international employee visas was lifted after the 2020–21 ski season, but the H-2B program hit its cap, Arapahoe Basin officials told the Summit County newspaper" -- https://www.nytimes.com/2022/01/26/travel/ski-resort-labor-s... )
Normally these companies have been able to hire (2018) the number of people who are willing to work for six months - but as the H-2B visa program has hit its cap, it is uncertain if the company will be able to hire...
I’ve never met someone in real life who’s restricted how many kids they want for environmental reasons.
It’s always always for practical reasons - money, space, time, effort, and interest. What lifestyle do you want to live, and what are you willing to sacrifice.
I think culturally parents have shifted to spending more resources on each child, so having more children is infeasible.
[0]: https://web.archive.org/web/20221120164732/reddit.com/r/smal...?