Less immigrant labor in US contributing to price hikes

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The U.S. is experiencing a labor shortage that’s partly fueled by a drop-off in immigration, which ground to a halt during the coronavirus pandemic

May 7, 2022, 5: 02 PM

6 min read

Just 10 miles from the Rio Grande, Mike Helle’s farm is so short of immigrant workers that he’s replaced 450 acres of labor-intensive leafy greens with crops that can be harvested by machinery. Al Flores raised the price of his brisket plate at his Houston BBQ restaurant because it was more expensive than usual due to the inability of meatpacking plants to employ enough immigrants. In the Dallas area, Joshua Correa raised prices on the homes his company builds by $150,000 to cover increased costs stemming partly from a lack of immigrant labor.

” These 2 million missing immigrants are part of why we have a labor crisis,” stated Giovanni Peri, an economist at University of California at Davis. “In the short run, we are going to adjust to these shortages in the labor market through an increase in wages and in prices.”

The labor issues are among several contributors to the highest inflation in 40 years in the United States — from supply chains mangled by the pandemic to a surge in energy and commodity prices following Russia’s invasion of Ukraine.

Steve Camarota is a researcher at The Center for Immigration Studies. He believes that a surge in illegal immigration under President Joe Biden would make up any shortfalls left by the pandemic. He also believes that wage increases in low-paying industries like agriculture are minor contributors.

“I believe wages going up is good for the poor and I think it is mathematically impossible to drive down inflation if wages are kept at the bottom,” Camarota said to The Associated Press.

Immigration is rapidly returning to its pre-pandemic levels, researchers say, but the U.S. would need a significant acceleration to make up its deficit. Given a sharp decline in births in the United States over the past two decades, some economists forecast the overall pool of potential workers will start shrinking by 2025. The immigrant worker shortage is occurring as the U.S. political systems shows less interest in increasing immigration. Democrats, who control all branches and have been more supportive of immigration in recent years, have not attempted to push for major legislation that would allow more people to come to the country. Recent Gallup polls showed that illegal immigration worries are at an all-time high. With a difficult election in November, Democrats are growing divided over the Biden administration’s attempt to eliminate pandemic-related restrictions for asylum seekers.

” At some point, we either decide to get older and smaller or change our immigration policies,” said Douglas Holtz Eakin, an economist who was formerly a member of President George W. Bush’s administration and is the president of the center-right American Action Forum. He acknowledged a change in immigration policy is unlikely: “The bases of both parties are so locked in.”

That’s certainly the case in Republican-dominated Texas, which includes the longest and busiest stretch of the southern border. The Legislature in 2017 forced cities to comply with federal immigration agents seeking people who are in the U.S. illegally. Gov. Greg Abbott sent the Texas National Guard as a border patrol and created traffic jams by ordering more inspections at the border ports. Some Texas business owners are distressed by the turn against immigration. Correa stated that immigration is essential for the United States’ workforce. “We just need it.”

He’s seeing delays of two to three months on his projects as he and his subcontractors — from drywallers to plumbers to electricians — struggle to field crews. Correa has raised the standard price of his houses from $500,000 to about $650,000.

“We’re feeling it and, if we’re feeling it at the end of the day as builders and developers, the consumer pays the price,” said Correa, who spoke from Pensacola, Florida, where he brought a construction crew as a favor to a client whose hasn’t been able to find laborers to fix a beach house damaged by Hurricane Sally in 2020.

The share of the U.S. population born in another country — 13.5% in the latest census — is the highest it has been since the 19th century. But even before Donald Trump won the 2016 presidential election vowing to cut immigration, migration to the United States was slowing. Many jobs that had attracted workers to the United States, legal or illegal, were lost in the Great Recession. The rising standard of living in Latin America has encouraged more people to either stay or return to the United States.

Flores, who runs a chain of Mexican restaurants as well as his barbecue restaurant, said while the COVID-19 pandemic was a bigger shock to his industry, the immigration slowdown has hit it hard — and not just for meatpackers that supply his restaurant’s brisket. He said, “You have a lot of jobs that aren’t being filled.”

He’s steadily raised pay, up to $15 an hour recently. Flores, who is president of the Greater Houston Restaurant Association, said that “this is a culmination in years and years.”

Helle is an immigrant who raises onion and cabbage in McAllen, Texas. He claims that people born in the U.S. won’t work in the fields, regardless of their pay.

Before, he could only find farmworkers in the area. He now works for a federal program that allows him to bring in agricultural workers across the border. Although it is more costly for him, he believes it is the only way to prevent his crops from rotting.

Helle, 60, has farmed the area for decades. “I live 10 miles from the Rio Grande river and I never in my life thought we’d be in this situation.”

ABC News

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