Neil Bradley, chief policy officer at the Chamber of Commerce, told CNN Business that the worker shortage can’t be solved in the long run without ramping up immigration.
“We’ve never seen a situation this broad-based across the country where businesses are having to turn down work because they simply can’t find the workers to do it,” Bradley said. “This crisis is not going to go away.”
The Chamber is advocating for Congress and the White House to double the cap on employment-based visas, double the quota on H-1B visas for highly skilled temporary workers and H-2B visas for seasonal workers and take other steps to reform the immigration system.
“For several decades, immigration has been a key component of meeting the needs of a growing economy. However, immigration levels, particularly employment-based immigration, has been largely flat,” Bradley said.
‘Immigration is a shadow of what it was’
Economists have long warned that the aging US population means the nation will need to rely on a steady influx of foreign workers to meet demand. Yet Washington has repeatedly failed to reach a deal on immigration reform. And the Trump administration repeatedly put up obstacles to legal immigration, including restrictions imposed in 2020 that cited the pandemic’s impact on the jobs market.
“Immigration was completely upended by the pandemic,” said Bradley. “Go to any resort town in America. Where you would normally have individuals on temporary J-1 visas, they are nonexistent.”
Even before the pandemic, the lottery systems that grant companies access to H-1B and H-2B visas were heavily oversubscribed, indicating strong demand for labor.
“The survivability of your business comes down to how lucky you are in the lottery,” Bradley said.
Mark Zandi, chief economist at Moody’s Analytics, told CNN Business he’s hopeful that some worker shortage issues will be ironed out as schools and daycares reopen and enhanced unemployment benefits expire in September.
“But labor supply will be a longer run issue, just like before the pandemic,” Zandi said. “There are reasons to believe it will be a bigger problem post-pandemic because immigration is a shadow of what it was.”
Will Congress act?
Citing “increased labor demands,” the Department of Homeland Security announced in April that it would increase the number of H-2B temporary visas to non-agricultural workers by 22,000.
“The [Biden] administration deserves a lot of credit for taking that step,” Bradley said. “They are operating within the limits of where the current law exists.”
The Chamber of Commerce is optimistic that the worsening labor shortage will soon convince lawmakers to allow more legal immigration. Bradley pointed to concerns that local residents will be impacted when seasonal businesses such as amusement parks and landscaping companies don’t have enough workers to operate.
“Pressure is only going to continue to build to address this workforce shortage,” Bradley said. “There is a reasonable chance Congress can act, probably in a piecemeal fashion, to begin to address these issues.”
Childcare headaches are not helping
Beyond immigration reform, the Chamber told CNN Business it will urge states to use American Rescue Plan funding to help parents struggling with the high cost of childcare.
“There is no question the disruption of in-person schooling and childcare has reduced the number of caregivers, principally women, who are in the workforce and able to work,” Bradley said.
Arizona announced plans on May 13 to use funds from the $1.9 trillion American Rescue Plan to assist working parents with childcare costs. The state said it will provide three months of childcare assistance to people making $52,000 or less who return to work after collecting unemployment benefits. The initiative is part of Arizona’s decision to end the $300 enhanced unemployment benefit.
“We will encourage other states to do that,” Bradley said, adding that the “affordability and accessibility to childcare” were problems even before the pandemic erupted.
The pressure from the Chamber of Commerce comes amid a record-high 8.1 million job openings as of March.
“We have to find a way to bring [women] back to work,” Minneapolis Federal Reserve President Neel Kashkari told CNN’s Poppy Harlow on Tuesday.
Although the Chamber of Commerce opposes major elements of President Joe Biden’s Build Back Better agenda — most notably the proposed tax hikes — Bradley applauded the administration’s efforts to ease the burdens of childcare.
“The president deserves credit for identifying a lot of important problems that we need to discuss with the American Families Plan,” Bradley said, specifically citing the affordability and accessibility of childcare.