Fighting labor shortage, inflation: Immigrants can get the job done on both fronts

Fighting labor shortage, inflation: Immigrants can get the job done on both fronts

Editor’s note: Steve S. Rao is a Council Member At Large for the Town of Morrisville and an Opinion Writer for WRAL Tech Wire.  He served on the Board of the New American Economy, now the American Immigration Council, and on the NC League of Municipalities Race and Equity Task Force. He is a regular contributor to WRAL TechWire.


MORRISVILLE – From the price of milk to the cost of gasoline, inflation is a real problem for North Carolina.   According to numbers released last week, the consumer price index jumped 7% between December 2020 and 2021,the biggest leap since 1982. Over the same period, prices rose 5.5%, the highest rate since 1991. Families are struggling to make ends meet, and businesses are having challenges to turn a profit.

But the U.S. Chamber of Commerce has a solution: double the number of legal immigrants.”We need more workers. We should welcome people who want to come here, go to school and stay,” Chamber CEO Suzanne Clark told reporters last week. “If we can alleviate the worker shortage, it might be the fastest thing to do to impact inflation.”

We don’t usually think about immigration as related to inflation, but it’s worth taking a closer look at the connection.

John Chambers, left, with Steve Rao

The Chamber’s core argument is that labor shortages spur inflation — directly, by making it harder for businesses to keep their doors open, and indirectly, by exacerbating supply chain disruption. If there are no truck drivers to bring gas to filling stations or groceries to the store, for instance, the price of those products will keep on climbing. These are certainly problems we’re seeing in North Carolina. The unemployment rate in the Raleigh/Cary/Morrisvile area now stands at just 2.8%— the lowest it’s been for over two decades. That creates real problems: just last week, for instance, the state announced it didn’t have enough workers available to dig out roads following winterstorms.

Here in the Triangle, there were more than 120,000 job openings in October — but only about 84,000 people seeking jobs. Our economy is roaring, but our businesses simply do not have the people they need to meet demand.

That is where immigrants come in. Right now, according to the American Immigration Council, immigrants make up 11% of our state’s workforce. Many new arrivals gravitate to particular jobs— often those with theworst shortages. In our state,for instance, foreign-born workers account for 23% of all agricultural employees, and 21% of construction workers. In the transportation and logistics space, we have more than 46,500 foreign-born workers. Just imagine how bad inflation would be if they weren’t driving our trucks and bringing products to market.

Here in the Triangle, of course, immigrants also support our economy as high-skilled workers, driving innovation. More than a quarter of our region’s immigrants hold graduate degrees in areas such as coding, engineering, and the life sciences. By driving technological innovation, these skilled immigrants create jobsfor all of us: in fact, research showsthat each skilled-worker visa that gets issued leadsto the creation off our or five additional jobsfor Americansin the yearsthat follow. The problem is that as things stand, we are making it far too difficult for North Carolina’s businessesto hire the folks they need. There are any number of immigrants who’d love to come here to help harvest our crops, drive our trucks, and bring products to market, but we’re still seeing the demand for guest-worker visas drastically outstrip the supply — and the cost and complexity of gaining those visas hold back our state’s businesses.

Things are even worse when it comes to skilled immigration. The existing H1B visa system for skilled workers is literally a lottery, with businesses forced to vie for a ridiculously low number of visas each year. This year, it is forecasted that only 28% of H1B applicants will actually receive a visa, and that means we’ll wind up turning away thousands of the world’s best and brightest people — including many graduates of top-notch STEM programsright here in North Carolina. Our businesses will continue struggling to hire and their inability to grow will inevitably result in further delays and higher prices for all of us.

This month, the White House is poised to unveil new rules for skilled-worker visas and foreign-born entrepreneurs. I  hope these new policies can address the inflation problem,though whether they’ll go far enough remainsto be seen.   The supply of labor should ultimately be decided by the free market, not by federal policymakers.  Visa caps are choking the supply of labor, and creating an artificial bottleneck that holds back American businesses.

To promote growth, rein in inflation, and boost job creation for everyone,the government should get out of the way. Streamline the lawful immigration system, and let businesses hire the people they need.

More Steve Rao columns

Why Morrisville? An insider’s look at a Triangle hotspot for new businesses, jobs

A vote for H-1B visas: Congress can boost NC’s innovation economy – here’s how

We need skilled workers – America’s ‘Documented Dreamers’ deserve a chance to stay

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Kassie Hoffman
Kassie pens down all the news from the world of politics on ANH.