Maybe the problem with the US economy isn’t visa workers or even immigration. Maybe it’s much bigger than that.
A squabble on the right that started on Christmas over certain temporary foreign visa workers and later caught the attention of progressive stalwart Sen. Bernie Sanders may be distracting from what’s happening more and more — an intractable problem the pandemic put into hyper-focus: labor shortages.
From tech workers and teachers to plumbers and healthcare aides, many types of employers across the country are talking about difficulties hiring qualified workers — even as pandemic-induced shortages subside.
With the native-born US unemployment rate at 3.7% — slightly lower than the foreign-born rate — and the economy adding 256,000 jobs last month, the issue doesn’t appear that Americans can’t get jobs. In fact, it seems like there may be more than enough jobs to go around.
That’s a problem if we decide we don’t want foreign workers to fill them.
“If you think about the building blocks of GDP, it’s productivity and population,” said Courtney Shupert, an economist at MacroPolicy Perspectives, a market research firm. “We’ve seen productivity increase, and we’ve also seen population increase, and that allows the US economy to increase quite a bit.”
When Sanders released a statement raising concerns about the H-1B visa program that brings over highly skilled foreign workers, he also acknowledged that the US was in “desperate need of more doctors, nurses, dentists, teachers, electricians, plumbers and a host of other professions.”
His solution — to hire qualified Americans first and create an education system that produces workers to fill those roles — is noble but misses the big, looming problem. The US workforce is aging and there are simply not enough people in our younger generations to fill in the gaps left behind by the behemoth baby boom generation.
And even though retirees are no longer working, they still require goods and services and rely on working-age adults to produce them, a dynamic called “old-age dependency.” Boomers, too, are pretty wealthy, so their consumption likely will be higher than previous generations.
The shortage has already started. Google a profession and the words “shortage in US” and see what comes up. Kent State University has an entire fact sheet on “the accountant shortage in the United States,” while Morning Brew explains why the “plumber shortage is gumming up the US economy.” Both note that retiring professionals is a big factor behind the shortfalls.
The jobs with the oldest workforces don’t require a college degree, according to labor market research firm Lightcast, such as home health aides, laborers and material movers, and building custodians. But more younger workers stayed in school to avoid those jobs with the number of Americans with college degrees growing 80% since 2001.
Nowhere is this aging workforce phenomenon more apparent than when it comes to Social Security. The reserve fund for the social welfare program is scheduled to run dry in 2033, when the program will only be able to pay out 79% of benefits. That’s because the ratio of workers contributing to Social Security to those receiving benefits has shrunk considerably.
In 1955, there were 8.6 workers per Social Security beneficiary. That fell to 3.2 by 1975 and has dwindled to 2.7 in 2024. It’s expected to decline even further and remain around 2-to-1 because of lower birth rates among younger generations and increased life expectancy.
The most immediate salve is relying on more foreign-born workers, whether that’s immigrants or temporary visa workers like the H-1B holders as well as the H-2A and H-2B workers for seasonal agricultural and non-agricultural roles. (Even some of these workers pay into the Social Security system.)
They also “help to add a lot of dynamism to the US economy,” said Mark Regets, a senior fellow at the National Foundation for American Policy, a nonpartisan public policy research organization.
But that idea seems to be going against the current grain. During the first Donald Trump administration, there were very high denial rates for H-1B visas and more restrictions for high-skilled workers looking to come to the US, according to Regets.
That could leave the US behind in a competitive world where many other countries are facing similar demographic shifts, such as Canada, Western Europe, and Japan. Canada has been known to put out ads to recruit potential foreign workers considering the US, Regets said.
“Having H-1B visa problems?” he said, recounting an anecdote from a few years ago. “Come to Canada instead.”
That may sound good to Trump. But it may spell a diminished US economy in the long run.
Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on X @JannaHerron.
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