The Take: U.S. Immigration Policy and Labor Shortages

What’s News

U.S. business leaders, including the U.S. Chamber of Commerce, are sounding the alarm over labor shortages and arguing that immigration rules need to be eased to allow more immigrants into the country.

In a recent survey conducted by The Conference Board, U.S. CEOs said labor shortages are the number-one threat to their businesses this year.

Background

From truck drivers to nurses and teachers, the headlines are full of stories about the impact of the pandemic and labor shortages on the supply chain and – indirectly – on prices. Since the start of the pandemic, millions of immigrants, older workers and mothers have left or otherwise been excluded from the labor force.

Based on census data analyzed by the University of California, Davis, there are about 2 million fewer working-age immigrants in the U.S. because of immigration restrictions related to COVID-19 — of which about half are higher-educated adults.

At the same time, some older workers facing workplace closures, pandemic-related restrictions, and concerns about health have decided to retire early. The Federal Reserve Bank of St. Louis calculates that there were a higher-than-expected 3.3 million more retirees in October 2021 than in January 2020.

Meanwhile, about 1.5 million fewer mothers of school-age children are actively working compared with pre-pandemic times, according to the U.S. Census Bureau, reflecting the fact that mothers have borne the brunt of the impact from school disruptions and closures due to to reduced childcare options.

SAP’s Take

In many sectors, including technology, labor shortages predate the arrival of COVID-19 and partly reflect an immigration slowdown that began during the Trump administration.

Peter Selfridge, SAP senior vice president and head of Global Public Policy and Government Affairs, argues that the current labor shortage in the tech sector — like supply chain problems — reflects a combination of problems, including those that predate the pandemic.

“It’s our immigration system that needs an overhaul,” Selfridge says. “The system is not keeping up with the times.”

Overall, he says, a combination of tighter restrictions on immigration, fewer work visas, and limits on the ability of foreign-born students to remain in the U.S. after they graduate has resulted in a significant shrinkage of the available workforce. “On top of that we had COVID, which has sidelined many workers, reduced graduation rates and the like.”

To help fix the problem, SAP supports U.S. immigration reforms to ensure U.S. operations have access to the best and the brightest global talent. In addition, SAP supports investing in the next generation of innovators to prepare workers for the digital economy by providing STEM education and skills training in artificial intelligence (AI), machine learning, and data science.

“We support raising the temporary cap for H-1B visas from its current limit of 65,000 per year, making employment-based green cards more readily available, and eliminating the arbitrary per-country caps on employment-based green cards,” Selfridge confirms.


Contact:
Joellen Perry, Head of Global Public Relations, SAP
+1 (626) 265-0370, joellen.perry@sap.com, PST