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Shortage of immigrant labor raises prices in the US

Escasez de mano de obra inmigrante eleva precios en EEUU

About 10 miles (16 kilometers) from the Rio Grande, Mike Helle’s farm suffers from such a shortage of migrant workers that he has replaced 450 acres (180 hectares) of leafy greens, which are harvested by hand, with crops that can be harvest with machines.

In Houston, Al Flores raised prices at his restaurant because the cost of meat doubled due to a lack of immigrant staff on the production lines of the meatpacking plants. In the Dallas area, Joshua Correa raised the prices of homes built by his company by $150,000 due in part to cost increases caused by a lack of immigrant labor.

After immigration to the United States declined under President Donald Trump — and came to a near halt during the 18 months of the coronavirus pandemic — the country is finding that there is a labor shortage due in part to those brakes.

It is estimated that the country has two million fewer immigrants than it would have if the rate had been maintained. This has sparked a desperate dispute over labor in many sectors, including meatpacking and home construction, which also contributes to shortages and price increases.

“The lack of those two million immigrants partly explains why we have a labor shortage,” said Giovanni Peri, an economist at the University of California, Davis, who calculated the shortfall. “In the short term, we will adjust to that deficit in the labor market through increases in wages and prices.”

The labor factor is one of those that contribute to the United States suffering its highest inflation in the last 40 years; others are the disruptions in supply chains due to the coronavirus pandemic and the increase in fuel and raw material prices since the Russian invasion of Ukraine.

Steve Camarota, a researcher at the Center for Immigration Studies, a supporter of reducing immigration, believes that during the presidency of Joe Biden there will be a sharp increase in unauthorized immigration that will offset the shortages that still persist after the pandemic. He further argues that wage increases in low-income sectors such as agriculture contribute little to inflation.

“I don’t think wage increases are a bad thing for the poor and I think it’s mathematically impossible to reduce inflation with limits on the lowest wages,” Camarota told The Associated Press.

Immigration is rapidly returning to its pre-pandemic levels, according to the researchers, but the United States would need a sharp acceleration to make up the shortfall. Given the sharp decline in birth rates over the past two decades, some economists forecast that the potential labor force will begin to shrink by 2025.

Meanwhile, the political system shows little will to increase immigration. The Democrats, who control the White House and Congress and have been the most pro-immigrant party in recent years, have not introduced important bills that would allow more new residents to enter the country. A recent Gallup poll reveals that fears of unauthorized immigration are the highest in two decades. With the November midterm elections looming, which will be difficult for Democrats, President Biden’s party is divided over Washington’s attempt to end pandemic restrictions on the asylum application process.

“At some point we either decided to get older and shrink or we changed our immigration policy,” said Douglas Holtz-Eakin, an economist and a former official in the administration of President George W. Bush who now chairs the center-right US Action Forum.

Holtz-Eakin acknowledged that a change in immigration policy is unlikely.

“The bases of both parties are very closed,” he said.

This is certainly the case in Republican-ruled Texas, which encompasses the longest and busiest stretch of the southern border.

In 2017, the legislature forced cities to have their federal immigration agents search for people living in the United States without legal authorization. Gov. Greg Abbott sent the Texas National Guard to patrol the border and recently caused massive traffic jams when he ordered increased inspections at border crossings.

The turn against immigration distresses some Texas business owners.

“Immigration is very important to our workforce in the United States,” Correa acknowledged. “We just need it.”

Correa is seeing his projects running two or three months behind schedule as he and his subcontractors — from drywall erectors to plumbers and electricians — struggle to put together work teams.

Correa has raised the regular price of his homes from $500,000 to about $650,000.

“We are feeling it and if at the end of the day we are feeling it as builders and developers, the consumer pays the price,” said Correa, who spoke from Pensacola, Florida, where he brought a crew of workers as a favor for a client who did not has been able to find employees to fix a beach house damaged by Hurricane Sally in 2020.




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