It looks like a budget, border, and immigrant-parole-exemption deal is coming fast so that a US government shutdown will be avoided in January. The usual 11th hour rules of Washington apply. Will Speaker Johnson end up like Speaker McCarthy after making a deal? That remains to be seen. Meanwhile, there are still nearly 9 million unfilled jobs in America, and there is a chasm between the opinions of extremist Washington insiders (Alt-left and alt-right are equally guilty of extremism) and the businesses that are dealing with labor force shortages. The political outcome impacts wages, labor shortages, missing worker skills and ultimately wage inflation, Fed policy and interest rates.
Excerpts follow from a Dec. 29th Bloomberg Law story: “Labor Crunch Fuels Pursuit of Expanded Immigrant Work Options,” https://news.bloomberglaw.com/immigration/labor-crunch-fuels-pursuit-of-expanded-immigrant-work-options.
The Homeland Security Department has allowed more than half a million people to enter the US over the past year and a half from countries such as Ukraine, Afghanistan, and Venezuela using its parole powers. That authority allows the agency to temporarily admit individuals to the US for urgent humanitarian or public benefit reasons….
…the American Business Immigration Coalition has argued that the White House can use the same authority to grant immediate legal employment authorization to immigrants who would provide a “significant public benefit” to the US under the Immigration and Nationality Act, including recent arrivals and long-term undocumented residents. The coalition—whose members include 1,400 business associations and business leaders, including executives from companies like Lowes and Crate and Barrel—said the effort emerged from frustrations over labor shortages across its members and a sense that polarization in Congress would stand in the way of further action on immigration. With the national unemployment rate reaching a historic low of 3.4% in 2023—and states like Massachusetts (2.5%) and Pennsylvania (3.5%) reaching record lows—employers and elected officials have been desperate to find new workers.
If we can take this policy debate beyond the narrow confines in the House of Representatives, the national view seems to be for a bipartisan initiative inclusive of business and state and local governments.
For example:
Illinois Gov. J.B. Pritzker, a Democrat, and Republicans like Utah Gov. Spencer Cox and Indiana Gov. Eric Holcomb, whose states nearly matched previous low unemployment rates, have backed the concept along with scores of business leaders who have joined a campaign to have the administration expand parole options to long-term residents of the US without legal status. “There’s a lot of restaurants that need three busboys, but they’ve only got one because there’s not enough people,” said Sam Toia, CEO of the Illinois Restaurant Association. “We could address a lot of these issues if we got undocumented immigrants working permits.” The argument applies even in Texas. “At Cambridge Caregivers, a Dallas-based in-home care provider, about 80% of workers are foreign-born,” said CEO Adam Lampert. Immigrants tend to be overrepresented in occupations like landscaping, construction, and home care, he said, and expanding the labor force through options like parole and Temporary Protected Status would mean relief for employers. The unemployment rate in Texas, meanwhile, hasn’t exceeded 4.1% since early 2022. “We’re crunched to hire people. We can’t find enough people,” Lampert said. “Taking incremental steps is the best we can hope for until there is enough pressure that our Congress members will pass more comprehensive immigration reform.” (Bloomberg Law, cited above)
We will now excerpt from an analysis by Rick Swartz of Strategic Solutions Washington:
Are employers/evangelicals and other GOP oriented networks making any efforts to include Dreamers, Afghans, farm labor, backlog reductions in the current debate over the border/asylum supplemental aid for Ukraine? Such bipartisan reforms were supported by 15-20 GOP Senators, and 40-60 GOP Representatives, the past five years, or longer. The US Chamber, ABIC, agricultural groups, the Koch network, universities, high techs have pushed for compromises in lame duck sessions 2018, 2020, 2022. What about now? Or do concerns about retribution from Trump and GOP leaders in Congress and among certain governors like Abbott suggest an explanation? Or are such interests active behind the scenes in Congress? If Biden were, as some now demand, to grant parole in place to 8 million undocumented workers, would the GOP demand that such an action be barred in the current negotiations? Surely GOP members of Congress seeking to limit parole will take notice of this Bloomberg report, and other recent reports. DACA is hanging by a thread in the courts. Parole for 8 million? By Biden fiat? Litigation is inevitable. Congress is the battleground, like it or not. Implementation of the CHIPS Act and Infrastructure Act will likely fail absent visas for high and lower skilled immigrants. These are national security issues, as are food security and protection of Afghans who served and ASSISTED US FORCES. At least have a debate and votes---for if not now, when? What if Trump is elected or the GOP controls the Senate as well as the House, come January 2025?
In my opinion, as the election year of 2024 unfolds, outcomes are presently unpredictable. The intensity of culture war politics steals the headlines from the policy debates. In my view, we desperately need the policy debates. Meanwhile, there are nearly 9 million unfilled job openings in the United States.
Here’s a personal suggestion. As you travel, do your own survey, and look at the labor force serving you that operates in the back of your facility or the one you are visiting. Look at the folks doing the manual work rather than smiling at you from the front counter of the business. Ask yourself where the workers would come from if the most aggressive policy of anti-immigrant isolationism were to be enacted.
Resources
Rick Swartz is a veteran immigration activist and political strategist who cofounded the National Immigration Forum in 1982. In an Oct. 29, 2023, commentary on the Real Clear Politics site (“Biden Must Prioritize Bipartisan Solution to Border Crisis,” https://www.realclearpolitics.com/articles/2023/10/24/biden_must_prioritize_bipartisan_solution_to_border_crisis_149945.html), author Mort Kondracke details Swartz’s current approach to immigration reform:
Another, more expansive proposal, with a political strategy included, has been circulated by longtime immigration activist Rick Swartz, founder of the 200-member National Immigration Forum.
In recent years, Swartz has advocated piecemeal reform of immigration policy, declaring comprehensive reform politically impossible. His latest proposal is a list of policy changes that have attracted significant bipartisan support in the past, though failing to get enacted.
These include allowing “Dreamers” – children born in the U.S. to illegal parents – to remain in the United States for 10 years and seek permanent residence. Also proposed is legalization of up to 2.4 million undocumented agricultural workers, billions of dollars in impact aid to communities burdened with increased immigration flows, increases in adjudicators of asylum claims to reduce backlogs, and reductions in years-long backlogs delaying completion of legal immigration processes. And his broader package proposes permanent residency for tens of thousands of Afghans emigrating to the U.S. after the fall of Kabul. Further: legalization for non-citizen military veterans, even for vets who have been deported.
Neither set of proposals includes expansion of H1B visas for highly skilled persons needed by industry to fill positions for which adequate numbers of Americans can’t be found. (Current law caps H1Bs at 65,000 a year, whereas employers submit more than 400,000 applications.) And they don’t suggest moving toward a skills-based legal immigration system such as Canada, Australia and New Zealand have. But Biden should include both.
Swartz says that immigration will be a crucial element in impending negotiations over keeping the government open. His political strategy is Senate-based, hoping to get 15 or 16 GOP Senators who’ve supported immigration reform in the past to cosponsor his ideas so they could get 60 votes in the Senate and put pressure on the House to support it.
Asked what GOP border security measures he’d include, Swartz said, “Whatever Biden can accept.” Asked what might happen if GOP senators wouldn’t sign on or House Republicans blocked it, he said, “That’s on them,” meaning they could suffer a political price for opposing reasonable reforms. As they should.
Rick Swartz called my attention to a Dec. 29 piece in the Houston Chronicle, “Abbott's new border security law sets cops up for failure (Opinion),” (https://www.houstonchronicle.com/opinion/outlook/article/sb4-immigration-abbott-texas-law-border-police-18578626.php
There is another organization working for reasonable immigration policy. It is the Council on National Security and Immigration (CNSI), which describes itself as “a group of American national security leaders who believe immigration reforms are imperative to address the unprecedented levels of migration and asylum claims at the southern border and to bolster and maintain the United States’ global leadership in the 21stcentury. CNSI’s “Policy Recommendations for Senate Border Negotiations” can be viewed here: https://www.cnsiusa.org/_files/ugd/5b8edc_a0256162f5d148d1b4f764f6cdadbea9.pdf (PDF file).
Opposing the moderate bipartisan approach to immigration reform championed by Rick Swartz, CNSI, and many others, we find folks on the far right, like Chip Roy:
Chip Roy on shutdown threats: “It’s now or never” on border demands: https://thehill.com/homenews/house/4391249-chip-roy-shutdown-border-demands/
Meanwhile, in Florida, Gov. DeSantis has pushed through a new state law that makes it a felony to bring undocumented immigrants into the state. The law fails to distinguish between transporting people for illegal purposes and for legitimate ones like seasonal farm work that routinely has migrant laborers moving from state to state. See “New Florida immigration law slammed for trapping indispensable migrant farmworkers in a field of fear,” https://www.floridabulldog.org/2023/12/new-florida-immigration-law-slammed/ From personal conversations locally, I can affirm that agriculture businesspersons in Florida are disappointed with the DeSantis political antics.
The extreme left is not in the debate because they lack the political power to obstruct. They are a minority within a minority in the House of Representatives. So, the “what ifs” about what the Alt-left politicians might do are currently irrelevant, in my opinion.
But will a reasonable, workable approach to immigration emerge from the Congress in this election year?
We may know soon. We have no way to confidently forecast any financial market reaction to this very uncertain outcome.
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