What are Essential Workers?

“Essential Workers” are the unskilled and semi-skilled workers employed in all sectors of our economy. Essential workers include restaurant workers, retail clerks, construction trades people, manufacturing line workers, hotel service workers, food production workers, landscape workers, and health care aids. These individuals often work in the jobs that many Americans do not choose, but which are “essential” to keep our economy and our country growing.

Yes. Over the last several years, our robust economy has resulted in tight labor markets in virtually all sectors of the economy and in most areas of the country. Unemployment nationally was at its lowest point in 30 years, having been at 5% or below (which used to be considered “full employment”) from April 1997 through December 2000! Even with the recent apparent slowdown of the economy, the employers of essential workers are still looking for employees. The service, retail, construction, health services and other similar industries all gained jobs while the high-tech and manufacturing sectors were laying off employees. However, it appears that these workers are finding other employment quickly, while essential worker employers are still begging for applicants.

The shortage could hurt our economy. Chairman Alan Greenspan of the Federal Reserve has noted repeatedly in Congressional testimony that tight labor markets threaten the continued growth of the economy and could result in inflation. The Federal Reserve’s “Beige Book” of Current Economic Conditions reports “Many Districts noted the lack of available workers continued to hamper overall economic growth.” Companies report difficulties retaining permanent staff and hiring replacements, curtailing expansion plans, and many small businesses are struggling to survive without enough employees.

The demographics say no. By 2008, total civilian employment is projected to be 160.7 million, but the total civilian labor force is expected to be 154.5 million, more than six million more jobs than people. This shortage is expected to last for two decades!

Unemployment is below “full employment” rates. For many years, economists believed the economy would be at “full employment” if unemployment were to drop below 5%. Yet within the last five years, 60% of metropolitan areas have had unemployment rates of 4% or less, 30% have had rates of 3% or less and 5% have had rates of 2% or less! This essentially means that everyone who is employable is employed.

Employers are doing the “right” things. Essential Worker employers have led the way in welfare-to-work, school-to-work and other initiatives that have been successful in reducing welfare rolls and getting graduates jobs, but these efforts still are insufficient. Employers are raising wages, offering improved benefits, signing bonuses and relocation pay, but they still cannot find enough employees.

Yes and No. The H-2B temporary visa program is useful only for employers who can establish that their need for foreign workers is temporary (seasonal, a one-time occurrence, or a peak load or intermittent need). If the employer’s need is year-round or does not fall into one of the definitions used by the Department of Labor or Immigration Service, the employer cannot use the H-2B classification to fill labor needs. A nonimmigrant visa category does not exist for employers who need workers for more than one year or for employers who have permanent or long-term jobs, for example in the health care, retail, hospitality and other industries. Even for employers with truly temporary needs, the H-2B category is fraught with bureaucratic red tape that makes it extremely time-consuming and difficult to use. The permanent immigrant category for non-professionals in occupations that require less than two years’ experience is virtually useless; only 5,000 visas are available annually, and the backlog of waiting cases is over ten years long. As a result, employers often are forced to send their work overseas, cut back, or close their doors.

Chairman Greenspan and others have called upon Congress to reexamine our immigration policies as a means to alleviate the worker shortages. In Congressional testimony, Mr. Greenspan stated that tight labor markets could be the greatest threat to our economy, as they promote inflation. He stated that Congress should look at the contributions that skilled and unskilled immigrants can make to our economy.

Congress Needs to Update Our Immigration Laws to Meet the Needs of Our Economy. The United States needs a regulated, workable immigration system that allows foreign nationals to work here when there is evidence of a shortage of available U.S. workers, and that allows those individuals already here and working to obtain legal status. Our laws also should allow those individuals to obtain green cards immediately when there is a permanent job.

U.S.-Mexico Immigration Talks. Following his meeting in February with Mexican President Vicente Fox, President Bush announced a new, cabinet-level working group between the two nations to discuss immigration issues. The two sides have focused their talks on crafting an agreement on migration and border issues. Reports of the meeting indicate that areas reviewed include some type of guest-worker program and a “regularization” of undocumented Mexicans living in the U.S. In addition, a bi-national working group from the Carnegie Endowment for International Peace and the Autonomous Technological Institute of Mexico (ITAM) has issued recommendations that call for both countries to reach a “grand bargain” on migration matters. Such a “bargain” would include various legalization measures for undocumented Mexicans in the United States, expanding the legal work visas available to migrants, equalizing the treatment of Mexican citizens under NAFTA immigration provisions, cracking down on immigrant smugglers and preventing dangerous border crossings.

Essential Worker Immigration Coalition (EWIC). A coalition of employer associations from sectors of the economy that rely heavily on essential workers, including hospitality, retail, restaurants, construction, recreation, transportation and others (including AILA), has been formed in Washington to work toward a broad solution to the essential worker issue. The agenda of this coalition includes reforming the current temporary visa category (H-2B), creating a new and longer-term nonimmigrant visa for essential workers (similar to H-1B), increasing the available green cards for essential workers and providing for earned adjustment for essential workers already in the U.S.

39IP1005  /06/12/01