Importing a Solution: Immigration Can Help Mitigate Looming Labor Shortages

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Sep 29, 2016, 01:33 ET

NEW YORK, Sept. 29, 2016 /PRNewswire/ -- In the face of an emerging labor shortage – driven by an aging population – immigration will be the only significant source of labor force growth over the next 15 years, concludes a new report by The Conference Board.

The report, Importing a Solution: Can Immigration Help Mitigate Looming Labor Shortages? examines the role foreign-born workers will play in meeting future demand for several key occupations – including healthcare, skilled trade and mathematical/computer jobs.

"US businesses must prepare for an era of near-zero working age population growth, which will present elevated labor shortage risk in many key job categories, including health care, skilled trade, mathematical and statistical occupations," said Brian Schaitkin, Senior Economist at The Conference Board and author of the report. "Immigration will be a key factor in meeting the demand to fill these roles."

While immigration has been a focus during this election year, the study examines the particular role foreign-born workers will play in specific occupations and locations. The report seeks to guide firms in determining whether hiring more immigrants can be a viable solution for addressing these labor shortages, and if so, what the characteristics of those workers are likely to be.

Several key findings:

As the US population ages and demand for health services grows, foreign-born workers will play a critical role in meeting future needs for doctors, registered nurses and home health aides.
High rates of immigrant entry have helped ensure that most computer specialist occupations face low future labor shortage risk. These workers will provide a large number of data scientists who are an essential component of the US economy's ongoing digital transformation.
The composition of the immigrant pool has undergone major changes in the last decade. Between 2005 and 2013, immigration from Mexico declined by more than 60 percent. In contrast, immigrants from throughout Asia, especially those from China and India, have been arriving in the US in larger numbers. This change has important implications for employers. Data show that on average immigrants from such countries as China and India have higher educational levels than those from Mexico. This results in a more skilled and slightly more geographically diffuse pool of workers entering the labor force.
Using a new method for identifying undocumented immigrants in labor force surveys, the report concludes that while these immigrants are currently concentrated in occupations having low future labor shortage risk, their role could change if the threat of deportation were reduced.

"Facing deportation risk and an inability to obtain licenses and enter educational programs essential for joining certain occupations, undocumented immigrants are currently concentrated in jobs with low shortage risks," adds Schaitkin. "Without assurances that they can work in the US in the future, these workers have less incentive to invest in upskilling, as do their employers. Status clarity could help pave the way for these workers to enter higher skilled occupations and, therefore, play a more complementary role in the labor market."

The decision to migrate to a new country is not made lightly considering the tremendous expense, social dislocation, and cultural barriers new arrivals face. As conditions in the US and in their native countries shift, decisions of prospective immigrants will change. Executives need to track who these new entrants into the labor force are just as they would newly minted high school and college graduates. The evolution of US immigration policy can constrain or enhance the ability of firms to find and attract suitable candidates. A forthcoming report from The Committee for Economic Development of The Conference Board will examine the barriers different aspects of the US immigration system place in the way of using immigrants to fill vacancies. The report will also examine reform proposals that have the potential to better align policy with the future requirements of the US labor market.

Source: Importing a Solution: Can Immigration Help Mitigate Looming Labor Shortages?
Executive Action EA 445 September 2016

About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org

SOURCE The Conference Board