Add Declining Immigration to Problems Weighing on the Labor Market

In an economy where nearly every industry is short of labor, nursing homes represent an extreme. Their employment has fallen 16% since 2019, and 99% of homes said last fall they didn’t have enough staff.

Burnout and stress are leading causes, but so is a less-known contributor: fewer immigrants.

Emeka Nwaokolo, 36 years old, came to the U.S. from Nigeria for a business trip and met a woman from Dallas he eventually married. He ended up working as a manager for Manchester Care Homes, which runs a network of nursing homes around Dallas.

Over the years, he has referred other Nigerian immigrants from his church to Manchester. In the past few years, though, it has become much tougher for Nigerians to emigrate to the U.S. because of more-stringent visa screening at American consulates abroad. The situation has worsened with pandemic-related backups in immigration processing.

For several years after the 2007-09 recession, roughly a million people moved to the U.S. annually. That pace started to slow during the Trump administration and fell to a trickle after the Covid-19 pandemic started.

The slowdown has left the U.S. with 2.4 million fewer immigrants of working age—about 1% of the working-age population—than if pre-2017 immigration trends had continued, according to Giovanni Peri, a labor economist at the University of California, Davis. The change is being felt as the economy rebounds and many employers struggle to replace workers who were laid off or quit since early 2020, contributing to wage pressure and inflation.

Labor shortages stem from a wide variety of factors, including early retirement, Covid-19 sickness or fear of it, lack of child care and a desire to start a business. Additionally, Mr. Peri noted, fewer immigrants are a factor. Industries with above-average levels of foreign-born workers are likelier to have high job-opening rates.

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The slowdown in immigration began in 2017, when the Trump administration adopted a broad range of policies to curb both illegal and legal immigrants, including refugees, foreign recruits, international students and family members of American citizens.

Those already-reduced flows were then cut in half in 2020 by the onset of the pandemic and the related restrictions. The U.S. closed consulates around the world, stopped processing refugees and began turning away most adult migrants at the Southern border under a new public-health authority known as Title 42.

In the 12 months ended last June 30, about 247,000 people moved to the U.S., less than a quarter of the 2016 level and half that of 2019, according to U.S. census data. Those figures don’t distinguish between people who came to the U.S. legally and those who didn’t.

In five top countries where people receive green cards to work in the U. S.—Mexico, the Dominican Republic, Vietnam, the Philippines and China—the fiscal year ended last September saw declines of half to two-thirds in green-card issuance from two years prior, according to Department of Homeland Security figures.

Further crimping the availability of foreign-born workers are pandemic-related delays in processing work permits for those already in the U.S. There were 1.6 million pending work-permit applications at the U.S. Citizenship and Immigration Services at the end of December, up from 646,000 in 2019. It takes an average of nine to 11 months to process applications, versus three to four months at the end of 2019, according to government data.

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The administration, in a move it said was to address labor shortages, this year made 55,000 additional visas available for temporary seasonal employers such as landscapers, hotels and ski resorts, nearly doubling the total available.

A political backlash to the administration’s handling of illegal immigration at the Southern border this year has made officials reluctant to take bigger steps to increase legal immigration, according to people familiar with the administration’s thinking.

About a fifth of consulates still aren’t processing most visas, and even those that are open are buried under a backlog of 7.5 million applications, according to State Department data.

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