“While the specific cases in [this] lawsuit are unfortunate, they point to broader systemic issues in the American immigration apparatus. As Reason’s Eric Boehm reported in September, “one of the major drivers of the immigration system’s mounting caseloads,” which involves “a backlog of nearly 7 million applications and petitions,” comes down to “the government’s own, recently beefed-up immigration bureaucracy.”
The Application for Employment Authorization—the document at the heart of these plaintiffs’ woes and USCIS’s processing issues—”was expanded from one page and 18 questions to seven pages and 61 questions,” writes Boehm. Immigration restrictionists often say that hopeful migrants should come here “the legal way,” but the legal way is becoming more and more difficult to navigate. Immigrants who are already here and employed legally are finding themselves unable to continue working.
Unfortunately, the plaintiffs’ struggle is a reminder that the byzantine legal immigration system doesn’t just harm the migrants tangled in red tape—it also harms the native-born Americans who could benefit from their skills and services in tough times.”
“Manufacturers haven’t overcome the worldwide semiconductor shortage. Gaming consoles like the PlayStation 5 are still scarce, automakers are delivering cars with missing features, and Apple may end up producing 10 million fewer iPhones in 2021. For a few companies, however, these supply chain woes may have an unexpected upside.
The manufacturing delays abroad and relentless demand for consumer electronics have turned into a windfall for some chipmakers in the United States. Even lesser-known American manufacturers with aging or secondhand equipment have seen a surge in sales for the legacy chips, or microcontrollers, they produce. These parts are inexpensive to make but are a critical component for many devices, and as supply chain troubles have affected larger companies that focus on more advanced technologies, demand for the more basic chips has grown. Flush with customers, the companies that make these microcontrollers are now on a spending spree to boost their overall manufacturing capacity.”
“Over the course of the pandemic, home prices have skyrocketed; the underlying issue is simply that there are not enough homes for the people who need them (in particular in the places where people need to live for their jobs). This supply crisis is forcing a growing number of people to bid on a small number of available homes, thus increasing prices.
But not all “housing investments” are created equal. Generally, there are two ways you can attack an affordability crisis: 1) You work to make the item itself less expensive (supply-side policies), or 2) You give people more money to be able to afford the item (demand-side policies).
Both have their place in policymaking. But if you pursue demand-side policies when you are facing a massive supply shortage, you end up increasing prices, not decreasing them. And the nation is facing an estimated 3.8 million unit shortage.”
“The major constraint on building housing in the places where people are demanding it the most is zoning laws. These laws restrict what kinds of homes can be built and where, and regulate the size of homes to the point that smaller or “starter” homes are becoming incredibly scarce. For instance, a law mandating that lots of land be no less than 4,000 square feet means that starter homes (smaller than 1,400 square feet) are illegal. The history behind these laws is complicated, but essentially they are a way for some homeowners to block change in their communities, and in their original form were a tool of segregationists.
Beyond even small, single-family homes, it is illegal in most of the United States to build duplexes or small apartment buildings that could bring down the cost of housing. The White House has repeatedly acknowledged this problem, but in the Build Back Better bill, Democrats have metaphorically thrown up their hands, abrogating responsibility for the driving force behind skyrocketing home prices.
The best way to have tackled this problem would have been to tie the dollars in the bipartisan infrastructure framework to zoning reform. Iowa law professor Greg Shill suggested tying existing highway dollars to zoning reform, quipping that “there’s no reason Iowans should be subsidizing a highway from Silicon Valley to SF when the Valley makes it illegal to build homes under $1M.”
Essentially, if California wants federal dollars to build highways or transit, it’s going to need to reform policies like parking minimums and minimum lot sizes to get it. Instead, states are being handed money from the federal government to construct transportation networks that exclude large swaths of the American public from using them.
The federal government has held highway funding hostage for other reasons in the past — notably was the 1984 National Minimum Drinking Age Act, which “requires that States prohibit persons under 21 years of age from purchasing or publicly possessing alcoholic beverages as a condition of receiving State highway funds.” President Ronald Reagan also conditioned highway dollars on setting a national minimum speed limit; this was later repealed, which one study shows may have cost over 12,500 lives
If Democrats are serious about attacking housing inflation, they should put real money into incentivizing states to hold localities accountable. States are ultimately in control of local zoning policy “
“Many had expected people to return to the workforce en masse after federal unemployment benefits expired in September. While that’s happened to some degree — the economy added more than half a million jobs last month — there are still many more Americans holding out, thanks to a variety of reasons, from savings to lack of child care to the ongoing risks of the pandemic.
Importantly, the pandemic — as well as government social safety nets like extended unemployment benefits — gave people the time, distance, and perspective to reevaluate the place of work in their lives.”
“There are still more than 4 million fewer people in the workforce than there would be if labor force participation were at pre-pandemic levels. There are 10.4 million open jobs and just 7.4 million unemployed, according to the latest data. Of course, many of these open jobs are bad: They have bad pay, dangerous working conditions, or just aren’t remote (remote positions on LinkedIn get 2.5 times more applications than non-remote, according to the company).
The result is a situation where many employers — especially those in industries with notoriously bad pay and conditions — are having difficulty finding and retaining workers. To counter it, they’re raising wages, offering better benefits, and even altering the nature of their work. Depending on their strength and duration, these various actions could have long-lasting impacts on the future of work for all Americans.”
“In September, a high of 4.4 million people quit their jobs, according to the latest data from the Bureau of Labor Statistics, which has been tracking this data since 2000. That’s 3 percent of all employment and follows a summer of record quit numbers. Quitting has been especially prevalent in lower-paying, lower-status jobs like those in leisure, hospitality, and retail.”
“In 2021, approval of labor unions grew to 68 percent of Americans, its highest rate in more than 50 years. This is happening as many American workers are attempting to unionize their workplaces. Recent unionization efforts include Starbucks, Amazon, and meal-kit delivery service HelloFresh. Last month was dubbed “Striketober,” as more than 100,000 workers across industries, including workers at John Deere and in film and TV crews, participated in various labor actions. This is one of the many worker trends bulwarked by social media, which is rampant with support for unions.”
“In an op-ed for The New York Times published Friday, Hawley uses the temporary supply chain problems as an excuse to push for a permanent expansion of federal power over the affairs of private businesses. We must “fundamentally restructure our country’s trade policy,” Hawley demands, and that means injecting both the Pentagon and Commerce Department bureaucrats into companies’ purchasing decisions. Under the terms of a bill that Hawley is proposing, any product determined to be “critical for our national security and essential for the protection of our industrial base” would have to have at least 50 percent of its value made in the United States.
Why is it necessary for the government to get significantly more involved in the system of global trade that’s allowed Americans to enjoy unparalleled prosperity in recent years? Because “the global pandemic has exposed this system for what it is—a failure,” Hawley writes.
One must assume that if the lights in his home went out due to a storm, Hawley would respond by declaring electricity to be a mistake and demanding that the government require homes to be lit with candles and gas lamps. After all, what is the electrical grid but a complicated supply chain that leaves Americans woefully dependent on production and distribution systems (power plants, substations, and lines) that they do not fully control? Better to produce your own lighting, right? If that means you have to live without television or the internet, well, those are just the trade-offs required to achieve self-sufficiency.
A storm—or a pandemic—can create temporary problems in the highly complex systems that run so much of the modern world. That’s hardly a reason to abandon them. If Hawley is imagining a world in which the United States is wholly self-sufficient, then he’s asking you to accept a scenario in which the United States is significantly poorer than it is today.”
“Hawley says the supply chain crisis is the result of “a crisis of production.” Wrong again. American manufacturing is stronger than it has ever been, in part because outsourcing low-level production has allowed companies here to focus on higher-value goods (which means higher wages for the people who make and sell them). The true cause of the current mess is a disconnect between supply and demand—supplies have been constrained by a number of pandemic-related issues like temporarily closed factories and worker shortages, while demand has shifted in unexpected ways.”
“If his thesis is correct, then items that are already mostly produced domestically should be exempt from the problems with foreign supply chains, right? Except, no, that’s not true. As Scott Lincicome, a senior fellow with the Cato Institute, points out, the vast majority of food consumed in the United States is grown, raised, and otherwise produced here. And yet Americans are seeing higher prices and supply issues at the grocery store too.
“That a mostly‐domestic U.S. food supply chain hasn’t protected American consumers from recent shortages and price increases is unsurprising,” Lincicome writes. “For starters, many of the same things that stress global supply chains—COVID-19 outbreaks; supply‐demand imbalances; labor shortages in the trucking and warehousing industries; misguided trade, transportation, and immigration policies; etc.—stress domestic ones too.””
“The Biden administration has reached a deal with the European Union to withdraw tariffs imposed by President Donald Trump on European-made steel. Unfortunately, the agreement likely won’t translate into lower costs for American manufacturers and consumers.
That’s because the Biden administration is replacing Trump’s tariffs with a new form of protectionism that will continue to artificially inflate the cost of steel imported from Europe. Instead of charging 25 percent tariffs on all steel imports, as Trump did, Biden’s deal includes a so-called “tariff-rate quota” that will allow 3.3 million metric tons of steel to be imported annually without tariffs. Once that threshold is met, the 25 percent tariffs will apply to subsequent imports. For reference, the U.S. imported nearly 5 million metric tons of steel from Europe in 2017—the last full year before Trump’s tariffs caused imports to fall sharply.”
“inflation is real. The all-item consumer price index (CPI) was up more than 5 percent on a year-over-year basis for July, August, and September, and now shows a 6.2 percent increase for October—the largest jump since 1990. The Fed considers 2 percent inflation to be its bright-line monetary policy goal. Obviously, there is a large gap between that and what we are seeing on the ground.”
“Individuals whose salaries, wages, Social Security payments, and even mortgage interest or rental rates are automatically adjusted for inflation have much less to worry about than their neighbors on fixed salaries, who must cope with ballooning grocery bills or pay twice as much at the pump. On these grounds, inflation may be devastating for some and almost meaningless for others. These gaps widen as inflation gets worse.”
“The rate of inflation gets captured in interest rates that borrowers must pay, especially for longer-term debt. Lenders hope to be paid back with at least as much purchasing power. If they believe inflation will tick away at 4 percent, interest rates tend to rise with this baked-in expectation.
In any case, higher interest rates mean higher interest costs on all forms of public and private debt. As a result, mortgage rates will rise, all forms of construction will suffer, and businesses will postpone making large investments in plants and equipment.
Now consider the public debt—especially the federal debt that ballooned from large deficits in recent years. (In 2020, federal revenues were $3.4 trillion and spending was $6.6 trillion.) The interest cost of the national debt in 2008 was $253 billion and remained at about that level through 2015. Even though the debt doubled in those years, sharply falling interest rates and low inflation worked to contain costs.
But that was yesterday. With today’s higher inflation and rising interest rates (perhaps with more to come), the Congressional Budget Office (CBO) estimates the interest cost of public debt to be $413 billion in 2021. Obviously, any dollar spent on interest cannot be spent on government benefits and services to taxpayers.”
“Companies across the United States can’t find enough employees. One immediate solution is simple: Bring in more foreign workers.
The US needs roughly 10 million people, including low-wage and high-skilled workers, to fill job openings nationwide — and only 8.4 million Americans are actively seeking work.
And despite job openings hitting historic highs in July and extended unemployment benefits ending in September, Americans aren’t returning to work, especially in low-wage industries. At the same time, workers are resigning in record numbers. And though consumer spending has surged this year, businesses don’t have the people to meet demand — to cope, some companies are raising their prices. Supply chain bottlenecks are even threatening to ruin Christmas.
When the economy is fragile, there’s an instinct to shut borders to protect American workers. And indeed, that’s what the US has done during the pandemic, practically bringing legal immigration to a halt and closing the southern border to migrants and asylum seekers. In a normal year, the US welcomes roughly 1 million immigrants, and roughly three-quarters of them end up participating in the labor force. In 2020, that number dropped to about 263,000.
Generally, economic research has shown that the arrival of low-wage foreign workers has little to no negative impact on native-born workers’ wages or employment. And under the current circumstances, welcoming more low-wage foreign workers could address acute labor shortages in certain industries, helping hard-hit areas of the country recover while staving off higher inflation.
The industries currently facing the worst labor shortages include construction; transportation and warehousing; accommodation and hospitality; and personal services businesses like salons, dry cleaners, repair services, and undertakers. All four industries had increases in job postings of more than 65 percent when comparing the months of May to July 2019 to the same time period in 2021, according to an analysis conducted for Vox by the pro-immigration New American Economy think tank. Immigrants make up at least 20 percent of the workforce in those industries.”
“Employers in almost every industry say they’re struggling to find workers, but the situation is especially severe in the leisure and hospitality sector. While workers in these industries are getting paid more than ever, it still doesn’t seem like enough. Bars, restaurants, and hotels across the country are posting signs advertising open jobs — or asking customers to be patient since they don’t have enough staff. In August, the latest available month for openings and turnover data from the Bureau of Labor Statistics (BLS), there were a near-record 1.7 million open jobs in leisure and hospitality — 10 percent of all jobs in the sector — and a record of nearly a million people quitting.”
“when individual states rescinded their unemployment benefits this summer, it didn’t have a meaningful impact on the worker shortage in many industries, including leisure and hospitality. Data from September, when the benefits were cut on a federal level, show a similar story, suggesting there are reasons beyond financial keeping people from taking these jobs.”