“Vong spoke with his interim manager and new team director in December about his upcoming trip. They indicated that it wouldn’t be a problem for him to work from Australia remotely, so he left the U.S. in January, first visiting Singapore and then Malaysia. There, Vong got the news that he’d been laid off after all. His interim manager had been moved to another team and his director had been fired.
The layoff would’ve been bad enough on its own, but because of the rules of Vong’s visa, it landed him in a bureaucratic mess that now prevents him from returning to the United States. “February was hard,” Vong tells Reason. “Coming to terms emotionally with staying in Australia a lot longer…how to move things out of my apartment in L.A., sell my car, and I’ve been trying to facilitate all of that remotely.”
Vong was in the U.S. on an E-3 visa, which is reserved for highly skilled workers from Australia. Similar to the H-1B visa, another temporary visa for specialty workers, E-3 holders only have 60 days to find a new job if they’re laid off. Otherwise, they have to leave the country. With mass layoffs taking place recently across the tech industry—which relies heavily on the H-1B program—thousands of foreign workers have been forced to scramble to find new work.
But Vong’s case had an added layer of complexity since he was out of the country when he was laid off. “I was thinking, well, I have 60 days’ grace, I’m still technically employed, maybe I can just like fly back to the U.S. right now, cancel the plans to hang with my family in January,” he says. He consulted his immigration lawyer—who is also his friend—and learned that it might not be that simple. “There were all of these potential risks that plausibly could happen because of the uncertain, undefined circumstances around my unemployment, or technical unemployment,” explains Vong. “None of that language matches the visa language.
Immigration officials could interpret his employment status in very different ways. On one hand, he was still technically employed, having been given “two months of a nonworking period” where he was still getting paid. On the other, he’d lost access to his company email. They could welcome him back without issue. “Or it could go the other way where it’s like, ‘It doesn’t look like you’re actively employed right now, and this visa requires you to be actively employed, so we’re going to have to deny you entry,'” Vong says. An immigration officer might also feel that Vong was intentionally misrepresenting himself, which could lead to more severe penalties.
Ultimately, his lawyer warned him not to risk it. “I didn’t have a reliable way to get back in,” he says. Immigration lawyers interviewed by Fast Company, which covered Vong’s story, indicated that he was “right to stay overseas for now.””
“Meta laying off 11,000 people and Goldman Sachs 3,200 sounds like a lot. But when you put it in context, it’s quite tiny — there are some 165 million people in the workforce. It’s also important to keep in mind when looking at websites like layoffs.fyi, which tracks tech sector layoffs, that in the grand scheme of things, some of these totals are not that much.”
“There is “a lot of brain drain among H-1B workers who are considering alternative options, Canada being the most notable, but also the U.K., a lot of European countries also have a lot easier routes,” Sam continues. Though salaries might not be as high as in the U.S., “a lot of us are OK to take a financial hit just for peace of mind.”
Recent tech layoffs may affect only a small share of America’s immigrant workforce, but they’re a sign that much reform is needed to ensure that high-skilled workers continue to come to the United States. Reforms could also address discriminatory limits on certain immigrants. Immigration analysts like David J. Bier of the Cato Institute note that employment-based green card caps “serve no purpose because nearly all wait-listed, employer-sponsored immigrants are already in the United States working in temporary statuses.” The EAGLE Act, bipartisan legislation introduced in the House and Senate, would eliminate the per-country cap on employment-based green cards that has exacerbated wait times for many immigrants.”
“And that’s the catch. In an era of strong wage growth, surging inflation, and record demand for workers, we’re still seeing an unexpectedly slow rate of workers returning to the labor market. The best and fastest solution to the problem would be to rapidly expand immigration opportunities, which have been severely curtailed by pandemic-era policies.
During the pandemic, pundits put forth three main arguments on why people weren’t returning to work: aversion to being exposed to COVID-19, insufficient child care, and overly generous relief programs. These considerations should be in the rearview mirror by now. With readily available vaccines and boosters, the risk of COVID-19 infection for the typical worker has been minimized. Most schools resumed in-person classes by last fall, primary school children have had access to vaccines since November 2021, and schooling interruptions from COVID-19 variants have faded away. Meanwhile, nearly all pandemic relief programs that would reduce a worker’s need for a paycheck have expired.
But there’s still a marginal case for each of these explanations. Around 2.7 percent of the U.S. population (up to 7 million potential workers) is immunocompromised. Because they face a higher risk of severe illness from contracting COVID-19, that threat may still inhibit them (or their household members) from reentering the workforce. Similarly, children under the age of 4 still can’t receive COVID-19 vaccines—causing some parents to keep their children away from group child care services. It’s quite possible that there is a bit of a chicken-and-egg problem, where the reduced supply of workers limits the amount of child care a nursery school can provide, thus making it harder for parents to take on a job.
And some pandemic relief programs remain in effect, which may, at the very least, be indirectly reducing the labor supply. The federal Emergency Rental Assistance (ERA) program still has almost $20 billion out of an initial $46.5 billion to spend. Applicants can receive up to 18 months of rental assistance, including payments for previous and future housing costs. Recipients can also reapply for additional assistance. March data from the Treasury Department show that the program distributed $2.2 billion to anywhere from 305,000 to 514,000 households. Assuming that no household was double dipping in the two rounds of the ERA program, this averages out to a $4,200 payment per household.
Similarly, the number of borrowers seeking loan repayment relief has significantly increased since the onset of the pandemic: The proportion of federal student loan borrowers opting for loan forbearance grew from under 10 percent to over 50 percent in 2020 and has remained there since.
Both rental assistance and loan forbearance would diminish the pressure a worker would feel to return to work, but there hasn’t yet been an estimate of these programs’ effect on labor supply. Perhaps in response to such concerns, the governors of Nebraska and Arkansas have declined most future ERA funding.
However, the larger contributors to the dramatically reduced labor supply are likely the increase in people retiring and the decrease in immigration.”
“A recent study of the program’s effects from the National Bureau of Economic Research (NBER) finds that the majority of the funds spent by the program went to business owners and shareholders rather than to workers themselves. Ultimately, “only 23 to 34 percent of the program’s funds went directly to workers who would have otherwise lost their jobs.” The jobs it did keep in place were preserved at very high cost—somewhere between $170,000 and $257,000 a year, far more than the typical earnings of affected workers, which are closer to $58,000 per year.
While the PPP was able to save some jobs, albeit, at a very high cost, the overall result of the program was precisely the opposite of what was intended. The purpose of the program was to preserve the jobs of wage workers, not to funnel money to business owners. As David Autor, a Massachusetts Institute of Technology economist and the lead researcher behind the paper, told The New York Times recently, “it turns out [the money] didn’t primarily go to workers who would have lost jobs. It went to business owners and their shareholders and their creditors.” The program, he added, was “highly regressive.””
“Immigrants frequently fill jobs that native-born Americans are reluctant to do. Unsurprisingly, the largest gaps in the labor market tend to appear where immigrants make up a larger share of the workers. According to the Bureau of Labor Statistics, in 2020 “foreign-born workers were more likely than native-born workers to be employed in service occupations; natural resources, construction, and maintenance occupations; and production, transportation, and material moving occupations.” Foreign-born workers make up roughly 17 percent of the U.S. labor force. In each of the struggling sectors mentioned above, more than 20 percent of the workers are already immigrants.
This dynamic isn’t just affecting low-wage jobs. According to Bloomberg, the U.S. is currently experiencing its worst health care labor shortage ever. An estimated 2.7 million immigrants are already working in hospitals. In October, 16 percent of American hospitals reported that they were critically short-staffed and the situation has only gotten worse. These essential jobs need to be filled so desperately that health officials are allowing staff infected with COVID to stay on the job. Many health care workers are experiencing burnout, and immigrants have already proven they can step in and get the job done.
Immigrants won’t solve every labor shortage in the U.S., but letting more people come here for an honest and well-paying job would be a great place to start. The sooner we see more immigrants allowed into the U.S., the sooner we’ll see more milk and meat at the supermarket.”