A GRIM NEW YORK TIMES ARTICLE last weekend describes a labor shortage that’s so acute that immigrant children as young as 12 are working in meat packing, food processing and other industries that have an acute shortage of workers.
THE ARTICLE WAS SO STUNNING — straight out of Charles Dickens or Upton Sinclair — that lawmakers in both parties vowed to crack down on the explosive growth of migrant child labor. This will make the American labor shortage even worse.
WE HAVE WRITTEN EXTENSIVELY in the past year about the lack of workers, which will keep the unemployment rate low (it’s 3.4% now). Much of the media focus has been on layoffs in the tech sector but in the service sector — restaurants, hotels, food processing etc. — there’s a crisis.
POLITICIANS KEEP RANTING that there’s a need for more jobs, but they are exactly wrong — the real need is for more workers. That’s finally sinking in at the White House, where officials worry that their massive new infrastructure and climate change initiatives are threatened by a lack of workers.
AN ARTICLE IN THIS MORNING’S POLITICO takes this crisis beyond the service sector or child labor. A bottleneck is growing in the construction and manufacturing companies that are central to Biden’s climate agenda, Politico says.
HUGE NEW SPENDING PLANS approved by Congress in the past three years rely on those companies to make batteries, build solar panels and accelerate next-generation technology that aims to remove planet-warming carbon dioxide from the atmosphere, Politico says. This requires building and deploying electric cars, carbon-free energy sources and less-wasteful appliances.
THE U.S. CONSTRUCTION INDUSTRY was short by 413,000 workers as of December, while 764,000 manufacturing sector jobs remained open, according to the Bureau of Labor Statistics. And the consulting firm McKinsey expects 550,000 new energy transition jobs will become available by 2030.
THERE’S AN OBVIOUS SOLUTION: Sweeping immigration reform — allowing “dreamers” into the U.S. with an eventual pathway to citizenship — would rapidly ease the labor crisis. Yet there’s no prospect of immigration reform passing in Congress any time soon.
THUS THE BOTTOM LINE is that wage inflation and labor shortages will persist. Federal Reserve rate hikes will not change the need to fill jobs now held by 14-year-olds, or jump-start the moribund Biden infrastructure and climate initiatives. The labor market is where inflation is centered, and there’s little hope for improvement until immigration laws are reformed.
Related: Is Joe Biden Certain to Run Again? Perhaps Not
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