Future Flow for Job Growth in American Manufacturing

October 6, 2015 | American Manufacturing

Microphone_In_front_of_American_FlagImmigration can be a contentious topic for many in the U.S. Some are for immigration reforms, some are for stricter border control and deportation, some call for a bit of both. Despite the somewhat controversial nature of the topic, immigration is an important issue for the manufacturing industry.

Why is immigration an Important Issue for U.S. Manufacturers?

For businesses in the manufacturing industry, there is a shortage of qualified applicants for many business-critical positions. Because of this, manufacturers need to have access to a talent pool that is ready, willing and able to work. Having access to foreign-born workers that have the right qualifications can help American manufacturing companies fill job openings and drive business success.

According to a statistic cited in a National Association of Manufacturers video about immigration reform, “82% of manufacturers report difficulty finding workers with the right skills.” That’s right, more than 4/5 of U.S.-based manufacturers are having difficulty filling job roles because of a lack of skilled applicants.

What Can Be Done with Immigration to Resolve the Skills Shortage?

Some organizations, such as the NAM, are calling for reforms that would “improve the employment-based green card system to keep talent within the United States, streamline and simplify the procedures for the temporary or non-immigrant visa, allow for temporary workers and immigrants to meet the needs of employers without displacing American workers,” and other changes that would make it easier for American businesses to fill important job positions.

This would give immigrants an increased number of legal recourses for remaining in the U.S., which may help to discourage illegal immigration, since immigrating legally would be easier. Companies would benefit from access to a larger talent pool of workers who are ready, willing, and able to work the jobs that they need to fill to succeed.

Why are Many People So Opposed to Immigration?

Despite the potential benefits of immigration reform for businesses, there are many who oppose the idea of immigration. There are a variety of reasons for this opposition.

One key fear highlighted in an article by the American Immigration Council is “the fear that native-born Americans will lose out on scarce jobs if currently unauthorized immigrants acquire legal status.”

Illegal immigration can be a problem. These individuals are in the country without the legal rights and protections of a normal citizen. They may end up being abused as a cheap, disposable labor source by unscrupulous individuals who use them to skirt labor costs and regulations.

What’s the Actual Impact of Immigration on Unemployment?

There is little evidence that immigrants keep American-born citizens from being employed. As cited in the Immigration Council article, “the best available evidence suggests that neither legal nor unauthorized immigration is the cause of high unemployment.”

In fact, converting illegal immigrants to legal immigrants may benefit the economy, as “the higher wages and purchasing power which formerly unauthorized immigrants would enjoy were they to receive legal status would sustain new jobs.” This would create new job opportunities for American citizens rather than take them away.

To support this statement, the article cites a statistic about the rate of unemployment in counties with immigrant populations. According to the study, “recent immigrants comprise 3.1% of the population in counties with the highest unemployment rates (over 13.4%). But recent immigrants account for a higher share of the population (4.6%) in counties with the lowest unemployment rates (below 4.8%).

So, if anything, the addition of legal immigrants to the population might actually be beneficial to the overall employment rate.

Benefits of Immigration Reform for Manufacturers

What are the potential benefits of streamlined/improved immigration laws and practices for manufacturers?

Here are a few:

  • Lowered Risk When Hiring Immigrants. According to the NAM, “the current employment verification system creates undue liability for employers, causes increased administrative burdens, and does not deter identity fraud.” In other words, there is a high risk that illegal immigrants might use stolen credentials or otherwise slip through systems meant to prove an individual’s right to work in the U.S. without an employer’s knowledge, putting that employer at risk of illegal hiring charges. Changing the laws and improving verification systems can help to significantly reduce this threat.

  • Access to More Qualified Applicants. Currently, there simply aren’t enough qualified applicants for manufacturing jobs in the U.S. The 82% statistic from the NAM is a fairly powerful highlight of this fact. Immigration reforms would give companies access to a much larger pool of candidates, making it easier to find qualified applicants for important job roles.

  • Larger Customer Base. Studies cited by the Immigration Council show that “legalized workers earn more, spend more, and pay more in taxes.” Manufacturers in numerous industries can benefit from this either directly or indirectly. How so? These immigrants become buyers of consumer goods, and their taxes help go to fund government contracts for manufacturers who serve the government sector.

Reforming immigration laws and practices has the potential to benefit manufacturers in the long run. Immigrants are a vast potential talent pool for manufacturers, one that could help keep the American manufacturing renaissance going strong in the coming years.

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