Why are US employers shifting towards hiring a global workforce?

According to data from the Bureau of Labor Statistics (BLS), the United States had 8.863 million job openings in January 2024, while there were only 6.124 million unemployed individuals in the country. This means that the number of unemployed persons per job opening was only 0.7, which is the lowest it has been since January 2009. These figures indicate that the US is currently experiencing a severe labor shortage, perhaps the most significant one in its history.

Data source

The following pie chart displays the labor force statistics from the current population survey of BLS, classifying unemployed persons by their reasons for being unemployed. Out of the 6.124 million unemployed persons, 13% had left their job completely, which makes the 0.7 figure even smaller. This suggests that the labor shortage is worsening. Furthermore, 35% had lost a permanent job, 14% had lost a temporary job, and 38% were either entering or re-entering the workforce.

Data source

The BLS releases a report every month that includes job opening rates by industry. These rates serve as indicators of labor shortages in various industries. According to the latest data from January 2024, the health care and social assistance industry has the highest proportion of job openings, indicating a significant labor shortage in this industry.  As a traditional labor shortage industry, the accommodation and food services industry still has many jobs open.

Data source

The US Chamber of Commerce has identified several factors that have contributed to the current labor shortage. Firstly, the pandemic has led to more than 3 million adults opting for early retirement, alongside with a declining birth rate, the proportion of older workers in the workforce continues to increase. Secondly, net international migration to the US is at its lowest point in decades, with the US Census Bureau reporting a drop in population growth from 1,049,000 between 2015 and 2016 to 247,000 between 2020 and 2021. This represents a sharp decline of 76%. Thirdly, the pandemic has significantly impacted the childcare industry, resulting in the closure of many providers and the loss of around 370,600 jobs. A survey of unemployed workers who lost their jobs during the pandemic found that 27% of them had to quit their jobs to take care of children or other family members. Lastly, the emergence of new business models, particularly those related to digital businesses, has led to an increasing number of people opting to start their own companies. This is demonstrated by the creation of 5.5 million new businesses in 2023.

Employers in the United States are facing a shortage of employees to fill job vacancies due to various factors. To address this issue, many employers are seeking overseas solutions through the EB3 immigration visa, which is the third preference category for employment-based immigration. However, in order to hire foreign workers through the EB3 visa, the US-based employer must comply with the processes required by the Department of Labor (DOL) and United States Citizenship and Immigration Services (USCIS).

To hire a foreign employee, the employer must first provide the minimum requirements and job duties to the Department of Labor (DOL). The DOL then assesses the wage offered by the employer to ensure that it is at least equivalent to the typical salary for the job in the United States, which is called the prevailing wage determination (PWD). Once the PWD is passed, the employer must conduct pre-filing recruitment and advertising to demonstrate that there are no willing or qualified US workers available for the position. After completing the first three steps, the employer can obtain the quota to recruit employees from overseas and submit the ETA Form 9089 to apply for labor certification for the employee. The approval of PERM means that the DOL certifies to the US Citizenship and Immigration Services (USCIS) that there are not enough US workers who are able, willing, qualified, and available to accept the job opportunity in the area of intended employment, and that hiring a foreign worker will not adversely affect the wages and working conditions of similarly employed US workers.

Once the PERM case is certified, the employee can file an I-140 petition. If approved, an immigration visa number may not be immediately available depending on the category and country of chargeability. The employee has to wait for the priority date to become current. If the priority date is already current, the case can be moved to file the I-485 application to adjust the status if the employee is in the United States. If the employee is outside the United States, they can undertake consular processing by submitting the DS-260 form and NVC-required files. After this, the employee will need to take a medical examination and attend an interview. Once the interview is approved, the employee will receive their green card and can start working for the employer.

The process of obtaining a green card through PERM can take up to four years, depending on the current waiting time of the visa bulletin. Despite the long wait, many US employers still rely on EB3 as a solution to the severe long-term labor shortage. They recruit overseas workers to fill the job vacancies that cannot be filled by local workers.

Globevisa Group is an immigration advice provider based in Singapore with more than 20 years of experience in the immigration services industry. The expert team at Globevisa Group offers meticulously selected services on various immigration programs, including the US EB-3 visa program. You can find the program link at EB3 – Globevisa.

References:

https://www.bls.gov/charts/job-openings-and-labor-turnover/unemp-per-job-opening.htm#

https://www.uschamber.com/workforce/understanding-americas-labor-shortage

https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-third-preference-eb-3

https://flag.dol.gov/programs/perm