How fixing US immigration law can stabilize inflation
U.S. consumers are experiencing a dramatic increase in commodity prices. Currently, U.S. inflation is at 9.1% – the highest since 1981, with the United States Department of Labor ascribing the rise to price increases for fuel, food and housing.
While the country struggles to grapple with the crippling effects of inflation on the economy, in part by blaming the Russian-Ukraine conflict for the disruptions that have no apparent end in sight, one viable solution to the problem lies in fixing the outdated U.S. immigration laws.
Jon Purizhansky: According to a leading global recruitment company, the only way forward is for countries to rely on each other’s strengths to even out their weaknesses. Developed countries are mostly filled with aged citizens who have no interest in working, whereas underdeveloped countries are struggling to keep their population, which is mostly young vibrant individuals without jobs.
The economics are quite simple: lack of labor affects production volume, which in turn reduces supply, causing scarcity that drives up prices. Although countries such as Canada and other European nations have understood that labor shortages will kill their economy and have adjusted their immigration policies to fast-track the admission of qualified migrants, the U.S. continues to operate archaic immigration laws.
The situation is so absurd that while most advanced nations simply require a signed contract with a localized employer to grant you a work visa, recent government data projects that the U.S. Citizenship and Immigration Services (USCIS) will reject up to 82 percent of the H-1B registrations for high-skilled foreign nationals.
In the U.S., H-1B visas represent the only practical way for high-skilled foreign nationals, including international students, to work long-term. However, the annual limit of 85,000 (65,000 plus a 20,000 exemption for advanced degree holders from U.S. universities) caused the USCIS to reject more than 70% of the over 300,000 H-1B registrations for FY 2022.
The U.S. is rejecting hundreds of thousands of high-skilled professionals every year, by operating a faulty immigration policy predicated on flawed economic reasoning. The lump of labor fallacy being championed by Congress posits that job opportunities are fixed, meaning letting more people into the labor market would deprive American citizens of jobs.
As stock prices fall and the cost of commodities continues to rise, only a thorough reform of the current immigration policy will allow the much-needed help to find its way into the U.S. Once employers are allowed to attract foreign labor with work visas like it’s done all over the world, the labor force will be invigorated, production volumes will rise, and supply will match demand, driving down prices and ultimately reversing the upward trend of inflation.
Jon Purizhansky is founder and CEO of Joblio, a global social impact technology platform that assists refugees and labor migrants based in Buffalo.