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Essential Worker Shortage Continues
from American Immigration Law Foundation

Since April of 1997, the national unemployment rate for the United States has remained at its lowest level in 30 years, having been at or below 5%, which economists have traditionally considered to be "full employment." While these numbers bode well for workers, it has become increasingly difficult for employers to locate available employees.

Demand for Essential Workers Still on the Rise

According to the Bureau of Labor Statistics (BLS) during the month of January 2001, mining, construction, food products, services, health services, retail, amusement and recreation sectors, which are heavily labor-dependent on essential workers, combined to gain 319,000 jobs.1

Manufacturing and the "help supply services" industries declined by a combined total of 104,000 jobs. However, the overall net gain of new positions for essential workers in the month of January was 215,000. Thus, the recent slowdown in the economy has not decreased the demand for essential workers, especially regarding industries heavily reliant on so-called "unskilled workers."

The recent slowdown in the economy has not
decreased the demand for essential workers.

In fact, leaders from several industries provided testimony to congress that there is a dearth of available workers.2

Nobody Home in the Lodging Industry

The American Hotel and Motel Association (AH&MA) reports that the worker shortage is the most critical issue facing the lodging industry. Hotels are paying more in cash signing incentives, attractive pay, benefits, training and development and still cannot find enough employees. According to the Hospitality Research Group of PKF Consulting, "Since 1993, the annual growth in hotel labor costs has ranged from two to three times the growth in labor costs for all U.S. private employers."3

Foundries Struggling to Find Workers

The American Foundrymen's Society states that with the demand for unskilled and skilled workers outpacing supply, the dilemma of how to meet the growing shortage is one of the greatest obstacles facing the foundry industry today. Furthermore, this industry has been saddled with a shortage of unskilled workers for nearly a decade that is now reaching epidemic proportions.

Foundries have seen erosion in its industry's business to offshore competition, where there is an abundant source of cheap labor. In order for U.S. foundries to compete in the global marketplace, they must be able to find sufficient employees who can produce quality work.

Long-Term Care for the Elderly

Stephen Guillard, President and CEO of a Boston-based, privately held company that provides long term care services to disabled and elderly patients in living facilities in 9 states, argues, "If you are in the business of caring for our nations' elderly, whether you are for-profit, non-profit, or government managed, it is a daily struggle to find enough dedicated caregivers to care for the people in your charge."

The nationwide labor shortage threatens the elderly and their families who depend on nursing homes to provide the care they cannot.

Tight Labor Market Likely to Continue

Dr. Harry J. Holzer of the Urban Institute presents a survey administrated to several thousand employers showing that roughly 80% of the employers surveyed reported at least some difficulty hiring qualified workers, and 40% reported great difficulty. Dr. Holzer proposes that if productivity or labor force growth falters, these conditions could threaten the sustainability of our economic expansion over time.

BLS estimates that by 2008 the largest single employment sector will be services (30.2%).4 From 1998-2008, among the top 10 fastest growing occupations will be personal care and home health aids (58% growth), medical assistants (58% growth), social and human services assistants (53%), and physician assistants (48%), all of which are essential worker occupations.

In addition, from 1998-2008, 8 of the top 10 occupations with the largest job growth in absolute numbers are in essential worker occupations: Retail sales persons, cashiers, truck drivers, office clerks, registered nurses, computer support specialists, personal care and home health aides, and teacher assistants.


By 2008, total civilian employment is projected to be 160.7 million, but the total civilian labor force is expected to be only 154.5 million, resulting in a surplus of 6 million more jobs than people.


As long as the national unemployment rate remains at or below 5%, while job growth in the so-called "unskilled" occupations increases, American companies will continue to have difficulties in adequately staffing their organizations. Allowing essential workers from abroad to enter the American workforce is one possible solution for supporting and maintaining the U.S. economy.

Prepared April 2001


1 "The Employment Situation: January 2001," Bureau of Labor Statistics of the U.S. Department of Labor. February 2, 2001.

2 Remarks from the AH&MA, American Foundrymen's Society, Stephen Gulliard and Dr. Harry J. Holzer were taken from a congressional hearing held by the Committee on Education and the Workforce Subcommittee on Oversight and Investigations on 21st Century Worker Shortages," February 17, 2000.


4 Bureau of Labor Statistics Employment and Labor Force Projections, 1998-2008.

About The Author

The American Immigration Law Foundation was established in 1987 as a tax-exempt, not-for-profit educational and service organization. The Foundation's mission is to promote understanding among the general public of immigration law and policy, through education, policy analysis, and support to litigators. AILF is governed by a Board of Directors and a Board of Trustees.

Working closely with leading immigration experts throughout the country, AILF has established three core program areas: the Legal Action Center, the Public Education Program, and an Exchange Visitor Program. Through these programs, the Foundation sponsors numerous awards programs, publishes policy reports, engages in impact litigation, and provides policymakers and the public with complete and accurate information about the benefits of immigration.

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