ORA Co-Leads Coalition for Working Oregon

The Oregon Restaurant Association (ORA) and Oregon Association of Nurseries (OAN) have started a coalition of Oregon Business groups in order to work towards a long-term solution to the immigration issue. As of today there are more than 20 business associations participating in the Coalition for Working Oregon. The overall goal of the coalition is to develop a strategy for a comprehensive federal solution. We will start this process by contracting an economic study on the impact to Oregon's businesses and by hiring a coordinator dedicated to organizing all Oregon business groups so that the same message is being sent from every group to our congressional delegation. However, we first need to understand how we arrived in this position.

Changing Reliance on Foreign-Born Labor

The US economy has grown over the past 15 years and so has its reliance on foreign-born labor. From 1990 to 2004, the number of foreign-born workers in the civilian labor force has increased from 9 percent to 14.5 percent. America now contains a total of 21.4 million foreign-born workers, an increase of 50 percent in just 15 years. Of those 21.4 million foreign-born workers more than 50 percent are non-citizens. With such a large number of foreign-born workers contributing to the economy, the output of goods and services would be significantly less should those workers be removed from the equation.

It is important to note that the growth in the foreign-born labor force has not produced significant adverse effects on native workers. For example, between 2002 and 2004 about 1.2 million foreign-born workers were added to the workforce. At the same time the unemployment rate for native-born workers dropped from 5.7 percent in 2002 to 5.5 percent in 2004. Those numbers would hardly imply that foreign-born workers within our economy are overcrowding the labor market and leaving fewer jobs for native workers.

Meanwhile, the pool of native workers willing and happy to fill such jobs as are usually held by foreign-born workers continues to shrink. Some of that shrinkage is due to the fact that American workers are growing older. According to the Bureau of Labor Statistics the median age of workers in the U.S. labor force will increase from 34.6 years old to 41.6 by 2012, the highest level ever recorded in U.S. history. As the older generation of laborers grows older the share of young workers between 16 and 24 will drop by a third, from 22.3 percent to 15 percent.

Additionally, workers in the U.S. labor force are becoming more educated. Over the past four decades, the share of adults 25 and older who have not completed high school has plunged from more than half in 1964 to less than 15 percent in 2004. The share of native-born adult Americans without a high school degree has declined even further to below 10 percent. As those older workers prepare to leave the labor market and the number of younger workers interested decreases immigrants provide a ready and willing source of labor to fill that growing gap between supply and demand on the lower rungs of the labor ladder.

Immigration provides needed flexibility to the U.S. economy, allowing the supply of workers to increase relatively quickly to meet rising demand. When demand falls, would-be immigrants can decide not to enter, and those already here can decide to return home. The result is a more efficient economy that can achieve a higher rate of sustainable growth without encountering bottlenecks or stoking inflation.

Immigration not only increases the supply of labor but also the demand for that labor as to provide food, housing, transportation, services and consumer goods. In essence, immigration helps to maintain a steady, healthy growth rate in the U.S. labor force. Because of immigration the U.S. workforce and economy will continue to grow well into the 21st century, while Japan, Germany, and other advanced economies will be forced to adjust to an unprecedented decline in their workforces.

The US economy continues to grow while maintaining low unemployment rates. This means that foreign workers have aided in that growth and have not, as is more commonly believed, taken jobs from native-born workers. With such dependence on foreign-born workers, removal of a large percentage of those workers during these periods of economic growth while retaining those low unemployment rates could have a dramatic impact on the economy.

What does the future hold?

Finding a stable supply of workers is already a problem for almost every industry, including the hospitality industry. While software or computer programming jobs that can be outsource to different countries production or service industries cannot. Those industries are left to fight for available workers in a shrinking environment. The combination of Baby Boomers moving out of the workforce, families having fewer children, and an enforcement only immigration policy is creating a "perfect storm" impact on the labor market. And, as some might argue, simply offering to pay employees more will not come close to solving the problem. Offering more will not make up for the fact that there will most likely not be enough workers to fill current jobs even when you consider possible growth in the industry.

Business owners are gong to have to find efficiencies where they can. They are going to have to do more recruiting in high schools and colleges in order to try and find qualified managers who can find solutions to industry labor shortages. Immigration and foreign-born workers have allowed for a short-term fix to these labor shortages as well as flexibility in economic growth. While Immigration as a whole might not be an acceptable solution for the long-term it is necessary for the short-term in order to keep the economy stable.