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Why Are US Companies Facing Skilled Labor Shortages?

3 minute read
"In February 2021, the US job market surged to a 2-year high, especially in the hospitality and tourism industry. However, US employers and companies are increasingly facing worker shortages."
Written by My Visa Source Team
Published on:  Aug 27, 2021
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In February 2021, the US job market surged to a 2-year high, especially in the hospitality and tourism industry. However, US employers and companies are increasingly facing worker shortages. 

What Are the Reasons that US Companies Are Facing Labor Shortages of Skilled Workers?

Demand-Supply Shift 

Unfortunately, the US is facing a double challenge of increasing demand and decreasing supply. There is a nationwide shortage of over 1 million skilled workers which is expected to rise to 2 million over the next 5 years. Much of this shortage is the result of the retiring baby boomer generation, which has also been accelerated due to the global pandemic. This has led to a spike in demand for workers on top of a decreasing supply. 

Low Productivity in Industries

Many would expect that the increased use of automated technology will increase the productivity of US companies. However, productivity is steadily declining or flatlined as there is a shortage of skilled workers to operate and maintain the highly automated machines. Hiring less-experienced workers costs the company in terms of training and errors. Meanwhile, companies are finding it difficult to hire laborers, let alone highly specialized trades workers. 

Backlog Projects Due to No Raw Materials

Many companies rely on offshore raw materials for at least a part of their manufacturing process. However, the ongoing global pandemic has significantly limited the supply chains. Due to the worldwide travel and border restrictions imposed to control the spread of the Covid-19 virus, many companies are facing a backlog of projects. 

Low Level of Post-Pandemic Workforce

The global pandemic forced many baby boomers into early retirement. This significantly reduced the supply of skilled workers in the market. On top of that, many people are choosing not to return to work due to health and safety concerns. Many are receiving the stimulus benefits, giving them financial protection for at least a while.

Low Interest in Youth for Skilled Trades

Young people are showing less and less interest in learning skilled trades. The future of the skilled trades workforce largely depends on the younger generation. While two decades ago, it was perfectly normal for young people to pursue trade school or an apprenticeship instead of a college education. Today, it has become the social norm for young people to attend college.

How Can US Employers Hire Temporary Foreign Skilled Workers?

H-1B - Specialty Occupations: 

The H-1 B Visa is a nonimmigrant visa for temporary foreign workers employed in specialty occupations, or with the Department of Defense (DOD) or as a fashion model of distinguished merit.

H-2A - Temporary Agricultural Worker: 

The H-2A Visa is for citizens of certain designated countries who want to be employed in the US as temporary or agricultural or seasonal workers. 

H-2B - Temporary Non-Agricultural Worker Visa: 

The H-2B Visa is for skilled and unskilled foreign workers who want to come to the US for temporary unemployment in a non-agricultural, non-seasonal occupation.

L-1 - Work Visa: 

The L-1 Visa Program is for foreign workers employed in a US company overseas and workers with specialized knowledge. This visa has 2 categories:

L-1A Visa: This visa is for foreign workers employed in senior management or executive positions in a company that has a US branch, subsidiary, affiliate, or joint venture.

L-1B Visa: This visa is for foreign employees with specialized knowledge to work in the US company after working with the overseas branch for at least a year in the last 3 years. 

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