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There aren’t enough American workers. The solution is obvious: more immigrants.

The US labor market faces a shortage of 4 million workers.

Starting wages were advertised on a sign in the window of a Taco Bell in Sacramento, Calif., May 9. A wave of retirements, a drop in legal immigration, and hundreds of thousands of COVID-19 deaths have left the United States with a smaller workforce than when the pandemic began.Rich Pedroncelli/Associated Press

When the chair of the Federal Reserve talks about immigration, people should take notice.

Chair Jerome Powell keeps bringing up the urgent need the US economy has for more immigrants. Powell’s remarks do not constitute a political cry — they represent more of a subtle jab at lawmakers on Capitol Hill, who let another year pass without codifying significant immigration policy changes despite failed lame-duck, last-minute efforts.

The big picture is clear: Federal policy continues to undermine one of the most important inflation levers, the supply of labor. It’s obviously not the only reason behind inflation, but the spigot of workers has tightened to the point where the country is down millions of working-age people. The supply-demand math is only going to get worse, given the demographic trends, which reveal just how much of a role immigration will play for the nation’s future population growth. And yet, the political stalemate around solving the immigration puzzle feels impossibly futile to overcome because it’s such a hot-button issue.

Per a recent Axios scoop, President Biden plans to push again for immigration reform in 2023, “looking for ways to provide legal status for so-called ‘Dreamers’ and increase the labor supply to help lower inflation.” Biden is clearly late to the party in terms of linking immigration to inflation woes — the president should have done that this year, when his party controlled both branches of Congress. With the GOP in control of the House in the coming year, the odds of an immigration deal are fantastically minimal.


Putting aside my cynicism, the White House’s more-immigrants-to-reduce-inflation bid, if true, is worth a shot. That’s how desperate the outlook is.

In late November, during a speech at the Brookings Institute, Powell referenced the slower growth in the working-age population as a contributing factor to the labor supply shortfall. “The combination of a plunge in net immigration and a surge in deaths during the pandemic probably accounts for about [1.5 million] missing workers,” he said, according to his prepared remarks. In a footnote, he expanded on this point by noting that “total immigration has slowed substantially since the start of the pandemic, lowering the labor force by about 1 million people relative to pre-pandemic trends.”


Then, in a mid-December press conference, Powell said: “[I]t feels like we have a structural labor shortage out there where there [are] … 4 million fewer people.” Powell noted that, despite high wages and the tight market, labor participation is not going up. Part of it is that “close to half a million people who would have been working died from COVID,” he said. “And part of it is that migration has been lower … [I]t’s not our job to prescribe things. But … pretty much everybody you talk to says there aren’t enough people. We need more people.”

Of course, that’s not a secret. What’s remarkable is that the most influential person in US economic policy is signaling the connection between immigration and America’s macroeconomic troubles, even if he’s doing so in such a guarded manner.

Giovanni Peri, an economics professor at the University of California, Davis, has been sounding the alarm all year about the immigrants missing from the US economy. Peri’s calculations found that by “the end of 2021 there were about 2 million fewer working-age immigrants living in the United States than there would have been if the pre-2020 immigration trend had continued unchanged.”


One has to wonder why Biden and his economic team waited this long to go all-in with the economic argument to publicly push for an increase on immigration. In 2023, the Republican-led House will be consumed by an ardent desire to do nothing substantial around immigration policy; instead, Republicans want to impeach Homeland Security Secretary Alejandro Mayorkas. But Biden is to blame — his failure to fully push for meaningful immigration solutions to stave off an impending recession will surely go down as one of the worst mistakes of his presidency.

Marcela García is a Globe columnist. She can be reached at marcela.garcia@globe.com. Follow her @marcela_elisa and on Instagram @marcela_elisa.