Use USMCA Temporary Entry.

• Author: Miller, Eric
• Position: United States-Canada-Mexico Agreement

U.S. businesses are struggling to find workers, and the shortage has to do with more than business cycle excesses. It increasingly appears that the United States labor market is undergoing a rapid structural shift that may result in endemic labor shortages for a sustained period of time. Recent U.S. policy to limit immigration threatens to exacerbate this problem.

There are multiple reasons for this development. One is the COVID pandemic. More than 1 million Americans have died of COVID since March 2020, and a significant portion of those were of working age. What's more, Katie Bach of the Brookings Institution estimates that between 2 and 4 million workers between the ages of 18 and 64 are out of the labor market because of "long COVID."

A second reason is demographic: the baby boomers are rapidly exiting the labor market. Moreover, the cohorts of Generation Y and Z are not as large and they appear to have less allegiance to the labor market than their predecessors. As a result, the civilian labor force fell from 67.3 percent in January 2000 to 62.4 percent in August 2022.

A third reason is the changing workplace demands of workers. The pandemic appears to have changed worker preferences for where and how they want to work. The Survey of Working Arrangements and Attitudes found that the share of full-time workdays completed from home grew from 4.7 percent in January 2020 to 29.5 percent now (following a peak of 61.5 percent at the height of the lockdowns in May 2020). Many employees who got to work remotely for the first time during the pandemic liked it. They are now willing to leave their jobs when managers try to force them back into the office.

The net effect of all these changes is that the number of U.S. job openings has been above 10 million since July 2021.

Temporary entry I There is no single solution to the current mismatches in the labor market. Public policy should be broadly supportive of training Americans for the labor market of today and tomorrow. In the meantime, America should look at all available instruments to address immediate labor shortages.

One important step would be to better utilize the Temporary Entry provisions in America's trade agreements. Among these are the provisions in the United States-Canada-Mexico Agreement (USMCA) that the Trump administration negotiated to replace the North American Free Trade Agreement (NAFTA).

Trade agreements are not just about the movement of finished goods; they are also about...