US executives call for immigration reform to staff manufacturing boom

Clean energy and semiconductor executives have called for an urgent loosening of immigration rules in the US, saying the Biden administration’s strategy to reindustrialise the economy will need a rapid influx of foreign labour.

More than 80 new projects have been announced in the US since Congress last year passed hundreds of billions of dollars of subsidies, part of President Joe Biden’s plan to reshore manufacturing jobs lost to Asia in recent years.

But the investment rush has coincided with a historic tightening of the labour market, leading developers to call for reform to allow more workers into the US and keep foreign students.

“We have to fix our high-skilled immigration system,” said Patrick Wilson, vice-president of government relations for MediaTek, a Taiwanese semiconductor company. “Sending the most brilliant, foreign-born, US-educated talent to work somewhere else is just ludicrous.”

The calls for more foreign labour come during an acrimonious debate over immigration, as Republican lawmakers blame the Biden administration for a “surge” of migrants across the US-Mexico border after the expiration of pandemic-era restrictions.

“There has to be a separation in the language between the political, red hot issues that [Congress] doesn’t want to address at the border with a bigger, very different issue of bringing highly qualified tradespeople,” said Bob Clark, founder of construction company Clayco, which is building a number of factories in the US, including Entek’s $1.5bn battery plant in Indiana.

Clark said the immigration system forces him to “pick winners” among his group of foreign-born interns. He added that companies have chosen locations in Canada and Mexico over the US as a result of friendlier immigration laws and a larger labour pool in those countries.

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The Inflation Reduction Act and the Chips and Science Act, both passed last August, included billions of dollars in subsidies to spur domestic cleantech and semiconductor manufacturing and create thousands of jobs.

But Associated Builders and Contractors estimates the US will face a construction shortage of at least half a million workers this year as a result of the construction boom. McKinsey estimates the US will face a shortage of 300,000 engineers and 90,000 technicians by the end of the decade.

Developers say labour shortages will slow the government programmes’ rollout and make it costlier.

“These programmes are not going to roll out as fast as the administration would like,” said Jeannie Salo, vice-president of government relations at Schneider Electric, a France-based energy management group that operates multiple factories across the US. “Things are going to move slower because they don’t have the workforce.”

With analysts calling for a “World War II repurposing” of the US workforce into the science and engineering fields needed for advanced manufacturing projects, tough immigration quotas and long waiting periods mean talent is being lost to foreign competitors.

The US received a record 781,000 entries this year for its H-1B visa lottery, which offers only 85,000 slots per year for college-educated foreign workers to work in the country, according to new data from the US Citizenship and Immigration Services. Country caps on permanent resident cards have also caused backlogs for entry.

While the US is a top destination for science, technology, engineering and mathematics degrees, a disproportionate share of these students are foreign-born. More than half of US workers with a doctorate in engineering in the US were born abroad, according to the National Science Board.

“While we collaborate with academic institutions across the country to greatly improve opportunities for American students here at home, there is still a need to attract and retain additional talent,” said David Shahoulian, director of workforce policy for Intel. The US semiconductor company said it has invested $280mn in developing talent domestically over the past five years.

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A group of semiconductor companies including ASML, Intel, Samsung and Texas Instruments wrote to Congress last year calling for reforms including the exemption of advanced STEM graduates from permanent residency quotas.

“One arm of the government is saying: ‘Hey, we’re open for business, come here, we’re laying everything out on a red carpet for you.’ The other arm is like: ‘I’m sorry. Our hands are tied’,” said Tahmina Watson, an immigration lawyer at Watson Immigration Law. “We’re really shooting ourselves in the foot.”

One executive at a South Korean battery maker said as a workaround, the company was sending foreign workers to the US without a visa for the maximum 90 days before having to leave and re-enter the country. The fix is threatening the project’s timeline and disrupting production, the person said.

“If people want to come to our country and work hard, particularly in manufacturing, we should be welcoming them with open arms,” said Raffi Garabedian, chief executive of Electric Hydrogen, an electrolyser manufacturer based in Massachusetts.

“Everyone from the Chamber of Commerce to semiconductor companies to a bipartisan group of governors agree: Congress needs to fix our long-broken immigration laws,” said a White House official, adding that the economic case for reform was “clear”.

“It’s past time for Republicans in Congress to get on the same page and stop blocking the president’s comprehensive immigration reform proposal.”

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Shortly after taking office, Biden introduced a bill that would offer undocumented immigrants a path to citizenship and improve the employee-based immigration system. A group of House Democrats reintroduced the bill last week after the end of pandemic-era border restrictions.

Republicans in states seeking investment were among the voices in recent weeks calling for more skilled workers to be allowed into the US.

“We have to know who’s coming into our country, we have to have a strong border,” said Kevin Stitt, Republican governor of Oklahoma, a top state for wind generation. “And at the same time, we have to have immigration reform.”

“Immigration reform is super, super important to the growth of our future economy,” said Brad Chambers, commerce secretary of Indiana, another Republican-controlled state in the midst of a project construction boom. “I just encourage federal leadership to roll up their sleeves and move quickly.”