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Despite the U.S.'s huge and flexible labor market and its abundance of leading-edge multinational corporations and world-class universities, it faces growing competition for skilled labor from other countries. This situation underscores the need to revamp U.S. immigration policies to make them more responsive to the demands of an increasingly competitive global economy. One possibility is to replace the H1-B visa program for highly skilled foreign professionals with a quality-selective regime like the point-based systems in Australia, Canada, and New Zealand.
Shortages of skilled labor constitute the foremost challenge confronting U.S. manufacturers who face growing competition from manufacturers in Asia, Eastern Europe, and elsewhere. Demand for professionals with university degrees is rising as manufacturing becomes increasingly high tech. But the U.S. educational system is not producing enough highly educated native-born manufacturing workers to meet this growing demand. Moreover, the pending retirements of Baby Boom generation workers will further constrain the growth of the manufacturing labor force. Bridging this gap between the supply and demand for skilled workers requires new investments in the U.S. educational system and the formulation of immigration policies that respond to the labor needs of the U.S. economy. Yet current immigration policies, especially since 9/11, have made it more difficult for highly skilled professionals from abroad to enter the United States. Among the findings of this report:In 2005, 90 percent of manufacturers surveyed by the National Association of Manufacturers (NAM) reported "moderate to severe" shortages of skilled production workers, while 65 percent indicated "moderate to severe" shortages of scientists and engineers.In order to hedge against worker shortages, and in response to mounting global competition, American manufacturers are boosting investments in industrial automation, robotics, and other labor-saving equipment that requires a high level of skill to operate. These developments are raising demand for highly educated manufacturing workers.Even during the 2000-02 recession, during which 2.8 million manufacturing jobs disappeared, high-salaried positions for machinists, tool and die makers, and welders went unfilled owing to a paucity of qualified applicants. NAM estimates that U.S. manufacturers will face a deficit of 10 million skilled workers by 2020 if these trends go unchecked.In 2004, immigrants represented large shares of advanced degree holders in technology-intensive manufacturing industries: machinery (65.4 percent), measurement/control instruments (48.2 percent), electronic components (44.6 percent), computers/peripherals (44.4 percent), communications equipment (39.8 percent), and medical equipment (37.3 percent).Between 2001 and 2004, the number of foreignborn workers with advanced degrees rose in 7 industries (machinery, electronic components, aircraft, computers/peripherals, measurement/control instruments, motor vehicles, and aerospace) and declined in 3 (pharmaceuticals, communication equipment, and medical equipment).