Helping Tackle Labor Shortages with Data: How the Department of Labor Can and Should Update Schedule A

The US labor market has changed a lot since 1991, but the federal list of shortage occupations, which impacts employers and immigrant workers alike, has not. Now, for the first time in decades, the US Department of Labor (DOL) will soon be seeking information on how the Schedule A shortage occupation list should be updated. This blog outlines what Schedule A is, how the DOL could update it, and—thanks to a new Help Wanted Index released today by Institute for Progress (IFP)—what occupations should be on it.

What is Schedule A?

Many high-income countries such as Australia and Singapore maintain some form of shortage occupation list. This list, which is periodically updated, outlines those jobs which are largely unable to be filled by domestic supply. It is therefore used to make it easier for immigrants with those precise skills to enter and stay in the country. There are pros and cons to using shortage occupation lists to dictate immigration policy, but lists with a data-driven, objective focus are often seen as more politically attractive.

The US shortage occupation list is called Schedule A. It was included within the 1965 Immigration and Nationality Act as a way to offer permanent visas to skilled immigrants who are qualified to work in permanent jobs for which there are insufficient native workers. In its first few decades, Schedule A was used to bring in people across a range of critical fields, such as aeronautical, chemical, and nuclear engineering, physics, and pharmacology. In recent years, it has mainly been used to support the immigration of physical therapists and nurses.

Employers who hire within Schedule A occupations do not have to obtain a permanent labor certification (PERM). Ordinarily, PERMs would prove that the employer is unable to hire a domestic worker; for Schedule A occupations, the DOL has already certified that there are not enough domestic workers. This saves employers thousands of dollars and roughly a year of processing time per application. It also gives an indication of which occupations need additional federal workforce training funds to boost domestic supply.

If an immigrant is successful under Schedule A, they are granted an employment-based green card within the yearly cap (in FY2023, it will be 197,000 visas). Schedule A does not create more green cards. It merely encourages employers to utilize the limited number of employment-based green cards to fill critical gaps in the labor force. The permanent nature of the visa also has other benefits: it gives immigrants the incentive to invest in the US economy and society over the long term, while also sending remittances home to their families and communities. Additionally, American businesses will benefit from new skilled talent, potentially enabling them to hire more domestic workers, while increasing demand for services within local communities.

Despite all of these benefits, the list of Schedule A occupations has not been updated since 1991. It is unclear why the list has languished for so long, but some likely reasons include the time-intensive process to update it, and the difficulty in setting out a data-driven method that reduces DOL’s reliance on employer testimony about shortages. President Biden’s focus on establishing and maintaining leadership in artificial intelligence, as well as science, technology, engineering, and mathematics (STEM), provides a perfect reason to seek an update. Ideally, the new list would keep attracting talent to advance science and technology goals, while also providing a holistic assessment of gaps in the labor market.

What occupations should be on the list?

When Schedule A has been updated in the past, the updates have been driven solely by testimony from stakeholders. This subjectivity risks missing gaps in the labor market, and opens the list up to scrutiny. Instead, the DOL needs an objective, data-driven, and transparent way to update the list. Today, IFP has released a new report providing that solution: the Help Wanted Index.

The report draws on publicly available data to develop 10 indicators measuring labor shortages. These indicators look at the short- and long-term, to strike a balance between favoring persistent shortages and being responsive to the evolving labor market. It is inspired by the approach used by the UK’s Migration Advisory Committee to update their list. Some of the key indicators include:

• Job vacancy postings per worker - sourced from Lightcast and occupational employment data from the American Community Survey (ACS)
• Percentage change in employment over one year - sourced from the ACS
• Percentage change in median wage over one year and over three years - sourced from the ACS
• Labor force non-participation - sourced from the ACS
• Job-to-job transition rate over one year (which measures how often workers change jobs within the same occupation) - sourced from the longitudinal component of the Current Population Survey, divided by total employment in the occupation

Based on these indicators, there should be 28 occupations (rather than two) on the list. These would include:

• Registered nurses;
• Electrical and electronic engineers;
• Surgeons;
• Atmospheric and space scientists; and
• Psychologists.

For anyone who regularly reads the news, this list will be unsurprising. It reflects the often-discussed shortages experienced by employers in the healthcare and STEM fields. However, it is interesting that other visible shortages didn’t make the cut. For example, service jobs (such as cooks, dishwashers, and waiters) only score highly in the job-to-job transition rate, but poorly on the rest. Similarly, construction workers score highly in the job-to-job transition rate and three-year change in wage, but are in the bottom half of occupations on the others.

How can the DOL update it?

It is hoped that this new request for information (RFI) will show why and how Schedule A can be updated. Unlike many immigration reforms, this will not require Congress; the DOL Secretary can update the list through regulation at any point.

Historically, each update has been initiated through a “notice-and-comment rulemaking,” in which DOL issues an RFI to collect public feedback and then issues a final rule. Collecting and reading all the comments can take weeks or even months, before the DOL even starts to develop a final rule.

But it is possible for DOL to make this process more efficient. For example, it could initiate a notice-and-comment rulemaking to establish the process by which the agency will update the list in future. This should include the methodology by which new shortage occupations will be included and identify when and how the public can comment. After this is passed, the DOL can update the list without having to change the regulation every time.

For the first time in over 30 years, there is real momentum to enact meaningful Schedule A reform, enabling the US labor market to attract the skilled immigrants it needs. Updating Schedule A, particularly using a new data-driven method and new procedures, will finally bring the US in line with its high-income country peers and make it an attractive destination for years to come.