Macro Roundup

Maxim Massenkof and Aaron Chalfin, "Beyond Crime Rates: How Did Public Safety in U.S. Cities Change in 2020?,"Working Paper, March 8, 2022, http://maximmassenkoff.com/papers/victimization_rate.pdf

We plot crimes known to law enforcement for our combined NYC-Los Angeles-Chicago sample in panel Aof Figure 2, presenting monthly counts of violent crimes separately for 2019 and 2020. Public violence was approximately 10% higher in the winter of 2020 than the winter of 2019 but began to fall steeply after March 2020. In April 2020, public violence was approximately one third lower than it had been in April 2019. Consistent with the seasonality documented in prior research…public violence rose during the spring and summer months in both years. However, throughout the summer and into the fall months, these crimes remained between 5-20% lower in 2020 than they had been in 2019. Aggregating across the entire pandemic period of 2020 (March through December), public violence was 19% lower in 2020 than it had been in 2019. Next, Panel B plots violent street crime risk per 100,000 people using Safegraph data to measure the change in exposure. In March 2020, street crime victimization risk was roughly equal to risk in the previous year at approximately 5 violent street crimes per month per 100,000 person-visits to a community. However, at the same time that street crimes fell by more than 30% in April 2020, the risk of street crime victimization rose by nearly 40%. Victimization risk remained elevated throughout the summer approximately 12% higher in July 2020 than July 2019|and never fully returned to trend, even by the end of the year. For the March-December period, street crime victimization risk was approximately 14% higher in 2020 than it had been in 2019, despite a 19% decline in the incidence of public violence. Taken together, these results suggest that the increase in risk was not restricted to an aberration in gun violence. While gun violence rose by 47% in the three largest cities in the United States, the risk of other violent street crimes rose as well. Though street crimes appear to be less sensitive to the effects of the pandemic than shootings, the trends are much more similar after accounting for changes in criminal opportunities.

The Evidence

Using a variety of administrative and survey sources, as well as information on the movement of people based on mobile location data, we study the risk of public victimization in 2020. Newly-available survey data from the American Time Use Survey as well as foot traffic data from Google, Apple, Facebook and Safegraph, show that time spent outdoors fell rapidly in March 2020 before slowly rebounding thereafter. While Americans eventually began to return to many of their normal activities,even at the end of 2020, time spent outdoors remained about 20% lower than in 2019.We then compare the number of violent crimes known to law enforcement to measures of time spent away from home in order to calculate the risk of street crime victimization. We formulate this as the count of violent crimes occurring in public spaces divided by a measure of public foot traffic, inferred from SafeGraph data. While analyses of traditional crime data show discrete drops in opening during the post-pandemic lockdown period, we find that, in 2020, the risk of outdoor street crimes initially rose by more than 40% and was consistently between 10-15% higher than it had been in 2019 through the remainder of the year In the cities we study, people were more likely to be robbed or assaulted while spending time in public.

Methodology

In this paper, we illustrate how changes in human activity during the COVID-19 pandemic led to an unusual divergence between crime rates and victimization risk. Beginning in March 2020, public violence/assaults and robberies occurring in public or commercial space declined by approximately 35% as people responded to disease risk and mandated lockdowns by spending more time at home. These offenses remained 10-15% below 2019 levels throughout the summer before returning to 2019 levels in the fall. But what happened to the risk of violent crime that people faced in while spending time in public spaces? Because our principal measure of public safety the crime rate is so limited, conventional analyses are unable to answer this question

Divergence btw crime rate and “victimization rate”

The 1997 Asian Financial Crisis scared developing countries into accumulating more funds to shield their currencies from crashes,pushing official reserves from less than $2 trillion to a record $14.9 trillion in 2021, according to the International Monetary Fund. While central banks have lately sought to buy and repatriate gold, it only makes up 13% of their assets. Foreign currencies are 78%. The rest is positions at the IMF and Special Drawing Rights, or SDR—an IMF-created claim on hard currencies. Many economists have long equated this money to savings in a piggy bank, which in turn correspond to investments made abroad in the real economy. Recent events highlight the error in this thinking: Barring gold, these assets are someone else’s liability—someone who can just decide they are worth nothing.... China itself owns $3.3 trillion in currency reserves. Unlike Russia, it cannot usefully hold them in renminbi, a currency it prints. Stockpiling commodities is an alternative. The conundrum creates another incentive for Beijing to reduce its trade surplus by reorienting its economy toward domestic consumption, though it has proven challenging.

The risk to King Dollar’s status is still limited due to most nations’ alignment with the West and Beijing’s capital controls. But financial and economic linkages between China and sanctioned countries will necessarily strengthen if those countries can only accumulate reserves in China and only spend them there. Even nations that aren’t sanctioned may want to diversify their geopolitical risk. It seems set to further the deglobalization trend and entrench two separate spheres of technological, monetary and military power.

China itself owns $3.3 trillion in currency reserves. Unlike Russia, it cannot usefully hold them in renminbi, a currency it prints. Stockpiling commodities is an alternative. The conundrum creates another incentive for Beijing to reduce its trade surplus by reorienting its economy toward domestic consumption, though it has proven challenging.

What can investors do? For once, the old trope may not be ill advised: buy gold. Many of the world’s central banks will surely be doing it.

Jon Sindreu, "If Russian Currency Reserves Aren’t Really Money, the World Is in for a Shock,"Wall Street Journal, March 3, 2022, https://www.wsj.com/articles/if-currency-reserves-arent-really-money-the-world-is-in-for-a-shock-11646311306

If Russian Currency Reserves Aren’t Really Money, the World Is in for a Shock

“What is money?” is a question that economists have pondered for centuries, but the blocking of Russia’s central-bank reserves has revived its relevance for the world’s biggest nations—particularly China. In a world in which accumulating foreign assets is seen as risky, military and economic blocs are set to drift farther apart.

After Moscow attacked Ukraine last week, the U.S. and its allies shut off the Russian central bank’s access to most of its $630 billion of foreign reserves. Weaponizing the monetary system against a Group-of-20 country will have lasting repercussions.

The 1997 Asian Financial Crisis scared developing countries into accumulating more funds to shield their currencies from crashes, pushing official reserves from less than $2 trillion to a record $14.9 trillion in 2021, according to the International Monetary Fund. While central banks have lately sought to buy and repatriate gold, it only makes up 13% of their assets. Foreign currencies are 78%. The rest is positions at the IMF and Special Drawing Rights, or SDR—an IMF-created claim on hard currencies.

Recent events highlight the error in this thinking: Barring gold, these assets are someone else’s liability—someone who can just decide they are worth nothing. Last year, the IMF suspended Taliban-controlled Afghanistan’s access to funds and SDR. Sanctions on Iran have confirmed that holding reserves offshore doesn’t stop the U.S. Treasury from taking action. As New England Law Professor Christine Abely points out, the 2017 settlement with Singapore’s CSE TransTel shows that the mere use of the dollar abroad can violate sanctions on the premise that some payment clearing ultimately happens on U.S. soil.

To be sure, the West has frozen Russia’s stock of foreign exchange, but hasn’t blocked the inflow of new dollars and euros. The country’s current-account surplus is estimated at $20 billion a month due to exports of oil and gas, which the U.S. and the European Union want to keep buying. While these balances go to the private sector, officials have mobilized them. Stopping major banks like Sberbank from using dollars and excluding others from the Swift messaging system still plunges the economy into chaos, especially if foreign businesses are afraid to buy Russian energy despite the sector’s explicit exclusion from sanctions. But hard currency will probably keep gushing in through energy-focused lenders like Gazprombank, and can theoretically be used to pay for imports and buy the ruble.

Russia has spent the last few yearsshifting reserves into gold and theChinese renminbi...Russia, official reserves in gold and foreignexchange, by share of currencySource: Bank of Russia

Yet the entire artifice of “money“ as a universal store of value risks being eroded by the banning of key exports to Russia and boycotts of the kind corporations like Apple and Nike announced this week. If currency balances were to become worthless computer entries and didn’t guarantee buying essential stuff, Moscow would be rational to stop accumulating them and stockpile physical wealth in oil barrels, rather than sell them to the West. At the very least, more of Russia’s money will likely shift into gold and Chinese assets.

Wells Fargo economists, using labor market data, calculated that the drop in daycare employment from pre-pandemic levels has left about 460,000 families still in need of alternative arrangements. The latest data adds to evidence that a shortage of child-care workers is rippling throughout the U.S. workforce, hampering companies who are trying to hire more workers and particularly affecting the careers of women...But as parents struggle to find care for their children, the responsibility of staying home more often falls on the mother, Wells Fargo said. The labor-force participation rate among women has fallen to the lowest levels in decades during the pandemic, according to government data. “There are no overnight fixes to this issue,” Sarah House, a senior economist at Wells Fargo and co-author of the report, said in an interview. She added that there were broader implications for overall economic growth as a result of the child-care labor shortage.

Camille Furst, "Nearly Half a Million Families Are Hurt by the Child-Care Labor Shortage,"Wall Street Journal, March 2, 2022, https://www.wsj.com/articles/nearly-half-a-million-families-are-hurt-by-the-child-care-labor-shortage-11646237879

Nearly Half a Million Families Are Hurt by the Child-Care Labor Shortage

A daycare worker shortage has left nearly half a million families without child care, according to a new report, keeping many parents at home and hindering the labor market.

Wells Fargo economists, using labor market data, calculated that the drop in daycare employment from pre-pandemic levels has left about 460,000 families still in need of alternative arrangements.

The latest data adds to evidence that a shortage of child-care workers is rippling throughout the U.S. workforce, hampering companies who are trying to hire more workers and particularly affecting the careers of women.

Broadly, the U.S. labor market has recently shown signs of improvement as employers hired rapidly late last year and in January. The economy added 467,000 jobs in January and job growth in November and December was revised higher. The unemployment rate is 4%.

But as parents struggle to find care for their children, the responsibility of staying home more often falls on the mother, Wells Fargo said. The labor-force participation rate among women has fallen to the lowest levels in decades during the pandemic, according to government data.

“There are no overnight fixes to this issue,” Sarah House, a senior economist at Wells Fargo and co-author of the report, said in an interview. She added that there were broader implications for overall economic growth as a result of the child-care labor shortage.

President Biden, in his State of the Union address on Tuesday, urged lawmakers to take up a proposal to cut child-care costs for families. He said many families pay as much as $14,000 a year on child care per child.

“Middle-class and working families shouldn’t have to pay more than 7% of their income for care of young children,” Mr. Biden said. He said his plan, part of the Build Back Better bill that passed the House of Representatives in November but has stalled in the Senate, could cut the cost in half for many families.

Stephanie Schmit, director of child care and early education at the Center for Law and Social Policy, said the child-care industry has suffered from a declining number of workers for years, even before the Covid-19 pandemic, amid low wages and poor benefits. She said the pandemic gave more awareness to the issue, highlighting longstanding problems in the industry.

Cindy Lehnhoff, the director of the National Child Care Association, said the child-care industry needs the federal funding to attract workers.

“We definitely have to have some government assistance, similar to public school systems, if we want early education and child care to be at its very best,” Ms. Lehnhoff said.

Christopher Mims, "How the Pandemic Broke Silicon Valley’s Stranglehold on Tech Jobs,"Wall Street Journal, March 12, 2022, https://www.wsj.com/articles/how-the-pandemic-broke-silicon-valleys-stranglehold-on-tech-jobs-11647061211

How the Pandemic Broke Silicon Valley’s Stranglehold on Tech Jobs

Silicon Valley, make way for Silicon U.S.A.

In a feedback loop that could transform the economic geography of the U.S., millions of Americans are moving, and companies are following them—tech companies in particular. In turn, this migration of companies and investment is attracting more workers to places that in the past usually lost talent wars. This is a reversal of a decadelong trend in the opposite direction. It could have big implications for which parts of the U.S. will prosper and for income inequality, and so possibly also for politics, innovation and America’s overall ability to compete.

For decades, the success of America’s so-called “superstar cities” was driven by the tendency of the nation’s most productive workers and firms to cluster in a handful of places such as Silicon Valley. Now, in the economic equivalent of the blink of an eye—the two-year span of the pandemic—that has begun changing.

Until very recently, evidence for this shift has been mostly anecdotal and preliminary. But a cornucopia of Research has yielded eyebrow-raising statistics documenting the scale and speed of this change in how people with jobs that can be done remotely work and live:

Nearly 5 million Americans say they have moved since 2020—and 18.9 million more are planning to do so—on account of remote work, according to a survey released this past week by Upwork, a platform connecting employers and freelance workers.

In the U.S., nearly a quarter of all full work days will happen at home after the pandemic ends, as opposed to 5% before the pandemic, according to survey data published in December that was gathered by economists at Stanford University, University of Chicago and the Instituto Tecnológico Autónomo de México.

A paper from researchers at Oxford Universify, the OECD Economics Department and Indeed, the job-postings site, found that as of December 2021, the proportion of job listings in 20 countries that mentioned the possibility of remote work had more than tripled from before the pandemic, to 8.5% from 2.5%. The same researchers also tracked how such postings changed as pandemic restrictions ebbed and flowed, and found evidence these figures are unlikely to budge after pandemic restrictions end.

Yet another paper published this past week, from economists at Stanford, MIT Sloan, Princeton University and other institutions, makes the case that the U.S. government has undercounted the share of Americans working remotely by 33 percentage points, and about half of all U.S. workers currently perform their jobs remotely at least some of the time.

Finally, research out this past week from the Brookings Institution provides fresh evidence that the rise of work-from-anywhere as both a technological and cultural phenomenon is driving a mass migration of capital, companies and workers. They are heading to a diverse array of cities that for decades saw their best and brightest drained away to places like the San Francisco Bay Area, New York City and Seattle. These new “rising star” cities include Atlanta, Dallas, Denver, Kansas City and St. Louis, according to Brookings.

“We knew remote work was feasible, and we knew job seekers wanted it, but it was the pandemic that made it an actual day-to-day experience, and once it happened it stuck,” she adds.

The surge in pandemic-induced remote work happened to coincide with another phenomenon, years in the making, according to data from Brookings: a decade or more of increased investment in tech firms clustered in cities outside regions that typically consume the lion’s share of investment and talent.

The result of the convergence of these two reinforcing trends is that, in 2021, six of nine rising-star cities all saw growth in the number of postings for tech jobs, a proxy for future employment in those cities. During the same period, postings in Boston, the Bay Area, New York and Los Angeles declined, according to data from Brookings.

Commentators and local boosters have been proposing for decades, perhaps wishfully, that this sort of thing might happen. From the “Silicon Prairie” to “Philicon Valley,” it’s been a slow build to the present inflection point, and some regional tech hubs are growing more quickly than others.

The movement of capital, talent and companies has typically been a relatively slow process, and can take decades, says Margaret O’Mara, a professor of history at the University of Washington and author of “The Code,” a history of Silicon Valley. The development of America’s existing superstar tech hubs are the clearest example of that—after all, the term “Silicon Valley” was coined a half-century ago.

“One of the secrets of Silicon Valley is time,” says Dr. O’Mara. “No mayor or county executive wants to hear that answer, which is why I don’t have a multimillion-dollar economic-development consulting career.”

The ascension of these new tech hubs is hardly an apocalypse for America’s superstar cities or the tech companies and tech workers in them, says Mark Muro, who conducted the research for Brookings. But it does seem to be the first full-year data in a shift that is just getting under way. Data in 2022 and beyond should show an even more profound shift in employment away from what have in the past been dominant cities for tech, he adds, especially as a number of tech companies, such as Oracle and Tesla, transfer workers as a result of moving their headquarters out of the Bay Area.

After the rise of remote work and the growth of more tech hubs, a third underlying trend could also be driving this geographic shift: the maturation of some of the technologies that for decades have underpinned Silicon Valley and other hubs, in particular the microchip and the internet itself.

The “silicon” in Silicon Valley is, after all, a reference to what microchips are made of. The first commercially available integrated circuit was produced in 1961 by Fairchild Semiconductor, in Santa Clara, Calif. The PC revolution and later the internet created the tech giants of today, mostly in and around the Bay Area and Seattle.

But the outsourcing of electronics manufacturing and the rise of cloud services have made it much easier to build a tech startup anywhere. The dispersal of the knowledge required to build companies, and the precipitous drop in the cost to launch a startup in the tech industry, are both hallmarks of what historians call a “mature” set of technologies. This doesn’t mean these technologies are done evolving, just that the rate of breakthroughs has slowed enough that companies built far from where they were first invented can now participate in their development.

Some historians and economists have declared our current age the “fourth industrial revolution.” If that’s so, then in some ways it might be following the path of past industrial revolutions, says Dr. O’Mara. From England’s 18th-century Industrial Revolution—which quickly became America’s, after the requisite expertise and technologies were transplanted across the Atlantic—to the rise of Detroit, history is full of new technologies that started in one place, made those who lived there enormously wealthy, and eventually became global phenomena, leading to specialized hubs of knowledge and production all across the world.

While it’s impossible to precisely copy the formula that worked for the Bay Area and build the “next Silicon Valley,” regional tech hubs can prosper by finding their own niches, she adds.

Atlanta is a good example of these trends. While it was largely left out of the early decades of the rise of the PC and the internet, the presence of corporate headquarters and the Georgia Institute of Technology meant it had both demand for the products of enterprise tech startups and the talent to build them.

America’s ninth-largest metro area has quietly become an assembly line for tech unicorns, with five of its startups topping $1 billion valuations in 2021 alone, including Calendly, which streamlines the process of scheduling meetings, and Stord, which helps businesses with fulfillment and logistics. The result of successive waves of startup exits, followed by mentorship and reinvestment from startup founders, plus the proximity of potential customers in the headquarters of Fortune 500 companies like Home Depot and United Parcel Service, means that the city has built up all the elements necessary to churn out tech startups.

Combined with the relatively low cost of living and the availability of housing—both in sharp contrast to superstar cities—Atlanta has attracted workers in a way that gives it a talent pool ready-made for new startups, says Adam Steinberg, a serial entrepreneur in the Atlanta area and CEO of Fetch, a startup that allows individuals and small businesses to rent trucks and utility vans by the hour.

Mr. Steinberg went through the storied startup-accelerator program Y Combinator, where he was advised he would have better access to funding and talent if he moved his company to the Bay Area. But other variables, such as his existing professional network in Atlanta, being close to family and friends, and the fact that he could sustain his company longer on the same amount of investment because of Atlanta’s lower costs, kept him in that city.

The pandemic has made finding talent easier, he adds, because with the rise of the remote-first work culture across the tech industry, he can hire workers anywhere in the world.

Also, he felt that for a truck-rental company it was important to start in a city typical, in its layout and demographics, of most of America: “We figured if we could make it in Atlanta, we could make it anywhere.”

Nearly 5 million Americans say they have moved since 2020—and 18.9 million more are planning to do so—on account of remote work, according to a survey released this past week by Upwork….In the U.S., nearly a quarter of all full work days will happen at home after the pandemic ends, as opposed to 5% before the pandemic, according to survey data published in December that was gathered by economists at Stanford University, University of Chicago and the Instituto Tecnológico Autónomo de México....The surge in pandemic-induced remote work happened to coincide with another phenomenon, years in the making, according to data from Brookings: a decade or more of increased investment in tech firms clustered in cities outside regions that typically consume the lion’s share of investment and talent. The result of the convergence of these two reinforcing trends is that, in 2021, six of nine rising-star cities all saw growth in the number of postings for tech jobs, a proxy for future employment in those cities. During the same period, postings in Boston, the Bay Area, New York and Los Angeles declined, according to data from Brookings.

“…For several years after the 2007-09 recession, roughly a million people moved to the U.S. annually. That pace started to slow during the Trump administration and fell to a trickle after the Covid-19 pandemic started. The slowdown has left the U.S. with 2.4 million fewer immigrants of working age—about 1% of the working-age population—than if pre-2017 immigration trends had continued, according to Giovanni Peri, a labor economist at the University of California, Davis. The change is being felt as the economy rebounds and many employers struggle to replace workers who were laid off or quit since early 2020, contributing to wage pressure and inflation…”

In long-term care, the outlook is especially striking. Demand for home health aides and nursing home care is increasing as baby boomers age. Over the past decade, an average 18% of the sector’s workforce has been foreign born. That is close to the national average, but a disproportionate share of those with hands-on jobs such as orderlies are foreign born, according to nursing home operators.

Employment in nursing-care facilities fell to 1.34 million in March from 1.6 million in mid-2019. While the U.S. has some visa programs to help foreign doctors or engineers immigrate, operators of long-term-care homes can’t recruit from abroad because the jobs they are filling wouldn’t qualify for any existing visa program.

A September survey by the American Health Care Association and the National Center for Assisted Living, sister trade groups, found 99% of nursing homes and 96% of assisted-living facilities reporting staffing shortages.

Because of those shortages, 58% of nursing homes and 28% of assisted-living facilities limited how many new clients they could take on. With fewer caregivers, industry officials say, people looking for homes or health aides sometimes can’t even get their calls to agencies returned.

Adam Lampert, the chief executive of Mr. Nwaokolo’s Dallas employer, Manchester Care Homes, and a sister company employing home health aides, said that African immigrants make up roughly 80% of his workforce, many referred to him through a church.

Recently, when his team has tried to recruit through employee networks, it has come up short. There are fewer new arrivals, the people likeliest to take caregiving jobs.

“We’re not trying to discriminate against citizens when we look for employees—quite the opposite,” Mr. Lampert said. “We’re just looking for people to fill the roles that we need. And time and again, we find it is the immigrant population that tends to respond to us.”

Mr. Nwaokolo said caregiving can be demanding, such as when he needs to change clients’ adult diapers or help them go to the bathroom. It can be emotionally taxing, too, particularly working with those who have dementia.

“You have to learn how to be patient,” he said. “You have to watch your anger, because sometimes they can hit you or maybe spit in your face.”

Mr. Nwaokolo, who had been working as a local health official in Nigeria, came to the U.S. in 2015 for a health conference in Boston, where he met his future wife. That meant finding a new job. He wanted to work in healthcare but knew his experience likely wouldn’t transfer. Caregiving appealed to him, he said, because all the children in his village were taught to care for their elders.

Among Mr. Nwaokolo’s colleagues at the Dallas company, many came to the U.S. on tourist visas and ended up staying, typically by marrying an American. Others were sponsored by immediate family members who are U.S. citizens.

His cousin Anthony Chidera Nwakor, who lives in Lagos, applied for a visa to the U.S. in 2019 and was rejected. He applied again last year and is still waiting for an appointment at the U.S. consulate in Lagos. “I want to come there and make some connections, maybe work or go to school,” he said.

Mr. Nwaokolo said he has received offers to work as a traveling home nurse for as much as triple the $15 an hour he currently earns. He has decided to stay put for now because he feels some loyalty to Mr. Lampert, the chief executive of Manchester Care Homes, who paid for his nursing training and has lent him money for his family’s medical care in Nigeria.

“This place is like a family to me,” Mr. Nwaokolo said.

Michelle Hackman, "Add Declining Immigration to Problems Weighing on the Labor Market,"Wall Street Journal, April 5, 2022, https://www.wsj.com/articles/add-declining-immigration-to-problems-weighing-on-the-labor-market-11649174837

Add Declining Immigration to Problems Weighing on the Labor Market

DALLAS—In an economy where nearly every industry is short of labor, nursing homes represent an extreme. Their employment has fallen 16% since 2019, and 99% of homes said last fall they didn’t have enough staff.

Burnout and stress are leading causes, but so is a less-known contributor: fewer immigrants.

Emeka Nwaokolo, 36 years old, came to the U.S. from Nigeria for a business trip and met a woman from Dallas he eventually married. He ended up working as a manager for Manchester Care Homes, which runs a network of nursing homes around Dallas.

Over the years, he has referred other Nigerian immigrants from his church to Manchester. In the past few years, though, it has become much tougher for Nigerians to emigrate to the U.S. because of more-stringent visa screening at American consulates abroad. The situation has worsened with pandemic-related backups in immigration processing.

For several years after the 2007-09 recession, roughly a million people moved to the U.S. annually. That pace started to slow during the Trump administration and fell to a trickle after the Covid-19 pandemic started.

The slowdown has left the U.S. with 2.4 million fewer immigrants of working age—about 1% of the working-age population—than if pre-2017 immigration trends had continued, according to Giovanni Peri, a labor economist at the University of California, Davis. The change is being felt as the economy rebounds and many employers struggle to replace workers who were laid off or quit since early 2020, contributing to wage pressure and inflation.

Labor shortages stem from a wide variety of factors, including early retirement, Covid-19 sickness or fear of it, lack of child care and a desire to start a business. Additionally, Mr. Peri noted, fewer immigrants are a factor. Industries with above-average levels of foreign-born workers are likelier to have high job-opening rates.

Now, no one is coming, Mr. Berlanga said, and he faces more competition for his subcontractors’ time as home demand booms. He is also paying more for almost every service. Paint jobs, which routinely cost him $6 a square foot before the pandemic, now cost $7.50.

The smaller number of immigrants appears to be one reason wages are growing briskly in industries where vacancies are high, from hospitality to long-term care. “The numbers suggest it’s a small contributing factor to what’s happening with wage growth,” though likely dwarfed by factors such as the opportunities low-wage employees have to switch to different lines of work, said Daniel Costa, director of immigration law and policy research at the Economic Policy Institute, a left-leaning think tank.

The slowdown in immigration began in 2017, when the Trump administration adopted a broad range of policies to curb both illegal and legal immigrants, including refugees, foreign recruits, international students and family members of American citizens.

Those already-reduced flows were then cut in half in 2020 by the onset of the pandemic and the related restrictions. The U.S. closed consulates around the world, stopped processing refugees and began turning away most adult migrants at the Southern border under a new public-health authority known as Title 42.

In the 12 months ended last June 30, about 247,000 people moved to the U.S., less than a quarter of the 2016 level and half that of 2019, according to U.S. census data. Those figures don’t distinguish between people who came to the U.S. legally and those who didn’t.

Further crimping the availability of foreign-born workers are pandemic-related delays in processing work permits for those already in the U.S. There were 1.6 million pending work-permit applications at the U.S. Citizenship and Immigration Services at the end of December, up from 646,000 in 2019. It takes an average of nine to 11 months to process applications, versus three to four months at the end of 2019, according to government data.

Guito Tatawho fled violence in Haiti and now lives in Indianapolis, received a work permit in 2017 as part of his asylum application and became certified as a commercial truck driver. In 2020 he bought his own truck and began working for an Illinois trucking company, where he estimates he made $7,000 a month after truck payments.

When he applied to renew his work permit in February 2021, the immigration agency didn’t get to his case before his permit—and driver’s license—expired in August.

“I’m sitting at home right now doing nothing,” Mr. Tata said in February. “My truck is just parked somewhere. I’m losing money.”

On March 18, some seven months after the expiration, he finally got his new work permit.

A spokesman for the immigration agency said it couldn’t comment on an individual case but is aware of unprecedented processing delays and is working to fix them. Last week, the Biden administration said it plans to make expired work permits valid for many immigrants who rely on them.

The administration, in a move it said was to address labor shortages, this year made 55,000 additional visas available for temporary seasonal employers such as landscapers, hotels and ski resorts, nearly doubling the total available.

A political backlash to the administration’s handling of illegal immigration at the Southern border this year has made officials reluctant to take bigger steps to increase legal immigration, according to people familiar with the administration’s thinking.

About a fifth of consulates still aren’t processing most visas, and even those that are open are buried under a backlog of 7.5 million applications, according to State Department data.