H-2B, or Not to Be? A Look at Labor Shortages and Immigrant Labor
Several publications recently ran stories on issues with the H-2B visa program and impending shortages that are affecting local economies of various parts of the country. For those who aren’t familiar, the H-2B program allows US employers to bring in temporary workers for non-agricultural jobs. While the length of stay varies and can sometimes be extended, typically these workers come for about six months and then return home.
Some of the recent coverage is being driven by the fact that shortages are happening in parts of the country that voted for President Trump and yet, ironically, are highly dependent on H-2B workers. This NBC News piece, for example, covers H-2B worker shortages on Hoopers Island, MD, mainly for crab pickers who assist with seasonal harvest each year. Hoopers Island is part of Dorchester County, which voted for Trump by a 16-percentage-point margin over Hilary Clinton.
This incongruity makes for interesting feature stories – and catchy headlines: “Trump-voting crab town left shell-shocked by his visa changes” – but what’s perhaps most interesting about the H-2B controversy is that it’s a debate being carried out primarily between Trump supporters: businesses insist they need to use the program for seasonal workers to keep their businesses afloat while others want to quash immigration, claiming Americans are eager to fill these seasonal jobs.
For business owners, the situation is straightforward – there are insufficient local workers to meet seasonal demand, even when offering good wages of $15 per hour or higher. Looking at historical program applications, in FY2017 four out of the top five states requesting H-2B workers voted for Trump – Texas, Florida, Louisiana and North Carolina. The top occupations staffed by H-2B visa holders are landscapers, forest and conservation workers and housekeepers. So the program is clearly important in a lot of summer vacation and rural areas, many of which voted heavily for Trump, such as Hoopers Island.
The other side of the debate includes hardline immigration opponents who want to reduce immigration in all forms. This group is often led by the Center for Immigration Studies (CIS), which calls itself a research organization but has a long history of publishing the work of white nationalists. David North, a fellow at CIS, showed up in one H-2B story with this quote that summarizes their case against H-2B workers: “The solution is to raise the wages. It wouldn’t take much, maybe a dollar or two more an hour, and bingo, you’d have everyone you wanted.” By “everyone”, North means American workers would rush to take these jobs if only the pay was slightly higher.
To untangle these conflicting claims, let’s first consider whether businesses are right in claiming there is an actual shortage of H-2B workers this year.
The chart below shows data on H-2B requests compared to visas issued by fiscal year since 2010 as well as the success rate, which is the percentage (shown on the right axis) of requests that resulted in a visa being issued. The H-2B program runs on the US government’s fiscal year, which starts in October. So for FY2018, the data is for Q1 and Q2 only.
As shown in the chart, the H-2B program’s demand outstrips supply every year by a good margin. But from 2010 to 2017, the success rate remained relatively steady – fluctuating between the mid-40s up to just over 60 percent. For 2018, the success rate dropped precipitously down to 27%. By comparison, the success rate for Q1 and Q2 of 2017 was 42%. So for 2018, the program is behind its historical visa issuance rate making business owners’ complaints about a shortage seem legitimate.
To determine whether employers could simply raise their wages by “a dollar or two,” and suddenly have enough American workers to fill jobs as North and the CIS claim, a closer look at the process required to actually attain H-2B visas is informative. Once businesses determine their need, as in the number of workers they want and where they will hire them, they first have to submit an application for temporary labor certification with the Department of Labor (DOL). The DOL process is designed to establish that the employer does have an actual labor shortage and hiring H-2B workers won’t hurt US workers. It includes a substantial amount of paperwork, receiving a prevailing wage determination to ensure a fair wage is being offered, and going through a recruitment phase – including posting newspaper advertisements – that demonstrates effort to hire US workers first.
After receiving certification from the DOL, the next step involves petitioning the Department of Homeland Security’s US Citizenship and Immigration Services (USCIS) with a form I-129 petition. This 36-page form requires additional information on top of what was provided to the DOL and, of course, requires the petitioner to pay additional fees. If USCIS approves the petition, the next step requires the prospective employees to visit a US State Department consular office to fill out more forms and sit for a consular interview. If successful, the employees will receive their H-2B visas.
Because of the complexity involved, many employers turn to H-2B agents to help get the workers they need. These agents, typically law firms, might help streamline the process but will, of course, add considerable fees on top of what the DOL, USCIS, and Department of State already charge for their respective processes.
The costs, time and effort required to attain H-2B workers indicate that merely offering slightly higher wages will not bring droves of US workers to apply for these jobs. No business owner will hire lawyers and go through three separate federal government departments’ application processes every year – not to mention the international recruiting effort to find the workers – if they could simply bump their pay up by a dollar or two an hour to increase the labor supply.
So how will this story play out for 2018? There have been reports recently that the cap on H-2B workers, set by Congress at 66,000 per year, will be raised by around 15,000 this year by the secretary of Homeland Security, who has the authority to adjust it. Even if that happens very soon, it will be too late for businesses that need summer-season workers for 2018 as the process of getting H-2B visas takes around five months or longer.
Many of the businesses that depend on H-2B workers this season will need to look elsewhere and, based on what’s being reported, many will lose considerable revenue or even have to close their doors due to this labor shortage. As this situation continues to play out, it will be interesting to see if a backlash from Trump-voting states that rely on H-2B workers will lead to an adjustment for 2019 or if the anti-immigration Trump voters will succeed in keeping out even the temporary, legal workers that so many businesses clearly depend on.