A Blog by Jonathan Low

 

Jun 23, 2017

Is the Foreign Visa Crackdown Putting Americans Out of Work?

The unintended consequences of ideology vs practicality. JL 

Jesse Ellison reports in Bloomberg:

Temporary workers support the creation of higher-paying positions for U.S. citizens. “Many American businesses could not function without the H-2B program.” One in three businesses would be forced to close or reduce operations if they couldn’t get H-2B workers. A study from the conservative American Enterprise Institute for Public Policy found that adding 100 H-2B workers would result in an increase of 464 jobs for Americans.
Kate Bridges should be waiting tables right now. She’s been a server at the lauded farm-to-table restaurant at the Pentagoet Inn in Castine, Maine, for six years, making enough during the summer season to carry her through the year. But in early June she was answering the phone at the inn, telling callers that the restaurant was closed for the foreseeable future.
“We depend on that income,” she says. “If the restaurant doesn’t open, I don’t know exactly what I’ll do. But if we don’t have cooks, then we don’t have a restaurant.”
The Pentagoet is the oldest continually running business in the tiny coastal community of Castine. Like a lot of seasonal businesses, it has long relied on a federal program that provides temporary visas to low-skilled foreign workers. They come from all over the world, typically for six-month stretches, to take jobs that employers say they’re otherwise unable to fill. In the Pentagoet’s case, that’s meant six women from Jamaica (about a fifth of the total staff) who work in housekeeping and in the kitchen. Some have come every year for almost a decade, but this year, because of changes to the H-2B visa program, they’re staying home.
Congress failed to extend H-2B’s returning worker exemption when it expired in late 2016, reducing the number of visas by half, to 66,000 nationwide. Congress passed a measure this spring that would have doubled the number of visas available. But the Department of Homeland Security, which oversees the program, didn’t act. In an open hearing on May 25, DHS Secretary John Kelly was asked about the delay by Senator Lisa Murkowski of Alaska, where the seasonal fishing industry relies on temporary workers. “This is one of those things that I really wish I didn’t have discretion over,” Kelly told Murkowski. He said his agency was still consulting with the Department of Labor and planning to release more visas, though he refused to say when or how many. “For every senator and congressman that has your view, I have another one that says, ‘Don’t you dare, this is about American jobs,’ ” he said.

“Restaurant Closed. Sorry! We have no Staff.”
Photographer: Christine Collins for Bloomberg Businessweek
Many economists argue that rather than taking jobs from Americans, temporary workers support the creation of higher-paying positions for U.S. citizens. “I don’t think that people who talk about defending American jobs with this policy have ever looked into the economics of it,” says Giovanni Peri, chair of the economics department at the University of California at Davis. “They’ve never analyzed how local economies grow.” Peri says the low-skilled jobs that H-2B workers fill act as a complement to higher-wage management positions, and that when you reduce the supply of one type, you reduce the creation of the other. With the unemployment rate around 4 percent, he says the notion that Americans will fill these low-skilled positions is unrealistic. “I think this is one example in which the rhetoric is hitting reality,” he says.
A 2010 report co-authored by the head of the Labor, Immigration and Employee Benefits division of the U.S. Chamber of Commerce states that “many American businesses could not function without the H-2B program.” The report determined that one in three businesses would be forced to close or reduce operations if they couldn’t get H-2B workers. A 2011 study from the conservative American Enterprise Institute for Public Policy found that adding 100 H-2B workers would result in an increase of 464 jobs for Americans. “The particularly strong results for the H-2B program,” it notes, “may reflect that employers, who find the H-2B program expensive and bureaucratic, tend to reserve it for hard-to-fill jobs that are critical to expanding operations.”
According to the H-2B Workforce Coalition, a lobbying group, the entire H-2B program represents less than one-tenth of one percent of all U.S. workers. In a June 14 letter to the Hill newspaper, its co-chairs argue that for industries that rely most on these workers—including seafood and meat processors, hotels, motels, golf clubs, and carnivals—they do jobs that Americans simply won’t. “The reasons are many,” they write. “The work is often itinerant in nature. It is, by definition, temporary. And the work can be backbreaking.” Plus, the application process is both costly and onerous. To be granted employees through the program, employers have to prove their need through a multistep procedure that involves three separate federal agencies and costs an estimated $2,500 per employee, not including the round-trip airfare and housing that they’re required to provide.
Not every industry will be affected by this year’s shortage. Many employers whose seasons start earlier managed to make it in under the cap. President Trump’s Mar-a-Lago resort, for example, was approved for 64 H-2B workers late last year. Maine, meanwhile, is set to be hit so hard by the shortage that Republican Governor Paul LePage has conditionally commuted the sentences of a number of prisoners so that they can fill some of the needed positions.

The Pentagoet Inn’s owners, Julie Van de Graaf and Jack Burke, with server Kate Bridges and manager Joyce Hammond.
Photographer: Christine Collins for Bloomberg Businessweek

That’s not likely to help the Pentagoet back in Castine. The inn’s owners, Jack Burke and Julie Van de Graaf, say that including the costs of the newspaper ads they have to take out as part of the process, plus the $1,200 in monthly rent they’re paying on an apartment that’s sitting empty, they’ve already spent thousands of dollars they won’t get back. “What’s especially irksome now is, they’re changing the rules halfway through the game,” says Burke.
Through mid-June, the Pentagoet has had to turn down at least one wedding, plus a number of big dinners. When people call to book a room and discover that the restaurant is closed, they often decide to stay elsewhere. Burke is trying to remain hopeful that the DHS will come through with the extra visas. But every day they don’t is money out of his pocket and another blow to the local economy. “I cannot survive without my restaurant,” he says. “This little town is being crippled.”
BOTTOM LINE - By not extending a key portion of the H-2B visa program for seasonal workers, Congress has robbed many businesses of a key source of labor that can’t easily be replaced.

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