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Jan
2016
22

Logic Shortage: Study Reinforces Data on Temp Visa Suppression of U.S. Wages, Employment

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New research from the Economic Policy Institute (EPI) shows little evidence of worker shortages in top H-2b visa occupations, a far cry from the story being told by supporters of temp worker expansion. 

The H-2b visa program provides work visas to foreign workers in fields where labor shortages exist.  However, the program is rife with abuse and the jobs granted to these temporary workers frequently come at the expense of American workers who are seeking employment.  Though a prevailing wage is set to ensure that Americans are not harmed by the program, the methods for calculating the wage keep wages artificially low.  The number of instances of H-2b visa holders being forced into subpar working conditions or otherwised wholly exploited is staggering.

The research was conducted by EPI Director of Immigration Law and Policy Research, Daniel Costa.  It comes at a time when Congress is debating H-2b expansion at the behest of business interests.  According to Costa, the claim that there are not enough American workers to fill these jobs — and that companies would go under without temporary foreign workers — is without merit:

“It’s clear that there aren’t national-level labor shortages in H-2B jobs that would justify expanding the H-2B program or watering down rules requiring that employers first recruit U.S. workers before hiring an H-2B worker.  Members of Congress and the administration should take claims to the contrary from employer groups and corporate lobbyists with a grain of salt.”

The research looks at employment numbers in the top 15 H-2b occupations over the past decade, examining both employment and trends.  These occupations span a wide array of industries — from hospitality to construction, landscaping and groundskeeping — and make up the bulk of the program’s participants.  Earlier this month, H-2b visa holders working for a Minnesota carnival company filed a lawsuit over “ungodly conditions” and accused their former employer of a range of transgressions from assault to human trafficking.  The workers, mostly from Mexico, eventually fled in the night to escape the situation.   

The truth about the program’s intent boils down to one simple economic principle: If there was a true labor shortage in these fields, there would be low unemployment and rising wages.  Instead, some of these industries have experienced wage stagnation or declines and unemployment has remained consistently high.  

Some highlights from the report:

There was no significant wage growth; in fact, wages were stagnant or declining for workers in all of the top 15 H-2B occupations.

• Seven of the top 15 occupations experienced employment growth that exceeded the overall growth of 5.5 percent for all occupations, two experienced employment growth that was less than the overall growth for all occupations, and six contracted.

• In the three fastest-growing occupations of Nonfarm Animal Caretakers (up 99.5 percent), Coaches and Scouts (up 72.3 percent), and Cooks in Restaurants (up 44.3 percent), wages declined over the same ten-year period.

• Unemployment rates increased in all but one of the top 15 H-2B occupations, and all 15 occupations had very high average unemployment rates in 2013–2014 (the most recent data available). In 11 of the top 15 H-2B occupations, unemployment dropped from 2004–2005 to 2006–2007, but then rose significantly between 2006–2007 and 2013–2014. Such high unemployment rates suggest a loose labor market in the top 15 H-2B occupations.

A change in the prevailing wage rules that govern the program in mid-2013 caused a welcome jump in H-2b wages. Yet, the broad rules of the program still allow wages well below state and national averages for a given occupation. In most cases, this difference represents how much employers can save in wages, on average, by hiring an H-2b worker instead of a U.S. worker:

Except for six instances out of 45, nationwide, on average, H-2Bs were certified at a wage that was below the national OES average wage.

• In the top H-2B occupation, of Landscaping and Groundskeeping Workers, employers saved on average between $2.59 and $3.37 per hour by hiring an H-2B worker instead of a worker earning the national average wage for the occupation.

• In the second-largest H-2B occupation, Forest and Conservation Workers, employers saved on average between $3.27 and $3.80 per hour by hiring an H-2B worker instead of a worker earning the national average wage for the occupation.

• Comparing the average hourly certified H-2B wage for an occupation in a particular state with the average hourly wage for the occupation in the state yields similar results, with the share of all top 15 H-2B certifications that were in occupations where the average certified H-2B wage exceeded the state OES average rising but still low: from 1.2 percent in fiscal 2012 to 3.5 percent in fiscal 2013, to 9 percent in fiscal 2014.

In conclusion, Costa writes:

The evidence presented here—flat wages and persistent high unemployment rates in the top 15 H-2B occupations for the past decade—sheds doubt on claims that there are labor shortages in the top 15 H-2B occupations. Members of Congress and the federal agencies tasked with administering the H-2B temporary foreign worker program should take these data points into consideration when employer groups and other corporate representatives urge them to modify the H-2B wage methodology or rules relating to the recruitment of U.S. workers.

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