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The H-2B Cap-Related Concerns are like Apples, the Solutions are like Oranges.

On June 15, 2021, Rep. Henry Cuellar [D-TX] introduced the bipartisan Returning Worker Exception Act of 2021 which seeks to exempt all returning H-2B visa workers from the cap system. According to the bill, this cap-related reform will help ensure that small and seasonal businesses can find necessary workers during the post-pandemic economic recovery. The legislation would require the Department of Labor to provide an online registry of available jobs to the public as well as improve the program’s anti-fraud measures to better protect U.S. workers and migrant workers. Congress has so far failed to reconcile the H-2B federal level policy to meet states’ needs for temporary and seasonal workers. This new bill is Congress’ latest attempt at modernizing the visa program’s contentious cap regulation.

The H-2B visa program is used by U.S. employers to hire temporary and seasonal nonagricultural foreign workers. While the program remains popular, its cap-provisions are a contentious issue among lawmakers and immigration experts. Proponents of tightly regulating the visa program argue that employers use them to undercut U.S. worker wages, whereas those arguing for liberalization suggest that most H-2B employers are following the program rules and violations are not systemic. Liberalization proponents also insist that increased regulations making the legal pathway too onerous will make violations and the hiring of unauthorized workers more attractive.

Currently, the H-2B visa program is relatively small, capped at 66,000 visas per year. However, employers’ need for temporary and seasonal workers has outgrown the programs capacity. Since 2010, the demand for H-2B workers has steadily increased, and each year the cap is exhausted relatively quickly, making it challenging and competitive for employers across the country to fulfill their labor needs.

To address this supply and demand imbalance, Congress has implemented some cap-related reforms over the last several years. Some of these reforms include dividing the H-2B visa category semi-annually; 33,000 from October 1-March 31 and 33,000, plus all the unused visas from the previous fiscal year, from April 1-September 30, allowing employers with differing seasonal worker needs to access visas. Other reforms include exempting certain types of workers and foreign employees already in the United States or who are returning within the same fiscal year. Occupations such as technicians and fish roe processors have been exempted, and so have workers in the U.S. territories such as Guam and Puerto Rico. However, these policies have sometimes exacerbated the challenge for employers by making it harder to find seasonal workers. U.S. Citizenship and Immigration Services announced that the H-2B cap for FY2021 was reached on February 12, 2021, and any other employment that started before October 1, 2021, would not be reviewed, leaving many employers scrambling to fulfill summer labor needs.

In each fiscal year since 2017, Congress authorized the Department of Homeland Security to exceed the 66,000-cap and make additional H-2B visas available at its discretion. Each year DHS has done so, but even the additional visas are not enough to meet employer demand. In 2021, the Biden administration added 22,000 additional H-2B visas to the existing cap, targeting 6,000 of those visas for Central Americans from Guatemala, Honduras, and El Salvador. DHS received far more than 16,000 petitions in the first five business days of filing, compelling the agency to conduct a lottery to allocate the visas.1 The recurring cycle of increasing and reaching the H-2B caps demonstrate that we have not figured out a system that is sustainable and fair to both U.S. businesses and U.S. employees. Employers have argued that the uncertainty of the lottery system makes the whole visa process inequitable while labor unions argue that blanket increases in visa caps do not protect American workers and labor restrictions are necessary. The crux of the issue seems to be how labor shortages are determined. Employers argue they cannot find sufficient U.S. workers for these jobs, while labor advocates argue employers are not doing enough to recruit them. Meanwhile, undocumented workers continue to be the relief valve for the labor market, as new immigrants can readily find work.

This leaves economists scrambling to determine actual labor shortages, often based on national unemployment figures that may mask regional differences. Even researchers who argue that the labor market shortage is a myth, qualify that some shortages in the seasonal workforce exist. In May 2021, the United States added 500,000 more jobs to the labor market, but that number may not be representative of the regional and smaller state-based labor markets where employers are struggling to find workers. Even with the U.S. adding more jobs, unemployment rates in some industries, such as leisure and hospitality, remain high at around 10%. However, these rates do not account for regional trends. For example, in Vermont, which has a relatively small population, the state unemployment rate is back down to a pre-pandemic level of 2.9%, making it difficult for small and seasonal businesses to attract workers.

Moreover, attracting Americans to take seasonal or temporary jobs in remote states is a difficult proposition. According to the Census Bureau, Americans are moving at the lowest rate since the agency started keeping track. High levels of labor shortages in small and remote parts of the country are less likely to drive people to move, especially for seasonal and low-wage jobs.

While the H-2B cap is mandated federally on a semi-annual basis, states may need different types of seasonal workers on varying levels depending on location and season. Labor certifications for landscaping and groundskeeping drown out the application pool, especially in states with high demand like Texas, Pennsylvania, and Colorado.2 Other states, such as Alaska, Florida, and Nevada have wide-ranging seasonal worker needs such as forestry workers, maids, waitstaff, painters, and amusement and recreation assistance. According to the FY2019 H-2B disclosure data, 39% of labor certification applications were for landscaping and groundskeeping occupations, with forest and conservation workers at a distant second with only a 7% application rate.

The figure below shows the breadth of H-2B workers that different states demand. Having a single national quota that does not account for different regional and seasonal differences is inefficient and unfair. This one-size-fits-all standard has led to an unequal distribution of visas that favors employers submitting a large number of labor certifications for a single occupation, crowding out smaller employers who need employees for a niche sector.

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Figure. H-2B Occupations for Selected States

Conclusion

H-2B visas are nuanced and require thoughtful consideration. However, most proposed H-2B visa reforms have been of an all-or-nothing proposition, with employers simply arguing to increase the cap while opponents suggesting that we eliminate the program. The inability to form a consensus has prevented any meaningful reform. The argument from all sides over the federal H-2B cap misses the key point that America’s labor market is regional and each state may have a varying degree of temporary or seasonal labor demands. To select the right cap-level Congress must reconcile its federal-level policy with states’ needs for temporary and seasonal workers that can be properly calibrated to the location, season, and business size. Decentralizing the H-2B visa cap based on regional labor markets, shortages, and foreign worker needs may help the United States better fit the country’s different regional labor demands while protecting American workers.

End Notes:

1 USCIS reached the cap for the first half of FY 2021 on November 16th, 2020, and the cap for the second half on February 16, 2021.
2 According to BPC’s calculation of FY 2019 H-2B disclosure data, landscaping and groundskeeping was the top H-2B labor certification request for eight out of 10 states with the highest total labor certification requests. With almost 12,000 approved certifications had the highest certified foreign workers for landscaping and groundskeeping.

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