By: Connor Haaland is a fellow in the Government Affairs and Policy Department
The United States is on the brink of a labor crisis. Last year, Tennessee had twelve times as many jobs as they had workers in the STEM field. Meanwhile, entrepreneurs in South Dakota could not open up restaurants and hotels because they could not find workers in a state where unemployment is only 3%. If Massachusetts had avoided labor shortages from 1998 – 2012, it would have 24,000 more jobs today. The commonality in these problems is labor shortages, and the panacea is reform to the American work visa system.
The economy of the United States is constrained by inadequate work visa policies. Labor shortages in key industries combined with low visa caps are a recipe for economic disaster. For example, the H1-B visa, a visa for highly-skilled immigrants that mainly work in STEM fields, has a national cap of 85,000. These 85,000 visas were filled in the first 5 days of the application window opening. Nearly 200,000 petitions were created in those 5 days alone, leaving 115,000 jobs unfilled. This means that 115,000 employees did not work in the United States despite having skills that would contribute to the American economy and help end STEM labor shortages in states like that of Tennessee.
Not only are H1-B visas in short supply, they are prohibitively costly. The petition process to receive one can cost up to $7,500. Furthermore, the visa only lasts 3 years. If they want to be renewed, employers must pay the petition fee of up to $7,500 once again.
The H2-A visa is distinct from the H1-B visa in that H2-A is designed for temporary agricultural workers and has no annual cap. However, like most work visas, it can cost an employer anywhere from $5,000 – $75,000 depending on the quantity of workers requested. In addition to a hefty sum an employer incurs from simply trying to stay in business, the bureaucracy of the process often deters and overwhelms employers since it involves three federal, one state, and at least one local agency.
Ultimately, the financial burden and lost time that is incurred upon petitioning for H2-A visas deters employers from using the process. Oftentimes employers opt for an undocumented workforce, free of the bureaucratic hassle and high fees that accompany the petition process. This is evident by statistics showing that 50-70% of farmworkers are undocumented. The undocumented workforce is essentially foregone revenue for the United States government.
Undocumented workers do not pay into social security, Medicare, nor pay income taxes. If the United States were to ensure that the undocumented farmworker population received documents through visa reform, it could receive a significant boost in payments towards vital programs like Social Security and Medicare.
Last on the list are H2-B visas. These visas are designated for temporary low skilled non-agricultural workers. Many workers that utilize this visa are employed in the restaurant and services industries. H2-B visas are the backbone of many businesses and the current quota of 81,000 is insufficient. The annual quota of 81,000 visas was filled the first day the application window opened in 2018.
The scramble to secure H2-B visas makes sense when there are, as reported by the National Restaurant Association, over 800,000 unfilled positions in the restaurant and service industries alone. In fact, the negative impact of the quota is lowering the amount of jobs in the economy. The National Restaurant Association cited that in the summer of 2018 alone there are 50,000 less jobs this year than last year. The loss of these 50,000 jobs is due to restaurants and service related businesses closing because of the labor shortage crisis we are entrenched in.
The proof is in the statistics. The statistics say that we must reform American work visa policies. We need a work visa system that allows employers to cheaply and efficiently employ immigrants willing to come and contribute to the American economy. Increasing work visa caps to a level that is commensurate with their demand, or doing away with them entirely, would alleviate the pain being experienced by nationwide labor shortages. America cannot reach its economic potential without the help of immigrant workers.