Study Reveals H-2B Visa’s Role in Addressing Seasonal Labor Shortages

A recent study by the H-2 B Workforce Coalition has provided new insights into the effects of the H-2B visa program, which enables U.S. employers to hire foreign workers for temporary non-agricultural jobs. The study, focusing on the program’s impact from 2015 to 2019 and 2023, reveals that the program supports local employment and wage growth without adversely affecting domestic workers.

Study Methodology and Improvements

The study builds upon previous research by utilizing recent substantial changes in the annual issuance of H-2B visas. It examines local labor market outcomes before and after these policy changes, offering a more precise understanding of the program’s impact. Unlike earlier studies that focused on broader geographic areas, this research targets local areas heavily reliant on H-2B workers, providing a clearer picture of the program’s effects.

Positive Local Impact

The findings indicate that the H-2B program helps fill seasonal labor shortages that domestic workers are unlikely to address. This not only allows businesses to continue operations but also benefits other employees and consumers who depend on these businesses. The study presents empirical evidence showing that each additional H-2B worker is associated with the employment of 2.7 to 4.9 additional full-time-equivalent U.S. workers. For those with a degree beyond high school, this number ranges from 3.5 to 4.1.

Wage Growth Observations

In areas with increased H-2B hiring, wages grew by an average of 1.6% more across all workers. For those with more than a high school degree, wages increased by about 2% more. Importantly, the study found no significant negative effects on the wages or employment of workers with a high school degree or less, suggesting that H-2B workers do not displace domestic workers in these categories.

Employer Insights and Challenges

Survey responses from employers highlight the program’s role in addressing labor shortages. Employers reported limited success in hiring domestic workers before turning to the H-2B program. Without access to these workers, businesses might face operational constraints, increased costs, reduced investment, and lower sales. However, employers also noted challenges with the H-2B process, such as the visa cap and bureaucratic delays, which can lead to workers arriving late for the season.

Prevailing Wage System Concerns

The study also critiques the current system for setting H-2B prevailing wages, which are often higher than market wages. This discrepancy can discourage the use of H-2B visas and negatively impact seasonal businesses. The prevailing wage system’s lack of alignment with common pay differences across occupations and areas introduces uncertainty and limits the program’s potential benefits.

Conclusion

Overall, the study highlights the H-2B visa program’s positive impact on local employment and wage growth. By filling gaps in the labor market, the program supports businesses and benefits the broader economy. However, addressing challenges in the visa process and wage-setting system could enhance the program’s effectiveness and further support economic growth in areas facing seasonal labor shortages.

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