Labor Department tackles guest worker problems

On Friday, Feb. 10, the Department of Labor (DOL) announced a new set of rules for the H-2B program, the country’s main temporary foreign labor program for less-skilled workers in non-agricultural positions. The new rules are set to become effective in late April, and as the New York Times reported on Saturday, “the changes were hailed by advocates for guest workers, who said they would make it more difficult for businesses to exploit vulnerable foreign migrants and hire them to undercut Americans.”

I join in the applause for the H-2B rule changes. For several years, the H-2B program has operated in ways that defy common sense. For example, in the District of Columbia, where more than 30,000 people were unemployed in 2010 and the unemployment rate hovered around 10 percent, common sense tells you that hotels should have an easy time finding local residents to take jobs as maids or cooks. And if they really couldn’t find anyone from D.C. to clean hotel rooms, surely they’d find qualified applicants in Northern Virginia or Maryland.

Yet lodging giant Marriott Hotels claimed they couldn’t find anyone here or elsewhere in the United States for 48 hotel maid and cook positions. They got government approval to bring 48 H-2B workers from abroad to do work that local people (with a high school education or less) could have been trained to do very quickly.

How did Marriott do it? How did they convince the DOL that no one in the D.C. area was interested in and qualified for these jobs? One possibility is that Marriott might have dishonestly claimed that they tried to recruit U.S. workers but failed. Under the old program rules, DOL didn’t have to check the accuracy of Marriott’s claims; DOL in all likelihood simply accepted Marriott’s “attestation,” i.e., simply took their word for it. Widespread fraud and abuse, documented by government and news reports and legal cases, are the main reason DOL has done away with the attestation procedure in its new rule.

More likely, Marriott fully complied with the minimal recruiting requirements mandated by the current rules, and few qualified local residents responded, because few ever heard there were positions open and because the wages offered were well below the prevailing wage in the D.C. area.

Marriott offered to pay the cooks $9.80 an hour. Here are the median, mean (or average), and annual wages paid to cooks in D.C. in 2010. Marriott’s wage offer was $3.80 an hour less than the average paid to the lowest paid of the hotel, cafeteria, or restaurant cook occupations in D.C.

Table 1 Table 1 (continued)

Number of workers

Median

Mean

Annual

Mariott hourly

Mariott annual

35-2012

Cooks, Institution and Cafeteria

1,240

$13.72

$14.29

$29,720

$9.80

$20,384

35-2014

Cooks, Restaurant

4,620

$13.57

$13.76

$28,620

$9.80

$20,384

35-2015

Cooks, Short Order

740

$13.60

$13.60

$28,290

$9.80

$20,384

35-2019

Cooks, All Other

90

$14.97

$14.10

$29,320

$9.80

$20,384

Marriott offered to pay the maids $8.50 an hour, even though the median wage for maids in D.C. was $14.58 and the mean was $14.44. Marriott’s offered wage was only 59 percent of the prevailing wage for maids in D.C. That might have been enough all by itself to discourage anyone in D.C. from applying for the jobs. It’s likely, however, that potential hotel maids in D.C. either didn’t see Marriott’s ad if it ran only for the required minimum of three days in some local paper, or if they did see it, it could have been months before the position was available and therefore job seekers ignored it.

Table 2 Table 2 (continued)

Number of workers

Median

Mean

Annual

Marriott hourly

Marriott annual

37-2012

Maids and Housekeeping Cleaners

6,430

$14.58

$14.44

$30,030

$8.50

$17,680

If Marriott had been looking to employ cooks and maids in the broader, D.C.-Virginia-Maryland-West Virginia area, the prevailing wage would have been somewhat lower but still far above what the company actually offered.

Table 3 Table 3 (continued)

Number of workers

Median

Mean

Annual

Marriott hourly

Marriott annual

35-2012

Cooks, Institution and Cafeteria

3,650

$13.41

$13.93

$28,960

$9.80

$20,384

35-2014

Cooks, Restaurant

15,180

$11.99

$12.52

$26,050

$9.80

$20,384

35-2015

Cooks, Short Order

2,360

$12.08

$11.97

$24,900

$9.80

$20,384

35-2019

Cooks, All Other

230

$11.79

$12.57

$26,150

$9.80

$20,384

37-2012

Maids and Housekeeping Cleaners

16,950

$10.96

$11.71

$24,350

$8.50

$17,680

It’s easy to see why employers like Marriott love the current H-2B program. They can legally pay temporary foreign workers less than the local market rate for essential jobs. Fixing this aspect of the H-2B program was the impetus for an earlier rule proposed by DOL, but that common sense rule was blocked by Congress after a lobbying firestorm. Employers claimed they’d go out of business if they were forced to pay the local average wage to maids and cooks (and especially landscapers), even though the employers they compete with are doing just that. But the fact that employers don’t have to document and prove their efforts to recruit U.S. workers—even at the below-average wages permitted by the H-2B program—exacerbates the problem and allows employers to ignore the employment needs of the local workforce where they do business, at the expense of the local workers’ ability to earn a living wage.

The new H-2B rules will help local workers find jobs at the prevailing wage for the work that they do. They will help put more unemployed Americans back to work, and also prevent the undercutting of employers who pay a living wage. Unfortunately, H-2B employers are already up in arms about these common sense reforms. Congress should not allow the desire of H-2B employers to lower American wages trump the need of unemployed workers to earn a decent wage.