Commentary | Wages, Incomes, and Wealth

Fairness shortage

Opinion pieces and speeches by EPI staff and associates.


Fairness shortage

Instead of importing workers, pay a decent wage to those already here

By Ross Eisenbrey

With unemployment rising, hundreds of thousands of American families facing foreclosures on their homes, and wages flat-lining (especially for workers without college degrees), the nation needs … more workers who are willing to accept low wages and are less likely to organize or otherwise assert their rights.

That’s what a well-funded business coalition, with well-connected lobbyists, is telling Congress. Many members of the U.S. House and Senate – including Sen. Barbara A. Mikulski of Maryland – are listening attentively and getting ready to give these low-wage employers just what they want.

These special-interest lobbyists have been all over Capitol Hill demanding that Congress allow tens of thousands of additional “guest workers” into the U.S. to pick crabs on Maryland’s Eastern Shore, can corn in the industrial Midwest, and serve as dishwashers, hotel maids and other low-paid workers all over the country. That would be bad news for the nation’s low-wage workers, whether immigrant or native-born.

Current law permits a maximum of 66,000 foreign nationals to enter this country each year under a special visa program known as H-2B, if employers fail to find qualified U.S. workers after only three days of advertising in local newspapers. If you’re skeptical that dishwashers and crab pickers are so hard to find in a sinking economy, you’re right. But because the law allows the businesses to advertise so briefly – and six months before the jobs become vacant – more employers each year somehow manage not to find anyone to do the work. That’s because the whole process is designed to obscure this simple fact: There isn’t a shortage of workers willing to do these jobs; there’s a shortage of employers willing to pay a decent wage.

Ten years ago, only 20,000 H-2B visas were issued. In 2007, 130,000 were issued, even though more than 7 million Americans were unemployed and millions more had part-time jobs but wanted full-time work. Why are so many more businesses turning to foreign workers? Because the U.S. government lets them pay poverty-level wages.

Almost all H-2B employers pay less than a living wage, including most of the Maryland restaurants and crabmeat processors that use these visas. Some pay less than the minimum wage. In 2007, when Maryland’s minimum wage was $6.15 an hour, a dozen crabmeat processors were certified to pay foreign workers $5.36 an hour.

Despite the loss of 230,000 jobs in the first three months of this year, more than 150 House members, including Maryland Rep. Wayne Gilchrest, have signed on to legislation to lift the 66,000 visa cap and allow all the foreign workers who used H-2B visas in the last three years to enter, in addition to the current 66,000, for a potential total of more than 200,000 visas in all.

But the obvious questions aren’t being asked. These businesses managed to succeed until 2003 without needing even 66,000 H-2Bs when unemployment was less than 4 percent. So what has changed, except that the number of Americans seeking jobs has increased? Why is the cap on visas a crisis now? And what will happen if the cap remains at 66,000?

The last question is being answered already. Lawn and Landscape magazine reports that employers are (grudgingly) beginning to raise wages to attract more U.S. workers. The average landscape worker without a college education earns only $10.67 an hour – less than in 2000, after adjusting for inflation. The unemployment rate among such laborers is above 9 percent – worse than in 2000. So there is plenty of room to raise wages and there are plenty of unemployed Americans to do the work.

The Economic Policy Institute examined wages and unemployment in the occupations with the most H-2B workers. In these occupations, unemployment was higher and had risen faster since 2000 than the national average, while wages were lower and had risen more slowly than the national average.

What’s worse, scores of Maryland and Baltimore employers have been offering U.S. workers less than the entry-level wage determined by the federal Bureau of Labor Statistics. (The entry-level wage for crabmeat processors was $6.73 an hour, though it varies by locality.) This phenomenon is driving wages down in Maryland, and making it even harder to find workers willing to compete with the H-2Bs. It’s a vicious downward spiral.

The obvious answer to Maryland’s so-called labor shortage is to offer local workers a decent wage. The answer is not to pay poverty level wages and look overseas for workers willing to accept them.

Businessmen usually claim to love the magic of the marketplace. Congress should let the labor market work its wonders and get hardworking, low-paid Americans of every background the raises they need and deserve.

Ross Eisenbrey is vice president of the Economic Policy Institute in Washington, D.C.


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