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Immigration Law Blog

The Connection Between H-2B Visa Caps, Labor Shortages, & Iinflation

Posted by Jacqueline Delgado | Sep 07, 2022

The U.S. economy is experiencing its biggest disparity between job openings and available workers since World War II, with around 5 million more job openings than unemployed people. A recent analysis by investment firm Goldman Sachs shows that the U.S. labor market has yet to recover from the drastic drop in immigration that began in 2020, set off by the Covid-19 shutdown, then exacerbated by Trump administration visa bans and caps on humanitarian-refugee admissions. Federal Reserve Board Chair Jerome Powell has said that the subsequent drop in foreign-born workers entering the country has had a ripple effect on the economy and contributed to inflation. The Goldman Sachs analysis suggests that increasing legal immigration levels might solve the worker shortage.

Federal agencies are largely run by career employees, and the change in presidential administration has brought minimal improvement. While Congress is tasked with authorizing the number of total visas, it relies on guidelines set by two executive-branch agencies whose missions sometimes clash: the Department of Labor (DOL), whose mission is to promote the wellbeing of the U.S. workforce; and the Department of Homeland Security (DHS), whose public security mission includes oversight of border security, immigration, and customs.

H-2B Visas and Temporary Employment Shortages

DOL understands that employer needs can deviate depending on the season and other factors, including unanticipated emergencies. The H-2B nonimmigrant classification was created to fill temporary worker shortages. It permits U.S. employers to hire foreign workers to carry out temporary, non-agricultural labor on a seasonal or intermittent basis. Early in 2022, Congress responded to constituent complaints about a lack of temporary workers by authorizing the Executive Branch to grant up to 66,792 H-2B visas. On May 18, 2022, DHS and DOL responded by raising the cap by 23,500, making the total number 35,000–almost 32,000 fewer than authorized.

One week later, U.S. Citizenship and Immigration Services announced that the cap had been reached and that no more applications would be accepted from countries other than Honduras, Guatemala, El Salvador, and Haiti, who were granted a separate allocation.

The U.S. Chamber of Commerce had supported the increase, at the same time noting it was not sufficient to address the country's permanent needs. The Chamber has often urged Congress to permanently raise the annual H-2B quota as part of immigration reform. Likewise, Labor Secretary Marty Walsh recently testified before the House Committee on Appropriations that comprehensive immigration reform is necessary for the U.S. “to move forward as a country. . . We need real immigration reform in this country for a pathway to citizenship.”

Walsh acknowledged that given the current deadlock in Congress, none of this is likely to happen: “Now, I know that I'm speaking to Congress, and nothing's going to happen about it–I'll be completely honest with you—and I think it's really unfortunate.”

Where Secretary Walsh blames Congress, a blog post from the libertarian Cato Institute blasts the Biden Administration itself for DHS's failure to release all 66,792 congressionally authorized visas and its chronic delay in overhauling the immigration system. Cato's David J. Bier wrote that the U.S. currently has a record-setting number of job openings in the most common H-2B occupations and that DHS had provided no reasonable explanation for its decision to limit the number of visas. Analyzing DHS's densely written explanation for not issuing the full number authorized, he argued that the agency's excuse was basically that it had delayed so long before announcing the new cap that employers would not have time to act on it before it expired.

Bier ends by urging Congress to pass the H‑2B Returning Worker Exemption Act, which would exempt workers who have entered on the H-2B within the previous three years from being counted toward the annual cap. Passing the bill into law would help improve the situation for employers in desperate need of temporary, non-agricultural workers.

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About the Author

Jacqueline Delgado

Jacqueline Delgado is the Founder and Managing Partner at Delgado Law Group, focusing in the area of Immigration Law. Ms. Delgado has vast experience representing businesses and investors in their applications for EB-5 green cards, E-2, H-1B, L-1, O, and P visas. Further, she ha...

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