Could increasing the cap onResearch shows that businesses with foreign H-2B work : The Indicator from Planet Money The U.S. economy added 261,000 jobs in October, meaning there are still about two jobs available for each unemployed person. Could expanding the H2-B visa program for temporary foreign workers help America's tight labor market?

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Could foreign workers unlock America's tight labor market?

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC'S, "WAKING UP TO THE FIRE")

DARIAN WOODS, HOST:

This is THE INDICATOR FROM PLANET MONEY. I'm Darian Woods.

WAILIN WONG, HOST:

I'm Wailin Wong. And it is Jobs Friday.

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WOODS: Love Jobs Friday - all the numbers.

WONG: The monthly jobs report is out today, and it showed that the U.S. economy added 261,000 jobs in October. The unemployment rate rose slightly to 3.7%, but there's still 1.9 jobs for every one unemployed person.

WOODS: Some of these jobs are ones that businesses have trouble filling with American workers even when they advertise widely or raise wages. And a potential solution for this hiring shortfall is immigration.

WONG: Now, there are lots of ways foreign workers come to the U.S. One of them is a visa program that businesses from vacation resorts to seafood processors rely on to staff their busy seasons.

WOODS: Today on the show, we will learn about this program with the potential to alleviate staffing shortages. And we look at new economic research that shows when businesses hire foreign workers through this program, they end up actually creating new jobs for Americans.

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WONG: For years, temporary foreign workers have been coming to the U.S. for months at a time to process salmon in Alaska and pick crabs in Maryland. They clean hotel rooms and work in the kitchens of ski resorts in the winter and beach resorts in the summer.

WOODS: A lot of them also work in groundskeeping and forestry. Economist Michael Clemens is a senior fellow at the Center for Global Development, where he studies migration. And Michael says that evidence of temporary foreign workers is all around us.

MICHAEL CLEMENS: If you see a right of way through the forest for utility lines, somebody needs to clear the vegetation from below those, so the forest doesn't come back. If there's a pulp paper forest, somebody needs to go in a remote area and do the difficult physical labor of planting all those seedlings.

WONG: Many of these workers have what are called H-2B visas. This is a visa program that hires temporary foreign workers without college degrees for non-agricultural jobs. Every year, the U.S. government hands out 66,000 H-2B visas split between the winter and the summer. The workers hail from countries like Mexico, Guatemala, Jamaica, Serbia and the Philippines.

WOODS: And the H-2B visa was almost not to be. For nearly seven decades starting in 1885, the U.S. banned foreign workers without advanced education. But in 1952, the post-World War II labor market had a lot of jobs and not enough workers, and that's when the H-2B visa was created.

CLEMENS: It was designed to be a way to hire foreign workers when there was literally no other option.

WOODS: In other words, when businesses couldn't find any American workers to take a job at that wage - but lawmakers were concerned that foreign workers would replace their American counterparts. So they put in restrictions that remain in place today.

WONG: For example, the H-2B jobs have to be limited in time, like seasonal or one-off work, and employers have to certify with the government that no American is willing and able to do the job.

CLEMENS: The Department of Labor can ask for evidence of recruitment activities. Did you advertise in newspapers? Did you advertise on the radio? When people came to you through the state workforce agency saying, I'm unemployed, I would like to work in seafood processing, what happened to them?

WONG: Michael points out that these kinds of jobs can't or haven't been automated, and they're also jobs that don't attract American workers even at higher wages.

WOODS: So remember when we said that there's a yearly cap on H-2B visas of 66,000? Well, that limit was put in place in 1990 when there were far fewer H-2B workers in the country, around 20,000 workers. So the cap of 66,000 seemed really generous at that time.

CLEMENS: That number was seen as so high that it would never be reached.

WONG: Well, the number was reached and then some. In 2019, employers requested triple the number of H-2B visas available for half a year. By 2022, the number of requests was four times the quota.

WOODS: And the government's tried some stopgap measures. Like, in the law, they are allowed to extend the number of visas by up to around 65,000 extra visas, and that's what they're going to do in the coming year.

WONG: But whether a business gets these visas depends a lot on luck. This is because when employers submit their request to the Department of Labor, they get randomly assigned a letter of the alphabet A through E. The applicants in the A group get evaluated first.

CLEMENS: The ones that don't get letter A end up hiring about half as many as they would otherwise prefer to. It's not bigger firms or smaller firms, more productive, less productive. It's literally just the luck of the draw.

WONG: Last month, Michael and a fellow economist published a working paper that studied the businesses that won and lost the 2021 lottery for H-2B visas. And here's what they found. Businesses that were able to hire foreign workers, the winners, produced 17% more stuff than the losers. The winners also spent triple the amount on investing in their business.

WOODS: In other words, just being able to hire H-2B workers unlocked productivity, not just for the foreign workers coming in but for the entire company. And Michael says businesses that are expanding tend to create more jobs for Americans.

CLEMENS: If a restaurant can operate because there is a dishwasher, that means not just more jobs for people who are waiting tables. It also means more jobs for the accountants who keep the books of the restaurant. It means more jobs for the people at the businesses from which things are bought by the owner of the restaurant with the revenue they get because the restaurant can operate because there is a dishwasher. There are all kinds of ripple effects.

WOODS: Michael's analysis found that businesses who couldn't hire H-2B workers, the losers, weren't able to hire American workers for the unfilled positions either. And the result was that these businesses' output and investment fell.

WONG: Industries that rely on H-2B visa workers have shared anecdotes that align with Michael's findings. For example, a national landscaper organization said this year that in past seasons, their members have had to turn away customers and cancel equipment purchases because they didn't have enough H-2B workers.

WOODS: In Colorado, the Aspen Skiing Company used to employ hundreds of H-2B workers at its four ski areas. That was over a decade ago. Last year, it got approved for only a couple of dozen H-2B visas.

MIKALA FORD: It is a little nerve-racking because you never know if the government is going to approve you to have the amount that you've requested.

WONG: That's Mikala Ford, the company's acting director of talent acquisition. She says the company's had to get creative about seasonal staffing. It has an arrangement with a hotel in Colorado Springs that hires H-2B workers for the summer season. When the summer ends, those workers pack up and head over to Aspen for the winter.

WOODS: These H-2B workers are known as in-country extensions, and this winter, 55 of them will be at Aspen Skiing Company.

WONG: Mikayla says she feels good about this year's staffing levels, and one big benefit of having enough workers for the peak season...

FORD: We all get to go ski powder. Seriously, though, we do get to take, you know, ski breaks if we're fully staffed. If we're understaffed, you know, that means we're asking somebody maybe to stay longer or to work an extra shift. And that can really weigh on someone. It can really impact a business, and so that's really why we do these visa programs.

WOODS: I would love my breaks to be ski breaks. How do I sign up?

WONG: I mean, you got to relocate to Aspen.

WOODS: That's true. And it's also not all ski breaks and sunshine for these seasonal workers. Many H-2B workers perform difficult, physically demanding jobs, and they're often in these precarious situations where they can't speak up about unsafe conditions or mistreatment. You know, their visas are tied to their employer. They also don't have a pathway to citizenship in the U.S.

WONG: Economist Michael Clemens says the H-2B visa program has needed improvements basically since it was conceived, but progress has been stalled in the absence of broader immigration reform.

CLEMENS: It's really hard to find somebody who will put H-2 visas on a bumper sticker and say, I love H-2 visas. That doesn't change the fact that for several sectors that are crucial for all of us, foreign fundamental workers are a major constraint. And this is the policy tool that we have in order to give massive opportunities to them and substantial opportunities to American workers and to the rest of the economy.

WONG: Honk if you love learning about the labor market. That's what's on my bumper sticker.

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WOODS: It's going to sell well, Wailin. How do I buy in?

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WONG: Let me get the printing press ready.

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WONG: This episode was produced by Nicky Ouellet and engineered by Katherine Silva. Noah Glick checked the facts. Viet Le is our senior producer. Kate Concannon edits the show, and THE INDICATOR is a production of NPR.

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