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Top Story: Potential labor pinch strains restaurateurs, processors

Attempts to raise or eliminate the cap on H-2B visas will likely meet resistance in Congress

Steven Hedlund
February 01, 2005

Jake Wolterbeek, owner of Jake’s Seafood and The Hayloft in tourist-friendly Wells, Maine, may be left in the cold this spring when the snow melts. He may be forced to close his restaurants one or two days a week, eliminate breakfast and lay off waitstaff.

That’s the scenario he faces if he can’t rehire the nine Jamaican workers he’s employed as cooks, dishwashers and busboys for the past several years.

Wolterbeek is not alone. Blue-crab processors, shrimpboat owners and live-lobster suppliers are also among the summer-dependent employers who may reluctantly curb operations and lose business if they can’t rehire foreign workers to fill the seasonal, labor-intensive jobs most Americans reject.

On Jan. 3, the federal government stopped issuing visas to non-agricultural foreign workers, known as H-2B visas, for the remainder of fiscal 2005. The cutoff for the 66,000-visa cap came more than two months earlier than last year, when the cap was met for the first time since its inception in 1991.

The fiscal year, which begins Oct. 1, puts summer employers at a distinct disadvantage, because H-2B petitions can’t be submitted more than 120 days before workers are due to arrive.

Fall, winter and spring businesses eat up all the H-2B visas, which can last up to nine months, before summer employers can apply.

All but one legislative effort to remedy the situation fell flat last year, and attempts to raise or eliminate the cap are expected to hit resistance in Congress again this year.

News of the Jan. 3 cutoff rattled Mid-Atlantic blue-crab processors and Gulf of Mexico shrimpboat owners, who are already struggling to compete against burgeoning imports and manage rising fuel costs.

New England lobster suppliers and Alaska salmon- and pollock-roe processors were also aggravated, because they require skilled Canadian and Japanese workers to properly grade product, or risk losing customers overseas.

News of the cutoff shouldn’t have come as a surprise to employers after last year, when U.S. Citizenship and Immigration Services, the agency responsible for processing H-2B petitions, failed to keep the public abreast of the number of petitions it had received.

“After last year,” says USCIS spokesman Chris Bentley, “we committed to monitoring the count closely this year.”

On Nov. 17, USCIS announced that it had received petitions for 33,153 visas in October. The agency approves a total of 100,000 visas each fiscal year, because historically, one-third of workers never show up in the United States, says Bentley.

Then on Dec. 13, USCIS revealed that it had received petitions for 61,747 visas through Dec. 8. Less than a month later, the agency had received petitions for 100,000 visas and announced on Jan. 4 that it had quit accepting any.

“There’s no way for us to know … what drove demand this year,” says Bentley.

Summer employers speculate that the publicity surrounding the March 9 cutoff in fiscal 2004 prompted all employers to submit H-2B petitions as early as possible and request more workers than usual in fiscal 2005.

Whatever the cause, it’s clear that demand for H2-B visas is through the roof. The number of H-2B visas issued increased from less than 13,000 in fiscal 1996 to nearly 79,000 in fiscal 2003, the latest year for which figures are available.

Meanwhile, the number of H-2B workers admitted to the United States jumped from less than 15,000 in 1997 to almost 103,000 in 2003 (see graphs on p. 24). (The H-2B workers admitted exceed the number of H-2B visas issued because workers who enter the United States twice in a given year are counted twice, and some workers are by law exempt from the cap.)

Before H-2B visas are issued, employers must prove to the government that they first tried to hire local workers through newspaper ads. But most Americans shun jobs in restaurant kitchens and processing plants because they’re temporary, labor-intensive and usually provide no benefits, say employers. Students are becoming less likely to take these jobs, too, they add.

“I don’t know what we’re going to do,” says Wolterbeek of Jake’s Seafood and The Hayloft. “We’re going to lose business — big time.”

About 150 Maine businesses, many of them restaurants, requested a total of roughly 1,500 workers to arrive on April 1, says Vaughn LeBlanc, foreign labor specialist with the Maine Department of Labor.

“Everyone should have an equal shot” at obtaining H-2B visas, argues Wolterbeek.

“We’re discriminated against because of the fiscal year,” says Wendy Northcross, chief executive of the Cape Cod Chamber of Commerce in Hyannis, Mass., which represents more than 100 restaurateurs.

At press time in early January, the 109th Congress hadn’t introduced legislation addressing the problem. But Sen. Susan Collins, R-Maine, plans to introduce a bill exempting returning H-2B workers from counting toward the cap and limiting the number of H-2B visas issued each quarter of the fiscal year.

“It’s absolutely essential that employers let lawmakers know that this is an important issue,” says Judy Golub, senior director of advocacy and public affairs for the American Immigration Lawyers Association in Washington, D.C., which is urging Congress to raise or eliminate the cap.

Additionally, short-staffed employers may want to consider sharing H-2B workers with other employers, convincing older workers to come out of retirement, hiring foreign students with J-1 visas, which can last up to four months, or hiring workers from U.S. territories such as the Virgin Islands, who don’t require H-2B visas.

For the few remaining Mid-Atlantic blue-crab-picking houses fighting to compete against burgeoning imports of inexpensive crabmeat, the inability to hire H-2B workers during the fishery’s summer peak may be the final blow.

“It’s very, very frustrating,” says John Graham III, VP of Graham & Rollins in Hampton, Va. “We’ve got new customers and had tremendous sales.”

But the company’s sales, says Graham, may plunge by $100,000 to $200,000 this year if his petition for 100 Mexican workers, many of whom he’s employed for the past several years, is denied.

Sherrill Styron, owner of Garland Fulcher Seafood Co. in Oriental, N.C., is one of the lucky ones. His H-2B petition for 60 Mexican workers was granted.

“I got my petition in by the skin of my teeth,” says Styron. “If I didn’t, we’d be in a lot of trouble. We wouldn’t be able to pick crab.”

What’s worse, says Jerry Schill, president of the North Carolina Fisheries Association, is that picking crab is becoming more labor-intensive. The basket trade in the Chesapeake region, where the blue-crab catch is way down, is gobbling up most of the large crabs, leaving the crabmeat market with most of the small crabs.

Gulf shrimpers are in the same boat. In addition to burgeoning imports of inexpensive farmed shrimp, fuel prices are soaring.

Although diesel prices are down from $1.65 a gallon in mid-2004, they’re still up 35 cents, to $1.35, from a year ago, says Carlton Reyes, owner of Reyes Trawlers in Brownsville, Texas, and president of the Brownsville-Port Isabel Shrimp Producers Association.

Reyes was waiting in early January for the 10 Mexican workers he successfully petitioned for to arrive so he could put them to work as headers and deckhands on his six boats. Many of the 1,200 to 1,400 workers in the Gulf shrimp fishery are Mexican, says Reyes, because most local workers refuse to spend 40 to 60 consecutive days at sea.

For New England lobster suppliers and Alaska roe processors, hiring H-2B workers isn’t just a matter of work ethic, it’s also a matter of skill and experience. Although the Canadian and Japanese workers who grade lobsters and roe are considered “unskilled” by the government, they’re anything but, say employers.

“We need experienced people,” says Shannon Kinney, general manager of William Atwood Lobster Co. in Spruce Head Island, Maine.

Until last year, Atwood employed 14 workers from Newfoundland to sort lobsters and check for defects that diminish their value. The company loses customers if too many inferior lobsters reach the European market, says Kinney.

“If we don’t get the 14 people we need, we’ll be forced to drastically change our marketing plan,” says Kinney, who was waiting in early January to hear whether Atwood’s H-2B petition had been granted or denied. “We’ve worked 40 years to get some of our European customers. Now we may lose them … and a significant portion of our business.”

Additionally, short-staffed restaurateurs bought fewer lobsters last year because they were compelled to trim operations, says Kinney.

“It’s been financially devastating to a lot” of lobster suppliers, she says.

Fortunately for roe processors, Sen. Lisa Murkowski, R-Alaska, stepped up in time last year for them to hire Japanese technicians during most of Alaska’s pink and chum runs, which constitute around 70 percent of the state’s total salmon harvest.

Sen. Murkowski attached an amendment to the 2005 Defense Appropriations Act, which was signed into law on Aug. 5, exempting roe technicians from counting toward the cap. (Sen. Ted Stevens, R-Alaska, was chairman of the appropriations committee.)

Only Japanese technicians have the skills to properly sort and pack the seven different grades of roe to the specifications of the Japanese market. In 2003, Japan imported 24 million pounds of Alaska-salmon roe worth $85.4 million.

“If Japanese buyers aren’t comfortable with the technicians, they won’t buy the roe,” says Glenn Reed, president of the Pacific Seafood Processors Association in Seattle, which represents nine processors.

Roe technicians will not count against the cap again in fiscal 2005, but they will in fiscal 2006 unless something’s done, says Reed.

Other attempts last year to raise or eliminate the cap were stalled by opponents, including Sens. Jon Kyle, R-Ariz., and Jeff Sessions, R-Ala., and never reached the president’s desk. They cited the nation’s unemployment rate, which averaged 5.5 percent in 2004.

Sen. Ted Kennedy, D-Mass., introduced a bill boosting the cap to 106,000 visas, while Sen. Orrin Hatch, R-Utah, sponsored a bill exempting returning H-2B workers from counting toward the cap. Identical bills were introduced in the House.

Sen. Norm Coleman, R-Minn., introduced a bill exempting workers in rural areas within 50 miles of an international border from counting toward the cap, while Rep. Bart Stupak, D-Mich., sponsored a bill restricting the number of H-2B visas issued during the first one-third and two-thirds of the fiscal year. Finally, a U.S. District Court judge in Boston dismissed a lawsuit brought by eight Cape Cod businesses to raise the cap to more than 100,000 visas.

Proponents of raising or eliminating the cap argue that the labor crunch isn’t going away. The Bureau of Labor Statistics projects that the foodservice and food-processing industries will create nearly 1.7 million jobs, some of which are seasonal and labor-intensive, between 2002 and 2012.

Additionally, the well being of thousands of H-2B workers denied admittance to the United States is at stake. Many alternate between fisheries in their home country and the United States.

“Of our 14 workers,” says Kinney, “two have lost their houses, three have moved from Newfoundland and the rest are out of work. They’re desperate, too.” Says Graham, “They depend on us as much as we depend on them.”

February 2005 - SeaFood Business


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