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H2B - Additional H-2B workers

H2B - Additional H-2B workers
New Rule Allows Additional H-2B Workers, but Carnival Companies Fear Damage from Delay Permanent
By: Timothy Herrick 
Monday, May 13, 20199999

In 2019, the H-2B program went from crisis to nightmare. If a more sustainable fix is not implemented, the costly ramifications of severe understaffing due to a broken foreign guest worker program will become permanent. Left as is, securing a consistent labor force may soon become a nightmare carnival companies and their fairs are unable to awake from. 

Tens of thousands of seasonal workers – the vast majority – about 70 percent – are from Mexico – will be employed in the United States by the end of this year, but delays, political squabbling and technological problems have severely hampered industries, particularly the carnival companies on which most fairs rely. The core problem is that the demand for seasonal labor has outraced supply, compounded by the improved U.S. economy and its declining unemployment rate. 

“Demand was for 82,471 visas this year which means there is a current, unmet demand for 49,271 workers,” said Gray Delany, Executive Director, Seasonal Employment Alliance, a lobbying coalition. “I would estimate that 75-80 percent of employers will get their workers this year although many will have already suffered irreparable harm to their businesses.”

The disruption and its aftereffects were caused by one avoidable reason: workers expected to report to employers by April will not be available until June, at the earliest.

Betty Gillette of Gillette Shows has been using the H-2B program for 18 years. Because she was unable to get her usual allotment of 15 foreign workers by April, she was forced to scale back operations, using a skeleton crew made up of family members and friends to operate 10 instead of her usual 20 rides. “It’s a lot of physical work, and the workers we have are picking up the slack,” she said. “It’s very tough on the family. My outlook is not too positive. The government has to act, if they are not going to act, we can’t do anything.”

Happy New Year

The 2019 catastrophe began January 1. H-2B visas are capped at 66,000 for the entire year but split in half: 33,000 visas are available every six months. On New Year’s Day, 33,000 visas became available for the April 1st start date and Gillette, like other carnival company owners, as well as business owners in other industries, filed for workers. 

An estimated 98,000 H-2B workers were requested that day – nearly three times the available visas and vastly higher than the government anticipated. The large volume of  filing overwhelmed the system, crashing the government’s servers,. Some requests went through, but many, like Gillette’s, did not. The immense upsurge in demand meant the available workers were scooped up before all the servers were operational again, leaving dozens of carnival companies and other businesses without the labor force they require.

Months of intensive lobbying by the Seasonal Employment Alliance and its coalition members, such as the Outdoor Amusement Business Association (OABA) resulted in the Trump Administration finally relenting to an increased cap, with a few notable, and perhaps surmountable caveats. 

On May 5, the Department of Homeland Security and Department of Labor, the two departments that administer the program, officially issued the much anticipated new rule that allowed an additional 30,000 seasonal workers through the end of the Fiscal Year of 2019. This repair, which expires at the end of the fiscal year, is temporary, much like the current 66,000 H-2B cap, which was passed only as part of an appropriations bill for FY2019.  

“The Department of Homeland Security continues to urge lawmakers to pursue a long-term legislative fix,” said Kevin K. McAleenan, Acting Secretary of Homeland Security. “The truth is that Congress is in the best position to establish the appropriate number of H-2B visas that American businesses should be allocated without harming U.S. workers. Therefore, Congress – not DHS – should be responsible for determining whether the annual numerical limitations for H-2B workers set by Congress need to be modified and by how much, and for setting parameters to ensure that enough workers are available to meet employers’ temporary needs throughout the year.” 

Immigration Entanglements

With the H-2B program entangled in immigration issues and opponents to the program promoting the false perception that foreign guest workers are taking jobs from Americans, finding a more substantial legislative solution remains elusive. One of the few public comments by any legislator on the new rule came from Tom Cotton, Republican Senator from Arkansas and one of President Trump’s closest allies in the Senate. Senator Cotton criticized the rule with inflammatory and some say misleading rhetoric: "Our immigration system should prioritize the needs of U.S. citizens over cheap foreign labor. Allowing an additional 30,000 seasonal workers into the country forces Americans to compete for jobs against non-citizens who drag down wages.”

Senator Cotton’s heated statement may indicate what can be expected in future legislative battles, but for now the temporary fix is providing much needed relief. The major stipulation in the rule – that eligible workers must be returning workers – is believed to be both manageable and preferable to alternatives.

“It’s better than a lottery system,” said Michael Wood, Wood Entertainment Company, and president of the Seasonal Employment Alliance. “At least we have some control over our own destiny and not some unknown bureaucrat.”

That control is that the passport information and other paperwork carnival companies already possess can be immediately filed, hopefully expediting the process. Under the returning worker limitation, a worker had to be “legally present” in the U.S. in 2016, 2017 or 2018. Companies will also have to provide “attestation” documentation showing they have made a demonstrable effort to recruit American workers to fill positions.

Most companies in all likelihood have the necessary documentation and previous relationships with workers and can easily fulfill all the stipulations in the rule. The cautiously optimistic prediction is that the process should take no more than four weeks. The returning worker stipulation also means that most companies, “will get either all the workers they request or none,” said Wood. “I am as confident as I can be that carnival companies will get their workers by June.”

At What Cost?

But at what cost to the fair industry and individual carnival companies? Wood estimates that 75 percent of carnival companies were severely impacted by the computer severer crash. The midway providers most likely unaffected are the bigger companies, whose earlier start dates and longer season means they weren’t bound to file on January for an April start. “The bigger guys can carry over their workers,” he said. “The later your state date, the more likely you were affected.”

Larger midway providers may have dodged the 2019 bullet, but they are also straining from understaffing issues. Competition for employees is fiercer than ever;  rumors and uncorroborated reports of companies using ethically questionable tactics to entice workers from competitors persist. Labor costs – caused by everything from rising wages to increased recruitment efforts at the shrinking pool of domestic workers – have risen industry-wide in 2019, by some estimates as high as 20 percent.

The companies most likely hurt may be smaller, more regional in routing and provide midways to fairs and events that are much more modest in scope than say, a state fair. But it’s this segment that forms the foundation of the fair industry, employing more people and responsible for more events in the aggregate than the bigger carnival companies combined. “The small companies are the backbone of the industry,” said Wood. “The impact on them is significant, and can spiral out of control and affect everybody.”

By most estimates, carnival companies use about 8 percent of H-2B workers. Approximately 40 percent are employed in landscaping; the largest H-2B user. Other industries relying on these seasonal, guest workers, are forestry, hospitality (maids/housekeeping and hotel staff), seafood processing, and restaurants. Some of these industries are already feeling the employee pinch – Delaney of the Seasonal Workers Alliance has heard of hotels having to close off wings because they don’t have the housekeeping staff or restaurants in resort areas delaying opening until their temporary foreign staff arrives.

The ramifications of carnival companies cutting back and/or cancelling events ripples well beyond the midway. The spiral effect Wood alludes to includes undermining communities across the country, especially the local fairs and events whose fundraising objectives communities and nonprofits depend upon. 

Cancellations & Cutbacks 

Blue Sky Amusements is one of the carnival companies prevented from getting H-2B workers due to the computer crash. The company was expecting 37 workers by April. According to founder, Bill Reiss, the company was forced to slash its midway footprint by half and is now down to 22 rides. This sudden shrinkage not only reduced overall ride revenue, but some dates he was unable to fulfill and he gave the contract to a competing midway provider. “I have payments of more than $100,000 due in June, so if I don’t get these workers I don’t know what I am going to do,” he said.

Reiss has scrambled to recruit workers since the January 1st server crash, but finding qualified employees proved problematic. “We hired some locals, which aren’t many,” said Reiss. “I went through a job service, which are rent a dopes, that’s what I call them. But at least they’re a body, a worker. I’ve had to rely on family, my brothers-in-law and sons, a couple of other guys, but everyone is working 12 to 14 hours a day, it’s very stressful.”

Fewer rides lowers revenue, but fewer experienced employees also means the bigger, higher capacity rides that are more complicated to setup, operate and breakdown, are being left in winter quarters. These rides are the most popular and their absence depletes not just the bottom line of the ride companies, but their clients. Those clients are often counties trying to boost their local agricultural industry as well as churches, Lions clubs, Kiwanis, and Volunteer Fire Departments. These local nonprofits – whose fundraising weekends make up many of the spring dates on smaller ride company’s routes – have had to lower their projections due to midways depleted by understaffing.

This exact scenario meant that the Kiwanis Club of Concord, N.H., had to cancel its 63-year-old Spring Fair because Miller Amusements, the midway provider for the event, reportedly could not obtain workers in time for the annual May event. According to report in the Concorde Monitor about the cancellation: “We’re just dead in the water,” said Joanne Miller, who runs Miller Amusements with her husband, Scott. “We’ve worked hard for 30 years to build a business we’re proud of. … Now, our workforce for the last 13 years is sitting in Mexico wondering when they can come to work.”

Gillette pointed out that the one bright side in the 2019 H-2B nightmare has been the support from stakeholders and organizers of the events the Gillette Shows Plays. “They’ve been very understanding, especially the fairs. They’ve been very helpful contacting their congress people and making them aware of the problem. What I hate the most is disappointing our sponsors. They are used to a certain caliber of shows. They want to see our rides and what is new. We want to satisfy the public and we can’t right now.” 

Labor Woes

The May 5th announcement of the new H-2B rule allowing more workers couldn’t have gone live soon enough for Windy City Amusements. The week before the official rule was released, seven newly hired, first time carnival company workers, decided the carnival life was not for them and quit the company without notice. According to Tony Salerno, president of Windy City Amusements, he has had to cancel three dates at a loss upwards of $100,000. 

Windy City is down to 12 rides and four games at its spring events. Without the staff, there’s no other choice but to make midway adjustments. “The problem is breaking down the rides,” he said. “Setting up you can take two, three days and work with less people but when you break then down, you have to do so all in one day.”

With two units, Windy City Amusements provides midways to approximately 70 events during its six month route – 95 percent of which are for nonprofits – fundraising events supporting such charitable organizations as the Shriners, United Way, Jaycees and Lions Club.  “Politicians don’t realize that these groups depend on the carnival for their fundraising, they’re the ones who get hurt,” said Salerno.

Robby Driskill of Smokey's Greater Shows usually gets 55 H-2B workers for his season, which begins in May. He was able to hire a handful of local workers who may have lacked midway experience but had applicable experience, such as welding or auto-mechanics. In addition, he “lucked into”  hiring two experienced carnival professionals who had reentered the job market. Driskill was able to assemble a team which may have been far below the crew size he needed, but enough to at least get by. “I did no winterquarter work. I will not have as many rides available. I am totally dependent on these workers.” 

Driskill has gone to great lengths in 2019 to hire American workers, with very limited success. Driskill held a “job fair” that he publicized heavily throughout social media and other local sources in Maine and nearby New England states. Only one person showed up for the event.

Perhaps no better sign of just how complicated a nightmare the H-2B program has become in 2019 was Driskill’s social media experience. When he first posted advertisements for the job fair, anti-immigration trolls ridiculed him. “I got blasted for not hiring Americans. When I posted about how only one person showed up for the job fair, they all disappeared. Nobody had anything to say about that.”