Congress has authorized the Biden administration to increase the cap on the number of H‑2B seasonal guest worker visas this summer. In the past, the Department of Homeland Security (DHS) has only used a portion of the H‑2B visas that Congress authorized it to use. In 2021, DHS authorized just 22,000 of the 64,716 additional H‑2B cap spots Congress created, citing higher-than-normal unemployment rates early that year. In December, it announced it would authorize just 20,000 for the end of winter season. But this summer should be different: the economic case for using all of the H‑2B visas is stronger than ever.

  • Employers are requesting a near-record 136,555 H‑2B positions for the summer, more than 4 times the summer cap of 33,000.
  • The Department of Labor (DOL) certified a record 95 percent of H‑2B positions as unfilled by U.S. workers in 2021.
  • H‑2B wages have grown at twice the rate of all U.S. wages.
  • The unemployment rate in the top H‑2B job (landscaping) was at a record low 4 percent in the summer of 2021.
  • H‑2B’s main industry (which includes landscaping) had a record 2.3 job openings for each unemployed worker in the summer of 2021.
  • H‑2B businesses (mainly small businesses) face declines in revenue of about $2 billion without a cap increase.

H‑2B Summer Demand Is Spiking to Near-Record Highs

The H‑2B 66,000 annual visa cap is divided into two half-year caps (October to March, April-September) of 33,000 each. The earliest date employers can file for the April-September (Summer season) cap is January 1 (the start of the 2nd quarter of the fiscal year). Figure 1 shows the number of quarter 2 Department of Labor temporary labor certification filings by year, indicating how rapidly the demand has grown for H‑2B visas for the summer months since 2010.

DOL Certified a Record 95% of H‑2B Jobs As Unfilled by U.S. Workers in 2021

The H‑2B process is complex and expensive. In order to hire an H‑2B worker, a U.S. employer must recruit U.S. workers first. They must post the job on U.S. government website—sea​son​aljobs​.dol​.gov—where U.S. workers can pick any H‑2B job. U.S. employers must also contact former-employees to request that they fill the job and reach out to a labor union representative or, if there isn’t a union, post the job at the jobsite. Meanwhile, the employer must submit a request to the state government’s State Workforce Agency to have it recruit and refer unemployed U.S. workers to the job who must be given the job. In the last supplemental H‑2B allocation, the government required employers to redo these steps.

All H‑2B jobs must offer the “prevailing wage,” which the Department of Labor equates to the average for the occupation in the area. This means if you are looking for entry-level workers, you cannot offer the entry level wage (which is naturally below the average of the entire occupation). You must offer a wage you would normally offer a more experienced worker. Despite the inflated wages, the recruitment efforts, and the prioritization of U.S. workers, almost all (95 percent) H‑2B job requests were certified in 2021. As seen in Figure 2, the rate at which the DOL certifies the jobs as unfilled by U.S. workers has increased quickly since the recession in 2009. In fact, this is the highest certification rate on record.

H‑2B Wages Are Increasing at Twice the Rate of Other Wages

H‑2B jobs—for all industries and occupations—are also increasing their wages at double the rate of other wages since 2011 (Figure 3). Despite these mandatory prevailing wage pay increases for H‑2B jobs, the number of H‑2B jobs being certified as unfilled has reached record levels (Figure 2), and the number of requests for H‑2B workers continues to rise to near-record levels. Pay is not the main problem. The limited supply of willing and able workers is.

Unemployment Rates in the Largest H‑2B Occupation (Landscapers) Reached Record Lows in 2021

Real labor market trends are behind the spike in demand for H‑2B workers. In 2021, the unemployment rate for the largest H‑2B occupational category—landscaping and groundskeeping—was the lowest on record: 4 percent (Figure 4). This was actually lower than the national average at the time. It is important to look at the unemployment rate in the summer because that is when demand for H‑2B jobs peaks. Some researchers make the mistake of looking at the unemployment rates in the winter months (when very little work is available) or at the entire industry which can include many different types of occupations, rather than at the specific occupation that is in demand.

H‑2B’s Main Industry Has More Than Twice as Many Job Openings as Unemployed Workers

Like the labor market generally, the H‑2B program’s main industry (professional and business services, which includes landscaping) is facing an unprecedented labor shortage. At the end of last summer season (August 2021), there were 2.3 job openings for every unemployed person looking for work in the industry—the highest on record (Figure 5). While it would be preferable to analyze job openings by occupation, those statistics are unavailable. Nevertheless, the fact that H‑2B jobs went unfilled by U.S. workers in 2021 at an unprecedented rate should not be surprising. Moreover, the government has limited past supplemental H‑2B cap allocations only to those employers who could show “irreparable harm” if they fail to fill the positions.

It would be nice to be able to conduct similar analyses for other industries and occupations, but the other two top H‑2B occupations (forestry and seafood processing) are primarily winter month activities and are mostly not filing H‑2B requests right now. Besides them, the other H‑2B job requests are based on very niche regional needs and have little relationship to national trends. The availability of maids and cooks nationally has basically no relevance to whether maids and cooks are available during the summer months on Mackinac Island in Michigan or Cape Cod in Massachusetts where not enough U.S. workers are able or willing to relocate for the summer.

Regardless, the overall unemployment rate nationally has improved to nearly the same rate as pre-pandemic (3.9 percent v. 3.5 percent). What hasn’t improved is labor force participation. More Americans have retired; others have dropped out of the labor force to take care of their kids; and others have chosen to step away from working for various other reasons including health fears. But whatever the causes, this decline in the absolute number of people seeking jobs has also negatively affected H‑2B employers’ search for U.S. workers.

The economic case for using all the H‑2B work visas is incredibly strong. If the administration will not accept it now, it will never accept it. Without these workers, these businesses (mainly small businesses) face declines in about $2 billion in lost revenue and productivity (based on the wages that they are offering). Imposing these costs on the U.S. economy will not benefit U.S. workers. It will harm all U.S. workers already employed by those businesses in complementary positions as well as all the U.S. workers who work in complementary industries. The Biden administration should immediately raise the H‑2B cap to the fullest extent permitted by law.