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Commentary By Charles Hughes

Maryland’s Crab-Worker Crunch

Economics, Economics Regulatory Policy, Employment

Growing up in North Texas did not give me many opportunities to eat crab, but spending time in the Maryland-D.C. region has changed that. Feasting on crabs in the summer is a revered tradition. But Maryland’s seafood industry is facing a worker shortage as some companies are unable to get enough temporary foreign workers to pick crabs during the season through the existing H-2B visa program.

The federal government could raise the visa cap through an exemption that would go at least some way to easing these shortages. In the meantime, these companies face a dearth of labor. As a result customers could face higher prices, less quantity, or even the prospect of eating imported crabs from Venezuela and Asia.

The H-2B program allows U.S. companies to bring in foreign workers on visas to fill temporary non-agricultural jobs. Crab picking is difficult, seasonal work. Stretching back a quarter century, American workers have shown little appetite or interest in these jobs. Those who want jobs prefer permanent jobs to seasonal work. College students would prefer work that would give them experience that would help them in their eventual careers, the timing of peak crab picking season might not match up with the school year, and their limited experience means they would fare poorly with production-based compensation. So the companies have relied heavily on the visa program to find workers to pick crab meat in the processing centers.

The 20 crab processors in the area usually employ about 500 foreign workers during the peak season, but this year companies’ applications for about 200 visas were not filled. For the second half of the fiscal year, from April through the end of September, the U.S. Citizenship and Immigration Services (USCIS) received 88,000 initial applications for the 33,000 slots. After the initial applications were sifted and some were denied, 47,000 applications still remained.

In response, USCIS opted to turn to a lottery system to allocate the visas, instead of the traditional first-come-first-serve basis. An argument can be made for using either method to allocate the visas, but neither method solves the essential problem that demand for the visas far outstrips the existing cap.

In Maryland, some of the processors were able to get most or all of their spots filled, while others unlucky in the lottery process ended up with none. This adds considerable uncertainty for the processors, as they scramble to find enough people in a short window, and in many cases were unable to anticipate how many openings would remain unfilled.

Under the current arrangement, most pickers are paid based on the pounds of meat they can produce, with more productive pickers making up to $500 per week.  While one option for these companies would be to simply offer more money, that would cut into already thin profit margins in a high-risk industry, and leave companies vulnerable to significantly lower production levels. Companies would still face the prospect of being unable to get enough workers in place for this pivotal season.

The relatively strong state of the American labor market will also make it more difficult for these companies to convince native-born workers that grinding, temporary work is the best prospect for them. The unemployment rate nationwide edged down to 3.9 percent in April, the lowest level since December 2000.

Focusing too narrowly on who is filling these specific jobs risks losing sight of the way these roles complement so many other jobs and businesses within the industry. As Harry Phillips, owner of Russel Hall seafood on Hooper’s Island, told NPR: “It's kind of like a domino effect. It just trickles all through the community - the stores, the railway. So many hundreds of people are going to be affected without these crab pickers.”

Fortunately, the immediate problem could still be avoided, or at least attenuated. In 2017 John Kelly, then the Department of Homeland Security Secretary, granted an additional 15,000 H-2B visas. Rep. Andy Harris (R-MD), told the Baltimore Sun last week that federal immigration officials had agreed to approve 15,000 new guest worker visas through a similar exemption created in the recent omnibus bill. However, even if those additional visas are granted, it still might be the case that too few of them would go to the seafood processors.

Federal officials should use the exemption available to allow for more H-2B visas for temporary, non-agricultural foreign workers this season. This shortage is not a new phenomenon, and applications consistently far outstrip the number of visas available. The government should consider reforms that would allow for the demand for temporary seasonal workers to be better met by the program, by either raising the cap or allowing the cap number to vary based the strength of the labor market.

As we are seeing here with the crisis in Maryland, foreign workers can play a complementary, necessary role in helping a domestic industry to thrive.

Charles Hughes is a policy analyst at the Manhattan Institute. Follow him on Twitter @CharlesHHughes.

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