The mired status quo of U.S. immigration policy is aggravating a workforce crisis that could seriously undermine the U.S. economy.
That is the consensus of local business owners, immigration attorneys and representatives from various industry associations who say small businesses are being particularly hard hit by labor shortages. The impact, however, is being felt across all sectors to different degrees.
Companies relying on an educated work force are unable to hire and retain desirable foreign nationals. Landscapers, hoteliers and other seasonal businesses spend an inordinate amount of time searching for workers, in some cases resorting to the cumbersome process of bringing in temporary foreign workers through an outdated guest-worker program. Contractors and unions complain of losing bids to competitors who undercut them by hiring undocumented workers at un-American wages.
The shortages are caused by several factors. Americans don”™t want low-paying jobs demanding sweat. Women have forsaken traditionally female occupations, while demand for those services has increased, as is the case with the nursing shortage. And fears about letting in foreign terrorists have played a part in keeping visa quotas tight. Millions fill the gaps illegally.
It”™s a situation some said the federal government has tacitly encouraged. “The U.S. government has had a policy for 20 years to encourage immigration because it”™s a source of cheap labor,” said Laura Jasinsky, principal of Jasinsky Immigration Law L.L.C. in Stamford. “Employers have been induced to rely on this type of labor.”
Risky business
In many cases, business owners who think they are hiring legal immigrants receive a letter from the Social Security Administration indicating the numbers on their new hires”™ green cards are phony. Susan Henner, an immigration attorney in White Plains, N.Y., said that happened to one client who runs a dry cleaning business in Jefferson Valley, N.Y. “He can”™t find legal workers for those jobs,” she said. “It”™s a real hardship for employers.”
Companies that can”™t find U.S. workers and attempt legally to hire foreign nationals on a temporary basis are up against a wall. The decades-old guest worker program for non-agricultural workers, called the H-2B, is “not user friendly,” according to Joe Russo, executive vice president of Valley Growers Coop, a Milton, N.Y.-based nonprofit that helps employers and government agencies procure offshore labor. There is a 66,000-person annual cap, with visas issued in April and October. In the last few years the cap has been exceeded, resulting in a huge backlog.
“Certain industries are suffering dramatically,” Russo said, including landscapers and hotels. Furthermore, the program is of no help to businesses that need year-round workers, since the H-2B visa is limited to 10 months. Instead, “they”™re hiring illegals,” he said.
Robert Heffernan, executive director of the Connecticut Green Industry in Monroe, said Connecticut landscapers, nurseries and florists “piece together their labor force as much as they can” rather than rely on the guest-worker program. The burdensome application process is one reason, as is the number of restrictions. “There are many areas where you could be penalized if you screw up on one of the federal rules” ”“ a risk businesses don”™t want to take, he said.
Because Connecticut has the highest per capita income in the nation, “finding that kind of labor is impossible,” he said. “Parents don”™t bring up their kids to work in the fields or mow the lawn.”
Rx for nurse shortage?
When Jim Foy, president and CEO of St. John”™s Riverside Hospital in Yonkers, N.Y., heard there was a surplus of 10,000 nurses in South Korea, he thought that bringing a small number to the U.S. and training them at his facility”™s nursing school in preparation for employment at New York City hospitals might help solve the nursing shortage. Foy contacted HRS Global Inc., a human resources firm in California that was working with the Korean government, to arrange for the nurses to come to the U.S.
But when he discovered the immigration process would take at least a year, the plan no longer seemed feasible. “I couldn”™t tell my colleagues ”˜I will have 10 nurses for you in 12 months,” he said. “I can”™t guarantee the immigration will come through.”
Besides the long, arduous process, the nurses weren”™t classified as professional, which meant they couldn”™t be brought in on an educational visa, said John Signorelli, president of MarJohn Enterprises, a business consulting firm in Goldens Bridge, N.Y., who was helping with the arrangements. (Signorelli said nurses have since been classified as professionals and the hospital is still considering the option.)
”˜Lottery is a tough thing”™
The H-1B visa program, which is designed for immigrants who have a bachelor”™s or higher degree, is capped at 85,000 visas annually (20,000 are reserved for people with advanced degrees). The need far exceeds the cap: when the U.S. Citizenship and Immigration Services (USCIS) began accepting petitions for 2008 last April 2, 150,000 petitions flooded in by midafternoon.
A lottery was begun and, lotterylike, many businesses lost out. One was Hypres, an Elmsford, N.Y.-based company specializing in superconducting electronics for applications for wireless and optical networks (the technology would enable fast downloads of information to a cell phone, for example). Oleg Mukhanov, Hypres”™ general manager and vice president of technology, said that because the company”™s niche is so unique, he has to search the globe for skilled specialists.
The company, which has 33 employees, had hoped to hire a Swedish national who had just earned a Ph.D. in physics. His doctorate focused on Hypres”™ technology, and the young man had done two internships at the firm. But it missed out on the lottery. He will probably be hired in Europe. “We”™re shooting ourselves in the foot,” Mukhanov said.
Sightlines, a Madison-based firm providing consulting services to colleges and universities, also lost out in the last round of H-1B visas. Much of its 30-person staff is hired out of a college, and last year”™s crop included a woman from Ethiopia who had studied in the U.S. on an educational visa and was authorized to stay under a one-year work visa. Sightlines hoped to retain her. With her visa scheduled to expire, the company petitioned for an H-1B visa last spring. Her number didn”™t come up in the lottery. She will return to Ethiopia.
The company has hired another graduate who is from Ethiopia this year ”“ “he was exceptional” ”“ even though “it”™s definitely a risk,” said John Ireland, Sightlines”™ chief financial officer. “The lottery is a tough thing.”
Some companies get around the bind by instead setting up shop overseas. “Employers are faced with a dilemma. They”™d like to keep the jobs in the U.S., but global outsourcing is a reality,” said Colin Munro, a partner at McCarter & English L.L.P. in Stamford, who specializes in immigration law for a Fortune 500 clientele. “We”™ve had clients who had not won the lottery and made other plans. The big multinationals have options.”
More green for green cards
The challenges don”™t end once an employer has obtained the H-2B visa. If it wants to keep the employee permanently ”“ and many companies do ”“ then the individual must apply for a green card, a process that is also fraught with bureaucratic hurdles and long delays. The green cards are issued to a limited number of immigrants holding visas, capped at 140,000 a year. Because that number is frequently exceeded, a backlog has developed. The wait could be as long as 10 to 15 years, according to Vivek Wadhwa, executive in residence at the Pratt School of Engineering at Duke University and author of a recent study on immigrant entrepreneurs by the Kauffman Foundation.
Because the green cards are apportioned out by country, with each nationality limited to 7 percent of the total, the wait can be even longer for immigrants from populous countries. “Forty percent of the H-1B visas are for people from India, but only 10,000 of them can convert to a green card each year,” Wadhwa said.
The H-1B visa expires after six years, and it must be renewed annually while the employee is waiting for the green card, a process that can cost companies thousands of dollars in filing fees.
The USCIS is doubling the fees beginning July 30 for each type of visa and tripling the green card application, which is rising from $325 to $1,110. Small businesses will take on an additional burden in mid-July, when a new ruling from the U.S. Department of Labor will require employers to pay all the attorney fees when they sponsor an alien worker (previously, the fees were split between the alien and the employer).
While larger companies usually pick up these fees, a lot of smaller companies have been passing the cost back to the employee. The cost can easily spiral to $10,000, plus advertising and filing fees, said Henner. “Employers such as catering companies and golf courses may be reluctant to take on this type of burden,” she said. “Most employers want to do the right thing. But just to keep their businesses afloat, there”™s no way to hire legally.”
