The Wage and Hour division of the US Department of Labor announced earlier this month that it was planning a campaign of inspections and investigations targeting employers who use the H-2B seasonal guest worker visa program to hire temporary employees from other countries. Billed as an “education and enforcement initiative,” the campaign will target hotels and landscapers, the two industries that rely most heavily on the H-2B visa, “providing compliance assistance tools and information to employers and stakeholders, as well as conducting investigations of employers using this program,” according to the Labor Department’s statement:
A key component of the investigations is ensuring that employers recruit U.S. workers before applying for permission to employ temporary nonimmigrant workers. “Any employer seeking workers under this program must be ready and willing to hire qualified U.S. applicants first,” said Bryan Jarrett, Wage and Hour Division Acting Administrator. “This initiative demonstrates our commitment to safeguard American jobs, level the playing field for law-abiding employers, and protect guest workers from being paid less than they are legally owed or otherwise working under substandard conditions.”
Last year, WHD investigations found more than $105 million in back wages for more than 97,000 workers in industries with a high prevalence of H-2B workers, including the hotel industry.
The H-2B is a six-month visa that allows foreigners to work for a US employer temporarily and is most commonly used in the hospitality and landscaping industries to fill labor shortages in the high-demand summer season. In a historically tight market for American workers, employers in these industries have grown more dependent on the H-2B program to keep up with seasonal demand and grow their businesses. The policies of President Donald Trump, who has tasked his administration with reducing the number of both legal and undocumented immigrants entering the US, have exacerbated the labor market challenges of many employers who rely on guest worker visa programs like the H-1B and H-2B.
The UK government’s Migration Advisory Committee issued a report this week assessing the impact of immigration from the European Economic Area and suggesting ways for the government to reform immigration policy in preparation for the UK’s exit from the European Union next March. Once Brexit is fully implemented in 2020, freedom of movement is expected to end between the UK and the EU, meaning UK employers will no longer be able to seamlessly recruit workers from other European countries, which employers fear may lead to labor shortages in a range of industries from agriculture and construction to hospitality, health care, and finance.
The MAC report concludes that there is no need for the UK to continue to have separate immigration rules for EU/EEA citizens and migrants from other countries. The committee’s main recommendation for alleviating these potential shortages is to remove the cap on Tier 2 skilled-worker visas, People Management explains:
Along with ending the Tier 2 (General) visa cap, the report also suggested extending Tier 2 eligibility to medium-skilled roles and abolishing the resident market test list but retaining the £30,000 salary threshold. It added the immigration skills charge should also cover EEA citizens. The report noted these changes “would allow employers to hire migrants into medium-skill jobs but would also require employers to pay salaries that place greater upward pressure on earnings in the sectors”.
Tier 2 visas became a concern for employers earlier this year as restricted certificates of sponsorship – which must be obtained by UK employers hiring non-EEA staff – were continuously oversubscribed for in the first half of 2018. Pressure on the system only eased after the government removed NHS doctors and nurses from the cap.
The main upshot of this proposal is that highly skilled talent would be relatively easy to recruit from other countries, but low-skill workers would not. Writing at Personnel Today, Kerry Garcia and Jackie Penlington from the law firm Stevens & Bolton LLP take a closer look at what the MAC’s scheme would mean for employers:
The holiday hiring season is already in full swing in the US and the number of seasonal workers hired this year is expected to grow, according to a new forecast from Challenger, Gray & Christmas, citing year-to-year trends and announcements retailers have already made this year:
Last year, seasonal retail employment increased by 668,400 during the final three months of the year, 4.3 percent higher than the 641,000 jobs added in 2016, according to employment data from the Bureau of Labor Statistics (BLS). … Last year, BLS data showed that transportation and warehousing employment increased by a non-seasonally adjusted 279,700, up 13.4 percent from the 246,700 workers in the final quarter of 2016 and 6.6 percent higher than the 262,300 workers hired in this sector in the final three months of 2015.
Companies in this sector are averaging 5.2 million workers this year, compared to 4.9 million in 2015 and 4.2 million in 2008, according to non-seasonally adjusted BLS data.
Challenger points to several companies that have announced they will hire as many holiday season employees as last year or more: Macy’s announced this week that it planned to hire 80,000 seasonal workers, as many as it planned to at the start of the 2017 season (it ultimately hired 87,000 last year). FedEx announced plans for 55,000 holiday hires, a 10 percent increase over last year’s number, and said it would also increase hours for some current employees. The big-box retailer Target, meanwhile, said on Thursday that it would hire around 120,000 seasonal workers for the holidays, 20 percent more than last year, while also raising starting pay by $1 per hour, the Star-Tribune reported:
Unemployment held steady at 3.9 percent last month, while the US economy added 201,000 jobs, according to the August jobs report from the US Bureau of Labor statistics, released on Friday. The numbers of new jobs created in the previous two months were revised downward, however, by 248,000 to 208,000 for June and from 157,000 to 147,000 fro July—a total downward revision of 50,000.
Average hourly earnings rose by 10 cents to $27.16 in August, for a year-over-year gain of 77 cents or 2.9 percent. These numbers indicate that wage growth in the US may finally be accelerating again after years of stagnation despite a tight labor market, the New York Times reported:
Amy Glaser, a senior vice president at the staffing company Adecco, said she had noticed a significant change in employers’ willingness to increase hourly wages. “Now clients are talking in terms of dollars instead of cents for wage increases,” she said. During the busy holiday season, employees often jump from one business to another for an additional 50 cents an hour, Ms. Glaser said. Companies are trying to head off that exodus, she said, by starting seasonal hiring earlier — in August, instead of September and October — and by offering higher starting pay.
One sour note in Friday’s report, however, was that both the labor force participation rate and the employment-population ratio declined by 0.2 percentage points, to 62.7 percent and 60.3 percent, respectively. These figures suggest “an economy running awfully close to its capacity,” Neil Irwin observes at the Times’ Upshot blog:
The latest labor market bulletin from the UK Office for National Statistics, released on Tuesday, shows that the number of citizens of other EU countries working in the UK has declined in the past year by the largest amount since the government began collecting comparable records two decades ago. Between April and June 2018, approximately 2.28 million EU nationals were employed in the country: 86,000 fewer than in the second quarter of 2017. In the same period, the number of employed UK nationals increased by 332,000 to 28.76 million, while the number of non-EU foreign workers increased by 74,000 to 1.27 million.
Gerwyn Davies, senior labour market analyst at the CIPD, comments on the report to Personnel Today:
“Today’s figures confirm that the UK labour market has suffered from a ‘supply shock’ of fewer EU-born workers coming to live and work in the UK during the past year, compared with previous years. This has contributed to labour supply failing to keep pace with the strong demand for workers; which is consistent with another welcome fall in unemployment.” …
“The tightening labour market is putting modest upward pressure on pay, but this still isn’t leading to more widespread pressure due to ongoing weak productivity,” said Davies.
New employer survey data released on Monday by the CIPD and the recruitment firm Adecco showed that UK employers were experiencing staff shortages due to the low-unemployment environment and a decline in migration from the EU. The survey found that the number of applicants per vacancy had dropped across all roles since last summer, while 66 percent of employers said at least some of their vacancies were proving difficult to fill.
Nonetheless, this tight labor market isn’t translating into higher wages for most UK employees.
In recent years, bachelor’s degrees have gone from giving young professionals a leg up in the job market to being a must-have credential for a wide range of careers, with college graduates taking the vast majority of new jobs created in the US since the end of the Great Recession nearly a decade ago. More recently, however, employers have begun to question whether these degrees are always necessary and dropping degree requirements for some roles.
A tight labor market and talent shortages in high-demand fields are driving this trend further. Last week, the Wall Street Journal highlighted an analysis of 15 million job ads by Burning Glass Technologies, which found that the share of job postings requiring a college degree had fallen from 32 percent to 30 percent between 2017 and the first half of 2018, down from 34 percent in 2012. Work experience requirements are also declining, with only 23 percent of entry-level jobs asking applicants for three years of experience or more, compared to 29 percent in 2012. That means there are an additional 1.2 million jobs accessible to candidates with little or no experience today than a few years ago.
With growing numbers of unfilled jobs, more companies are looking for ways to broaden their talent pool and speed up the rate at which they can fill a role. “Downskilling,” or requiring less work experience and education, is a strategy many companies have opted for to achieve this. One field in which many employers have “downskilled” to broaden their applicant pool is cybersecurity.
The latest migration figures from the UK’s Office of National Statistics, released last week, showed that the number of people emigrating to the UK from EU countries had fallen to its lowest level in four years, the Guardian reported:
Data from the Office for National Statistics released on Monday showed net long-term migration to the UK from the EU was 101,000 in 2017 – the lowest level since the year ending March 2013. Overall, the data showed that about 280,000 more people came to the UK than left in 2017.
While net migration continues to add to the UK population, the figure is down from record highs recorded in 2015 and early 2016. There has been a gradual increase in emigration since 2015 to approximately 350,000. Immigration has stayed stable at about 630,000, the report showed. Net migration from countries outside the EU rose to 227,000, the highest level since September 2010.
Concerned about the impact of immigration on wages and job opportunities in the domestic labor market, the UK government in 2010 set a goal of cutting net migration figures to below 100,000 a year. Curbing immigration from the EU was also one of the key objectives of Brexit. The British business community, however, has warned that reductions in immigration will make it harder for UK employers to fill jobs, slowing down hiring and hurting the economy.
In the context of a very tight labor market, these new figures are bad news for employers, Gerwyn Davies, senior labour market adviser at the CIPD, tells Jo Faragher at Personnel Today: