Wage Data Shows No Labor Shortage in H-2B Occupations

The Department of Homeland Security is considering an increase in the number of H-2B visa holders allowed into the country. The primary argument for doing so is that there are not enough workers for seasonal jobs that require modest skill levels. If such workers really were in short supply, wages should be rising rapidly in these occupations as employers struggle to recruit new workers or retain the ones they already have. In economics, the price of anything — steel, wheat, or workers — rises if demand outstrips supply and, of course, the price of workers is primarily wages. However, wage data shows in both the long and short term there have been little to no wage increases in many of the most common H-2B occupations, and in many cases wages show an outright decline.

Below we look at wages in 2007, before the Great Recession, and in 2013, 2014, and 2015 (2015 data is the most recent year available) in some of the top H-2B occupations using the public-use files of the American Community Survey (ACS). The top of Table 1 reports wages for all workers (immigrant and native-born) and the bottom of the table reports wage figures for natives only. (Table 2 reports sample sizes.) Table 1 shows that real wages (adjusted for inflation) increased little or actually declined from 2007 to 2015 for most of these occupations. In fact, collectively in these eight occupations real wages were 1.3 percent lower in 2015 than they were in 2007. And for native-born born Americans in the eight occupations wages were 2.8 percent lower.

The occupation that did the best from 2007 to 2015 was maids and housekeepers; it saw roughly a 7.7 percent increase from 2007 to 2015, or 1 percent annual wage growth on average above inflation. This is hardly a large increase. It is worth pointing out that this is a very low-paying occupation to begin with. Unlike maids, who at least saw some wage increase, in almost all occupations wages were lower in 2015 than they were in 2007. Even in the more recent period of 2013 to 2015 all the occupations saw trivial increases or even declines. Collectively, wages increased 0.8 percent between 2013 and 2015 for natives and immigrants together and wages for natives were actually very slightly lower in 2015 than in 2013. In short, the wage data, at least for these occupations, shows no evidence of a tight labor market.

Of course, the whole idea that wage increases justify increased immigration to reduce or hold down future wage growth is highly questionable. After all, these occupations are often filled by the least-educated and poorest Americans — immigrants and natives alike. Allowing wages to increase can be seen as a positive development because it reduces social inequality and encourages work. But even assuming that rising wages are a negative development that must be addressed by increased immigration, there is still no evidence in the wage data that workers are in short supply. So the stated reason for the increase in the H-2B program is unsupported by ACS wage data.

Wages for Selected Occupations, 2007-2015