Northern Businesses scrambling for workers

A serious labor shortage, caused by a nationwide increase in demand for seasonal foreign workers, may hurt northern Michigan's economy this same.

Many of the estimated 1,500 to 1,800 foreign workers who usually come to northern Michigan in April and May to work in the area's restaurants, hotels and stores will not arrive this year, due to a cap on H-2B visas that limits the number of seasonal workers who can work in this country to 66,000.

Visas are issued each fiscal year, beginning October 1, but businesses cannot begin applying for these visas until 120 days prior to the date they need the workers.

Most northern Michigan employers cannot apply until mid-January because they don't open before mid-April or May. The cap for 2004-2005 was reached on January 3, 2005—two months earlier than in 2004—stranding many northern Michigan businesses without the seasonal workers they depend on to keep their operations running smoothly.

The demand for H-2B workers has increased dramatically since the cap was set in 1990, as more industries, such as logging and construction, find value in hiring them. Areas that hire in the winter—such as southern states and winter ski resorts—snap up more visas each year, but this is the first year that businesses that cannot use the workers before late spring, such as summer resorts, have been shut out completely.

Mackinaw City businesses applied for 340 visas and received 40. St. Ignace obtained none, and only four businesses on Mackinac Island received any.

The Grand Hotel's solution was to open two months earlier than usual, on March 1, which allowed the landmark resort to apply earlier for the coveted visas it needs for its 300 foreign workers each summer.

Employers who operate year-round—such as Ron Dufina, who owns several hotels, restaurants and retail stores on Mackinac Island—also obtained visas.

"At peak season I hire about 160 employees, and we used 38 H-2B visa workers last year," said Dufina. "This year we applied for 54. We will bring them all in and probably get transfers for some of them to businesses that have been okayed by the labor board but just weren't early enough to get the workers."

Although the shortage impacts hotels and restaurants most directly, some employers such as Dufina use them in retail stores as well. Moreover, trouble in the tourism industry will affect the entire northern Michigan economy, since tourism is integral to the region's economy.

"It will have a serious impact on the whole region," said Dufina. ";It has really raised the cost of doing business up here, and that will ripple through our regional economy."

Area leaders in the tourism and travel industry, however, believe that the average tourist visiting the area will not notice the shortage.

"Whatever has to be done will be done to ensure that visitors receive a high standard of service and feel no negative impact," assured Bob Benser, president of the tourism bureaus of both Mackinac Island and Gaylord.

Behind the scenes, the community has come together to explore and implement creative solutions to the problem.

In January, Congressman Bart Stupak (D-Menominee) conducted a hearing in Petoskey on the issue. It drew some 60 northern Michigan employers, ranging from Boyne USA Resorts and Grand Hotel to smaller businesses in Petoskey, Charlevoix, Mackinaw City, Mackinac Island and Gaylord.

Stupak is a primary cosponsor of a bill that would address the problem, and a group of 10 area business owners went to Washington in early March to lobby for the legislation. The legislation is now in the House Judiciary Committee, so it will offer no relief for this year.

Other solutions include sharing the available workers and recruiting current H-2B visa workers from areas like Colorado's ski resorts, extending their current visas. College students and J-1 visa workers (foreign college students who come to work and usually travel) will be aggressively recruited as well, but they usually have to return to school in August, long before the season's end in October.

Even the best solutions, however, will be expensive. There will be added costs from traveling to find new workers, training them, and offering higher wages to an entire staff in order to entice more local workers.

Misconception
A labor shortage may seem hard to reconcile with Michigan's unemployment rate of above 7 percent. But the niche filled by these workers, primarily Jamaicans, is very specific and difficult to fill with other possible sources of workers. The jobs in question—mostly housekeepers, dishwashers and cooks—can be difficult to fill even when offering good pay, especially when they can only be offered from May until October.

It's a common misconception that these workers are taking away jobs from Americans, employers say. To obtain these workers, each business must go through a rigorous application process that includes demonstrating that it has sought to fill the jobs with American workers.

In addition, these workers' wages are set by the U.S. Department of Labor and based on the average regional wage for the position, so it's not a matter of importing "cheap labor."

"It's really a complex situation," said Dawn Johnson, executive director of the Mackinaw City Chamber of Commerce and owner of the city's Econolodge. "These seasonal jobs are just not well matched to Michigan's large unemployed population.

"People aren't going to come up here for a seasonal job—it's too expensive to have two part-time homes, and you may have kids to consider. It's just not feasible for most people."

Detroit immigration lawyer Robert Birach says his company ran 145 ads in The Detroit News and Detroit Free Press to fill 331 positions.

"We had 14 responses. One woman applied for five jobs, and a man applied for three jobs, said Birach"

In contrast, the Jamaican workers who have been coming for years for these jobs have filled the labor niche well.

"They're reliable and professional, they work hard and they wear a smile while doing it," said Brian Bailey, general manager of the Chippewa and Lilac Tree hotels on Mackinac Island. "Most of my H-2B workers have been with our company for three to 10 years."

The problem will only get worse, most labor analysts believe, which may explain the bipartisan support in both houses of Congress for a remedy. More than 50 legislators have cosponsored the legislation (House Bill 793 and Senate Bill 352), dubbed the "Save Our Small and Seasonal Businesses Act."

Legislative solution
Instead of raising the cap, which Congressman Stupak believes is unlikely in the current anti-immigration climate, the proposed legislation would distribute the workers more fairly across the country by making half the visas available on October 1 and the other half available on April 1.

Stupak said the legislation was "gathering steam" in early March, but it remains in the Judiciary Committee, so a provision to exempt any workers who participated in the H-2B program one of the last three years from counting against the 66,000 cap will not help this year.

The bill also includes fraud prevention and detection provisions that create sanctions for misrepresenting information in the application process. The strictest consequences are reserved for those who do not properly seek out U.S. workers to fill the jobs.

A big hurdle in passing such legislation is sensitivity on the issue of immigration, especially since it now falls under the Department of Homeland Security since the restructuring of immigration services after 9/11.

"Immigration is not a popular word in Washington. There is not the political will to [raise the cap]," said Stupak.

Benser, who went to Washington to lobby for the bill, explained, "we have to emphasize that this is not primarily an immigration issue but a labor and business issue."

Stupak and others agree that the legislation may only be a short-term solution to the problem, but if it eases the problem for another few years, it may give lawmakers time to craft a better solution while keeping afloat small businesses that rely on these valuable foreign workers.

Other solutions
One solution is to share workers among businesses, but the H-2B program stipulates that workers can only be shared between H-2B-approved businesses in the same category—for example, hotels. A potential solution of a hotel sharing a worker with a restaurant, whose scheduling needs might be complementary, would not be allowed in most cases.

Another solution is to recruit H-2B workers from other areas and extend their visas.

Brian Bailey went to Colorado and found 25 workers whose visas will be extended. A second trip to a West Virginia resort yielded 10 more, so he has filled more than half of the 60 jobs he normally has for foreign workers.

"We were lucky that we got [to Colorado] early. There's only a limited number of workers, and I think just about every employer in the country was there trying to recruit them!" said Bailey.

But he'd rather be able to retain some of his most valuable and experienced employees, so he will also pay a premium to an employment company that managed to get visas before the cap was reached, to be used for specific workers. He feels it's worth paying more to have the continuity and stability of a seasoned staff.

"We certainly hope that we are not in this boat next year," added Bailey. "If we can get this legislation passed, it will give us more time to work out some better long-term solution."