Debunking the CBO’s take on the H-2B Visas in the Omnibus

I voted against the 2,000-page, trillion-dollar omnibus budget bill for a number of reasons. But one main reason was that it included a provision that quadrupled the number of guest-worker visas — called H-2B visas — available to foreign non-immigrants. This was done at a time when millions of Americans are still looking for full-time work and working-class wages remain stagnant. And after the new leadership in the House of Representatives promised not to bring any major immigration legislation to the floor this year. Both illustrate a blatant disregard for the wants and needs of Arkansans and Americans.

Although certain industries lobbied intensely for this dramatic expansion of the guest worker program — with many declaring a labor shortage “crisis” — proponents of the provision have sought to downplay its impact. To support this argument, they point to a newly released 3¼-page memo from the Congressional Budget Office estimating that the visa expansion would result in “only about 8,000 additional [foreign] workers” in fiscal year 2016.

This argument — and the CBO’s estimate — warrants closer scrutiny. First, it must be pointed out that even if the 8,000 visas estimate is accurate, it is by no means a small number. If proponents of the visa expansion need convincing of that, they should ask each of the American loggers, landscapers, construction workers, janitors, food servers, and first-job seekers who will either be put out of work or forced to accept lower wages when competing for those 8,000 jobs.

However, the 8,000 figure is likely not accurate and far underestimates the number of additional H-2B workers who will be present in the United States. The CBO estimate is based on assumptions and conjecture, not rigorous analysis of historical data. It assumes that employer demand for foreign guest workers in FY2016 will remain in line with the demand seen between FY2013 and FY2015, pegging the demand at 110,000 positions. The CBO itself concedes that making this assumption is “highly uncertain.” It’s made even more uncertain because the CBO does not appear to account for a basic law of economics: an increase in the supply of labor will reduce wages and, in turn, increase the number of positions employers will seek to fill with foreign workers at lower cost.

This is not a merely theoretical flaw in the CBO’s estimate. It is based on historical evidence. In May 2005, Congress adopted a temporary H-2B visas expansion identical to the one just passed in the omnibus budget bill. What was the result? Sharp spikes in both the number of positions employers sought to fill with foreign guest workers and the number of visas issued to such foreign workers. After the 2005 bill passed, the number of foreign-worker positions sought by employers increased from approximately 150,000 to 247,000 in 2006, and then to 360,000 in 2007. The numbers trended downward after the visa expansion expired after 2007. The dramatic spike can be seen in the Chart 1 below.

This surge in demand for foreign workers resulted in the issuance of tens of thousands of new visas for returning foreign workers — 50,854 in FY2006 and 69,320 in FY2007. These numbers represent visa spikes far sharper than the 8,000 additional visas the CBO predicts for FY2016. Chart 2 below illustrates the spikes in both returning worker visas and total H-2B visas issued from 2005 to 2007.

The CBO, curiously, did not incorporate these historical data into its memo. A more rigorous study — perhaps one performed during a proper legislative process conducted under regular order — might have considered what happened the last time Congress passed a dramatic expansion of the H-2B visa program. Legislators and voters could then have soberly weighed the data and competing projections of what the impact would be on American workers.

But that didn’t happen. Instead, this massive visa expansion was slipped into a last-minute, must-pass budget bill that was crafted secretly among only a handful of legislators. And it was only in the days after the bill passed that the CBO issued an estimate of the impact of the visa expansion. Common sense would dictate that such an estimate should have come before the bill came up for a vote.

But, apparently, common sense doesn’t hold sway on Capitol Hill, even when the well-being of American workers is at stake. If House leadership want to fix our immigration system, they should start by securing our border. Anything else will create a slippery slope for more immigration legislation that doesn’t truly address the problems we face.