Local industries sue over sudden changes to wages
By Cara Bayles
A group of Louisiana industry leaders have filed suit against the Department of Labor and will testify before a federal judge in Alexandria Friday about mandatory wage increases to a visa program that allows workers to legally come to the United States for seasonal employment.
Many bayou-area businesses say pending wage increases will make employing immigrant guest workers prohibitively expensive.
In 2010, a federal court decision meant to ensure guest workers issued visas under the H-2B program were not taking jobs from their U.S. counterparts required that employers who use the visa program pay both their U.S. and immigrant employees prevailing wage rates determined by the Department of Labor.
That would increase the hourly rate by more than 50 percent. In January, the Department of Labor announced it would give employers 12 months before the new wage requirements went into effect. But the plaintiffs in the case claimed the delay violated the federal decision, and on June 16, the court ordered the wage changes go into effect on Sept. 30.
In response, an odd alliance of Louisiana industry groups has formed, including the outdoor amusement companies that put on county fairs and carnivals, as well as seafood processors, hotels and sugar-cane farmers. The coalition sued the federal government earlier this month, saying the ruling will damage the local economy in a state that has maintained a relatively low 7.6 percent unemployment rate.
The visa category, which is limited to non-agricultural workers for seasonal jobs or one-time projects, was created in 1990. To be eligible for the program, employers must first advertise and recruit American labor for the positions through state and federal labor departments. In Terrebonne and Lafourche parishes, known for having the lowest unemployment numbers in the state, local businesses say migrant laborers fill the jobs that the local workforce doesn’t want.
Sugar mills like Lafourche Sugars in Thibodaux hire skilled guest workers from Central America during the processing season, which runs from October through the beginning of January. Three men will spend the winter months operating the mill’s six sugar boilers, each a 3,000-cubic-foot vat.
At Motivatit Seafoods in Houma, a group of young women process the company’s oyster harvest. In one room, they separated the oysters that had clumped together, smacking them against the edge of a purring conveyor belt, and wrapping them with a yellow band that sealed the shells under a heat lamp before they were carted off to be exposed to high water pressure. Another group of women then pried the shells open, dumping their contents into a long tray.
During their lunch break, many of the women at Motivatit said they would be happy to get a wage increase, but they expressed concern about losing their jobs if the wage increases go into effect and the company decides it can no longer afford the migrant worker program.
“I want to bring my sister, my daughter, and my other daughter here,” said Narcisa Mesia, 37, who has been working at Motivatit for two years. “I would rather be paid less if it meant my family could come here.”
Juana Vasquez, 26, said jobs in Mexico pay about $8 per day. At Motivatit, they are paid $8.32 an hour.
U.S. LABOR SCARCE
Brothers Mike and Steve Voisin, who run Motivatit, say they face a difficult decision if the H-2B changes go through. The local employees make the same as the guest workers, and the changes would mean they’d have to give everyone a raise. To be able to hire workers under the visa program, companies must pay wages set by the federal government.
Eliminating the program and only hiring U.S. citizens at the current rate is one option, but H-2B workers make up nearly half of the company’s staff.
“Bringing in people from the outside allows us to maintain even employment numbers. They’re just more reliable,” said Steve Voisin, who added that constantly training new people hurts the company’s bottom line. “Some quit, but the percentage is reasonable, as opposed to catastrophic.”
Motivatit declined to give their annual profits, but they estimate that on average they make about $10 million to $15 million per year in sales. Without a reliable workforce to process their goods, that could fall to $7 million to $10 million, Mike Voisin estimates.
The Voisins hope the Louisiana lawsuit will at least postpone the wage hikes. If the changes go through, however, they will most likely cease hiring guest workers.
Michael Comb, general manager at the Louisiana Sugar Cane Cooperative, faces the same problem. He said the price of sugar has jumped by 50 percent this year to reach about 30 cents per pound, but he expects the price will drop again soon.
“We just can’t afford to pay that much on wages,” he said. “We are a co-op, so we’re owned by the farmers, and anything I do to my bottom line gets passed along to the farmers in lower cane payments.”
But he also has trouble filling jobs, especially during the planting season.
“We have to try to recruit local people, naturally. But part of the problem is a lot of the people we get are already skilled in sugar-making, and I can’t find them here locally,” he said. “And it’s not easy work we do. It’s seven days a week, 12-hour days. With local workers, I may have to hire four people to fill two positions.”
A ‘CAPTIVE’ WORKFORCE
Jacob Horwitz, lead organizer for the National Guest Worker Alliance in New Orleans, said the flawed pay scale is the reason companies can’t find American workers to take the jobs.
“If by raising the wages a bit they would turn a job nobody would take into a job that would support a family, that’s a good thing. And if a business feels that they’re dependent on a workforce that is captive, that’s not a sustainable business model,” he said.
The impending changes to H-2B were an improvement, he said, but even with increased wages, workers would still be dependent on their employer for their immigration status, and employees face threats and retaliation for asking for condition improvements. He said the National Guest Worker Alliance documented widespread abuse of the program in post-Katrina New Orleans, and has filed five pending complaints about Louisiana companies with the Department of Labor.
“The guest-worker program has been used since the beginning to lower job standards,” Horwitz said. “That’s not all right for anyone, even if they’re making more than they were in Mexico. How can U.S. workers compete with that, and how can we accept that kind of treatment of anyone within our borders?”
Greg Nolan, president of Lafourche Sugars, said it’s not so simple.
“Our industry is based on Mother Nature. Sometimes she’s kind to us, sometimes not,” said Nolan, who declined to give his company’s profits for the year, but estimated his annual payroll totals about $6 million. “I certainly want to supply everyone with the best I can, and we all want our kids to have more than what we had, but at some point, there’s not enough room to give everyone a raise every year.”
He has relied on skilled laborers from Belize and Honduras for at least a decade, and he will keep his H-2B workers, even if the changes go through.
“What else can I do? How do I replace these people with 10 to 20 years of experience in three weeks time? There’s no decision there,” he said.
Mike Voisin said that Motivatit would also try to keep using the program, but that if the wage changes go through, they will hurt some of the area’s biggest industries.
“When you make and produce, you’re able to create wealth. We create wealth in Terrebonne Parish,” he said. “But we can’t do it without outside labor.”