The tax rates proposed should be inverted, so as to encourage small independent enterprises and penalize large overcapitalized and legally-immortal corporate behemoths. Tax cuts for PEOPLE, not corporate Struldbrugs.Framework for tax overhaul would slash corporate rate to 20%President Donald Trump and Republican leaders launched an urgent effort to get a major legislative win this year, announcing a long-awaited tax plan that will immediately set off a fight over how much top earners should pay.
Rate for pass-through businesses would be capped at 25%
The framework proposes cutting the top individual rate to 35 percent -- but leaves it up to Congress to decide whether to create a higher bracket for those at the top of the income scale, according to the document released Wednesday.
Read Proposed Plan HERE
The rate on corporations would be set at 20 percent, down from the current 35 percent, and businesses would be allowed to immediately write off their capital spending for at least five years. Pass-through businesses would have their tax rate capped at 25 percent.
U.S. stocks pushed toward all-time highs, with a Goldman Sachs basket of companies that pay the highest tax rates pacing gains. The group added 0.5 percent at 10:20 a.m. in New York, poised to outperform the broader market for a sixth straight day.
The plan sets out three tax brackets for individuals -- 12 percent, 25 percent and 35 percent, down from the existing seven rates, which top out at 39.6 percent. But that’s not firmly set, as congressional tax-writing committees will be given flexibility to add a fourth rate for the highest earners -- an effort to prevent the overhaul from providing too much of a benefit for the wealthy.
There’s significant support among Republican members of the tax-writing House Ways and Means Committee to create a special top income-tax bracket for the highest earners, according to a GOP member of the panel who asked not to be named because discussions are private. Still, House Ways and Means Chairman Kevin Brady of Texas has said he’s committed to offering across-the-board tax relief. Trump has repeatedly said he’s focusing on middle-class individuals.
At the same time, though, the tax plan calls for repealing the alternative minimum tax, the estate tax and the generation-skipping estate tax, all of which would be a boon for higher earners and the wealthy.
“The last thing we should be doing right now is providing hundreds of billions in tax breaks to the wealthiest people and most profitable corporations in this country,” Senator Bernie Sanders, a Vermont independent who caucuses with the Democrats, said in an emailed statement. “It is particularly obscene to repeal the estate tax that would provide a $269 billion tax break to the top 0.2 percent.”
The release of the plan -- which Trump will tout Wednesday during a speech in Indiana -- is the result of a months-long process to craft a tax overhaul that was a key promise in Trump’s campaign. But it marks only the start of what could be a brutal fight in Congress among lawmakers who disagree on key elements of the framework. One influential skeptic has been Senate Finance Committee Chairman Orrin Hatch, a Utah Republican, who pledged his committee would not be a “rubber stamp” for the plan.
Other Republicans cheered the plan. “At first glance, the policies released today are good news to the American people,” Representative Mark Walker of North Carolina, chairman of a large conservative caucus, said in statement. “We need to begin acting on this framework legislatively as soon as possible.”
Trump selected Indiana for the speech because of the manufacturing resurgence experienced during the tenure of Vice President Mike Pence, who served as the state’s governor before his election last year. Democrats have attributed increases in manufacturing to recovery programs championed by former President Barack Obama. The speech is expected to include references to Indiana citizens who believe they would benefit from the proposed changes to the tax code.
The tax effort begins one day after Senate leaders decided not to move forward with a vote on repealing Obamacare, one of the most central promises of Trump’s presidential campaign. But Trump has said that tax legislation -- which he calls essential for stimulating economic growth -- has been his main focus.
Trump has told others that he expects lawmakers to work at a brisk pace. If not, he and the Republican Congress would end 2017 without a single major legislative victory.
International Plans
On the international side, the plan would move toward a “territorial” approach that would scale back the U.S.’s unique worldwide approach to taxing corporate profits regardless of where they’re earned. But it includes “rules to protect the U.S. tax base by taxing at a reduced rate and on a global basis the foreign profits of U.S. multinational corporations.” The amount of that reduced rate isn’t specified.
Companies with accumulated offshore profits would be subject to a one-time tax on those earnings -- clearing the way for that income to return to the U.S. The rates that would be applied are unclear, but there would be a higher rate for income held in cash compared to the rate for less liquid investments. Firms would be able to pay the new tax over several years.
Under current law, companies can defer paying U.S. tax on their offshore earnings until they bring them to the U.S. As a result, U.S. firms have stockpiled an estimated $2.6 trillion in profit offshore.
So-called pass-through entities, which include partnerships and limited liability companies, would see their rate capped at 25 percent. Currently, those businesses -- which can range from mom-and-pop grocers to hedge funds -- don’t pay income tax themselves but pass their earnings through to their owners, who then pay tax based on their individual rates.
While the pass-through rate cut would represent a major tax break for lucrative pass-throughs, tax-writers would craft measures aimed at preventing individuals from recharacterizing their personal wages as business income.
Middle-Class Benefits
In terms of middle-class benefits, the framework outlines a near doubling of the standard deduction -- to $12,000 for individuals and $24,000 for married couples -- and calls for “significantly increasing” the child tax credit from the current $1,000 per child under 17. It would also expand eligibility to include more upper-middle class parents.
The tax plan still lacks extensive details about ways to offset its rate cuts with additional revenue. It says most itemized deductions for individuals should be eliminated, without providing specifics -- while calling for mortgage interest and charitable giving deductions to be preserved. The tax exemption for municipal bonds would also be retained.
However, the state and local tax deduction would be abolished. Ending that break, which tends to benefit high-income filers in Democratic states, would raise an estimated $1.3 trillion over a decade. The move faces some Republican headwinds from lawmakers in districts that use the deduction heavily.
The plan would also limit the interest deduction companies can take on their borrowing, but no additional details were provided. Congress’s tax-writing committees will be tasked with limiting other business credits to help generate additional revenue.
Seeking Offsets
House leaders have proposed abolishing the corporate interest deduction, a move opposed by debt-reliant industries like private equity and commercial real estate. Senate leaders, including Hatch and John Thune of South Dakota, the chamber’s No. 3 Republican, have said they want to maintain the deduction at some level at least.
The lack of consensus on how to offset tax cuts -- a prerequisite to making them permanent under the procedure that Senate leaders plan to use to pass the legislation -- poses hurdles. If they fail to raise enough money to avoid a long-term hit to the deficit, at least part of the package would have to expire within a decade under current rules.
But as tax writers surface ideas to raise revenue by closing loopholes or ending specific tax breaks, they’ll unleash a torrent of lobbying similar to the campaign that killed a proposed border-adjusted tax earlier this year.
“We’re already working on it,” said Carlos Curbelo, a member of the Ways and Means panel, in reference to finding offsets.
“There are a number of pay-fors out there that are not just pay-fors, but also good elements of tax reform that will level the playing field across the economy and lead to greater growth,” said Curbelo, a Florida Republican. He said the committee’s goal is to make the tax changes as permanent as possible.
“So we’re in search of it and we’re getting close, very close,” he said.
Friday, September 29, 2017
Trump Tax Plan Rewards "Bigness" and Punishes "Smallness"?
Snark, Inc.
- Lewis Caroll, "The Hunting of the Snark: Fit the Third, the Baker's Tale"They roused him with muffins--they roused him with ice--
They roused him with mustard and cress--
They roused him with jam and judicious advice--
They set him conundrums to guess.
When at length he sat up and was able to speak,
His sad story he offered to tell;
And the Bellman cried 'Silence! Not even a shriek!'
And excitedly tingled his bell.
There was silence supreme! Not a shriek, not a scream,
Scarcely even a howl or a groan,
As the man they called 'Ho!' told his story of woe
In an antediluvian tone.
'My father and mother were honest, though poor--'
'Skip all that!' cried the Bellman in haste.
'If it once becomes dark, there's no chance of a Snark--
We have hardly a minute to waste!'
'I skip forty years,' said the Baker, in tears,
'And proceed without further remark
To the day when you took me aboard of your ship
To help you in hunting the Snark.
'A dear uncle of mine (after whom I was named)
Remarked, when I bade him farewell--'
'Oh, skip your dear uncle!' the Bellman exclaimed,
As he angrily tingled his bell.
'He remarked to me then,' said that mildest of men,
' 'If your Snark be a Snark, that is right:
Fetch it home by all means--you may serve it with greens,
And it's handy for striking a light.
' 'You may seek it with thimbles--and seek it with care;
You may hunt it with forks and hope;
You may threaten its life with a railway-share;
You may charm it with smiles and soap--' '
('That's exactly the method,' the Bellman bold
In a hasty parenthesis cried,
'That's exactly the way I have always been told
That the capture of Snarks should be tried!')
' 'But oh, beamish nephew, beware of the day,
If your Snark be a Boojum! For then
You will softly and suddenly vanish away,
And never be met with again!'
'It is this, it is this that oppresses my soul,
When I think of my uncle's last words:
And my heart is like nothing so much as a bowl
Brimming over with quivering curds!
'It is this, it is this--' 'We have had that before!'
The Bellman indignantly said.
And the Baker replied 'Let me say it once more.
It is this, it is this that I dread!
'I engage with the Snark--every night after dark--
In a dreamy delirious fight:
I serve it with greens in those shadowy scenes,
And I use it for striking a light:
'But if ever I meet with a Boojum, that day,
In a moment (of this I am sure),
I shall softly and suddenly vanish away--
And the notion I cannot endure!'
Tuesday, September 26, 2017
The Popularity of "Not Trump"
Republican Gov. Larry Hogan remains popular in Democratic Maryland, where he is largely viewed as a moderate who has taken the state in the right direction, a new poll has found.
About 62 percent of state residents approve of the job Hogan is doing as governor, according to Goucher Poll results released Monday. Fifty-nine percent of Democrats approve of his work.
At the same time, more than a quarter of Hogan’s GOP base believes the governor has put too much distance between himself and President Donald J. Trump, a fellow Republican.
The distance, analysts say, might have worked to Hogan’s advantage.
Trump’s disapproval ratings have climbed since the February poll. But he’s still more popular than Congress.
About 71 percent of people surveyed disapproved of Trump’s tenure. Fifty-six percent said they strongly disapproved. Ninety-three percent of Democrats disapproved of the president’s work so far. Seventy-one percent of independents and 21 percent of Republicans disapproved.
Pollsters interviewed 671 Maryland adults from Sept. 14 through 17. Five hundred thirty-three said they were registered voters. The survey has a 3.8 percentage-point margin of error.
Although 28 percent of Republicans think Hogan has distanced himself too much from Trump, it hasn’t dampened GOP enthusiasm for the governor. The governor’s approval rating among Republicans is 82 percent.
Democrats outnumber Republicans in Maryland by more than two to one.
Hogan’s popularity is driven by ”just consistency,” said Mileah Kromer, director of the Sarah T. Hughes Field Politics Center at Goucher College, which conducted the poll.
“People like hearing a clear, consistent economic message from the governor,” she said.
Most of the poll’s findings painted a positive picture of Hogan’s reelection chances in 2018. {***DANGER WILL ROBINSON!!!!***}
A majority of registered voters — 51 percent — say they either plan to vote for Hogan, or are “leaning” toward doing so. The poll found a 6 percentage-point uptick since February in the percentage of voters who say they’ll definitely vote for someone else. That group now represents 21 percent of respondents.
“If we were going to see some sort of Trump effect, you would have expected it to show up by now,” said Todd Eberly, political science professor at St. Mary’s College.
“His approval rating fell among Republicans, and I have to imagine some of that is the party base upset about him breaking with Trump, upset about” Hogan’s support for removing the statue of former Chief Justice Roger B. Taney from the State House grounds, Eberly said. “I don't think that in 2018 that would make them go out and vote for a Democrat.”
Seven Democrats have announced plans to run against Hogan: Baltimore County Executive Kevin Kamenetz, Prince George’s County Executive Rushern L. Baker III, state Sen. Richard S. Madaleno, former NAACP CEO Ben Jealous, Baltimore lawyer Jim Shea, author and tech entrepreneur Alec Ross, and Krish Vignarajah, a former aide to Michelle Obama.
A growing number of residents think the state is on the wrong track, but they’re still in the minority.
“Folks are a little bit less optimistic about the direction of the state,” Kromer said. “It's always difficult to disentangle what exactly that’s about.”
Fifty-five percent of respondents thought Maryland was on the right track. Most of the people who felt that way were also Hogan supporters.
The percentage of respondents pessimistic about the state’s direction increased by nine percentage points since the February poll.
Twenty-four percent said the economy was the most important issue facing the state. Fourteen percent thought education was the top issue, and 10 percent worried most about crime and criminal justice.
Hogan focused on pocketbook issues during his 2014 campaign, and has hewed closely to financial and business issues during his first two and a half years in office. Poll respondents were generally optimistic about Maryland’s economy. Fifty-seven percent said they felt “mostly positive” about it.
Residents don’t agree on where Hogan falls on the ideological spectrum. A little less than half of all residents, 45 percent, identified Hogan as a moderate, but about a third, 31 percent, thought he was conservative. Seven percent defined him as a liberal.
There were also mixed views among residents about Hogan’s place within broader Republican politics.
Forty-four percent said he represented “the future” of the party, and 24 percent said he represented the past. (The rest thought he represented both, neither, or they didn’t know.)
Congress continued to have dismal approval ratings, reflecting a national mood about the effectiveness of federal lawmakers. About 88 percent of those surveyed disapproved of the job Congress was doing. Fifty-nine percent said they “strongly disapprove.” That’s the most disillusionment with Congress since October 2013, when the federal government shut down amid a budget dispute.
Monday, September 25, 2017
Thursday, September 21, 2017
Tolls, Tolls Tolls. Whatever Happened to "Free"ways?
Gov. Larry Hogan on Thursday proposed a $9 billion project to add four express toll lanes each to the entire stretches of three of Maryland’s most congested highways — the I-495 Capital Beltway, the I-270 spur connecting Frederick to D.C. and the 295 Baltimore-Washington Parkway that connects the city to Washington.
“This problem has been marring the quality of life of Maryland citizens for decades,” Hogan said at a news conference. “Today, we are finally going to do something about it.”
The massive project involves persuading the federal government to give the Baltimore-Washington Parkway to the Maryland Transportation Authority. Hogan said he has already met with U.S. Secretary of the Interior Ryan Zinke about the transfer, and instructed state staffers to “finalize the details.”
He told reporters that the federal government wanted to give the state the road, according to a state spokeswoman.
Hogan proposed adding four toll lanes to the entire stretch of that roadway, from Baltimore to D.C. The price tag of that project is estimated at $1.4 billion. In addition, Hogan said his office has started writing a formal request for proposals for private companies to bid on the $7.6 billion projects to widen I-495 and I-270. The companies would finance, design, build, operate and maintain those express toll lanes.
Existing lanes on each road would remain free to drivers, a spokeswoman said.
Hogan predicted the “three massive, unprecedented projects … will be absolutely transformative and will help Maryland citizens go about their daily lives in a more efficient and safer manner,” Hogan said.
which the private sector helps build roads in return for revenue the project generates have become increasingly common. That method is being used to build the Purple Line light-rail project in the Washington suburbs.
Hogan said his new plan would be “the largest P-3 highway projects in North America.”
He proposed adding four toll lanes to the entire stretch of the Capital Beltway in Maryland, from the Woodrow Wilson Bridge in Prince George’s County to the American Legion Bridge in Montgomery.
He also proposed adding four toll lanes to I-270, from it’s connection to the Capital Beltway to where it meets I-70 in the city of Frederick.
Tuesday, September 19, 2017
Monday, September 18, 2017
Environmentalists Demand Marylanders Pay MORE than DOUBLE for Energy!
A coalition of environmentalists, clergy and solar and wind energy companies launched a campaign Wednesday calling for half of Maryland's electricity to come from renewable sources.
That would double a policy adopted last year requiring that renewable energy account for 25 percent of the state’s electricity portfolio by 2020. The new campaign is setting a target of 2030.
“We cannot wait another moment to begin bringing about the clean-energy future we need,” said Brooke Harper, Maryland and District of Columbia policy director for the Chesapeake Climate Action Network.
The campaign is casting the state’s renewable energy mandate as a tool to create “green” jobs, particularly in economically depressed communities and among women and people of color. Among the groups endorsing what has been dubbed the Maryland Clean Energy Jobs Initiative are branches of the NAACP from across the state, Interfaith Power and Light, SEIU 1199 and the Maryland-Virginia Solar Energy Industries Association.
They are also stressing it as a way to promote environmental justice.
“For too long here in Maryland’s communities of color, our children and our elders have paid for dirty energy with their health,” said Bishop Eugene Taylor Sutton, leader of the Episcopal Diocese of Maryland.
The policy does not require utilities to buy renewable power, but it mandates that they buy certificates that each represent a megawatt of renewable power. Utilities like Baltimore Gas and Electric Co. and retail electricity sellers are required to buy enough of the credits to equal a set and growing percentage of their power supply — 15.6 percent in 2017 — or pay a penalty.
The certificates cost Maryland electricity ratepayers $126.7 million in 2015, according to the state Public Service Commission.
The 25 percent goal became law last year when when the Democratic-controlled General Assembly voted to override a veto by Republican Gov. Larry Hogan. The legislature had passed it the year before, but the governor rejected it, deriding the measure as a “sunshine tax.”
That suggests another difficult political fight ahead in Annapolis.
Karla Raettig, executive director of the Maryland League of Conservation Voters, said the coalition is prepared for that.
“We have a lot of momentum,” she said. That is especially true coming off a stretch of natural disasters “where you see the impacts of climate change,” she said.
Amelia Chasse, a spokeswoman for Hogan, did not respond to questions about the governor’s position on the proposal. She said he “strongly supports efforts to combat climate change,” including statewide greenhouse gas reduction goals, Maryland’s participation in a regional cap-and-trade system for Northeast power plants’ carbon emissions, and incentives for use of electric vehicles.
No lawmakers attended an event marking the launch of the campaign Wednesday in Charles Village. Del. Bill Frick, a Democrat from Montgomery County, plans to sponsor the bill in the House; Harper said the campaign is still working to line up a sponsor in the state Senate.
Del. Shane Robinson, another Montgomery Democrat, said he meanwhile plans to push a bill that would move the state to getting 100 percent of its power from solar, wind and geothermal generation.
Those sources combined for just 27 percent of the state’s renewable energy supply in 2015. The bulk of ratepayer subsidies go to trash incinerators, hydroelectric dams and paper mills, which burn a byproduct known as black liquor.
He called the 50 percent renewable energy goal “laudable,” but said Maryland is too small for its policy to make a meaningful impact on global climate change — unless it adopts a policy so aggressive it prompts other states to follow suit.
“If we can get other states and then other countries to act more quickly because of actions we take here, that’s how Maryland has an impact on climate change,” he said.
Harper said while the campaign’s bill and Robinson’s bill may appear to be competing, “we all have the same goal of getting Maryland to 100 percent clean, renewable energy.” She called the 50 percent goal “a critical benchmark and step” to getting there.
Tuesday, September 12, 2017
A Clear and Present Danger to the Republic; Trump or Hillary?
In an interview released Tuesday, Hillary Clinton called President Trump a danger to America.
Clinton was asked on the “Pod Save America” podcast about the Democratic Party’s messaging and whether, going forward, Democrats should focus on promoting their economic agenda or drill down on opposing President Trump.
Clinton seemed to admit her campaign struggled with that balance, lamenting that her policy proposals were “just not competitive with the reality TV show” her general-election opponent provided.
“And we tried so many different ways to break through that,” Clinton continued. “And we did, of course, advertise what we saw as the threats that Trump posed to the country.”
She continued: “Because frankly, we thought — and I still believe — he’s a clear and present danger to America. And I would have been less than responsible if I didn’t talk about that. But we tried to do both, we tried to make the case for both, and I’d be the first to tell you, it was difficult to break through.”
Later, Clinton reiterated the “danger” she said Trump poses, saying, “I think Trump, left to his own devices, unchecked, would become even more authoritarian than he has tried to be.”
Clinton largely receded from public life after her stunning election loss, but she is set to participate in a round of interviews in conjunction with the release of “What Happened,” her election memoir. The tome officially went on sale Tuesday, but a number of excerpts have already made waves.
In both the book and in the “Pod Save America” interview, Clinton also took a number of digs at her primary foe, Sen. Bernie Sanders, I-Vt.
In “What Happened,” Clinton charges Sanders with “impugning my character,” thereby inflicting “lasting damage” and “making it harder to unify progressives” in the general election.
Wednesday, September 6, 2017
Tuesday, September 5, 2017
Immigration Flashbacks
THE PRESIDENT Effective immediately, the Department of Homeland Security is taking steps to lift the shadow of deportation from these young people. Over the next few months, eligible individuals who do not present a risk to national security or public safety will be able to request temporary relief from deportation proceedings and apply for work authorization. Now, let’s be clear — this is not amnesty, this is not immunity. This is not a path to citizenship. It’s not a permanent fix. This is a temporary stopgap measure that lets us focus our resources wisely while giving a degree of relief and hope to talented, driven, patriotic young people. It is –
Q (Inaudible.)
THE PRESIDENT: — the right thing to do.
Q — foreigners over American workers.
THE PRESIDENT: Excuse me, sir. It’s not time for questions, sir.
Q No, you have to take questions.
THE PRESIDENT: Not while I’m speaking. Precisely because this is temporary, Congress needs to act.
from Politico
President Donald Trump’s harsh criticism of immigration programs and Congress’ refusal to lift a cap on work visas meant many seasonal businesses had to hire American this summer — and pay their workers more.
That's good news for Trump, for U.S. workers, and for supporters of Trump's “American First” agenda, but business groups complain that increased spending on wages will ultimately cost jobs and sap company profits. Across the country, enterprises ranging from oyster shuckers to landscapers say they were forced to give up contracts and forgo revenue because they just couldn’t find enough workers to do the jobs this summer.
"There were a lot of businesses that lost a lot of revenue,” said Laurie Flanagan, co-chair of the H-2B Workforce Coalition, a lobbying group with a membership that includes the U.S. Chamber of Commerce.
Trump has blasted programs that allow foreign guest workers to take jobs in the U.S. legally. “Widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries to fill the same job for sometimes less pay,” he told workers in Wisconsin in April. “This will stop.”
The Trump administration hasn't moved specifically against the visas for summer workers — known as H-2Bs. His own companies use H-2B workers, especially at his Mar-a-Lago resort, which recently requested H-2B visas for 70 cooks, housekeepers and servers to start in October. But an executive order that Trump signed in April put the federal government on notice that he intended to tighten restrictions on guest-worker visas, and created a chilling effect.
The U.S. had 66,000 slots this year for foreign workers to staff non-agricultural seasonal businesses — landscapers, hotels and seafood processors among them. By March, these slots were all filled. In previous years, Congress often dealt with such shortages by extending the guest workers' H-2B visas. But this year Congress ignored employers’ pleas, putting the decision in the hands of the administration. In response, the Department of Homeland Security added 15,000 visas in what then-DHS Secretary John Kelly called a "one-time increase." Even that somewhat grudging gesture didn't occur until mid-July, when nearly one-third of summer was already past.
The Beachmere Inn in Ogunquit, a seaside village in southeastern Maine, didn’t receive the eight H-2B visas it requested to supplement its summer housekeeping staff. To make ends meet, owner Sarah Diment recruited college kids through her Facebook network and cobbled together part-time shifts, some filled by American students and some by foreign students here on cultural exchange visas. In the past year, Diment estimates she had to boost housekeeping wages roughly 10 percent to keep employees.
Diment could continue to increase wages, but the higher staffing costs, she says, would make it difficult to keep the business open year-round. “Raising wages is good in theory, until you put it into practice,” she said.
North American Midway Entertainment, a large traveling-amusement-park company headquartered in Indiana, requested roughly 400 H-2B workers this year, a quarter of its total seasonal workforce. But the Department of Homeland Security reached its 66,000-visa cap before the company could secure the guest workers. Company President Danny Huston said he had to skip three fairs and contract out some ride operations because of the visa shortage. In total, he estimates that North American Midway may have lost as much as $800,000.
But the company was able to cover about one-third of the vacancies by hiring American through job fairs, newspaper advertisements, and social media. "We even set up a job fair in Puerto Rico," Huston said.
Other employers say hiring American just isn't an option.
Michael Martin owns a Maryland-based landscaping company. Roughly 40 percent of his workers — and the majority of those performing manual labor — hold H-2B visas, he told POLITICO. Martin received his H-2B workers on time this year, but he knows other landscapers who didn't, and lost clients as a result. "It affects people, their bottom line," he said, "whether they’re still in business, whether they’re going to make it next year."
The H-2B program requires employers to first seek out U.S. workers before they bring in guest workers. But Americans, Martin says, just won’t take landscaping jobs. He paid $2,500 for a two-week want ad that ran in the Baltimore Sun (print and online) and on social media. The jobs Martin was advertising paid more than $14 an hour, slightly above the average wage for the job in his area. Even so, he got no applicants. “No parents in Maryland are raising their kids to swing a pickax,” Martin said.
Not everyone agrees with that view. Daniel Costa, director of immigration law and policy research at the left-leaning Economic Policy Institute, said the recruitment standards for the H-2B program aren't sufficient to give U.S. workers a real crack at the job.
“The requirements aren’t that onerous, and the DOL isn’t really checking all that much,” Costa said. H-2B employers are required to offer a so-called prevailing wage — defined as the average wage paid to people in a similar role in the same area — but Costa said the benchmark should be higher. A rider inserted in a 2016 spending bill, and re-upped again this year, allowed employers to use their own private wage surveys rather than Labor Department data to calculate prevailing wages. “There’s always some sort of loophole,” Costa said.
If H-2B workers had skills that were hard to find in the U.S., one might expect H-2B wages to be rising faster than those of other workers. But in a recent report, Costa found the opposite: Wage growth over the past decade in nine of the top 10 H-2B occupations was slower than wage growth for all workers, and some occupations actually lost ground. (Waiters and waitresses were the exception, with 20 percent wage growth from 2004 to 2016.)
Some employers say they can't raise wages substantially without pricing their products out of the market. Raz Halili is an owner of Prestige Oysters, a seafood processing outfit with operations in Louisiana and South Texas. He says he lost $3.5 million in sales this year because he got only one-third of the 150 H-2B workers he needed to shuck oysters. Prestige Oysters posted the H-2B worker positions at $9.64 an hour, according to data provided to the Labor Department. That's $2.39 above the state minimum wage, but $2.63 below the national 2016 average hourly wage for “meat, poultry, and fish cutters and trimmers,” according to EPI.
“You raise wages, and then you raise the prices of your crab meat,” says Jack Brooks, president of Chesapeake Bay Seafood Industries Association. Customers will pay more for domestic crab meat, he says, but if the price goes high enough, they’ll buy from "the guy down the street who’s using Chinese crab meat.”
EPI’s Costa disagrees with that logic. “It’s true that you can only raise [wages] so high,” he said. “I’m not saying that you should be paying $30 to $40 to people picking crabs.” But more modest increases — from $9 to $12 an hour, for instance — could bear different results, he said. “If you don’t have a business model that requires you to pay a decent wage," Costa said, "then you have to think about your business model."
One reason guest-worker wages tend to be low, quite apart from questions about the scarcity of their skills, is that the workers are by definition vulnerable as temporary guests of the U.S. government. “This is a controllable and compliant workforce,” said Art Read, general counsel with Philadelphia-based Friends of Farmworkers. “A U.S. worker with a family may miss a day of work.”
But many employers say the jobs that H-2B workers perform are so miserable that few Americans would take them, even at substantially higher pay. Of oyster shucking, Prestige Oyster's Halili says, "It’s a dirty, gritty job that most people just don’t want to do. They’ll do it for a few days or they’ll do it for a week, and then they just won’t show up.”
Meanwhile, despite the high demand, the 15,000 H-2B visas that DHS added to the pile in August are not yet exhausted — a bit of a surprise given the intense lobbying efforts by business groups and members of Congress. The H-2B Workforce Coalition's Flanagan chalks it up to how late in the fiscal year the visas were made available.
“I think that it’s the timing,” she said. “It would have been a different story if we saw visas released earlier in the process.”