This is the second in a two-part installment about labor problems facing Thoroughbred farm owners. Read Part 1 here.
Talk to enough Thoroughbred farm operators who are struggling to fill jobs and a pattern emerges: Their immediate concerns are articulated in terms of what work does and doesn’t get done in their paddocks, barns, and nurseries on a daily basis.
But when you speak to trade and marketing executives and elected officials, the discussion about how to best solve the nationwide labor shortage on horse farms trends heavily toward policy issues.
Both groups are fighting the same battle. Both accept that no easy solution is forthcoming. And both acknowledge that the entire process of sorting out horse farm labor woes is deeply entwined with partisan politics, our nation’s conflicting beliefs about people from foreign countries, and the state of America’s collective work ethic and social welfare programs.
Yet at times, the gents in boots and the guys wearing suits seem to be speaking different languages.
“Our Congressional delegation here in Kentucky, which is a fairly good one with the seniority that many of the members have, of course they’re aware of the problem,” said Chauncey Morris, executive director of The Kentucky Thoroughbred Association/Kentucky Thoroughbred Owners and Breeders organization. “But their caucus has to move as one. There is little support to do sort of band-aid fixes on this particular issue, which from a political standpoint, we really do have to understand. There are a lot of priorities that are going on [nationwide], not the least of which are obviously health care, national security, and tax reform. Immigration reform is one of those priorities. But it’s not the top priority.”
Morris continued: “Our farms are paying much better than minimum wage, and they’re still finding it hard to fill jobs, and that’s with local workers. As far as our Hispanic labor force, that’s also getting tougher. We know that the only relief that’s going to come is if there is substantive immigration reform, and the Thoroughbred industry is not alone in advocating for that. So is ‘Big Ag.’ And when I say ‘Big Ag,’ we’re talking about large food processors, large wine growers, peanut farmers, the American Farm Bureau–it runs the gamut… They are all advocating for and telling the Trump White House the exact same thing. This isn’t the dereliction of anybody’s government-relations strategy. It’s just that Congress, the majority, hasn’t seen fit yet to move on this particular issue.”
It’s important to differentiate the two guest worker visa programs that the Thoroughbred industry can rely upon to legally hire temporary foreign workers. Let’s start first with the H-2B visa. That program has been in the racing news for the better part of a year because of its newly changed effect on employment on Thoroughbred backstretches.
H-2B allows U.S. employers to bring foreign nationals to the United States to fill temporary non-agricultural (emphasis added) jobs for which U.S. workers are not available. After a period of 10 months, the work term expires and those employees must return to their home countries. Backstretch workers are not considered “agricultural” by the government, so the racing industry must compete with many other industries to obtain H-2B clearance for prospective employees. The number of visas is capped at 66,000, and the Louisville Courier-Journal reported earlier this year that racing’s share of those visas for 2017 is less than 2%.
In previous years, that 66,000 cap didn’t matter as much because returning workers who had qualified for the H-2B program in any of the three previous years did not count against the cap, and racetrack employers could build long-term relationships with workers who primarily came from Latin American countries. But that all changed on Sep. 30, 2016, when Congress allowed the “returning worker” exemption to lapse into inactivity. It has not since been restored, and it has caused a hiring crunch all across the nation’s backstretches.
The H-2A visa program, by contrast, is what farm operators rely on if they want to bring in temporary foreign workers to work with horses in an “agricultural “(i.e., not racetrack) setting.
There is no cap on H-2A visas, which you might think would make them easier to obtain.
But National Thoroughbred Racing Association president Alex Waldrop, who has lobbied intensely for the two programs to be more user-friendly for racehorse-related employers, assured TDN they are not.
“H-2A is the farm version of the H2-B, and it’s an extraordinarily hard visa to obtain,” Waldrop said. “It’s expensive, it’s time- and labor-intensive, and it’s only for a three-year period.”
Waldrop detailed some–but not all–of the dizzying steps in the qualification process: A prospective H-2A employer must prove their qualifying job is agricultural in nature, requires temporary unskilled workers, has been documented as being offered to U.S. citizens first (and that none will take it), show that the pay won’t depress the wages of anyone else, and certify that the pay meets the (varying) government standards for “prevailing wage.” You also have to go through the certification process every single year in order to continue to be qualified, he said.
“So it’s very onerous. It’s a hassle. It’s been around for a long time and farms do utilize it,” Waldrop summed up. “But proving and staying current with all of these things is a big headache. As a consequence, mostly only large farms take advantage of it. Smaller farms? I can only speculate what they do.”
When asked if they utilize the H-2A visa program, none of the five farm operators interviewed in Part 1 of this said they do.
Waldrop said there were some immigration reform rules being considered a few years ago in a more cooperative political climate that would have been beneficial to the Thoroughbred industry. One was the concept of a “blue card” to allow non-U.S. citizens to enter the country to work on a semi-permanent basis at agriculture jobs without the need for burdensome re-certifications. Such comprehensive solutions are still out there, Waldrop explained, but he sided with Morris in admitting that immigration reform is not a current Congressional priority.
“So we really have a two-pronged fight going on in Washington,” Waldrop said. “There’s a group that wants to keep immigrants out, including temporary workers, who technically aren’t immigrants. We have the Department of Labor, who wants to be very careful that those who do come over are here under very specific circumstances, are not taking U.S. jobs, and are not driving U.S. wages down. So all that makes it almost impractical for farms right now to utilize H-2A visas, [and it can] drive employers away” from filling positions legally through the proper channels.
Morris put it this way: “It becomes a business constraint whenever [farm owners] can’t build off their plants a little bit more–have a few extra broodmares, or frankly have another horse or two in training, even if they have the stall space.”
U.S. Representative Andy Barr (R-KY), who serves as the co-chair of the bipartisan Congressional Horse Caucus, might be the best bet for horse farm owners seeking relief at the federal level.
“I think it’s significant,” Barr responded when asked for his take on the scope of the Thoroughbred industry’s farm-related employment plight. “I’m hearing routinely from my constituents that are in the horse business that there is a labor shortage.”
Barr led off a phone interview with TDN last week by speaking about the need to return worker exemptions to the H-2B program and achieving permanent cap relief.
Reminded that the focus for farms had more to do with the agricultural-work visa, the H-2A, Barr said, “Obviously, the H2-A is used by horse farms. That is an important program for them.” Yet Barr kept returning to the H2-B angle.
“What we’re talking about is a program that does not in any way undermine homeland security,” Barr said. “This is a program, H2-B, that is a well-documented and vetted program, and these are [foreign guest workers] who are proven. Employers have gone through a vetting process. There’s no risk to our security situation with these individuals who have been working with these employers for some time.”
Barr said that in mid-June he spoke with U.S. Rep. Michael McCaul (R-TX), the chairman of the Homeland Security Committee, about agricultural labor difficulties.
“I told him this was an urgent problem that needed immediate attention,” Barr said, adding that he asked for and received McCaul’s commitment to provide some form of help. “So I’m just going to stay on him, and see what we can get done in the short term.”
With regard to immigration legislation that might affect labor, Barr said that McCaul is poised to re-introduce a border security bill that could include some components of relief for farm owners seeking temporary foreign workers.
“I do think we should pass that bill,” Barr said. “And in supporting some of the [Trump] administration’s proposals to strengthen border security, that will give the American people greater confidence. That will give members of Congress greater confidence to proceed with the important work of streamlining our guest worker programs.
“I’m just speaking for myself, but Congress should be able to walk and chew gum at the same time,” Barr continued. “We should be able to–at the same time that we’re enacting legislation and supporting the administration’s policies to strengthen our border and to strengthen interior enforcement and stop illegal immigration–we should at the same time be perfectly capable of reforming the H-2A and H-2B programs to provide legal guest workers to agriculture and other industries that need labor.”
Waldrop backed up the farm owners’ assertions that a feeling of governmental unwelcomeness–xenophobia toward foreigners at the worst; uncertainty over their status at the least–was keeping some willing and qualified guest workers from coming back to America to seek horse-related jobs they once held.
“What we’re seeing more of is that the temporary workers are just not returning from Mexico, or wherever they’re coming from in Latin America,” Waldrop said. “So there are not enough workers, period. At the racetrack that means trainers either have to give up horses, or do more of the work themselves. At the farm, I think it’s more of the same… As long as there are temporary workers available, we don’t really have that problem. But once the fear of deportation takes root and we don’t see the temporary workers coming back, that’s when we’ll start seeing more and more problems.”
Yet Barr was adamant that an atmosphere of hostility toward foreigners was not what is keeping those laborers from working in this country.
“To the extent anybody is saying that, I think that fear, if it’s real, it’s misplaced fear,” Barr said. “And certainly it is the policy of the majority of Congress to do both things–to secure our border to ensure our homeland security, but at the same time make sure that our guest worker programs are providing the labor that our agriculture industry requires for our economy.”
Barr continued: “If [the fear] is real, it’s unjustified and unwarranted, because the administration and the Congress’s approach to border security should not be conflated or confused with legal guest worker programs. In fact, in order to reform our immigration system we need both, and they’re not incompatible and they’re not mutually exclusive. They’re complementary… We’re a nation of immigrants, but we’re also a nation of laws.”
Barr was asked for his take on the point that several farm owners made about the need to face reality and simply pay higher wages if they want to lure better workers.
“Supply and demand in labor will set the price, clearly,” Barr said. “But what I would say also is that we do in this country need to take a hard look–and not just for agriculture or farms in central Kentucky–at our welfare system.
“It’s true that we’re closing in on full unemployment from the perspective of the unemployment rate, and that’s a positive,” Barr continued. “But the labor participation rate is the more meaningful statistic. And the fact of the matter is we are still stuck at one of the lowest labor participation rates since the late 1970s. And what that indicates is that there is a large number of work-capable, able-bodied adults in this country who are not only not looking for work, they’re just on the sidelines. They’re not in the workforce and they’re not even looking for work. And what many employers in my district have told me is that they can’t compete with the government; that the government is paying people to not work.”
Congress, Barr said, is considering revamping work requirements as a component of welfare eligibility and coming up with incentives that might improve the labor participation rate.
“Work is not a punishment. Work is a blessing,” Barr said. “And we want work-capable, able-bodied adults to be encouraged to go back to work, and we need to stop the practice of the government paying people to not work.”
Waldrop was asked a similar question. Is the need to pay better wages–and not immigration reform–the real issue?
“I will tell you that at the racetrack level, people are adamant that it’s not a wage issue,” Waldrop said. “But trust me: Go look at the [online] comments of just about any time this issue comes up, and certainly when I am quoted on it, there are lots of people who are saying this is all about wages; this is all about an unwillingness to pay enough. And that’s the debate we’re having in this country right now, frankly, about whether there should be immigrants coming and going [and whether foreign workers] drive down wages and eliminate jobs for U.S. citizens. It’s a tough debate, and I don’t have the solution for it. Is the [visa] program too onerous and workers aren’t out there? Or is it that we’re not willing to pay enough? I don’t know the answer to that, and I would be speculating if I were to say it.”
To wrap up the discussion, Waldrop was asked if he thought the Thoroughbred industry’s labor difficulties are likely to get worse before they get better.
“I think yes, there’s the potential for it to get worse because of the deportation fears,” Waldrop said. “And the fact that we’re seeing fewer people willing to cross the border to come to the U.S. to take temporary work or apply for temporary work visas because they’re not sure what the outcome will be. Some of the strong rhetoric coming out of the Trump administration is having a negative impact, if only because people are fearful of coming back across the border. It’s a more hostile environment, and I don’t see that improving at this point in time. And I think it makes [labor problems] more difficult.”ã—@thorntontd