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Cook County tourism industry braces for visa program changes

Sep 24, 2017 06:56AM ● By Editor
With downtown Grand Marais beyond it, the schooner Hjordis sails across the town's harbor on its way to Lake Superior in May 2016. File / News Tribune

By Lisa Kaczke of The Duluth News Tribune on Sept. 23, 2017 

Struggling to find enough domestic workers to fill seasonal jobs, Cook County's tourism industry typically turns to two visa programs to find international workers in the summer and fall.

But Cook County business owners say potential changes to the J-1 student work visa and H-2B temporary worker visa could cripple their ability to serve the tourists who flock to the North Shore and Gunflint Trail.

Located at the tip of Minnesota's Arrowhead, where 90 percent of the county is undeveloped state- and federal-owned land, tourism accounts for more than 80 percent of Cook County's economy. The remaining non-tourism businesses, such as gas stations, are indirectly affected, said Jim Boyd, executive director for the Cook County Chamber of Commerce.

"It would be devastating," Boyd said. "We simply do not have the workers we need to support our tourism industry. We only have 5,200 people here, and we just do not generate the seasonal labor, particularly, that we need."

President Donald Trump's administration is considering reducing or eliminating the J-1 visa, which brings in about 100,000 students to the United States for summer work. Trump signed his "Buy American and Hire American" executive order, which calls for a review of U.S. immigration policies, in April.

While no decisions have been made on the J-1 program yet, Boyd said the reduction of the H-2B visa program by Congress this year has already negatively impacted Cook County businesses. H-2B visas are annually capped at 66,000 and, in past years, returning H-2B visa holders haven't been counted in that capped number — a provision Congress failed to extend to this year. That caused the number of H-2B visas to shrink by more than a half. Congress then gave the U.S. Department of Homeland Security a one-time authority to release an additional 15,000 H-2B visas this summer.

Boyd said use of the visa programs in Cook County doesn't displace any domestic workers. Businesses go through a stringent H-2B process that includes providing evidence that the business tried and was unable to fill its positions domestically, and the J-1 visa process can include unannounced inspections of the students' living quarters and wages. The J-1 visa is intended for university students to experience a cross-cultural exchange. Boyd said J-1 students in Cook County often are earning degrees in subjects related to hospitality.

Domestic hires preferred

Cook County businesses employ local residents both seasonally and year-round, and business owners say they would rather hire domestically if they can. Brian Sherburne, human resources director at Bluefin Bay in Tofte, said although the J-1 student workers pay their own way to Minnesota, the H-2B visa is expensive because businesses have to hire attorneys to help them through the petition process and then pay the visa petition fees and travel expenses for the workers.

Although exact numbers of Cook County's international workers aren't known, the Chamber's informal survey of businesses earlier this year found about 200 J-1 workers and 150 H-2B workers. Boyd estimated that the total number is likely 400-500 international workers employed at 40 businesses in the county.

Cook County's unemployment rate typically dips to about 2 percent during the summer and fall. A healthy unemployment rate is about 4.5 percent, and Boyd said Cook County's "really unhealthy" 2.3 percent unemployment rate during July and August indicates that not only is everyone who wants a job working, but businesses are hiring people who can't do the work because they're the only alternative.

Cook County isn't the only place experiencing a tight labor market — it has been a statewide trend since the recession, said Erik White, labor market analyst with the Minnesota Department of Employment and Economic Development. People tend to not take seasonal jobs when there's full-time employment available. The hospitality and tourism sectors also tend to have tight revenues and budgets, so it's not as easy as just raising salaries to entice workers, he said.

"It has hit the hospitality and tourism industries particularly because they tend to be entry-level positions or lower-paying positions and especially seasonal along the North Shore," White said.

Mindy Fredrikson, owner of the Gunflint Lodge, said their location 40 miles up the Gunflint Trail from Grand Marais makes it difficult to find people willing to spend a season working at their rural location. The labor market seemed to be especially tight this year, she said.

"There was a point when we felt we were fully staffed, but that was a matter of weeks before we were then again understaffed. We have only had probably two or three weeks that we weren't really advertising and actively trying to hire," she said.

The Gunflint Lodge has three J-1 students annually, and although hiring international workers isn't a large component of their staff, it is for other businesses in the area. When those businesses can't hire international workers, it affects the Gunflint Lodge's ability to find staff, she said.

"As soon as they're not able to get international workers, then it's just going to tap this already very difficult market for us to be able to find the other components that we rely on. The students and the retirees and the other people we do rely on will be that much scarcer and more difficult for us," she said.

The Cook County Chamber and elected officials have sent letters requesting that Sens. Amy Klobuchar and Al Franken and Rep. Rick Nolan support the continuation of the J-1 visa and expansion of the H-2B cap. The Chamber is also planning to convene a group to begin brainstorming options for businesses if the visa programs are reduced or eliminated. That could include partnering with ski resorts to share H-2B workers between the winter and summer or searching for workers willing to relocate to Cook County from areas with high unemployment rates in the U.S., Boyd said.

"We'll be looking at some of those things, but those are only temporary fixes. The fact is that for the long term, I don't see any practical solution right now beyond these visa programs. There are people there who want to do the work, and we need the work done," Boyd said.

H-2B visa shortage

The change to the H-2B cap left some Cook County businesses scrambling to find staff this year until they were able to receive the visas under the one-time expansion. A resort on the North Shore considered downsizing its restaurant offerings; a North Shore hotel had to find H-2B workers already working at a ski resort out west who could extend their visas and were willing to move to Cook County for the summer; and a canoe outfitter on the Gunflint Lodge brought in their family members to help out.

"I had never seen it as bad as it was this spring, in terms of not being able to find workers," Boyd said.

This was Bluefin Bay's third year using H-2B workers, and the company came in right under the cap. The company, which operates three resorts, three restaurants and a spa in Tofte, had 20 J-1 and H-2B workers this year. Businesses can apply for H-2B summer visas beginning Jan. 1, and there was a rush of businesses submitting the paperwork during that first week, Sherburne said. Bluefin Bay submitted its H-2B petition Jan. 5 for workers with a start date of April 5, and the company was able to get its visas only because there were enough petitions submitted ahead of them that were denied, Sherburne said.

Without those 44 workers, Bluefin Bay's staff shortage would be "significant," Sherburne said. Even the loss of the J-1 workers at the end of September, the peak of the tourist season for the North Shore's fall colors, will be enough to create a staffing gap.

"What ends up happening is you get people like myself, in administration, that we're in the laundry room, we're helping clean rooms, we're in the restaurant helping serve. Everybody jumps in, the owner, the directors, the controller, everybody jumps in and says, 'All right, this is a resort.' You just put on whatever hat needs to be put on and go to work," he said.

Fostering cultural exchanges

Gunflint Lodge's three J-1 workers were "so excited" to see moose within their first few days in Minnesota, Fredrikson said.

"All three of them were from Bangkok, a huge city, and bringing them out to a place where it's so quiet and you can see all the stars, it's a totally different environment for them," she said. "A lot of people, when they think about America, they are thinking about California and New York. They're not picturing Cook County or the Arrowhead or the North Shore of Minnesota. It's a different perspective for them, and they get to see this very real part of America that they wouldn't otherwise be exposed to at all."

The international students are an important part of the Gunflint Lodge's staff, but it's also "an important part of us being good world citizens, too," she said. She added that the staff benefits from the diversity, and the guests enjoy interacting with the students.

"I think our guests usually enjoy seeing them and meeting and hearing from people who come from other parts of the world. Our guests even enjoy that our staff comes from Florida and Texas and California," she said. "They enjoy the fact that there's diversity in the staff and everyone's not just from Minneapolis or just from northern Minnesota. When they get a chance to talk to the international students, they're really interested in what their experience is and what they think of America and what they think of Minnesota."

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