Guam: Wages Increase with Fewer H-2B Workers

By Preston Huennekens on February 13, 2018

Between December 2016 and December 2017, wages rose on the island of Guam by 4.5 percent for public sector workers and 2.53 percent for private sector workers, according to the Guam Department of Labor and local reporting.

In the same time period, the number of H-2B workers on the island fell from 437 to just 35. This reflects the federal government practice of denying nearly all H-2B applications to the island after 2015.

The result of a recent lawsuit, however, will prohibit the federal government from continuing its denial of almost all H-2B requests, despite how local workers benefited from the lack of cheap, foreign labor and saw their wages rise impressively as a result of their absence.

The unemployment rate on Guam stands at 4.5 percent, which is in line with the U.S. rate of 4.1 percent. Guam's chief economist, Gary Hiles, even commented that "the reduction in total employment is primarily associated with repatriation of skilled foreign workers under the H-2B visa program." Hiles' statement indicates that the small decrease in employment on the island did not affect local workers, but simply reflected the removal of temporary foreign laborers from the island.

This seemingly minor news from Guam is indicative of a phenomenon that CIS scholars have written about extensively. The presence of H-2B foreign workers can depress the wages of native and local workers. When the H-2B crutch is removed, we often find that businesses work harder to fill vacancies with Americans. My colleague Steven Camarota revealed in a 2017 report that available wage data shows no labor shortage in popular H-2B occupations.