The crab industry is in a tough spot as President Trump clamps down on legal immigrant labor

Maryland crabs.
Karen James Sloan | CNBC
Immigration rules threaten crabbing industry

As a supply truck backed up to the loading docks of G.W Hall and Sons on Hooper's Island last week, anxious crabbers stood by to unload dozens of bushels of live Maryland blue crabs.

For generations, this has been a familiar scene at the start of crabbing seasons on Maryland's Eastern Shore: scores of crabs off to be steamed and then picked apart for their meat.

This year, however, many in the industry are feeling the blues about what happens after the crabs are unloaded. That's because President Donald Trump's tighter restrictions on legal immigration are causing a shortage of laborers who handpick crab meat, putting some businesses in danger of shutting down.

Hooper's Island, in the Chesapeake Bay, is the heart of Maryland's crab industry. Seafood processors like G.W. Hall rely on foreign labor for crab picking. The workers are usually women from Mexico on temporary H-2B visas.

Demand for applications was so high this year that, for the first time, businesses had to enter a federal lottery to bring in foreign workers — and not everyone was a winner.

'An empty picking room'

At Russell Hall Seafood, there's a deafening silence, except for the ticking clock. The stainless steel tables are gleaming. Metal chairs are pushed against the concrete wall. Yellow garbage bins are stacked high in the corner, and 1-pound crab containers on the counter remain empty.

"As you can see, we have an empty picking room. Nobody here," said Harry Phillips, who took over the company in 1992.

Empty cans sit on a table at A.E. Phillips as they do not have crab pickers this season.
Karen James Sloan | CNBC

Before he purchased the business, he said, it had been closed for six years because it couldn't find enough American workers to pick crabs. Phillips advertised the vacancies, and hardly any locals showed up, so he inquired about the seasonal program for immigrant workers. Phillips said Americans want year-round jobs.

"They don't want an eight-month job like we offer, and that's all we offer," Phillips said. "So that's a good reason they don't want to apply for a job here."

One of the country's largest labor unions contends that businesses are gaming the system and taking away job opportunities from U.S. workers.

"What you have is employers who need to get approval for the visas very early in the year claiming in January, 'I can't find someone who wants to do this job in the summer,'" said William Spriggs, chief economist at the AFL-CIO. "And then they bring in foreign workers, and then when American workers go to look for the job in the summer, it's 'Oh well, I already have people. So you can't apply.'"

A tough lottery to win

The national cap on H-2B visas has been set at 66,000 for years, but businesses successfully lobbied to exempt returning workers from that count. That exemption disappeared last year as the Trump administration took a hard-line stance on immigration. Eventually, the Department of Homeland Security added an additional 15,000 visas, but businesses said it wasn't enough.

This year, companies had to enter a federal lottery to receive the coveted visas. DHS began accepting applications in February, and within a week, the number of requests exceeded the available slots.

Homeland Security Secretary Kirstjen Nielsen said last week at a hearing on Capitol Hill that the agency plans to increase the number of available visas in May, but she did not specify by how much.

"We are very aware. We have finalized our recommendation. It's working its way through the process," she said.

But seafood companies say they need workers now.

Crabbers industry in a pinch as immigration regulations tighten

"The lottery is unfair. It's inadequate, but the sooner we get [visas] the better," said Colleen Purcell, executive director of American Seafood Jobs Alliance, an industry group.

According to a report published by the University of Maryland, every unfilled visa leads to 2½ jobs lost in the state. The shortage of crab pickers also puts many other jobs at risk, said Jack Brooks, president of the Chesapeake Bay Seafood Industries Association.

"It devastates our communities, our local markets," Brooks said. "The people who make our boxes right here in our county, the people who service our equipment, our truck drivers, our truck repair people, the local markets it goes on and on and on."

A pressure campaign from Maryland

Charlie Gibby, owner of Gibby's restaurant in Baltimore, serves blue crabs from the Eastern Shore in his dishes. He is concerned that the shortage of crab pickers will affect the entire crab supply chain — and his bottom line. He wrote a letter to Nielsen and Labor Secretary Alexander Acosta urging them to take swift action.

"Restaurants are struggling economically, and if you take Maryland crab meat from them, hundreds of restaurants that depend on selling Maryland crab cakes made with Maryland crab meat will go out of business," Gibby wrote.

Gov. Larry Hogan, a Republican, also sent a letter to both secretaries seeking support for the industry. He estimated the economic hit at more than $9 million and the loss of more than 1,000 jobs in the state.

Crab Pickers in G.W. Hall and Sons Seafood company.
Karen James Sloan | CNBC

"I am requesting that DHS provide immediate H2-B cap relief as a temporary fix to help these companies stay in business," Hogan wrote in the letter, dated April 23.

Aubrey Vincent, owner of Lindy's Seafood, said her request for 104 seasonal worker visas was denied. She said she recently invested $50,000 to upgrade her processing plant but feared completing the project would leave her broke because she has no workers to use the equipment.

"So everything pretty much in this area is on hold including, we've got a boiler in this area we purchased in order to increase our capacity," Vincent said. "Unfortunately, now we also put a hold on this. We're concerned that if we don't stop some of these projects we're going to need some that money to survive the season without our workers."

'We got lucky'

Of the eight seafood companies on Hooper's Island, five received visas. G. W. Hall was one of them.

"We got lucky," owner Bryan Hall said. "We got visas, H-2B visas. Without them, we'd be out of business."

Crab industry hit by immigration restrictions

Inside the well-lit picking room of G.W. Hall and Sons, the nonstop sound of cracking crabs is mesmerizing. About two dozen Mexican women, the tips of their fingers wrapped in bandages to protect from accidental knife cuts, move swiftly to dig out the jumbo lump meat to fill 1-pound plastic cups.

The rhythm produced from cracking claws mixes with the Latino music coming from an overhead sound system. Hall aims to provide a pleasant work environment.

"I feel bad for having them, almost, because I've got friends who own different businesses that don't have [workers]," Hall said. "It's terrible, devastating."