Business/Economy

Far fewer workers from abroad are in Alaska this summer, adding another challenge for employers

Foreign college students who once flocked to Alaska for summer work are in short supply this season, adding to the state’s labor shortage and creating another complication for local businesses trying to get back on track as the pandemic ebbs.

The employees, part of the U.S. State Department’s J-1 Summer Work Travel cultural exchange program, have traditionally worked in restaurants, hotels and other businesses during Alaska’s busy summer tourism seasons.

Before the pandemic, they came to Alaska in outsized numbers compared to other states.

But last year, the program was virtually nonexistent after President Donald Trump implemented a ban on the J-1 and other visa programs during the pandemic.

And their numbers remain low this summer, as understaffed U.S. embassies and consulates work through a backlog of visa applications, a State Department official said. Also, Anchorage employers say affordable housing for the students is hard to find.

More than 200 J-1 workers have arrived in Alaska so far this summer, more than last year. But that’s a fraction of the 2,000 that came in 2019, according to State Department data.

[Independent travelers have arrived in Alaska, and they’re a needed boost for many businesses]

The lack of foreign student workers is a big reason why the 49th State Brewing Co. in downtown Anchorage has closed on Mondays and Tuesdays, said co-owner David McCarthy.

The restaurant is employing about 20 of the workers this summer, about one-fourth of their numbers in a normal year.

“It’s having a huge impact, not just on our business but lots of businesses,” McCarthy said.

The shortfall comes atop the broader challenge restaurants and other employers have had finding enough workers this season.

The restaurant is employing and training about 175 people. But it still needs about 80 employees to return to pre-pandemic staffing levels, McCarthy said.

Another pandemic-related problem: It’s been hard finding housing in Anchorage that the students can afford, he said.

The Aviator Hotel Anchorage housed J-1 workers before the pandemic, but the city has contracted with the hotel to house homeless residents there as overflow from the Sullivan Arena mass shelter. The hotel is also getting remodeled, leaving no space for the workers. Other landlords who also once rented apartments to the summer workers have instead signed up long-term tenants, amid uncertainty over tourism and the J-1 program earlier this year, McCarthy said.

49th State Brewing is employing workers from Thailand and Jamaica this year. They prep food, clear tables and do other important jobs, McCarthy said.

They’re paid the same as their Alaska counterparts for the same work, he said. Starting pay ranges between Alaska’s minimum wage of $10.34 an hour and $18 an hour, he said.

On Tuesday, five young women from Thailand sliced vegetables and spread a crab mixture on bread, pre-staging food for cooks who would arrive on Wednesday.

Bangkok college student Baiya Thongruksanit, 23, said she and a few other friends came to Alaska to make money and experience a new country.

They’d heard stories of Thai students who had trouble getting J-1 visas, she said. But they found lodging in Anchorage they could afford — six people in a three-bedroom place — thanks to a landlord who is originally from Thailand.

Thongruksanit said she’s taken a second job at Polar Bear Gifts to help save money. Despite the hard work, it’s fun, she said.

“It’s a new culture, and you get to do so many different things,” she said.

Nationally, J-1 numbers plummeted to 5,000 last year, from more than 100,000 annually before the pandemic, a State Department official said in an email.

The State Department knows the delays are creating difficulties for employers, and the official said the agency is trying to process visas as quickly as possible.

Criticism of the program has centered on questions surrounding whether the J-1 workers are getting a true cultural experience when they work so much, and whether they’re a cheap source of labor for jobs that Americans could fill. Student workers can also be burdened with costs, such as their flight to the U.S. and fees required by placement agencies that connect the workers with employers.

[From 2016: In Alaska, young foreign workers on “cultural exchange” visas wash the dishes and make hotel beds]

The J-1 workers, in part because several take multiple jobs, are often a visible presence in Alaska in summer, said Mouhcine Guettabi, an economist with the Institute of Social and Economic Research at the University of Alaska Anchorage.

“They represent part of what summer is all about in Alaska,” he said.

Mike Middleton, manager for a restaurant group that includes Humpy’s Great Alaskan Alehouse and Flattop Pizza and Pool, said the sponsor companies that typically connect Alaska businesses with J-1 prospects haven’t called this summer.

He said he’d normally have an 8-inch-high stack of applications from J-1 students who come to Humpy’s looking for their second job.

Only a few J-1 workers have applied this year, and he’s hired one, from Jamaica.

“She works very hard,” he said.

He’d hire several more this summer if he could. The restaurant is open daily but it could increase sales with more staff, he said.

Jay Green, owner of Polar Bear Gifts in downtown Anchorage, said he normally employs about 20 J-1 workers, roughly his half usual summer workforce.

[To lure employees during the worker shortage, some Alaska companies are offering perks or more pay. Others are scaling back until they can restaff.]

This year, working with the sponsor company, he has hired only three J-1 workers, from the Dominican Republic.

He’s also signed up a couple of others who are working a second job after another employer brought them to Alaska, including Thongruksanit.

Green said he could have brought more foreign workers to the state. But he’s also had trouble finding affordable lodging for the students, he said.

To deal with his shortage of workers, the gift shop has shaved four hours off its morning and evening schedule, he said.

It’s still open 12 hours a day. Customers returned “instantly” in early May after pandemic restrictions loosened and tourists began returning, he said.

Business is going well — but it could be better, he said.

“We’d do better if we were open more and had more employees, and things were stocked and ready to go,” he said.

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