Halt of J-1 visa program could further cripple beach businesses

J-1 visa workers flock to the Rehoboth Beach Boardwalk each year to work at businesses. | PHOTO BY ALVIN MATTHEWS

REHOBOTH BEACH — While Delaware beach businesses are bracing for potential impacts of the coronavirus-related closures, tight restrictions on international travel could hit the summer workforce hard.

Roughly 1,000 international students come to the Rehoboth Beach area each summer, arriving in early May, to work under the U.S. Department of State’s summer work travel program. But in mid-March, the federal government announced it would pause the J-1 visa program for 60 days.

“Everyone’s out in the cold right now,” said Carol Everhart, president and CEO of the Rehoboth Beach-Dewey Beach Chamber of Commerce. “It’ll be interesting to see what happens this summer. We needed employees before the pandemic. Now, it’s unknown if we’ll get the number of [J-1 visa students] we need and hope for.”

The J-1 program draws international students, most under the age of 30, to come to the United States to work for 90 days and travel for 30 days before the visa expires. It’s billed as a cultural exchange for international students. To participate, the student must apply to a sponsor organization, which serves as the student main point of contact throughout the summer.

Rehoboth Beach Boardwalk | Photo by Ashim D’Silva

International students who work here spend 78% of their wages while here, according to a EurekaFacts study in 2017. Overall, the economic impact was $5,300 per student.

In the Delaware Cape region, J-1 students typically find work as amusement park ride operators, restaurant servers and housekeepers in hotels. In 2019, there were 1,056 J-1 visa students who worked down at the beach, and most came from Russia, Romania and Turkey.

The Council on International Educational Exchange, one of Delaware’s prominent sponsors, announced online it will not be taking any new applications, but those made before March 23 will be allowed to move forward.

Two weeks ago, Delaware Restaurant Association President and CEO Carrie Leishman got some calls from restaurants that were concerned about getting the number of J-1 visas needed. But since the stay-at-home order, the industry has gone into crisis mode.

“Right now, it’s triage. What’s pressing about this crisis is making it through this intact,” Leishman said. “Once we start opening up for business, then we need to look at the people that need to work. We’re going to have a whole lot of people out of work. I don’t know if the J-1 visa program will be as vital now than it has been in a robust economy.”

There’s not a lot of slack in the local labor market. Sussex County, which is grouped into the Salisbury, Maryland, metropolitan area, had an unemployment rate of 4% last July, almost two full percentage points below where it was in January 2019.

Maryanne Kauffman, director of the International Student Outreach Program, said she’s preparing as if her organization will see students, but she still has many questions. Her organization supports students, with organizing meals at local churches, cultural trips and other efforts.

“The businesses here are absolutely desperate for workers,” Kauffman told Delaware Business Times. “Where would people find 1,056 workers locally to meet that need?”

What makes J-1 visa students ideal candidates to many businesses is that they arrive before Memorial Day and can stay after Labor Day, while American college students may still be finishing courses, she said.

“Some American students can’t manage to move for three or four months and pay for housing,” Kauffman said. “Many of them are looking for internships, paid or unpaid, to further their careers instead of a summer job.”

Complicating matters is the shortage of housing that can be rented on a service worker’s budget. It’s common to have six J-1 students staying in one house. That could become a bigger issue if Delaware is still battling coronavirus during the summer season.

“My concern is if the students come, the housing situation could get a lot worse. How would a quarantine look like if they’re living in tight quarters with five other students?” Kauffman asked.

If travel restrictions do continue, Everhart said she’s not so sure there will be local workers willing to come do the same jobs as the J-1 students. Historically, the resort has seen less American high school and college students coming to work for the summer.

“It hasn’t been the pattern we’ve seen, and it’s not about the pay. I would be surprised if these jobs are paying less than $10 an hour and I wouldn’t be surprised if they’re up to $15 an hour,” Everhart said. “We just have to keep moving forward to May, whatever twists and turns are ahead.”

By Katie Tabeling

ktabeling@delawarebusinesstimes.com