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Land of opportunity or close to slavery?

  • 15 min to read

South Carolina’s famed hospitality industry is hooked on temporary foreign workers, a legal visa system that serves businesses well but comes with unexpected costs to employees and the community. 

Summer 2016: From Russia, Turkey and Thailand, they come here legally to make a little money and learn about life in America. By the tens of thousands, they flow into the nation’s coastal areas, a massive seasonal wave to fill jobs that the hospitality industry claims it can’t fill with locals.

From the Ukraine, Philippines and Jamaica, they make their way to Myrtle Beach, the Isle of Palms and Hilton Head. They fill dilapidated apartments. They pile into fading motels on the Grand Strand’s second rows; they sleep two to a bed, in moldy rooms crawling with roaches and bedbugs, rooms tourists on Trip Adviser call “despicable” and “the worst motel I’ve ever stayed in.”

And though many paid recruiters thousands of dollars to get here, these foreign workers make minimum wage or just a few pennies more, as housekeepers, waitresses, and clerks in surf shops — work that keeps South Carolina’s $19 billion tourism industry humming.

Migrant workers have long been an important part of agriculture here and across the country. But the same increasingly can be said about workers in the nation’s tourist centers.

A Post and Courier investigation shows that our coastal hospitality industry is hooked on a steady flow of temporary low-paid foreign workers, many lured here on the pretext of “cultural exchange.”

It’s an addiction that provides undeniable benefits for operators of restaurants, theme parks, hotels and resorts. Employers don’t have to shell out payroll taxes for employees here on one visa program. That’s a roughly 8 percent discount on labor costs. And businesses often get excellent workers. Many are intensely motivated to do their jobs well, seeing their time here as a chance to learn English or earn money for family members back home.

But, as with any addiction, this unevenly regulated system can have a major impact on participants and the community at large.

Interviews with more than 40 foreign workers, along with examinations of lawsuits and internal government documents, reveal how temporary workers here and in other tourist hotspots have been victimized by sexual predators and thieves, cheated out of wages, forced to live in filthy and overcrowded housing and threatened with deportation if they complained.

Many paid thousands of dollars to get jobs that promised a glimpse into American culture. But, as one expert says, they ended up learning what it’s like for the country’s working poor. Human rights activists call the situation “close to slavery.”

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All Nations Cafe'

Young people from around the globe come to Myrtle Beach for a summer working on the Grand Strand. A map at Seacoast Vineyard Church shows the various countries represented at a July gathering at the church's All Nations Cafe. Wade Spees/Staff 

Chapter 1: The Calm Before

May 2016: The trinket and towel shops along Myrtle Beach’s commercial strips are mostly empty; there’s no wait to play miniature golf through a volcano or under a gorilla. But about 180 students have just arrived. Most are from the Philippines, and they’re ready to work.

They gather in a conference room at Seacoast Vineyard Church. The church is in a former strip mall across a parking lot from the Myrtle Beach Convention Center and Captain Hook’s Adventure Golf. It’s the season’s first orientation session for students here on J-1 cultural exchange visas.

Nervous and quiet, students fiddle on their iPhones and Samsungs. Most will work at the Sea Mist Oceanfront Resort, two miles south of the giant beachfront Ferris wheel. Pete Woods, a crime prevention officer with the Myrtle Beach Police Department, strides to the front. In a thick Bronx accent, he proceeds to give them a little culture shock.

“There are three types of people who vacation here,” he says. “The drunks, the drugged and the deranged!”

Woods is a former New York City police detective. He’s in a beige suit with a badge that pops out when he lifts his hands to make points. He retired from NYPD five months after 9/11 and eventually moved to Myrtle Beach, in part, to raise his young daughter. He has a fatherly look in his eyes, even though his words come at the students like a subway car.

“If one of our famous cab drivers offers you a free ride home, do you get in? No!” A few startled students jump. “You have to pay attention! If someone asks, ‘Hey can you come with me, I’ll give you $25 an hour for something,’ they’re criminals! Don’t go to Craigslist to find a job! If they say, ‘come with me, and I’ll put you in a beauty show,’ that’s a scam!"

His urgency is grounded in experience. The number of foreign students working in Myrtle Beach exploded in recent years, and so had crimes and other abuses against them. Some were minor, but others were horrific — like what happened to a Russian exchange student last summer.

She was 20 years old, blond and about 5-foot-3. She responded to a Craigslist ad seeking models, which led her to a man name Paul Joseph Shuler. Shuler worked at a vacation rental as a cleaner, which meant he had keys to hotel rooms.

Shuler and the student met at the Hard Rock Café. They set up a time for a photo shoot in one of the hotels where he worked. When they met, he took a photo of her in shorts and a shirt. But she refused to change into a bathing suit. He told her to turn and face the wall, then handcuffed her.

He said he was an immigration officer, then raped her. When he was done, he warned her not to speak to anyone or he and law enforcement friends would gang rape her.

The student did contact police, and Shuler was arrested and sentenced in September to 10 years on a rape charge. But Woods knows that other students might not report crimes. In some countries, corrupt police are the last people you want to call. And there’s the shame of getting into trouble. Many student workers are away from their home countries for the first time, here to prove their independence.

So Woods raises his voice again. He tells them about the 911 emergency number. “When you call 911, what do you say?” Students glance at each other for answers.

“Help!” Woods yells, startling them again. A little fear is good; he’s trying to make an impression, one that might last the whole season. Because this group is just the first breaker; more waves are on the way.

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Filipino Students Myrtle Beach

Myrtle Beach detective Pete Woods emphasizes safety to students from the Philippines who have arrived to the Grand Strand. Seacoast Vineyard Church hosted them in April for a session emphasizing their safety while in the area on a four-month work visa. Wade Spees/Staff 

Chapter 2: A changing workforce

June and July 2016: Over the next few weeks, more than 3,000 foreign students flood the Grand Strand. Five hundred more end up in Charleston and on the Isle of Palms and Hilton Head. They’ve come from more than 40 countries, State Department records show.

At the same time, similar waves hit the Outer Banks, Ocean City, Maryland, the beaches of New Jersey, Cape Cod, Orlando, the Gulf Coast and other tourist destinations. It’s a major shift in the nation’s seasonal workforce.

Two decades ago, American high school and college students filled many of these jobs in what often was a summer rite of passage. No longer.

Businesses and industry groups say this pool has dried up, and they cite a number of reasons: young American workers today look for more skilled jobs to bolster their resumes; they’re enrolled in high school or college during the summer; or they do community service and other activities. Foreign workers, they say, fill the gap. “Many American businesses could not function” without temporary foreign workers, the U.S. Chamber of Commerce said in 2010.

Hospitality industry employers have two doors to find foreign workers: The State Department’s J-1 program and the Labor Department’s H-2B program.

Each has its own purpose. The State Department’s J-1 visa is for foreign students interested in cultural exchange. Their stays are limited to about four months. The Labor Department’s H-2B visa is for employers who can’t find low-skilled, non-agricultural workers. These workers are allowed to be here for a year.

But whether carrying J-1 or H-2B visas, these temporary workers often do the same kinds of jobs: serve food, clean rooms, work in fast-food and grocery stores. And their ranks are growing.

More than 130,000 students participated in the J-1 summer exchange, camp counselor and intern programs in 2015, an increase from roughly 22,000 in 1996. An additional 70,000 low-wage workers travel here on H-2B visas, up from about 10,000 in the mid-1990s.

“Addiction is the right word,” says William Terry, a Clemson University professor of economic geography. “If these programs went away, there would be painful withdrawal symptoms.”

Employers range from small hotels to large chains to presidential candidates.

Mar-A-Lago Club, a private club in Palm Beach, Fla., owned by presidential candidate Donald Trump, has sought 310 temporary foreign workers since 2013, Labor Department records show. When asked why he didn’t hire more American workers, Trump told The New York Times earlier this year: “The only reason they wouldn’t get a callback is that they weren’t qualified, for some reason. There are very few qualified people during the high season in the area.”

Closer to home, as many as 450 temporary foreign workers this summer manned mops and served food from the Isle of Palms to Edisto Island, federal records show. Employers included Kiawah Resorts and Charleston Harbor Resort and Marina. Hilton Head had more than 300 J-1 students and H-2B workers.

But few places have felt the impact of these temporary foreign workers as much as the Grand Strand, the arc of sand and pines from the North Carolina border to Georgetown. Tourism defines the Grand Strand. It has nearly 7,300 food servers, the most per capita in the nation. Foreign students hold many of these jobs. And, amid the pancake restaurants and surf shops, you see them walking in packs – Irish and Ukrainian students with sunburned arms and faces, students from the Dominican Republic manning go-karts at the Grand Prix, Russian women serving sandwiches.

Eager to please, they’re easy targets for unscrupulous employers and thieves.

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All Nations Cafe'

Young foreign workers head toward Ocean Boulevard in Myrtle Beach in July after a meal at Seacoast Vineyard Church's All Nations Cafe, which offers a place for young people from around the globe to gather during their summer working on the Grand Strand. Wade Spees/Staff 

Chapter 3 – Broken Promises

About four years ago, police in Myrtle Beach noticed a surge in certain crimes.

“We had a lot of armed robberies of money, passports, and electronics,” says Assistant Police Chief Amy Prock, who leads the department’s student outreach work with Pete Woods. “We started analyzing the data, and we realized it was all foreigners.”

Digging deeper, they found J-1 students packed into motels, usually the rougher-looking properties two or three rows back from the beach. They discovered 11 students in a single room. Students were even housed in a converted bus, which surprisingly offered more privacy than some of the motel rooms.

They heard stories about managers who made night-time “bed checks” – thinly disguised sexual advances. They learned how students lost all their summer savings in burglaries. They heard about students who paid recruiters for jobs but found those jobs were non-existent when they arrived. Prock traveled to other tourist cities, such as Virginia Beach, which had many of the same problems.

It was the dark side of a visa system that human rights groups, labor organizations and others say is poorly policed and prone to abuse.

In 2011, the Economic Policy Institute, a liberal Washington, D.C., think tank, criticized the State Department’s J-1 program for failing to fill jobs with willing and able U.S. employees. Unemployment for young Americans was more than double the national average then, the group noted. Wage growth for top temporary worker occupations were stagnant or declining, suggesting that there were no labor shortages at the national level. The group found that Horry County’s unemployment in 2011 was 12 percent, but that the hospitality industry still sought large numbers of foreign students.

Other groups, including the Southern Poverty Law Center, also found flaws in the programs. Its 2013 report, “Close to Slavery,” said the H-2B program was “rife with employers who prey on a highly vulnerable workforce.” In case after case, temporary foreign workers faced threats of “deportation, blacklisting or other retaliation.”

Its 2013 investigation, “Culture Shock,” uncovered similar abuses in the J-1 student summer work program. Sponsors made millions of dollars recruiting students for American businesses, which displaced local workers and routinely failed to live up to the program’s promise of cultural exchange. Students often made less than minimum wage when housing and transportation costs were factored in. The group concluded that the cultural exchange effort was a “story of debt and disappointment.”

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Filipino Students Myrtle Beach

Myrtle Beach Assistant Police Chief Amy Prock speaks in April to students from the Philippines who have arrived in the Grand Strand. Seacoast Vineyard Church hosted them for a session emphasizing their safety while in the area on a four-month work visa. Wade Spees/Staff 

Chapter 4 – Debt and disappointment

Early August 2016: Some students from the Dominican Republic have had enough.

Ana Cabrera, 20, a medical bioanalysis student, paid nearly $2,000 in recruiting and visa fees and airfare to get a job in Myrtle Beach. Her job was supposed to be at Ricciardi’s Italian Ice – a fun way to brush up her English and meet Americans, or so she thought.

By law, students enter the country through “sponsors,” which then place the students in jobs. Some sponsors are nonprofits, others are private companies. Whatever their tax status, recruiting students can be lucrative. The parent organization of one large sponsor, the Council on International Exchange, took in nearly $120 million in revenue in 2014, according to IRS records.

Ana Cabrera’s sponsor was American Work Adventures, a privately held company in California. On its website, its founder says the company offers opportunities to “immerse yourself into American life as well as do seasonal work in a vetted American company to help cover some of your costs.”

But soon after she arrived, Cabrera learned that she wouldn’t be serving ice cream after all. Her sponsor handed her placement to Grandeur Management, which describes itself as one of the Grand Strand’s leading resort providers with “one-stop” linen and laundry management programs.

Over the next few weeks, Grandeur Management moved Ana from one hotel to another, including one where she said she worked with chemicals that irritated her skin. She washed, dried and folded towels all day, earning about $8 an hour. In an interview, she said she had no time for cultural exchange, other than with a few local workers who smoked heavily.

After work, she returned to her room at the Calypso Motor Inn, a motel with a sorry history of inspection violations and no favorite with TripAdvisor and other reviewers, who describe it as “worst place ever,” “nasty” and “despicable.” She said her room was infested with bedbugs and had a malfunctioning air conditioner. She and seven other students shared a two-room unit, which meant they had to sleep two to a bed. Each paid $90 a week.

When Cabrera and other students complained, an official with Grandeur Management called them “troublemakers,” she said. Officials threatened to kick her out of the J-1 program. She eventually moved to a different apartment and took another job, this one at a Krispy Kreme.

American Work Adventures and Grandeur Management officials did not respond to requests for comment, and Yehuda Sadeh, the Calypso Motel’s owner, describes the students as “constant complainers” and “a headache” who trashed the rooms. “We have no bedbugs. I have nothing to hide.” About the consistently negative reviews from guests, he says: “You can’t make everyone happy.”

Meantime, as Ana Cabrera moved from job to job, Nicolas Florentino, an accounting student in the Dominican Republic, had his own story of disappointment. “I had a very promising contract,” he says. He expected to be put in comfortable housing a few minutes from his job and 40 hours of work a week, enough to pay back his debts to get to Myrtle Beach. But when he arrived, he found his employer, also Grandeur Management, placed him in a hotel that didn’t need his services.

Suddenly, he found himself unemployed in a foreign country, paying $90 week to stay in another old motel, the Oasis, sharing a full-sized bed with another student. Finally, he was given a housekeeping job.

“I’m doing exhausting work,” he says. “I’m not getting any cultural exchange. I would not have come here if I knew this would be my experience. Disillusioned and feeling tricked, he says the experience so far is that “Americans basically do whatever they want, no matter what’s legal, and we foreigners can’t.”

Myrtle Beach isn’t the only place where you hear these stories, State Department records show.

In Alaska, 15 students in 2011 had jobs at a concessionaire in Anchorage’s airport. But their sponsor, the Council on International Exchange, placed them in rooms also used as transitional housing for ex-convicts. A State Department official said at the time, “Sponsors should not have placed students with a manager who is under house arrest. …” An official with CIEE said rooms weren’t being used as a half-way house at the time and a CIEE staff member found the housing had “ample living space” and participants seemed happy about the arrangements.

Another student complained in 2011 that she was supposed to work in Chicago selling spa products but ended up at a flea market in Yuma, Arizona. Likewise, some Russian students in 2010 thought they would have jobs in New York but were placed with a moving company in Virginia, where they said they were deprived of food.

“This letter is a cry from the heart!!!” the student wrote the State Department, adding that they were held “practically in slavery.”

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Filipino Students Myrtle Beach

Passports from Filipino students who have arrived in Myrtle Beach are ready to return after processing. Wade Spees/Staff 

Chapter 5 – Power Imbalance

Summer 2016: A yearlong legal fight in Charleston nears its end.

On one side is Kiawah Resorts, operator of the luxury golf and beach destination south of Charleston. On the other, the resort’s temporary Jamaican employees.

South Carolina’s tradition of hiring Jamaican hospitality workers began in Myrtle Beach during the late 1980s and expanded to other areas of the state, says David Griffith, a professor in the anthropology department at East Carolina University. “Most had worked in hotels in the tourist industry in Jamaica. But they probably could make ten times the money in the U.S., and they really want those jobs desperately, so they work very hard.”

Unlike the student program, employers wanting H-2B workers must prove they can’t find qualified American workers. This typically means taking out small newspaper ads. “The requirements to advertise are ridiculous,” says Sarah Rich, an attorney with the Southern Poverty Law Center.

Congress caps the number of H-2B visas at 66,000, but demand for these workers exceeds supply during both recessions and economic booms. This year, the cap was reached by May.

In 2012, Kiawah needed a large number of seasonal workers for the PGA golf championship. U.S. Sen Lindsey Graham told reporters in the Upstate that he had “to beg the Department of Labor to give (Kiawah) a waiver so they could get people from Jamaica,” Graham said then. “They got nine (local) applicants for these jobs. Three of them failed the drug test.” In an application to the Labor Department, Kiawah says it put two ads in The Post and Courier and contacted state employment agencies to find local workers.

Jamaican workers paid $600 to $700 to obtain visas and other travel fees to get to South Carolina. Under federal rules, employers are supposed to cover such costs. Hearing complaints, the Southern Poverty Law Center filed a federal lawsuit against Kiawah Resorts last year.

The group had won several high-profile H-2B cases before, including a $20 million settlement in 2015. That case was against Signal International, a Gulf Coast marine company that imported about 5,000 men from India. Some had paid recruiters more than $10,000 to get these jobs, which is illegal under U.S. visa laws. Men were housed in guarded labor camps, 24 to a trailer-size barracks. Workers who complained were threatened and detained. One worker attempted suicide. An economist testified that Signal saved $8 million by hiring foreign workers at below-market wages. As part of last year’s settlement, the company formally apologized, saying it had “learned from its mistakes.”

But the Southern Poverty Law Center says many companies haven’t learned any lessons. While the Signal International case was particularly egregious, “it’s fairly common for workers to be nickeled and dimed,” says Rich, the group’s attorney.

Their lawsuit against Kiawah claimed that Kiawah failed to pay visa and other required costs. It also alleged that workers were housed in a West Ashley apartment complex, four to six workers sharing a unit. Kiawah allegedly deducted $165 every two weeks per employee, an amount a federal judge would later find was twice the market value of such housing. The lawsuit said these deductions drove their wages below what the law says they should have been paid.

More than 240 Jamaican workers were affected. Earlier this summer, Kiawah settled the case for $2 million. In its legal filings, Kiawah denied doing anything wrong. “I think the settlement document speaks best about our position on the case,” says Roger Warren, president of Kiawah Island Golf Resort.

But Rich and others say such cases highlight an inherent problem in these temporary worker programs: a power balance tipped in favor of employers.

Employees on H-2B visas are allowed to work only for the sponsoring company. If they leave that company, they must leave the country. And while J-1 students aren’t tied to a specific job, they arrive with so much debt that they “are virtually indentured to U.S. employers and are therefore unable to challenge low pay and poor working and housing conditions,” the Center for Immigration Studies said in a 2011 report.

Most employers, says Billy Terry, the Clemson economic geography professor, “are probably good to their workers, but the power imbalance still creates a very vulnerable situation. What if a worker is sexually harassed? Or if they’re in a dangerous job? They can stay here and put up with it, which is often what’s going to happen, or they can go home. But if they go home, they have to think, ‘What about the loan I took to get here? What about the money I was saving for my kids?’”

Meantime, the J-1 program “is supposed to be about cultural exchange – highlighting American culture,” Terry says. “But it’s clearly not about that. What it shows is the experience of the working poor in America. Is that the kind of diplomacy you want to promote?”

Chapter 6 – Departure

August 2016, near the season’s end: Students gather in the same Seacoast Vineyard Church conference room, the one used for orientations when they arrived. Tonight, it’s the All Nations Café.

Seacoast Vineyard Church and other ministries began serving free meals several years ago at about the same time Amy Prock and Pete Woods began looking into crimes against foreign students. When the churches did the first café, pimps and other predators cruised through the parking lot looking for recruits.

So this evening volunteers man computers that spit out identification labels. Security guards watch for unwelcome visitors. Young students from the Ukraine and China pour through the doors. The food is free. On some nights, nearly 300 students show up.

Amid the voices, students talk about their experiences: the amazing number of variations in which you can use the F word; the poor quality of food – much more expensive and less fresh than they expected; the challenges of getting around without a car; how they worked hard at the Bi-Lo and Red Roof Inn and crammed into apartments. Three Turkish students talk about how they spent their first night in Myrtle Beach on a stranger’s roof.

The All Nations Café and other outreach programs have helped stem some of the abuses that students experienced in recent years. Amy Prock says robberies of foreign students dropped by more than a half. Despite the growing number of temporary workers, no other community in the state, not Charleston or Hilton Head, has done anything close to Myrtle Beach’s outreach programs. But the question remains: Does this help perpetuate a system that feeds our addiction to low-paid temporary workers?

The students finish their meals. Some stay and talk and play board games. Others leave in packs. They walk together across the parking lot toward the beach. With the season ending, Myrtle Beach begins its off-season exhalation. The student workers go home. To Russia, Thailand and Turkey.

Gone, until next season.

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All Nations Cafe'

Young workers from Turkey and Russia play basketball in July outside Myrtle Beach's Seacoast Vineyard Church, which offers free food and a place for young people from around the globe to gather during their summer working on the Grand Strand. Wade Spees/Staff 

Reach Tony Bartelme at 843-937-5554.

Tony Bartelme is senior projects reporter for The Post and Courier. He has earned national honors from the Nieman, Scripps, Loeb and National Press foundations and is a three-time finalist for the Pulitzer Prize. Reach him at 843-937-5554 and @tbartelme