How work visa policies evade public oversight

June 26th, 2016

Daniel Costa at the Economic Policy Institute covers H-2B visa and other immigration issues. His reporting in June on H-2B, a temporary guest worker program for low wage manual workers, shows how Congressional leadership is captured by private sector efforts to weaken program oversight. He uncovers an example of why immigration policy evades real oversight.

His FAQ on the H-2B program is here.

U.S. Senate Subcommittee of the Judiciary Committee on Immigration and the National Interest is chaired by one of the most vocal critics of generous immigration policies, Senator Jeff Sessions of Alabama. Costa writes that the 2015 appropriations provisions which became part of the 2016 omnibus appropriations bill prevent the Labor Department from enforcing the H-2B law against bad-actor employers. H-2B employers and their lobbyists hope to expand an exploitative temporary foreign worker program by hijacking the appropriations process once again, as they did last year.

Who is hired?

Landscapers/groundskeepers account for about 40 percent of all H-2B jobs. The second-largest occupation is forestry workers, at about 8 percent. The visa is officially set for only nine months. Congress sets an annual limit of 66,000 H-2B visas a year, but exemptions and extensions means that several hundred thousand H-2B visas holders may be in the United States today. Texas, North Carolina and Florida have the highest concentration of H-2B workers.

What is a labor shortage?

H-2B visas are supposed to be issued only where there is a labor shortage. Philip Martin from the UC-Davis and Martin Ruhs from Oxford assert that industries and occupations reporting labor shortages should have (1) rising real wages relative to other occupations, (2) faster-than-average employment growth, and (3) relatively low and declining unemployment rates.

“Scant evidence of labor shortages”

While seven of the top 15 occupations experienced employment growth that exceeded the 5.5 percent increase for all occupations, the fact that wages were stagnant or declined, combined with persistently high unemployment rates, makes it highly unlikely that labor shortages exist at the national level in any of the top H-2B occupations. This does not mean that no labor shortages exist anywhere in the United States in these occupations—it is entirely possible and even likely that shortages exist in some states or localities—but the high national unemployment rates in H-2B occupations suggest that even the employers experiencing a local labor shortage might find available U.S. workers if they recruited outside their city, region, or state, and if they offered more attractive wages and benefits (including transportation and housing).

Manipulations authorized by Congress

Congress is considering provisions (also known as riders) to the omnibus appropriations bill that will fund the government for all of fiscal year 2017, which would extend riders amending the H-2B program that are currently in force during fiscal 2016. These riders deregulate the program by making it easier to exploit and underpay migrant workers while restricting the access of U.S. workers to jobs in their own communities. The riders also expand the program, allowing it to as much as quadruple in size. Members of Congress hijack the appropriations process because there isn’t enough political support to pass the H-2B riders as a standalone bill.

1. Expanded use of private wage surveys

Employers will likely be permitted to use private wage surveys in a much broader range of circumstances, and this may result in H-2B workers being paid wages that are below the Dept. of Labor’s occupational employment local average wage for their jobs…..the likelihood that private wage surveys will push down average H-2B wage rates to below-average wage levels will be very significant.

2. Returning worker exemption increased

The exemption allows for returning workers not to be counted against the 66,000 cap. Proposals to increase the number of exempted workers could cause the number of exemptions to quadruple.

3. Corresponding employment controls gutted

DOL has been prohibited in fiscal 2016 from using appropriated funds to enforce H-2B regulations that require “employers of H-2B workers to provide at least the same wages and other working conditions as they provide to H-2B workers to certain U.S. workers performing substantially the same work identified in the labor certification or performed by the H-2B workers.” It also requires that H-2B employers offer their corresponding U.S. workers the same benefits offered to H-2B workers, for instance, paid meals, transportation, or housing.

Under the appropriations rider, DOL may not use funds appropriated in fiscal 2016 to enforce the rule on corresponding employment. It is interesting to note that no senator or representative has publicly articulated the basis for denying U.S. workers the same wage rates and benefits offered to H-2B workers in the appropriations legislation.

4. “Three-fourths guarantee” made toothless

Each employer must guarantee each worker a total number of paid work hours equal to at least three-fourths of the workdays in the job order that induced the workers to come to the U.S. Without this rule, H-2B workers could come to the United States for a temporary job opportunity, only to find that there are not enough work hours to allow them to earn enough to break even. Under an appropriations rider DOL may not use any funds appropriated in fiscal 2016 to enforce the three-fourths guarantee. H-2B workers are greatly harmed when they do not have enough work hours to earn enough to live, save, and pay back the debts incurred to labor recruiters in order to obtain their job.

5. Prohibition on DOL conducting audit examinations and assisted recruitment activities

The Consolidated Appropriations Act of 2016 also prevents DOL from using funds to audit H-2B applications or to conduct audits or assisted or supervised recruitment. Many migrant and worker advocates have been consistently disappointed with DOL’s failure to enforce regulations and requirements of the H-2B program. This particular H-2B appropriations rider strikes at the heart of the integrity of the H-2B program. If DOL cannot audit employers to enforce the basic premise of the H-2B program—that H-2B workers should not be hired unless there are no U.S. workers available—then employers may simply bypass the U.S. workforce for any and all H-2B job openings.

A dark report on American attitudes

June 25th, 2016

PRRI and the Brookings Institution released on June 23 the results of a survey on cultural change and immigration. The findings may be a roadmap for how Donald Trump could win in November.

For starters, 70% Americans continue to believe the U.S. is still in an economic recession. And, 51% of Americans report feeling somewhat or very worried that they or a member of their family will become a victim of terrorism.

Cultural decline

The general public is evenly divided over whether American culture and way of life has mostly changed for the better (49%) or changed for the worse (50%) since the 1950s.

More than two-thirds of Republicans (68%) and Donald Trump supporters (68%)—Republican and Republican-leaning independents who supported Trump during the primary—believe the American way of life has changed for the worse since the 1950s, while roughly the same number of Democrats (66%) say things have improved.

Opinions about immigration

A majority (55%) of Americans believe that the American way of life needs to be protected against foreign influence, while more than four in ten (44%) disagree.

Nearly three-quarters (74%) of Republicans and about eight in ten (83%) Trump supporters agree that the foreign influence over the American way of life needs to be curtailed, compared to approximately four in ten (41%) Democrats. Political independents’ attitudes mirror those of Americans overall.

Americans are split over how comfortable they feel around immigrants who do not speak English: half (50%) say that they are bothered when they come in contact with immigrants who speak little or no English, while nearly as many (49%) say this would not bother them.

Nearly six in ten (58%) white Americans say they are not comfortable being around immigrants who speak little or no English, compared to four in ten (40%) black Americans and under one-quarter (22%) of Hispanic Americans.

Roughly two-thirds (66%) of Republicans and 77% of Trump supporters express discomfort when coming into contact with immigrants who do not speak English, while nearly two-thirds (64%) of Democrats say this does not bother them.

Nearly six in ten (58%) seniors (age 65 and older) say they are bothered coming into contact with immigrants who speak little or no English, compared to fewer than four in ten (37%) young adults (age 18-29).

Opinions about Islam

Approximately eight in ten Republicans (79%) and Trump supporters (83%) believe the values of Islam are at odds with the American way of life. This view is shared by a majority (54%) of independents and less than half (42%) of Democrats. A majority (55%) of Democrats say Islam does not conflict with American values.

Remittances from foreign-born in U.S.: up 455% from 1990

June 12th, 2016

Remittances from foreign-born residents in the U.S. to other countries in 1990 were $11.9 billion, $30.9 billion in 2000, in 2009 $48 billion, and in 2014, $54.2 billion. (For figures before 2014, go here, for 2014, go here). In 2014, $25 billion was sent to Mexico; $15 billion to China, over $10 billion sent to India, and $10 billion to the Philippines.

In 2113, Senator David Vitter of Louisiana introduced the Remittance Status Verification Act,” which would impose a fee on remittances made by remittance customers who wire money abroad but are unable to prove their legal status. The GAO analyzed the practical aspects of the bill here.

The best source of remittance data worldwide is the World Bank. Its 2016 report is here. The Bank reports the distribution of remittance income. Low-income countries receive 6% of all remittance dollars. Middle income countries claim about 70% of all remittance dollars. They include Mexico, China and India. The largest recipients in 2015 in descending order were all middle income countries. India, China, the Philippines and Mexico account for $192 billion or 44% of all $440 billion in remittances received (see the World Bank 2016 report). Higher income countries get 23% of remittances.

the Bank says that “At more than three times the size of development aid, international migrants’ remittances provide a lifeline for millions of households in developing countries. In addition, migrants hold more than $500 billion in annual savings. Together, remittances and migrant savings offer a substantial source of financing for development projects that can improve lives and livelihoods in developing countries.”

The needed housing construction boom and immigrant workers

June 7th, 2016

The blogger CSEN says that energizing construction of housing is essential for prosperity:

“The economic shortfall in the US right now is mostly on the housing side. Because of how important housing is to the US economy, this is why 4.7% headline unemployment doesn’t feel like full employment. Construction employment as a share of total employment is likely going to rise at least another 0.4% to get to a level of 5% in this cycle. At the current level of employment, this means we need another 550,000-600,000 construction workers. Construction unemployment is already near record lows.”

The construction workforce is 25% foreign-born and 15% undocumented workers. Building more houses at a large scale, especially in the high growth states of Florida, Texas and California, cannot be feasibly be done without a generous supply of these workers.

Here is a profile of construction workers in 2013:

22 occupations accounted for 8 million jobs. 25% of these jobs were held by immigrants and 15% were held by undocumented immigrants. The jobs in which immigrants have at least a one third share – eight – account for 44% of the construction workforce, leading with construction laborers, who make up a quarter of the construction workforce. Generally these 22 occupations do not require a high school degree and laborers definitely do not. Among Hispanic (foreign and native born) construction workers in 2007, half did not have a high school degree compared to 11% of all other construction workers.

Different correlation analyses of construction work might show that immigrant workers (1) drive down wages in some construction jobs, yet also (2) enable the construction industry to grow by providing needed workers in jobs that may be hard to fill with native workers, either because of low skill demand (laborers) or danger (roofing).

For a review of construction employment in 2007 with a focus on Hispanic workers, go here at the Center for Protection of Worker Rights.

Demographic winter in the Midwest: too few immigrants

June 5th, 2016

The decline in the numbers of native working age people is especially acute in the Northeast and the upper Midwest. “U.S. Economic Competitiveness at Risk” says a Midwest coalition, organized by the Chicago Council on Foreign Affairs.  The Chicago Council reported (“Growing Heartland”) in June 2014 that between 2000 and 2010, the Midwest lost 1.4 million native born people between ages 35 to 44, a 20% loss for the age group, while gaining 265,000 foreign born persons in that age group, a 44% increase.

Thus, while nationwide the primary driver of population increase in the U.S. will turn to net international migration in 2032, per the Census Bureau, the impact is acute today in these regions as far as the workforce is concerned.

These Midwest reports are saying, in effect, that there is not enough net in-migration of immigrant workers.

Recent impact of immigrant in-migration on labor force was estimated by the Conference Board. Major states with very large positive immigrant in-migration 2004-2013 are New York (- 3.6% decline in total working age population), New Jersey (0.1%), Florida (17%), California (8%) and Texas (20%).

But the opposite is the case for Midwest states where the labor force decline was weakly countered by immigrant in-migration since 2004: Michigan (total decline of -1%), Pennsylvania (-6%), Ohio (-6%), Illinois (-3%).

Asian American voters this November

June 5th, 2016

The data on Asian American public opinion reveal that Asian Americans are shifting in party identification towards the Democratic Party, and exclusionary rhetoric is a likely cause. There has been a 12-point increase in the proportion of Asian Americans who identify as Democrats from 2012 to 2016.

Asian American voters nearly doubled from more than 2 million voters in 2000 to 2000 to 3.9 million voters in 2012. Since in the last three presidential cycles, the number of Asian American voters has grown by an average of 620,000 votes, the 2016 turnout might be 4.4 million voters. Asian Americans will reach 5% of voters nationally by 2025. In battleground states in 2012, they were 6.5% of the voters in Nevada, 3.9% in Virginia, and 1.8% in Florida.

Trump’s unfavorability rate is 48% for 65 yo and older, 63% for 35-64, and 86% for 18-34 yo. 31% have a very or somewhat favorable view of the Republican Party, vs. 65% for the Democratic Party and 68% for Barak Obama.

This information is from a May, 2016 report, Inclusion, Not Exclusion. Apiavote stands for Asian and Pacific Islander American Vote.

2012 exit polls showed at least 70% of Asian-American voters chose Obama. Two decades ago, Asian-Americans reported voting Republican by a nearly 2-to-1 margin. See my post election posting here.

 

Footloose college graduates around the world

June 2nd, 2016

PriceWaterhouseCoopers interviewed 4,364 college graduates online. A third were PwC employees; that selection bias needs to be taken into account. All were 31 years old or younger (i.e. born 1985 or later). About 20% lived in the U.S., UK or Australia.

71% expect and want to do an overseas assignment during their career. Wanting to work (at least for a while) outside their country – for North Americans, 69%, with all other regions equal or higher.

Where they want to work most: U.S. 58%, UK 49%, Australia 39%, Canada 33%, Germany 32% and most other developed counties below 25%.

Opportunity for future growth is overwhelmingly the most important factor in job selection (65%) contrasted with salary (21%). The most important job benefit is training and development (22%).

“My personal drive can be intimidating to other generations within the workplace” – In India, 57% answered yes; in UK. 21%.

Ease with technology: 41% of those questioned said they would rather communicate electronically than face-to-face or over the telephone. 59% said that an employer’s provision of state-of-the art technology was important to them when considering a job. 78% said that access to the technology they like to use makes them more effective at work.

President Johnson and the 1965 immigration reforms

May 31st, 2016

Daniel Teichnor writes in the Atlantic about the 1965 legislation which opened up American immigration. Below are some excerpts from his article:

Immigration is one of the most dangerous issues in American politics… Nearly every new American president of the modern era has viewed the nation’s immigration policies as deeply flawed…. yet, President Lyndon Johnson’s battle for reform underscores the way immigration policy can be a potent political tool and offers a model for future presidents.

He ultimately expended far more political energy on this issue than anyone on his team anticipated. Johnson recognized that failing to spearhead an immigration overhaul would significantly undercut his civil-rights, social-justice, and geopolitical goals.

When John Kennedy took office in 1961, the dominant immigration law was the highly restrictive Immigration Act of 1924, heavily biased towards countries of origin represented in the 1890 national census. It completely excluded immigrants from Asia.

Democrats were deeply divided between southern conservatives opposed to any loosening of restrictions and northern liberals committed to dismantling racist national-origins quotas that reserved about 70% of visas for immigrants from just three countries: Great Britain, Ireland, and Germany. While Kennedy described immigration reform as “the most urgent and fundamental” item on his New Frontier agenda, he got nowhere on plans to alter U.S. immigration law due to potent opposition from conservative Democrats, who controlled the immigration subcommittees of both houses…. Immigration restrictions were defended in the name of national security, job protection, and ethnic and racial hierarchy

In January, 1964, President Johnson induced Senator James Eastland, an immigration reform opponent, to hand his chairmanship of the key Senate committee over to Ted Kennedy. Michael Feighan, a fierce reform opponent and chair of the key House committee, fought the administration but eventually decided to negotiate. Curiously, Feighan forced the Johnson to weaken a skills-based plan because he thought by doing so Northern Europeans would dominate immigration through family reunification provisions.

The Immigration and Nationality Act of 1965, or the Hart-Celler Act, was enacted by Congress on October 3, 1965. It abolished the national origins quota system, and introduced a system based partly on family, partly on skills. Between 1951 and 1960, new immigrants averaged about 220,000 a year. By 1981 to 1990, they averaged about 700,000 a year.

A Somali refugee’s encounter with meatpacking work

May 25th, 2016

Meat processing plants went rural in the last decades of the 20th Century, luring immigrant workers to places like Liberal, Kansas. Chico Harlan of the Washington Post narrates the struggle of a Somali refugee, 23 year-old Mohamed Ahmed, to make a living in this very tough work. Ahmed drives hundreds of miles through the Midwest and mountain states in search of an extra couple of bucks and hour pay and a job that doesn’t wear him down.

Harlan traces Ahmed’s story in the context of Somali refugees and in the context of meat packing. The Migration Policy Institute reports that of the 70,000 refugees admitted annually, about 8,000 of them have recently been from Somali. Most apply for refugee status from the massive Dabaab network of camps in Kenya, which Kenya is trying to close down.

Meatpacking (or meat processing) evolved to become a major hirer of immigrants with little formal education. I’ve described this evolution here:

Consolation of the meat packing business into large processing plants, causing family and small employer operations to sharply decline.

Placement of the plants in rural areas. As of 2005, only one small meatpacking plant in Chicago was left.

Deskilling: “A formerly urban, unionized, and semiskilled workforce employed in production plants, supermarkets, and butcher shops in the 1950s was transformed into one with rural, mostly nonunion, and unskilled workers concentrated at the industrial processing end of the meat production chain by the end of the 1980s.” Workers with limited English proficiency can find jobs.

 

H-1B and the IT job market in California

May 22nd, 2016

“There isn’t a clearer cut case of adverse impacts – the American worker is losing his job to an H-1B.” The person quoted was referring to the decision by Southern California Edison (SCE) in 2015 to lay off hundreds of domestic IT workers, and then turn to temporary work visa firms to replace the workers with Indians.

The dispute over outsourcing of IT jobs to outsourcing firms is complicated by the lack of public information on the detailed economics of major players such as SCE, plus the inherent complexity of IT workforce management.

We need an in-depth analysis by some one willing to suspend judgment. See George Borjas’ blog posting here, in which he reviews some recent research. For him, the only real benefit to American workers would come when temporary STEM workers bring skills and knowledge which spills over onto domestic co-workers. In the SCE case, it’s highly unlikely this would happen, because per Borjas these H-1B workers aren’t that special.

SCE had about 1,800 employees, plus an additional 1,500 contract workers. The 2015 layoffs involved about 400 workers. SCE hired Infosys, from Bangalore, and Tata Consultancy Services, headquartered in Mumbai, for replacements. Terminated employees signed confidentiality and non-disparagement agreements.

The Economic Policy Institute reports that the ten top IT outsourcing firms doing business in California filled applications in 2015 for 69,000 temporary H-1B jobs.

Over two-thirds of H-1B visas are granted for systems analysis and programming jobs.

On February 25 of this year Ron Hira of the Economic Policy Institute testified to Senate Subcommittee on Immigration and the National Interest of the Judiciary Committee.

Hira has estimated that SCE and other H-1B workers are paid less than prevailing wages. He did not have access to actual wages of lay off workers. He did know what H-1B worker wages for SCE, – in the $65K – $70K range, which he compared to the Dept of Labor estimates of the average wage of “computer systems analyst” of $91,990. And he had an Aon-Hewitt compensation study showing that IT employees of SCE were paid above $100K.

Wage data for IT certainly suggests that SCE and other outsourcing companies are saving a bundle on wages. BLS data show there were 74,000 computer systems analysts in California in 2014 with an average salary of $99,000. There were 548,000 computer and mathematical jobs in total in the state, with an average salary of $102,000.

The Dept of Labor has determined that SCE did not violate the H-1B law.