Part Two of Cheap Labor as Cultural Exchange: The $100 Million Summer Work Travel Industry
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Jerry Kammer is a Senior Research Fellow at the Center for Immigration Studies.
As the 2011 summer season in the beach resort town of Ocean City, Md., wound down in early September, a server at the Fish Tales Restaurant told of observing the bewilderment of job-seeking young Americans as they encounter the power of the Summer Work Travel (SWT) program.
“American kids will come in May when the season is just getting started, and we tell them, ‘Sorry, we’re all full,’” said Trina Warner. “And they say, ‘Already?’ They have no idea that foreign students have already been hired,” she said.
Then she added, “They don’t know how the system works.”
The robust, innovative, and lucrative system of worldwide recruitment for the Summer Work Travel program dwarfs efforts to recruit young Americans. To paraphrase Mark Twain’s observation about the speed advantage that a lie enjoys over the truth, SWT employers can line up their summer workforce halfway around the world before American students put away their winter boots.
The largest SWT sponsor, the Council on International Educational Exchange, boasts that it works with “a network of over 70 representatives in 50 countries.” It sponsors about 25,000 SWT participants each year. Its website assures employers that CIEE “can help you meet your hiring goals well in advance of your busy season.”1
While SWT has become a lucrative worldwide industry for sponsors, for some it is also a labor of love and good will. There may be no better example of this altruism than Anne Marie Conestabile, the regional manager for CETUSA in Ocean City. Expressing an opinion that appears common among SWT students, Daniela Pascau of Romania said of Conestabile: “She is very kind; she has a good heart.”
CETUSA hired Conestabile after learning of the volunteer work she performed to help bewildered J-1 participants whose negligent sponsors had sent them to the beach resort and then abandoned them. Others were broke and distraught, having been conned by home-country agencies that fraudulently sold them access to jobs that did not exist.
“I found myself embroiled in these horror stories of false job offers, students left unattended – no housing, no money, and no food,” Conestabile said at her office two blocks from the beach.
Working through her church, she drew other volunteers to pitch in. “I said, ‘Let’s welcome them instead of just dumping them.’” Later she helped establish Ocean City’s SWT task force, which brings together sponsors, employers, and city officials in an effort to establish order in a program that had become chaotic in its freewheeling growth.
The State Department’s own Inspector General discussed such negligence in a 2000 report critical of State’s management. “Some sponsors of J Visa participants may be motivated by the income that can be derived from the J Visa,” the report said. It quoted representatives of the international partner agencies as freely acknowledging: “It’s a business.”2
Conestabile takes an almost maternal pride in the progress of her young charges, whom she places in restaurants, hotels, amusement parks, and shops that swell their employment rolls in the summertime.
“They grow so much when they’re here,” she said. “They learn to make their own decisions. They become independent from family control. And they go home feeling proud. You have no idea the transformation I see every year. When they start out they’re walking in feeling timid and worried. Three months later they are so proud and so confident and their English has improved tremendously. These are things I love about the program.”
SWT clearly provides benefits to students, employers, sponsors, and their partners. The State Department believes that its value in U.S. foreign policy is also considerable, since all SWT participants must be college students and some could eventually become leaders in their own countries.
But when State’s partnership with an industry that it regulates has produced the rapid growth that SWT has experienced over the past 15 years, it is reasonable to ask what effects that growth has had among young American workers, who have no lobby and are not the objects of robust and sophisticated recruitment.
In the name of cultural exchange and international understanding SWT has denied or curtailed a place in the workforce for many American high school and college students who are thereby denied an important opportunity to work and grow within their own country.
Sarah Ann Smith gives a tally of how the arrival of J-1 students affected her teenage son’s dishwashing schedule at a restaurant in Camden, Maine: first week, 24 hours of work; second week, after the arrival of two SWT workers, eight hours of work; third week, when the SWT staff totaled six workers, zero hours of work.
Said Smith, “He was told by the restaurant manager that according to the contract with the foreign kids, they had to get a minimum of number of hours, so he was out of luck.”
Ironically, Smith is a former State Department Foreign Service officer who endorses the philosophy that underlies SWT: “I think the best way to convince the rest of the world that we’re not bad guys is for them to come here and see the United States,” she said. “But it’s wrong to have a program that allows foreign kids to come in and take jobs that American kids need.”
Assessing the well-established presence of SWT in her hometown, Smith added. “There are American kids sitting around on the sidewalk and hanging around complaining that they can’t get work. And there are foreigners who have jobs they could do. And in this economy there are foreigners in jobs that young adults would like to have. Instead, we’ve got kids saying, ‘I’m leaving Maine, there’s no jobs here, there’s nothing for me here.’ It’s a real problem. The [SWT] program is out of control.”
It is difficult to gauge the frequency of such stories. The number of SWT participants is small in relation to the overall workforce of young Americans. But the impacts can be significant, particularly in areas of the East Coast, where the program tends to concentrate many of the young foreigners.
The complaints have been building for years. In 2002 an indignant reader of the Hartford Courant wrote a letter to the editor suggesting that the SWT program be renamed “Importing Unneeded Cheap Labor.”
The author took note of the price paid by American young people when employers are committed to hiring foreign workers. He said he was “the father of a disillusioned teenager who, in the summer of 2000, found herself working a part-time job at Six Flags New England instead of a full-time job. The arrival of foreign workers two weeks into her employment led to a 50 percent reduction in her hours.”3
In Ocean City, Maria Raymond, a student at nearby Wor-Wic Community College, is a member of a rare group: an American employee at the many Dunkin Donuts shops along the coast of Maryland and Delaware. Those shops are largely staffed by some of the more than 20,000 young Russians who participate every year in the SWT program.
“I think (SWT) definitely makes it harder for American kids to get jobs,” said Raymond. “I mean, if all the foreigners are working, that means there aren’t jobs for Americans to find.”
Holy Cross College student Jessie Frascotti described losing a job because of a competitive disadvantage that employers often cite as a reason for hiring the foreign students: their school schedules allow some to arrive in early May and some to remain until October.
“This summer I came back to Martha’s Vineyard expecting to have the same job I did last summer, but it had been given to a foreign student who arrived earlier and stayed longer than I could,” she said in an e-mail. Frascotti eventually found work on Martha’s Vineyard, in a commercial area where SWT workers from Poland, Romania, Belarus, and Moldova and other countries worked in shops and restaurants and grocery stores.
Jobless in Boston
Last June, as hundreds of SWT participants were filling jobs on Martha’s Vineyard and nearby Cape Cod and as SWT students from Eastern Europe took jobs in Boston for moving companies and other employers, the Boston Herald was reporting that 1,400 local teens were expected to be unable to find summer jobs because of cuts in state and federal jobs programs. “We are still trying to find every job we can,” said Conny Doty, director of the city government’s Office of Jobs and Community Services.4
And as the summer ended in September, the Boston Globe reported that the cutbacks meant that “about 2,000 teens who would have been employed for at least six weeks went without paychecks.” Neil Sullivan, executive director of the Boston Private Industry Council told the paper, “There are plenty of teenagers ready to work. It’s just getting the adults together to organize it."5
In some instances, the frustration Americans feel at the State Department-sanctioned competition for jobs is muted by their admiration of the young foreigners’ work ethic and by the opportunity to learn about their home countries.
“I almost feel like some of them deserve the job more than I do because I do feel like some have a better work ethic than I do,” said Frascotti. “I did work with mostly foreign students last summer and they would come in, work hard from like 8 to 5 or 6 then go to their second job and work to 11.”
This hunger for work among SWT participants intensifies some employers’ dismay at the work habits and attitude of young Americans. Some, like the following three from Ocean City, offer a litany of criticism.
Employers Complain about Young Americans
Said Patricia Smith of the Castles in the Sands Hotel: “They don’t want to work weekends. They want to take a lot of days off. They’re always on their cell phone, always want to email and chat. You have to get them to understand that work time is not social time.”
Said Jon Tremellen, manager of the Princess Royale, where J-1 students fill the housekeeping crew: “American kids don’t want to make beds. That’s not what they’re interested in. They want to make a couple hundred dollars a night waiting tables.”
Said Christine Komlos of Seacrets, an Ocean City restaurant and nightclub: “They want to work when they want to and that’s it. They give you a laundry list of days they want off. For a lot of them, they don’t even have the desire to earn money. That doesn’t motivate them. When I was their age and worked in Ocean City, everybody fought for extra shifts because they wanted to make that money. I know I’m stereotyping but probably 75 percent are that way. If I say it’s not as busy as we thought so a couple people can go home, they’re fighting to be the people to go home, not the people to stay. I don’t understand it.”
Such criticism isn’t confined to employers of older generations. “I’m not sure that most American kids have been taught a good work ethic,” said Cory Balar, a Virginia Tech computer science student who worked two jobs in the summer of 2011 at Fenwick Island, Del., just north of Ocean City. “A lot of my friends don’t really need to work. They just do it because their parents tell them to go get a job, and then they don’t want to work a lot of hours.”
Melanie Pursell of the Ocean City Chamber of Commerce has heard many of her colleagues comment on the contrast in work ethics. She pointed to a built-in feature of the SWT program as a possible explanation. “This could be due to the fact that they pay a hefty price to participate in the program, and therefore have a very good reason to work their hardest, to be able to pay back the program fees.”6
Questioning the Effort to Recruit Americans
Asked about Ocean City’s efforts to recruit American youngsters for summer jobs, Pursell pointed to the job fair held every spring in the coastal resort. She said that in addition to advertising in local newspapers, job fair promoters put out the word to high schools and colleges within a 300-mile radius. “We do send posters to all of the colleges – mostly their career centers,” she said.7
One Ocean City employer whose policies require that it hire U.S. citizens has been far more ambitious in its recruitment. The Ocean City Police Department visits about 30-35 college campuses to hire its 100 seasonal workers, said Officer Barry Neeb. Police recruiters fan out across Maryland, Delaware, Pennsylvania, Virginia, and West Virginia, he said.
About 120 miles south of Ocean City, columnist Roger Chesley of the Virginian-Pilot newspaper expressed alarm at the growth of the SWT program in Virginia Beach. In a 2010 column he wrote that a Dairy Queen owner told him: “There are some good American kids, but eight out of 10 are not reliable.” Another employer told Chesley, “If J-1 didn’t exist I don’t know what we’d do.”8
Countered Chesley: “Companies could do more outreach for one. They could list the job openings at local colleges and contact officials at high schools.” Neither of the complaining employers was doing such outreach, he wrote.
Of course, one reason that American employers’ recruitment is so weak is that the recruitment done for them by the SWT industry is so strong. While Ocean City is sending out posters to East Coast campuses, SWT sponsors are taking employers to job fairs at universities across Europe, Asia, and South America.
At a 2010 job fair in the Ukraine, Anne Marie Conestabile made this pitch: “Ocean City is a heaven for young people. We have eight to 10 thousand young international students who come to Ocean City every summer, sporting their bikinis, sporting their tans, and making money.”9 Her CETUSA colleagues, meanwhile, promoted jobs at locations from the Hershey amusement park in Pennsylvania to desert resorts in Arizona to fish processing plants in Alaska.
Drastic Decline, Long-Term Consequences
The globalization of the SWT workforce has occurred at a time of drastic decline in work among American young people.
In the spring of 2011, the Center for Labor Market Studies at Northeastern University reported that from 2000 to 2010 the employment rates for 16- to 19-year-old Americans had fallen drastically. While more than half had jobs at the beginning of that period, about one in four had jobs at the end. “The size of these declines has been incredible,’’ said the Center’s Andrew Sum.10
The consequences can be debilitating in the long run. Steven Camarota of the Center for Immigration Studies notes that “The fall-off in youth employment is worrisome because research indicates those who do not work when they are young often fail to develop the skills necessary to function in the labor market, creating significant negative consequences for them later in life.”11
There are multiple explanations for the drop that go beyond the circumstances of the SWT program, or the use of foreign workers more generally. Many young Americans go to summer school. Some seek out unpaid internships. They and their families view summer as a period for gaining a competitive advantage in career building.
But a booming J-1 program that has habituated more and more employers to hire foreign students has clearly depressed job prospects for young Americans, especially in areas where that growth has been most intense.
One American entrepreneur who has made a go of it is Renee Ward, founder of Teens4Hire.org. Ward said she started her business in 2002 because as the parent of a teenager she saw there was no systematic outreach to hire them. “I found it was a haphazard process for American young people to find work,” she said.
Ward is angry at the growth of the SWT program, which she says displays a selfish disregard for the well-being of young Americans. She says she is frustrated at being rebuffed by employers from Cape Cod to Florida to Nevada: “They say ‘we’re okay; we just increased the number of J-1 kids that we’re hiring.’“
Ward has watched the expansion of SWT with dismay and disbelief. “These programs need to be revised in light of the status of American kids,” she said.
Culture Clash: The Hershey Legend Meets SWT
The Hershey Company revels in the legacy of its iconic founder, Milton S. Hershey, who is described in a highly regarded biography as an extraordinary man who “was able to fulfill the progressive utopian ideal of using the fruits of capitalism to raise the spirits, and the standard of living, of all involved in his company.”1
The company’s chocolate marketing still invokes that remarkable history, which includes Mr. Hershey’s decision to gift all his stock to sustain the school he founded for needy boys. A company press release in 2010 noted that legacy, adding: “Simply put, every time someone enjoys a Hershey’s product, they are helping to foster opportunity.”2
Hershey, Pa., calls itself “the sweetest place on earth.” So it was a bitter embarrassment for the company to be the target of a summer 2011 protest by about 200 young workers at its mammoth distribution center just east of the town that carries the founder’s name.
The dissident workers were all foreign students – from such countries as Turkey, Ghana, Russia, China, and Moldova – who were in the United States with J-1 visas as part of the Summer Work Travel program.
A New York Times story about the protest began this way: “Hundreds of foreign students, waving their fists and shouting defiantly in many languages, walked off their jobs on Wednesday at a plant here that packs Hershey’s chocolates, saying a summer program that was supposed to be a cultural exchange had instead turned them into underpaid labor.”3
The students’ complaints – that they were underpaid, overworked, overcharged for housing, and cut off from everyday contact with Americans – were spread around the world in a barrage of print and television stories. Often the news included photos of placards demanding “Justice @ Hershey’s” and “No More Captive Workers.”
“There is no cultural exchange, none. It is just work, work faster, work,” a Chinese student told the Times, which published an editorial saying the students’ plight “should shame us all.”4
Complaining about working a shift that began at 11 p.m., a Ukrainian student told the Associated Press, “All we can do is work and sleep.”5
Many students complained that other workers spoke only Spanish. One told the Pittsburgh Post-Gazette. “I wanted to improve my English, but I have only improved my muscle.”6
Horrified officials at Hershey pointed out that while the company owned the plant, it had contracted out with another company to operate it. That company, in turn, noted that it had hired yet another firm to staff the plant. And the staffing company turned to an SWT sponsoring organization to bring in many of its workers – about 400 in the summer of 2011.
The staffing company’s website told part of the story. It said clients typically face “increasing, unrelenting pressure to improve performance, drive down unit costs, and increase return on investment.”7
That hard-nosed orientation presented a stark contrast to the benevolence of Milton Hershey, whose words are memorialized on the walls of the Hershey Museum. Reads one quotation: “I have always worked hard, lived rather simply, and tried to give every man a square deal.” The museum shows a film that celebrates Hershey’s resolve to “create an ideal place for his workers and their families,”8 allowing them to escape the brutality and harshness characteristic of life for industrial workers of his era.
The multi-level arrangement at the Hershey plant surprised many observers who became aware of it after the foreign students launched their protest, with financial and organizational support from the Service Employees International Union and a group called the National Guestworker Alliance.
“It appears that the cultural exchange students were trapped in a tangled web of outsourcing and bureaucracy at its worst,” said a Philadelphia Inquirer editorial. “The candy makers apparently turned a blind eye to what the students … were experiencing until the controversy erupted.”9
The protestors aimed much of their criticism at the organization that sponsored the J-1 students. The Center for Educational Travel USA (CETUSA) had worked with agencies in the students’ home countries to recruit them, help them obtain visas, and make travel arrangements.
“They told us the job would be easy and fun and they would have pizza parties for us,” a Turkish student told the Washington Post. Other students complained that CETUSA was charging $2,000 for five of them to share apartments that normally rent for far less.10
Some commentators, noting the State Department’s vision of the program as a showcase of American life, suggested caustically that the SWT workers were indeed getting a realistic view of how many Americans lived their lives. “Hate to tell you,” said a letter to the editor of the Patriot-News in nearby Harrisburg, “but you are experiencing America in the same way many Americans are experiencing America.”11
More acerbic commentary came from RT, The Russian government-financed English-language news channel, whose reporting is often colored by schadenfreude about the social, economic, and political problems of the United States. For its story about the students taking their protest to New York, RT offered this comment:
Look at what corporations are doing to avoid hiring Americans … . They’re accused of using captive labor … . They’re accused of luring students from countries like China, Turkey, Romania to come to the United States for a cultural exchange program. And then putting them to work in their factories instead. At the same time activists say this ties into the bigger issues of robbing local workers of living wage jobs in America.12
That final point was a centerpiece of the protest, as students expressed solidarity with unemployed Americans. “They take students who came on a cultural exchange to slave for them and make next to nothing, when these jobs could be going to families in Pennsylvania,” a Nigerian medical student told the New York Times.13
Stunned by the publicity blitz that mocked Hershey’s image of corporate benevolence, a company spokesman said the students should be given a week of paid vacation so that they could see other parts of the United States. “We were disappointed to learn that some of the students were dissatisfied with the cultural exchange element of the program,” said spokesman Kirk Saville. He added, “We want to ensure that all the students have a positive experience of this program and leave the United States with an understanding of the Hershey Company.”14
Any understanding of the company would have to consider its efforts in recent years to cut costs. The production plant it opened in Mexico in 2008 took about 600 jobs from its home town. And when Hershey completes construction of the highly automated new candy factory coming to the edge of town, several hundred more jobs will be lost.
The director of the National Guestworker Alliance, the group that organized the students with the help of labor unions, was not in an understanding mood. He said the protest exposed “how companies like Hershey’s are getting creative in their search for the cheapest possible labor, using the J-1 cultural exchange program, which was never intended to be a guestworker program, to fill what used to be living-wage jobs for local workers.”15
The protest embarrassed not only Hershey but also the State Department, which launched an investigation, with particular attention to the work of the students’ sponsor, CETUSA. The executive director of the organization that lobbies for exchange program sponsors issued a statement welcoming the investigation and expressing confidence that the problem “will be assessed for what it is: an unusual, unfortunate event in a very successful program”16
CETUSA’s response to the State Department included documents to show that before coming to the United States, each student had signed a contract that described in detail the strenuous nature of the work. It explained that the $400 per month it charged each student for housing was necessary to overcome landlords’ reluctance to rent to students for a short period of time. It denied that it was making money on the arrangement. And it said that students who worked the night shift had chosen that schedule, frequently because they hoped to find a second job during the day.17
By the time the furor died down and the students returned home in the fall, SHS (the staffing company) had announced that it would no longer employ SWT students at the plant. The State Department continued its investigation. And CETUSA announced that it was closing its regional office in nearby Harrisburg and pulling out of the central Pennsylvania market, which it had begun to develop a decade earlier when it began supplying SWT workers to the Hershey amusement park and nearby hotels.
But CETUSA lost the Hershey Park account at the end of 2010, when regional manager Agata Czopek, who had recruited heavily in her native Poland, began working for the Harristown Development Corp. and took the Hershey account with her.
Harristown officials have been aware of the growth of SWT and of its potential for growth in central Pennsylvania for some time. In 2008, Harristown executive Brad Jones invited Czopek to participate in a discussion at the Harrisburg campus of Penn State University that was titled “The Work & Travel Visa – How it’s Changing America’s Workforce.”18
Harristown has pursued a sort of vertical integration of J-1 participants. It hires them to work at its Hilton Hotel and the Bricco restaurant. It houses students at a residential property it owns. And in 2010 it established the International Institute for Exchange Programs, which it hopes will receive State Department designation as a SWT sponsor.
Czopek, the director of the institute, did not respond to phone calls and emails. But she and the Institute clearly hope to expand the SWT program in the Harrisburg-Hershey area. In the summer of 2011, according to the Patriot-News newspaper, the program had placed participants at 22 business locations in the area, including the Harristown and Hershey sites, and the nearby Warrell Candy factory.19
In the spring of 2011, Independent Joe, the magazine for Dunkin Donuts franchise owners, published a story about owner B.J. Patel’s recognition that the program “can work for seasonal hiring, but can also provide coverage pretty much all year round, with students coming every four months or so. ‘I figured that I’d try it for the year,’ Patel said. ‘I wanted to see if it could work.’”20
The former mayor of Harrisburg, Stephen R. Reed, criticized SWT as inconsistent with the Obama administration domestic agenda: “In times of economic distress, you can’t have the Department of Labor and other departments calling job creation the number-one priority and then simultaneously have the State Department not just ignoring that but working in a contradictory manner.”
Reed said that while the SWT program can work well in areas of low unemployment, it should not be authorized in areas where unemployment is a significant issue. Given the high unemployment in the Harrisburg area, he said, SWT should be authorized there “only on a very limited basis at this time.” Reed said that while he supported cultural exchange, “I would not do it at the expense of unemployed Americans.”
1 Michael D’Antonio, Hershey: Milton S. Hershey’s Extraordinary Life of Wealth, Empire, and Utopian Dreams, New York, Simon and Schuster, 2006, p. 158.
2 PR Newswire, “Hershey’s Milk Chocolate Bars Now Contain Special ‘Thank You’ Message; Hershey’s Milk Chocolate Bars and Milk Chocolate Bars with Almonds to Deliver a Sweet ‘Thank You’ to Consumers who Have Supported Children in Need.” January 4, 2010.
3 Julia Preston, “Foreign Students in Work Visa Program Stage Walkout at Plant”, The New York Times, August 18, 2011.
4 “Not the America They Expected”, The New York Times, August 19, 2011.
5 Mark Scolforo, “Foreign workers for Hershey protest Pa. conditions”, Associated Press, August 19, 2011.
6 Tom Barnes, “Foreign Hershey Workers Continue Protest”, Pittsburgh Post-Gazette, August 20, 2011.
8 “Building a Place to Live, Work, and Play” film shown at the Hershey museum.
9 “Students say Hershey treated them like serfs”, Philadelphia Inquirer, September 3, 2011.
10 Pamela Constable, “Foreign students allege abuses in visa work program”, The Washington Post, October 30, 2011.
11 Cyndi Roush, letter to the editor, Patriot-News, September 6, 2011.
13 Julia Preston, “Pleas Unheeded as Students’ U.S. Jobs Soured”, The New York Times, October 16. 2011.
14 Brad Rhen, “Agencies probe Palmyra-area plant,” Lebanon Daily News, August 24, 2011.
15 Chris Sholly, “Human rights report calls for probe of J-1 program”, Lebanon Daily News, September 6, 2011.
16 Nick Malawskey, “Officials begin inquiry into Hershey strife,” Patriot-News, August 23, 2011.
17 CETUSA response to claims by Hershey protest, signed by vice president Kevin Watson, addressed to Under Secretary of State Ann Stock, August 21, 2011, http://www.cetusa.org/public/assets/download/38/state-department-respons....
18 Message from Agata Czopek, published in Chatter, the CETUSA in-house publication, May 2008, p. 3.
19 Nick Malawskey, “The Hershey Co.: Give foreign students paid vacation”, Patriot-News, August 24, 2011.
20 Brooke McDonough, “International Travel Agencies Offer Hiring Solutions and More”, Independent Joe, Issue 8, March 2011, p. 5.
2 “The Exchange Visitor Program Needs Improved Management and Oversite”, Audit Report OO-CI-028, Office of the Inspector General, September 2000, http://oig.state.gov/documents/organization/7782.pdf, p. 20.
3 Frederick M. Boyd letter to the editor, Hartford Courant, September 9, 2002.
4 Jessica Fargen, “Youth Job Crunch ‘Dangerous’; Teens face summer spent on streets”, Boston Herald, June 12, 2011.
5 Matt Byrne, “Storm cleanup gives teens extra work,” Boston Globe, September 4, 2011.
6 Melanie Pursell, e-mail to author, October 19, 2011.
8 Roger Chesley “Now, that’s a foreign idea: cross an ocean to fill our jobs,” Virginian-Pilot, December 10, 2010.
9 “Maryland vs. Alaska” job fair video, http://www.youtube.com/watch?v=5DSrmqd24kA.
10 Megan Woolhouse, “For teen job-seekers, summer again offers dismal prospects”, Boston Globe, May 17, 2011.
11 Steven A. Camarota, "Declining Summer Employment Among American Youths", Center for Immigration Studies Memorandum, December 2011, http://cis.org/declining-summer-employment.