A Comparison of Two Exploitative Migrant Worker Programs, H-1B and L-1

By David North on December 17, 2010

One of the grim aspects of America's programs for temporary alien workers is the wide menu of choices offered to the nation's employers.

If one program is seen as a little too costly to employers, or a tad inconvenient in its terms, the ever-gracious government provides a wide variety of alternatives. U.S. and alien workers are both hurt by the general laxity of these programs.

Some of these programs are worse than others, as Ron Hira, an Associate Professor of Public Policy at the Rochester Institute of Technology, pointed out last week at a Washington conference on such matters sponsored by the Economic Policy Institute, and mentioned in an earlier blog of mine.

Hira compared the H-1B program for high-tech workers with the L-1 program for the transfer of workers by multinational employers. Among his findings in an EPI paper were these:

  • "Neither visa requires a labor market test. Employees can and do bypass American workers when recruiting for open positions and even replace outright existing American workers with H-1B and L-1 guest workers." Sometimes the resident workers, about to be replaced, are forced to train their replacements.

  • "Wage requirements are too low for H-1B visas and they are nonexistent for L-1."

  • "Visas are held by the employer rather than the worker" and thus the alien workers are not free to move around the labor market to seek better deals for themselves.

  • "Program oversight and enforcement is deficient." In fact, some of the relatively expensive fees for the program, instead of being used for enforcement, have been siphoned off for other governmental purposes.

Hira's conclusion about these programs was this: "Both of these visa programs need immediate reform. The goals of the H-1B and the L-1 visa programs have been to bring in foreign workers who complement the U.S. workforce. Instead, the loopholes in both programs have made it too easy to bring in cheaper foreign workers who directly substitute for, rather than complement, workers already in the country. They are clearly displacing and denying opportunities to U.S. workers."

One measure of the size of these programs is the Department of Homeland Security admission figures. By that yardstick they are about the same size, with 339,243 H-1B admissions in FY 2009 compared to 333,386 L-1 admissions; both in FY 2009.

However – and here we venture into the alphanumeric soup of the immigration business – since spouses of H-1Bs are H-4s and cannot work legally, while the L-2 spouses of L-1s may obtain work authorization, and thus have a greater impact on the labor market. There were 160,606 admissions of L-2s in that year, according to Table 2 of "Nonimmigrant Admissions to the United States: 2009," a publication of the Office of Immigration Statistics.

So the L-1 program, which gets less public attention, appears to be worse than the more frequently discussed H-1B program. The L-2 visas, incidentally, like those of their L-1 spouses, have no program-specific labor market protections.

EPI recently released another study, devoted to the L-1 program alone, by Daniel Costa, entitled "Abuses in the L-1 Visa Program: Undermining the U.S. Labor Market."

For recent news and other comments on some of the least attractive of the nonresident worker programs operated by the Government, see two of my blogs on the H-1B programs for high-tech workers (here and here), two on the H-2B program for low-skill workers (here and here), and one each on the H-2A program for farmworkers and one on R-1 religious workers. A blog on the J-1 program will be forthcoming shortly.

For more comprehensive examinations of two of these programs, see David Seminara's backgrounder "Dirty Work: In-Sourcing American Jobs with H-2B Guestworkers," and John Miano's backgrounder "H-1B Visa Numbers: No Relationship to Economic Need."