DOL Does the Right Thing (Eventually) on Wages for H-2B Workers

By David North on February 6, 2011

The Obama administration's Labor Department has, finally, done the right thing regarding the wages to be paid to one group of temporary foreign workers and to the U.S.-resident workers who toil alongside them.

But the effective date is not until January 1, 2012!

The workers are temporary, unskilled, non-agricultural workers, i.e., those involved at the bottom of America's labor market, who are brought to this country under the relatively obscure H-2B program. They do landscaping, nursery, and forest maintenance work outdoors, and work as dishwashing and janitorial work indoors; they also work in construction and in "Amusement, Gambling and Recreation."

For more on the basic wage-depressing, American-job-grabbing nature of the program, see the CIS Backgrounder "Dirty Work: In-Sourcing American Jobs with H-2B Guestworkers" by my colleague David Seminara.

As in all substantial foreign worker programs, the government-permitted wages to be paid to the aliens end up setting the wage levels for everyone working alongside the H-2B aliens, so the (quite complex) Labor Department decision, published late last month, will eventually have an impact on workers both outside and inside the program. For a relatively neutral report see this BNA article.

The Labor Department's lengthy decision dealt with the methodology for calculating the prevailing wage in various H-2B occupations; the employers must pay at least the prevailing wage. Different statistical formulae can be used to provide different levels of such a wage.

To get a quick fix on the expected impacts of the new decision one only has to look at the reactions from the AFL-CIO and from the employers.

The AFL-CIO Now Blog says "New H-2B Wage Rules an Improvement, but Delay Hurts Workers."

According to a statement from an employers' organization, Immigration Works: "The Department of Labor has launched an attack on the H-2B visa program. After a long review of the H-2B regulations, DOL has issued a new rule that will significantly raise the minimum wages employers are required to pay H-2B workers – in some industries, by as much as 50 percent."

Note the employer-alarming "as much as 50 percent" statement. It is not at all clear that the wage increases under the new formula will be that large for any but a handful of workers, but if they are, it suggests that the workers involved were very badly treated under the previous rules.

The DoL announcement describes and defends a new formula for setting prevailing wages; exactly how that formula will work, for specific jobs, will not be known until later.

There is an annual 66,000 cap for new H-2B visas; as usual with these programs, there are many exceptions to the ceiling, and no government agency bothers to count or even estimate the total population of H-2B workers, a much better measure of its impact on the American labor market than the annual figures.

The major loophole in the ceiling relates to not counting H-2B workers whose visas have been renewed, as opposed to being granted initially.

Lesser, and more exotic, loopholes apply to fish roe processors (presumably working in Alaska) and to the locally numerous guestworkers still in the Commonwealth of the Northern Mariana Islands. The latter workers were admitted under the exploitative immigration system formerly run by the islands' government, a system that employed the notorious, once-jailed Jack Abramoff as its lobbyist. The CNMI loophole is slated to expire in 2014, as the territory is forced to transit from its own law to the congressionally-mandated inclusion under the federal law.

According to Immigration Works, DoL is also working on the ground rules for the program and that organization expects the department to change the regulations to provide more protections for the workers.

Late in George W. Bush's second term, the program's rules were sharply revised by DoL in directions suggested by the employers using the program. Those Bush-era rules are about to be scrapped, but only after three years after the arrival of the Obama administration.