MARK KRIKORIAN: Good morning. My name is Mark Krikorian; I’m the executive director of the Center for Immigration Studies. And as you see from the report, we’re releasing a report on the Summer Work Travel Program, which our author Jerry Kammer will go into some detail.
But it’s the kind of thing that a lot of people in Washington especially see the effects of in the summer, when they go to Rehoboth or Ocean City or Bethany Beach, but really – don’t really know what’s going on. You see lots of Bulgarians and Ukrainians; it’s like, well how did the Bulgarian get to, you know, the Dolly’s Salt Water Taffy store? I mean, how does this happen? And it’s – the mechanics of it, as well as the consequences and the implications of it, are really quite interesting. And the report which we’re doing the panel discussion on today really goes into some detail on that. And I think it’s going to be an interesting discussion.
Our first speaker is the author of the report, Jerry Kammer. He’s been a senior research fellow at the center since 2009. Was a – calls himself a former journalist, but really he’s basically still a journalist – this is a work of journalism really; has won the Robert F. Kennedy Award for Humanitarian Journalism; shared the Pulitzer Prize for helping send Duke Cunningham and his minions to jail; was a former reporter for the Arizona Republic and for Copley News Service, mainly the San Diego Union Tribune; and has really done work that – quite honestly reporters working for news organizations should have done a lot of this, but they aren’t. And so in a sense this is kind of our contribution to the evolving model of journalism that – where nonjournalistic institutions do journalism that isn’t getting done.
Our first commenter/respondent will be Jeff Collins. He’s vice president of Crystal Aquatics in Chantilly, Virginia, which is a pool management company. It’s a family company. He started as a – his family, right?
JEFF COLLINS: Yes.
MR. KRIKORIAN: So yeah, he started as a lifeguard there in 2009, became vice president – I mean, 2001 – became vice president in 2009, and has dealt with competitors using the summer work travel program as a means of underbidding his own family’s business and can talk some about what are – the consequences are for small businessmen for this program.
And our last speaker before the Q-and-A and discussion is Sarah Ann Smith, who is not physically with us but is in Maine. So that’s going to be her up there on the screen, I suppose. That’s the way you should think about it. She’s a former Foreign Service officer, has served in a number of countries – Canada, Bolivia, elsewhere – has done consular work, visa work in a variety of areas and also has a personal experience with her son’s difficulty in securing and keeping summer employment up in Maine, specifically because of employers that use the Summer Work Travel program. So she’ll be able to tell us some of the human interest side, the personal side of how this has affected American families.
So with no further ado, Jerry?
JERRY KAMMER: Thanks, Mark.
Just want to pick up on one point Mark made about the fact that in-depth reporting is being done less and less. That’s something that I, you know, lament that I was a reporter for many years – over 30 years – and because of what has happened to the newspaper business, it’s been downsized, it’s been defunded. It’s been a real shock to the world of journalism and reporters. I have many close friends who have lost what they thought were promising careers that they would have for a long time.
But because of the restructuring of journalism, it’s becoming less and less possible to do this sort of investigative, in-depth reporting. It just costs too much money. I mean, it really is a struggle at many, many American newspapers. And I think we’re all worried about that means for the future of journalism and for what that means for our ability to serve a watchdog function. I’m grateful to be here at CIS, because I had five months to work on this report. I said they were five months during which I had spent about 80 percent of my time working on this report. So that’s the sort of luxury that very few reporters have, and I’m glad that I can continue to do that sort of work. As Mark was saying, I still consider myself a reporter.
Just a quick word about who is not here today. I invited the State Department to come, hoped that they would come and disappointed that they didn’t come. But they’re in a sensitive stage now. They’re proposing changes to reform some aspects of the program. These are politically sensitive. They want to put certain industries off-limits to the SWT program, industries like the one up in Hershey, PA, where working in warehouses staged a very well-publicized protest.
And also there’s – there are those who want to put the Alaska fish processing industry off-limits, which is – we’ll talk about here – in which, by the way, the report begins with an anecdote: In 1969, Secretary of State Hillary Clinton, having just graduated from Wesleyan before she started Yale Law School, worked in an Alaska fish processing plant doing what they call sliming fish, cleaning the innards of fish. Just as a footnote, summer of ‘69, I worked in Alaska; I was in college. I was a rodman in a survey crew. A summer job in Alaska used to be considered a big deal for an American college kid. It was an adventure and a chance to make a lot of money.
One of the things we can talk about a little bit today is what has happened to that in part because of the growth of the SWT summer work travel industry, which makes large numbers of good working college kids from overseas who are eager to make 7.75 (dollars) an hour, because in their countries where a middle-aged wage might be 300 (dollars) a month, 7.75 sounds real good. And when you can double that or time and a half with overtime, that sounds real attractive. That’s something we’ll get into a little bit.
Another quick introductory point – we’re going to be talking about just the Summer Work Travel program, which is one component of the J-1 Visa Program, which also brings over in separate categories camp counselors, au pairs, teachers, researchers. There are 16 different J-1 categories.
So – and with that introduction, let me begin the PowerPoint. I think it’ll take about 15 minutes, but I’ll try to go through it quickly. This is a quote from the State Department’s website explaining the rationale of the program.
BRYAN GRIFFITH: You can expand it. F5.
JERRY KAMMER: F5. Thank you, Bryan.
Let me see – now I’m – there we go. Whoops. This is the State Department’s rationale for the purpose of the program, the intention of the program. And I think it’s – you know, it’s seriously or obviously a good intention, one that’s difficult to argue with on its face. It’s – it wants to do something good. But it has – the problem, as I see it, is that it has led to a huge industry that is motivated by a chance to make a lot of money recruiting kids, hiring kids and taking advantage of various tax incentives that our own government offers. And the sky’s the limit. That’s a phrase from an SWT recruiting site in Singapore that I quote in the report. They basically – they said it in their website: There are thousands of communities across the United States that offer youth, through SWT, a chance for a totally unique experience in the United States. I think, you know, that sounds very admirable, too. The question is what are the effects on American labor markets as well.
And then, up against this vision, we have another concern expressed by the president in his State of the Union address. He was talking, of course, about outsourcing. He says, “It’s time to stop rewarding businesses that ship jobs overseas and start rewarding companies that create jobs right here in America.” What I see as interesting in this regard is that at the same time our government is professing this goal and talking about jobs being the most important thing we can do for our company, we have this program which has the effect of bringing kids from overseas to work jobs that are not being worked by American kids. The question as to why the American kids aren’t taking (those ?) jobs, we’ll take on a little bit later.
So here’s a chart that tracks the growth of the program. In 1996, very small – 20,000 kids coming over in SWT every year. It grew very rapidly, reaching a peak of – in 2008 – of 153,000. And then for a couple of reasons, the recession and some problems in terms of abuse and cheating of some of the SWT kids who were sent over here to jobs that did not exist because of unscrupulous sponsors, it shrunk. And it has – last year it was down to 103,000. But there is clearly enormous potential for this program to grow. The State Department boasts about the growth of the program around the world. This shows the top 10 sending countries from 2004, 2006, 2008 and 2010.
In 2004, Poland was at the top. But Poland has entered the EU. There are more opportunities for Polish kids to work in Poland, and so their numbers have dropped. Meanwhile, Russia – excuse me – has shot to the top. Brazil is coming on in big ways. (This ?) program is very popular in the Ukraine. We can go to 2010 – a lot of Turkish kids were working in Hershey, a lot of Turkish kids working in Alaska and other places. Brazil is coming up – Thailand, Ireland. China is coming on big.
And I don’t think it’s an exaggeration to say there are millions of young people around the world who would love to come to the U.S. under this program. We could fill all our summer jobs and all our part-time jobs year-round through this program, because the program – it’s called Summer Work Travel, but the summer is not our summer. The summer is the summer in the home countries of these kids. So Latin American kids, South American kids come up during their summer which is our winter. And many of these recruiters boast about year-round availability of the Summer Work Travel kids. And you can see Peru is the last of the top countries, but a lot of kids from Brazil, Argentina, Colombia; there is some growth in Mexico. And there are many entrepreneurs in these countries that want to see the country grow.
Another aspect of the program is visa diplomacy. This is the use of visas to bring over visitors from foreign countries with the idea that this is – this is good for our foreign relations with other countries, and this is the value that is being served by bringing over these kids. And one of the rationales is, look, a lot of these kids don’t have the money. They don’t come from wealthy families and otherwise could not afford to come to the U.S. This program gives them a chance to come to the U.S., work, make some money and then travel and get an idea of our country. And presumably, the hope is they’ll go back home and with a good opinion of the U.S. And as presumed future leaders of their countries, since they all have to be college students, the idea is that this in the long-term will be good for U.S. foreign relations.
These – this is a view of some of the criticisms that have been brought against the program. They say it’s called a cheap labor – called a cultural exchange, but it’s really cheap labor. And by the way, I should point out there are very few American kids who go to work in countries like Ukraine, Moldova, Romania. I mean, American kids don’t speak those languages and don’t want to work for the local wages, whereas a Moldovan kids thinks that making minimum wage in the U.S. is a pretty good deal.
The idea that it has monetized the foreign policy initiative, that it – and generates enormous profits – SWT has become a money machine – over $100 million every year in fees and a lot of people competing for those fees and wanting to grow that pie. There’s a lot of pressure to grow that pie from an SWT lobby that acknowledges that it seeks permissive – that’s their term – they want permissive, i.e. loose regulation, by the State Department.
Of course the criticism that it displaces America’s young – American young people, we’ll hear that from Jeff; we’ll hear that from Sarah. And interestingly, it provides incentives for American employers not to hire American kids, but to hire SWT kids. American employers don’t pay Social Security taxes. They don’t pay Medicare taxes, and they don’t pay federal unemployment taxes on their SWT workers. It’s about an 8 percent savings right off the top. So our government is incentivizing American employers not to hire American kids, but instead to hire SWT kids all in the name, of course, of cultural exchange.
And then also, on the side of the kids, a lot of these kids are paying an average of $1,100 in fees to the sponsoring agencies. The sponsoring agencies have the job of screening, selecting and orienting these kids, and then monitoring them – their progress once they’re in the country. But when the kids are paying $1,100 in fees and maybe another $1,500 in travel expenses, they are in a lot of debt, especially in terms of the dollars that they could earn in their own countries. So they are highly motivated to work hard, get all the hours they can get and not to complain. Daniel Costa, the Economic Policy Institute, wrote a really good paper about this issue. He calls it a form of indentured servitude for these foreign kids.
This is a quote from a Russian recruiting website, which basically looks at all the benefits that are offered and he – they – he’s basically asking what I think a lot of people is: can this really be true that the U.S. government is offering this package of benefits? Sounds like a scam. This – it’s called (wwoof.org ?). It’s a Russian site. It’s not. This is Work and Travel USA program designed by the U.S. Department of State to promote intercultural friendship.
There’s been a long history of critiques of this SWT program and other J-1 programs going back to 1990. The GAO offers that criticism. Ten years later, the State Department’s own OIG offered a very similar criticism basically saying the management has been terrible, the oversight has been lax, but regulation has been next to meaningless. And what I found most remarkable was how little has been done over the years to reform the situation. I do think that there are encouraging signs that in the past six months with a big change in leadership at the Bureau of Education and Cultural Affairs at the State Department, there is recognition of the gravity of the problem and the need to correct it.
A lot of criticism over the years from other people outside the government, Daniel Costa, the Economic Policy Institute, a liberal think tank. Some of the sponsors who bring these kids over are also critical of State’s past management. They are upset that SWT kids, other kids coming from overseas not knowing anything about our country or very little, although they almost speak English. They are frequently – or I don’t know how frequently, but they are certainly occasionally cheated, taken advantage of, and that is a problem that has been cited by many of those who have looked at the program.
Many other kids, I want to point out, are very happy with their experience in the U.S., enjoy it and like their employers and are grateful for the chance to be here. I talked with one great Lithuanian kid who told me in Ocean City a few months ago, I had a great time. I’m going back to Lithuania and I’m going to tell all my friends, because he wants them to come as well.
The State Department has tolerated visa mills. Visa mills are sponsoring organizations that aren’t really interested in doing any real monitoring work, but they want – they’re very interested in collecting the $1,100 in fees. And again, we say this is a $100 million industry because at the low end – the low figure of 100,000 kids a year – you multiply 100,000 kids by an average of $1,100 in fees, that’s $110 million. That’s a lot of money that’s up for grabs for those who can recruit these kids and find them jobs.
Big problems with lack of accountability at State – I found this particularly frustrating, as have other reporters. You simple encounter a stone wall when you try to say, give us some information that will allow us to evaluate your performance. What is going on here? What are the effects in job markets? Employers are not required to test their local job market. Other guest worker programs, the employers have to certify or it has to be – that – it has to be established that bringing in foreign workers will not negatively affect American workers. There is no such standard here at all.
Employers don’t have to approve anything. It would be really good if reporters, journalists, social scientists could be able to evaluate this program. The State Department either doesn’t have the information or is unwilling – has been unwilling to produce most of it. Again, signs of some change in the past several months under the new direction of Rick Ruth. Also, the concern that they are fixated on visa diplomacy as an ultimate value without taking into consideration the effects on American labor markets, and that’s another big criticism.
SWT creates winners and losers, no surprise there. Some of the winners – well, in theory at least, and I think certainly in practice, to some extent – it helps relations and contacts with foreign countries. Most of the kids go back with a positive impression of the U.S. I think a significant though difficult to quantify minority are embittered by what they encounter here in terms of exploitation, and sometimes actual criminal activity that’s directed against them.
But they’re happy to come to the U.S. American culture has been globalized. Kids want to learn English, it’s good for their – for their resumes. They want to travel. You know, they’ve seen Hollywood; they’ve seen our sites. They want to see Broadway. They want to see Hollywood. They want to see the Grand Canyon. A lot of kids, I found, for some reason – they’d love to see Niagara Falls. They go up there – they go up there in a day and come back the next day.
Employers get a real deal. This is a great deal for employers. They get good workers. They tend to be mature workers. Instead of hiring a 16-year-old high school kid who might have issues with his girlfriend, his mom and dad, his football coach or whatever, you hire more mature foreign kids in their early twenties, many times. And so they’re good workers and they come with the advantage of a big tax break. They don’t pay these taxes for these kids. And so they pay lower wages. And as we’ll talk about a bit later, some employers are actually taken on free overseas recruiting trips by the sponsoring organizations – you hire a certain number of kids; you get this trip for free – and, of course, the sponsoring organizations making the fees that we’ve talked about.
Losers, OK: Young Americans who are displaced. American employers like Jeff, who prefer to provide jobs to young Americans. Jeff’s going to talk about what he has encountered because of SWT competition; and the SWT participants – the kids who are cheated, who are abused, who are abandoned by their sponsors and sometimes exploited by their employers.
I talked yesterday with a Department of Homeland Security investigator who is very concerned about some of these kids being trafficked for sexual purposes. There have been indictments of some SWT kids who have been working in concert with computer hackers in the Ukraine who hack into American bank accounts and use these kids to be money mules, taking the money back home. I think in percentage terms, the percentage is small; however, the impact can be big.
But I want to emphasize, the great majority of these SWT kids are good kids, but the program, because of lack of proper oversight and careful oversight by State and by sponsors, has been vulnerable to the infiltration of people who want to place some of these young girls in strip clubs. There was a good AP story in December of 2010 about that issue.
I have been blown away by the recruitment program that this industry has bred worldwide. And again, it’s all driven by this $100 million that’s up for grabs there. There are about 50 U.S. sponsors. Every SWT kid has to have an American sponsor. But the sponsors work in large part through their overseas partners and they have hundreds of them in countries around the world.
A remarkable use of social media – you’ll see in the appendices here, we have links to dozens and dozens of websites and several dozen YouTube videos. There are hundreds of YouTube videos that basically serve as a very attractive advertising tool for SWT. It’s really an energetic, robust and very creative use of the Internet to recruit foreign kids. And meanwhile, if you compare that to the efforts to recruit American kids for summer jobs, I mean, it’s the Stone Age compared to what is being done to recruit SWT kids.
Here is – this is a Moldovan site. They changed their site after our report came out. They did have a real glitzy, hip-hop type of animation that would say “Wassup, dude? See America in 3D.” This is some of the jobs that they’re offering – a lifeguard in the D.C. area, counter worker, restaurant worker on Myrtle Beach, grocery clerk in Alaska, cashier in Kentucky, retail in Michigan, food server in Yonkers, New York – I’m not aware of Yonkers, New York, being an area that has a labor shortage – but then – and then as salesperson in multiple, multiple locations.
There are many of these websites that talk about the availability of jobs all over the place. This is a Thai website. Here you see the early bird promotion. They want to get these kids to sign up early to come to the U.S. You get a discount. If you sign up for the early bird discount, you pay less in your fees. They advertise a job fair – these job fairs – (website plays music) –Thai kids apparently really like Kesha. Is that Kesha? So this is a really energetic, creative Thai website that talks about, well, how exciting it is to come to the U.S. And Thai kids are loving to come to the U.S. This is a Peruvian site, and the Peruvian kids, a lot of them are recruited to come to work at – I changed too soon – at ski resorts. And, of course, they’re coming in their summer, which is our winter.
A lot of these websites talk about – they really sell how much money employers can save by not hiring American kids. Here, you know, they talk about the exemption – the table on the right, you can see. And then they invite you to calculate how much you can save down below. Plug in the number of employees you want, the number of hours you expect them to work, and just magically you can see how much money you can save by not hiring American kids.
And as the TV pitchmen say, but wait, there’s more. (Laughter.) Employers also get free trips to overseas, to Europe, Asia and South America, if they hire certain numbers of these kids. And the competition amongst the sponsors to offer these trips is to me nothing short of astonishing. Here’s a trip that’s being offered – depart USA, arrive in Lima, have a sightseeing tour in Lima, Peru, interviewing some students, then Buenos Aires, a sightseeing tour there, then to Paraguay, sightseeing tour in Asuncion in Paraguay – oops, I did that too soon – and then to Rio. I mean, nice perk for employers. They not only don’t have to do any recruiting on their own – because these recruiting organizations will do it for them – but the recruiting organizations will also say, we’ll take you on a free trip to some of the neatest cities in the world. All you’ve got to do is sign up with us.
We’ve heard about CETUSA being knocked out. CETUSA was the sponsor for the kids at Hershey. The State Department debarred them from the program because of their alleged mismanagement. The big winner in the departure of CETUSA is a Maryland-based firm that started out as a pool management firm, but saw the big money that’s available in Summer Work and Travel. And they’re called United Work and Travel, and here is their website where they list their partners – whoops – around the world: South America, Africa, plenty in Europe and a growing number in Asia. One of the – the largest SWT sponsor talks about 75 partner agencies in 50 different countries, all offering kids eager to come to the U.S.
OK, this is something that – I’m trying to be a student of immigration in a broad way, and to me a lot of this raises a familiar theme that people who study labor markets and immigration have noticed. This is a New York Times, the lead of a New York Times story from 1950: “Much of the economic distress among seasonal farm workers results from a concerned long-term effort by big corporation farms, particularly in California, to keep wages at rock bottom by the use of foreign labor, the President’s Commission on Migratory Labor was told today.”
That is a big motivating factor for SWT. Sponsors and recruiters say, look, you can really save a lot of money because look at the money you don’t have to pay these kids. And the State Department tells them, boy, don’t feel guilty about this. You are doing well, but you’re also doing good. And the sponsors are quick to trumpet that on their websites. They talk about all that this program accomplishes for the foreign kids – it gets them ready to grow, it gets them ready to compete in an international competitive market.
My question is OK, what is happening to American kids? Are they growing, are they developing the skills that summer jobs teach? One of the chapters here, the second chapter, begins – this is out of Ocean City – young Americans simply – they have no idea of what’s happening. While they’re thinking, beginning to think of getting a summer job maybe in April, maybe in March – but already, the recruiting trips around the world in December, January and February – I’d paraphrase Mark Twain: Employers can line up their summer workforce halfway around the world before American students put away their winter boots. I don’t think there’s any doubt about that. American kids show up looking for jobs in April and they’re told, sorry, we’re already filled. Now, there are a lot of American kids who still get jobs, but a lot who don’t.
Interesting complaints about American workers by Ocean City, Maryland, employers and I think this needs to be taken – these complaints need to be taken seriously. I heard them quite a bit down there. And I do think that there are issues. You have a lot of high school kids who are immature, and this is work ethic or nonethic they’re bringing. Meanwhile, you have these SWT kids who are far more mature.
Well, one thing I think – and I’m going to speed up here – really highlighted to me the difference: The Ocean City police force can only hire American citizens for its summer workforce. It sends out recruiters to 30 to 35 colleges, OK? The Ocean City workers who are not police force, they don’t have any restriction at all. They do not have to hire American citizens. What do they do to publicize their job fair? Do they send out recruiters to college campuses?
No. I called them up, and Melanie Purcell, whom I also invited to be here today, who declined, said, well, we send out posters. So while we have job fairs around the world going to visit kids, to recruit them, Ocean City is sending out posters, which I predict most American kids never see.
Quickly going through Alaska, a big controversy now about whether this program is appropriate for Alaska fish processing, where you work long hours in remote locations. This is from a Turkish website. This is – the second quote is from a recruiter who made this comment at a job fair – I believe it was in the Ukraine. But the draw for these foreign kids is the chance not just to make $7.75 straight time, but time-and-a-half overtime. And again, if you’re from Eastern Europe, you know, making $11-12 an hour for overtime is really good money.
This will be a quote from one of the American seafood processing recruiters at a job fair in Odessa.
MS. : (From recording.) We represent a – (inaudible) – company called – (inaudible) – fisheries. We’re in – (inaudible) – Alaska, a very, very small town. We can offer a very exciting summer to you, about four or five weeks of very, very hard work. We work 16 hours a day seven days a week, so there’s not a lot to do, I mean, work and sleep and eat and work and sleep and eat. So that’s about it. (End of recording.)
MR. KRAMMER: OK. So work and sleep and eat, but by the way, this is cultural exchange. (Laughter.) So – I mean, clearly it’s cheap labor, but the kids are happy to take the job. And as we’ll see the American guys in Alaska say, it’s hard to get them. This is quote from Brian Gannon, who I hoped was going to be here today, a guy who I think sincerely believes in the value of this program.
He is very critical of American millennial kids – those born around 1980 – saying, look, they just don’t want to do these jobs. We can’t get them. I think we have some young people in the back like, you know, Gus, who would probably say: I think American kids will do these jobs. I did talk with several Alaskan Department of Labor people who say, look, we get calls every day from Americans in the lower 48, as they call it, looking for these jobs.
But still Brian Gannon is a very decent fellow, says that I have tried to recruit; I can’t get them. Again, an aside, I think another element of this problem is the declining – decline of the relative value of the minimum wage. When Hillary Clinton was working in the Alaska processing – fish processing, she was making the minimum wage, as most do, 2.10 (dollars) an hour. But because of inflation, what you could buy for 2.10 (dollars) in 1969 will now cost you 12.98 (dollars). But what has happened meanwhile to the minimum wage? It’s up to 7.75 (dollars). Obviously there is an imbalance there.
OK, just kind of summing up here quickly, SWT has a lot of advocates and a lot of people who are advancing their own interest through it. Meanwhile, there’s no lobby for unemployed American teenagers, and it’s not big business to recruit them. Down below is a quote from a women, Renee Ward, who does try to recruit American kids as a small business. And she is frustrated in her calls to SWT areas up in Cape Cod or Florida or Nevaska (ph) – Nevada. And when she talks to employers they say, we’re OK, we just increased the number of J-1 kids that we’re hiring.
So Renee wants to hire American kids, is very frustrated. There’s enormous potential for growth. If the State Department is bragging about the possibilities for SWT in China, Brazil and India, how many tens of millions of kids do you think might be eligible for coming over and might want to come over? Rick Ruth, again a State Department official who unfortunately just left, acknowledges there’s a lot of pressure to grow the program, to increase its size.
And I was struck by the title of this talk up at Penn State, Harrisburg, by one guy who’s working for a company that’s making money off of work and travel visa – how it’s changing America’s workforce. So they have very large-scale ambitions. Final quote from Rick Ruth, citing the need for balance here, and I think this is very well said. Unfortunately, we haven’t seen a lot of evidence that this balance is being struck. This is a program which is tilted very heavily to the side of growing the program and of making a lot of money by hiring foreign kids. Sorry I went a little bit long, but Mark it’s just –
MR. KRIKORIAN: Thank you, Jerry. Now Jeff Collins will give us some of his experience as a small businessman competing against companies that use SWT. Jeff?
JEFF COLLINS: Thank you for having me today. Hi, I’m Jeff Collins. I’m the vice president of Crystal Aquatics, a swimming pool management company located in Chantilly, Virginia. I’m here to tell you how the Summer Work Travel program has impacted my business in the swimming pool industry. Crystal Aquatics is a family owned and operated business who provides swimming pool management services to around 30 large communities in Northern Virginia. We – Crystal Aquatics was founded by my father Nathan Collins in 1974, and for 38 years we’ve been providing and proudly staffing swimming pools with American lifeguards.
I strongly believe that the Summer Work Travel program should be limited or suspended during these tough economic times to give American workers a fair opportunity to compete for summer jobs. It is argued by some of my colleagues in the swimming pool management industry that the Summer Work Travel Program is necessary because there’s a lack of American workers to fill lifeguarding positions. Proponents of this SWT program go on to argue that the American kids are lazy, unmotivated and bad employees.
I can assure you that this is simply not true. At Crystal Aquatics, we have an unbelievable group of lifeguards that are dedicated, hard-working and highly motivated. Last year alone, Crystal Aquatics sent W-2s to over 450 lifeguards. This year we had a record amount of applicants. Unfortunately, we are not able – we are forced to turn down potential employees in unprecedented amounts because we simply do not have enough positions available.
In addition, Crystal Aquatics does not actively seek and advertise for new employees. I believe that if we did advertise open positions for the – the pool of applicants would be endless. Every lifeguard that we hire goes through a proper interview process. And we work tirelessly to provide our customers with the best employees that the community has to offer. At Crystal Aquatics we firmly believe that if you provide America’s youth with the opportunity and proper supervision that they will thrive in the workplace.
In addition, we work very hard to make sure that our lifeguards receive the highest level of training and attention. In order to ensure our success, we provide each one of our pools with daily supervision from a senior member of our staff. The principal officers and I make it a priority to build a personal relationship with all of our employees and take a great deal of pride in watching them mature over the years and become successful adults.
Lifeguarding is an important stepping stone in life for our employees. For most of our employees, lifeguarding is their first job. Their time spent with us is listed on future job and college applications. Work experience shows potential employers and universities that applicants have achieved the important virtues of hard work, dedication and responsibility. Every year we are happy to provide our employees with letters of recommendation and references. We are proud to tell future employees and educators about the wonderful employees that we’ve had the privilege to work with.
For many of our current and former employees, lifeguarding has provided a source of higher education. Many of our lifeguards have gone on to graduate from prestigious universities such as Yale, Harvard, Princeton, University of Virginia and Virginia Tech. They’ve become doctors, lawyers, school teachers, mechanics, priests and engineers. A summer job does not only provide you with the economic means to succeed in higher education, but also provides them with the life skills to a brighter future.
Unfortunately, this American institution of youth employment is at risk. Companies that utilize international lifeguards are growing at an alarming rate. They are displacing jobs for American youth at a time of record high unemployment – record high youth unemployment, excuse me. Crystal Aquatics has the expertise, resources and, most importantly, the labor pool to expand our business and hire new employees. Crystal Aquatics is aggressively trying to grow its business, to be one of the few remaining companies in the area – in the Northern Virginia area that continue to hire American workers.
Unfortunately, we simply cannot compete with the low contract prices that swimming pool management companies who hire international lifeguards can provide. Companies that hire international lifeguards receive significant tax breaks – receive significant tax breaks because they do not have to pay Social Security, Medicare and federal unemployment on J-1 visa employees. The result is significant tax break savings of at least 8.45 percent.
In an industry driven by labor costs, it makes it extremely difficult for companies that hire the local labor to compete. The result of the payroll savings that are – as a result of the payroll savings that our competitors receive, we are always – all – excuse me, let me start over. As a result of the payroll savings that our competitors receive, we are almost always amongst the highest bidders. Not only does the payroll savings provide companies with an incentive to hire international employees, but it also gives companies that hire international lifeguards a fiscal edge in winning new work.
When contracts are rewarded, we routinely hear that Crystal Aquatics was our first choice, but we could not ignore the opportunities for fiscal savings. Another common response is: We would like to use Crystal Aquatics if you can match this company’s bid. The Summer Work Travel program is unfairly crippling our chances at growing our business and is a serious threat to our company’s longevity.
Over the years we have built a tremendous customer base. Most of our customers share the same feeling that we do at Crystal Aquatics, that while U.S. lifeguards might cost more money it’s, in the end, an investment worth making. Our customers are happy to see a familiar face at their local swimming pool, and they are proud to be supporting the local community. Local lifeguards provide a safer, more neighborhood-friendly environment at our swimming pools.
In an effort to understand our competitors and our evolving industry, we’ve explored the possibility of hiring international lifeguards. We have found the prevailing wages and conditions to be unacceptable. We have spoken to recruiters who provide international lifeguards, and they emphasize the opportunities to make money by charging inflated rent by housing four or more lifeguards in a single bedroom. I’ve personally spoken to international lifeguards who complain of unfair housing, but say that it is unavoidable because paying rent is part of the terms of their employment.
But the time many of these international lifeguards reimburse their employees (sic) for rent, transportation, fees and uniforms, they would be lucky to make any money at all. It has become clear to us, that international lifeguard – the international lifeguard business equates to big money. Crystal Aquatics would love the opportunity to expand our business and help bring down the record high unemployment among teenagers. I can say with certainty that the swimming pool management industry does not need to rely so heavily on the Summer Work Travel program to staff our nation’s swimming pools.
Despite political differences, I think that all Americans can agree that American workers have a right to the opportunity to be gainfully employed. American workers should not be put at a disadvantage because employers can bypass – can bypass paying payroll taxes by hiring their international counterparts. It is our experience that American workers provide a higher quality of service and that employing America’s youth is an important staple of our community. America’s youth is willing and eager to fill these positions and would excel, given the opportunity.
MR. KAMMER: That was great, Jeff.
MR. KRIKORIAN: Thank you, Jeff.
MR. KRIKORIAN: Sarah, are you there?
SARAH ANN SMITH: I’m here. Are you there?
MR. KRIKORIAN: OK. There you are. You – (inaudible).
MS. SMITH: Hi.
MR. KRIKORIAN: Now Bryan is – let me see, do we – I’m not familiar with Skype, so how do I – Sarah, you’re frozen on the screen, so bear with me for a minute.
MS. SMITH: Yeah, I went into freeze mode, I think, while you were still talking.
MR. KRIKORIAN: OK. That’s one of Sarah’s prize quilts in the background. She is a really talented maker of quilts.
MR. KAMMER: (Inaudible) – fabric artist.
MR. KRIKORIAN: OK, Sarah, I guess we’re going to hang up.
MR. KAMMER: I don’t know if she heard that. (Laughter.)
MR. KRIKORIAN: I bet you she heard – (inaudible).
MS. SMITH: You’re back. Am I back and moving?
MR. KRIKORIAN: Yeah, you’re back, Sarah.
MR. KAMMER: Your audio is back. There you are. Are you moving now?
MR. KRIKORIAN: Yeah, sometimes that’s how Skype –
MR. KRIKORIAN: (Inaudible) – but at least we’ll get the audio. (Inaudible) – telephone, so –
MR. KRIKORIAN: We’ll be able to see a still shot of your face. So anyway, Sarah Ann Smith.
MR. KRIKORIAN: Sarah, we see you in sort of stop action, so it’s kind of like the old instant replay on TVs. But we do see you and we hear you very well.
MS. SMITH: Good. Well, thank you for inviting me. I’m Sarah Ann Smith. I’m a mom, a wife, a textile artist and, for this conversation, I put on my former Foreign Service officer and consular officer hat. When we went to the Foreign Service a little over 14 years ago, I was working in the Advisory Opinions Office of the Visa Office. When our son – our older son turned 14, four years ago, he wanted to work. Now, we live in – currently in Hope, Maine, which is population 1,313. No jobs in Hope other than picking blueberries in August.
But our local center – the way D.C. is the center for the D.C. metro area, Camden, Maine, is the hub for our little area. It has a year-round population of about 6,000, goes up to many double that in – with all the summer vacationers. They have quite a number of B&Bs, hotels and restaurants in town. Joshua went everywhere applying for jobs. He finally was offered a job, and was quite lucky at the age of 14 to get one, at Camden Deli. He averaged about 24 hours a year – a week of work. He did so well that the owner invited him to stay on in fall, coming in a couple afternoons a week after school to help with food prep. And he had a guaranteed job the following summer.
What we didn’t know at the time is that by the following summer the economy had tanked. And, for the first time, Tom, the owner of the deli, had hired foreign workers to come in. Getting a teenager out of bed in the morning is difficult at the best of times. But Joshua got himself up, got on his bike and rode into town – we lived closer then – and would be at work at 6:30 in the morning regularly. He was supposed to be working until 11 or 12:00 every day. But frequently Tom would tell him around 8 or 8:30: OK, you’re done for the day. You can go home now. Joshua would hang out in town and walk by the deli later in the morning and see that there were European girls working behind the counter, making sandwiches, doing food prep, getting full-time shifts and hours while he was left with no work. He got maybe six to eight hours a week average that summer, even though he had been and continued to be a reliable employee.
Fed up with the way he had been treated at the deli, the following summer, in 2010, he applied all around town again and once again was lucky to land a job at Bay View Lobster. The first week, he had 24 hours of work. He was a dishwasher. In Maine, we have a tiered system of employment for young kids. They can work some jobs at a certain age. He was not yet old enough to wait tables, to serve wine or take money. So all he could do was wash dishes.
But he had 24 hours that first week in the kitchen. The second week he only had six to eight hours, and there was a European kid in the kitchen washing dishes with him. Then the following week, he wasn’t on the schedule at all. He went to the manager repeatedly and said, please, I really want to work. I’d like more hours. The answer he got? There’s a contract; we have to hire these workers. We have to give the hours to them. Sorry, kid.
That was the last week that Joshua had hours. He tried and tried and tried, and nothing else for the rest of summer.
Kids were sitting around town on the sidewalk. Joshua was playing his guitar on Main Street for change. All of them were complaining: I can’t get a job. I hate this place. There’s nothing for me here.
Now not all of the businesses hired the foreign workers. The little mom-and-pop grocery in town, a couple of the sandwich shops: They hired American kids. And guess who got my business and still has it? They were committed to supporting our community and our children.
Joshua was frustrated. And because of (my visa ?) background, I was upset. It never occurred to me at the time that they could be using the J Visa program, because that was for graduate students and researchers. That’s what the kids who were at Fletcher School of Law and Diplomacy with me when I was getting my master’s had when they had come from overseas to study in the States. I thought that they were H1-B workers where, in fact, you’re not allowed to displace U.S. workers. But I was wrong.
I decided to write our senators and congresswoman, but I did a little bit of research. I wanted to find out why they were hiring foreigners. First and foremost, the only reason: No taxes. The Europeans were less expensive as employees than the Americans. These businesses have no interest in providing a cultural exchange for these European kids. All they want is cheap labor.
Then something else struck me. When we first moved to Camden, I’d go to the local Hanover (ph) grocery store – the only chain grocery in town. And every summer there would be an influx of Russians and Eastern Europeans working the cash registers. But I realized I hadn’t seen them for a couple of years, so I sought out the manager of the store and said: Hey, what gives? What – how come you used to have them and you don’t now? He told me that it used to be that he simply could not fill his jobs that he had for summer. He needs to lay on extra employees because of the summer influx of vacationers. And he couldn’t fill those jobs locally as much as he tried. But he had watched employment over the previous fall and decided that, you know what, maybe I can make it and just hire locally this summer and not have the foreigners come in. So he tried it. Every year since then, he has been able to fill all of his positions locally with teenagers, college students who come from – home for summer and young adults. They are doing the right thing.
Jerry asked me to talk about recruiting. You’re not going to believe how rudimentary it is. It’s word-of-mouth. And they have a whiteboard. When they have a position open, they write: Deli assistant needed. Must be 18, because you’ve got to be 18 to work on the slicing machine. They prop the sign outside the front door, and that’s it. That’s all they have to do to recruit and they can fill those jobs.
Now I went into the Foreign Service because I love travel. I love going to other places in the world, meeting people, things like Skype and my international quote list. I love that I can Skype my friend in Sidney, Australia that I met online. I still keep up with this, even though I’m no longer in the Foreign Service.
Now I truly believe that foreign exchange is absolutely the way to go to show the world who and what we are and that it’s a good thing. I have read, and Jerry mentioned earlier, that some of the employees say that they like the foreign workers because they’re more responsible. Of course they are. They’re older.
Remember what it was like when you were 15 or 16? I realize that it’s a little bit terrifying, and I’m sure our parents were petrified also, to think that we were the future of America. These teenagers are the future of our country. If we don’t give them a chance, who’s going to? If they mess up, fine. They mess up. Fire them. There’s plenty of other kids standing in line to get those jobs, and I’ve seen that with my son’s best friend who lived out here in Hoof (ph) nine miles from town. There’s no public transportation here. It’s really hilly. It’s too far to ride a bike, and it’s too far to ride a bike home at 11:00 when you’re done with your dishwashing shift. Sometimes he couldn’t get rides into town. He got fired. Somebody else got hired. They work, they grow up.
Now when I did my research for today, I looked up the definition (ph) of the J Visa again, and it said that it’s to promote the interchange of knowledge and skills in the fields of education, arts and science, and return home to utilize the experience and skills you acquired. Can anyone tell me how working the night shift at the Hershey factory or washing dishes or changes bed linens in Camden, Maine, meets that goal? It doesn’t, plain and simple.
The J Visa is being misused and abused. If Congress wants to have a summer work program for foreign students, fine. But can you imagine any senator or congress person going home to their district to defend a vote in favor of a bill that would take jobs away from their teenagers, college students and the lowest income level of young adults? No. We need to cultivate, grow and give our children a chance to become responsible citizens. Looking at it from the perspective of the foreign students, what kind of cultural exchange are they getting? They’re seeing the inside of a kitchen washing steamy dishes.
And the employers that are not the good ones – there are some good ones out there. And I was glad to hear the – Jerry’s story about the Lithuanian, but some of them are not good. Is this the image of the United States that the State Department wants to project overseas? This project is missing the mark. This is not the way to carry out cultural exchange.
We have to remember: Our country is only as good as we make it. We as adults have to teach our children to become responsible members of society and show them how to do the right thing. The aquatics company that is there with you in the room today, they are doing the right thing. Responsibility begins with us as parents, with our local businesses on Main Street.
The employers that are using this program are turning their backs on the teens. They’re saying: You’re not worth hiring because I can save a buck hiring somebody from outside the United States. They are more interested in saving a few dollars than building a strong community and a strong nation. The State Department and Congress need to put an end to this backdoor use of the J Visa to obtain cheap labor, and we need to focus instead on building a strong United States, one teenager at a time. We need to take care of our own first. Cultural exchange is a wonderful thing, and I completely support it – but not this way.
To bring things back to where I started, our son Joshua is now 18. And all truth, he was our challenging child. And every parent I’ve talked to says: Oh, I had one like him. Well, last March he started looking for a job. In May, he was hired at a corner grocery as a cashier at starting minimum wage. The company also has a catering business. He started working full-time. In July, he and his girlfriend rented their own apartment, and they’ve been paying their bills on time every month.
The week before Christmas, the owner of the – (inaudible) – market called Joshua aside and his immediate thought was: What did I do? I didn’t do anything wrong. I know I haven’t made a mistake.
Instead, she said: Joshua, I noticed how much responsibility you have taken on here at the market. You’ve learned every job. You can fill in when I need you when somebody calls in sick or doesn’t show up. You’re there to help. You deserve to be paid for the responsibility you’ve taken on, and she gave him a raise of a dollar an hour. That’s more than 10 percent raise. It’s not much, but it was huge to Joshua. Lady did the right thing by Joshua, by the community, by our town. Joshua was elated. This year, he asked for my help, and he filed his first federal tax return and got his first refund. This is what we need to be doing for these kids. We need to give them a chance to learn and be responsible citizens. We can set a high bar. And I completely believe that our teenagers will rise to meet the challenge. It’s our country, from really big metropolitan areas like D.C. – where I spent most of my adult life – to small towns like Camden Point (ph), Maine. We need to take responsibility for our children, for our future, one kid, one job and one Main Street at a time. Thank you.
MR. KAMMER: That was excellent.
MR. KRIKORIAN: Thank you, Sarah. So now we’ll open it up to questions. You can hear us, right, Sarah?
MS. SMITH: Yup.
MR. KRIKORIAN: OK, so ask questions of anyone. Oh, yeah, we have somebody with a microphone.
MR. KRIKORIAN: Yeah, wait for the microphone. Was there any questions? Somebody have a hand up? Yeah, Jim.
Q: I noticed Ireland was a fairly large sender. Is there any assurance that the people actually go home at the end of the summer?
MR. KAMMER: Well, that’s another issue, Jim. The issue of visa overstays is another one which the State Department is aware of and which does not provide information. There is some information in our report about that issue which was available through WikiLeaks, not through the State Department.
Q: Thank you very much. What I learned this morning has made me ashamed to be an American. I consider the Summer Work Travel Program borderline treason for what it’s doing to people like Joshua. My name is Ross Ellis (ph). I’m with Occupy Baltimore. I live in Baltimore City. My question concerns the tax exemptions the Summer Work Travel participants and their employers enjoy. According to an organization that assists employers to hire these imported workers, I’ve learned that there are considerable savings of doing so. In fact, one website provides a tax calculator so prospective employers can see how much money they save by not hiring Americans.
My question is this – and possibly you could help me – I’m going to spend the summer doing a petition about this. What steps can we take and who should we contact to get these exemptions removed? I’ve already addressed these tax exemptions with my state Maryland comptroller. They also do not pay Maryland state tax. Why should employers be rewarded for not hiring U.S. citizens? And also, the Summer Work Travel Program imports don’t just take one summer job, they frequently take two. What would be the appropriate steps we could take to end these exemptions so that Americans can enjoy a level employment paying field? Thank you.
MR. KRIKORIAN: Who wants to take that one – OK.
MR. KAMMER: Well, I can offer a few thoughts. I think it’s a very interesting question. But the committee of jurisdiction is the Foreign Relations Committee, Senator Kerry. And the problem that I see is that while the advocates for SWT are very well organized and have their own lobby and have employers who have – who can pick up the phone and call their representative, and while their lobby has – (the top ?) lobby who is a responsible organization that acknowledge that their job is to seek permissive regulation – these folks have a much easier time because of their organization and influence in presenting their views to Congress. There is no lobby for unemployed American teenagers, and there isn’t a lot of money to be made in recruiting them.
We don’t have anything like the recruitment engine that the SWT program has. If this is to happen, what you’re talking about in terms of tax – I don’t know whether that would begin with Ways and Means, because it’s a tax issue. I don’t know whether it would begin with SWT, because it’s a foreign relations issue. These jurisdictional issues among committees are always very complicated. But one way to begin would be Senator Mikulski who, by the way, in 2002 after an interesting article in the Baltimore Sun about abuses of a lot of Polish kids in this program, expressed outrage, wrote a letter and then backed off. I have seen that Senator Udall last summer wrote a letter to Secretary Clinton. We’ve heard nothing from his since, and I’ve been unable to get anything from his office in terms of any follow-up. I think they write the letter to placate concerns, like the ones you’ve mentioned, counting on these concerns to dissipate and the lack of organization of groups who have organization of groups that have these concerns to be overwhelmed by the great and persistent organization of the groups that benefit from this program.
Q: Well, I feel it’s my American duty, if I even do nothing but do one page of the petition, to at least stand up for the future of my country. And I don’t see that happening. And I’m just one person. There are other people with Occupy Baltimore who feel very much the same way, and we’re willing to take a stand. And maybe letters get written. I mean, I hope to God we don’t get threatened or anything like that, but what is happening here is absolutely wrong. And I think we need to take a stand and say, hey, let’s get our country back in shape. Thank you.
MS. SMITH: Jerry?
MR. KRIKORIAN: Yeah, go ahead. Just speak up, Sarah, at any time because we can’t see your body language if you want to pipe up.
MS. SMITH: OK. One thought – they say that all politics is local. Write your local representatives, your congressman and your senators. One voice in the wilderness is not going to be heard, but a whole lot of voices, a whole lot of parents might be. I think that if we can organize a campaign to write letters – what Jerry has done has helped raise the profile of this issue from complete obscurity to people are paying attention. If we can get the word out that this is happening and explain to parents, the parents will know how to speak up.
And frankly, they also say money talks. When you find out a business is hiring foreigners instead of our kids, go to the other business, the one that’s supporting our community. Let the businesses know by your actions, by your purchases that you support the companies, the businesses that support our kids in our communities.
MR. KAMMER: Well said.
Q: Hi. I’m from the Washington Post. I just want – I was wondering whether the Hershey case and the – and the sort of, you know, attention that that case got and the resulting barring of CETUSA is simply being seen by the government as, you know, an aberration or whether it has produced any sort of serious rethinking of that program at the government level.
My second question, I guess, would be what is the reason that your – you keep saying that American teenagers have no lobby, what’s the reason that American labor groups are not involved in representing them in any way if they are in fact competing with foreign workers?
MR. KAMMER: Pamela, as you know I think from covering the issue at Hershey, that is an issue that embarrassed the State Department. And they acted to debar the sponsoring organization, taking a dramatic action that some cynics see as sort of trying to make it go away by showing toughness.
But I do believe that there has been a good faith effort with the new acting deputy assistant secretary for these programs. Rick Ruth, I think, made a very good faith effort to try to make the program do what it is supposed to do. And he said, look, this program is not intended to provide cheap labor to American employers. State now has an interim rule that they’re apparently preparing to put on the federal register, which would restrict certain industries and types of jobs from the SWT program. It’s getting pushback, most notably from the two senators from Alaska, who are representing the interests of the politically powerful seafood industry which is as powerful politically in Alaska as, say, the auto industry is in Detroit, in Michigan or coal is in Kentucky. And so there is a wrestling back and forth.
Rick Ruth, in an extensive interview that he did with us, and it’s – there’s a transcript here in this – I think he faces up squarely to the issues and acknowledges serious problems that he says are in need of reform. And he wants to balance what he sees as the good of bringing kids over against the potential negative influences for our own kids at a time of record unemployment.
Did that answer the question, Pamela?
Q: Yes, I mean, it’s –
MR. KAMMER: Oh, labor – labor unions – the SEIU was supportive of the group that mobilized the kids in Hershey, the – what was it called – the Guestworker Alliance. A fellow out of New Orleans named Saket Soni led the kids, and they got labor union support. But since that time, we haven’t seen anything sustained from them either.
I can’t help but wonder if some – to some degree, it’s they don’t want to do something which could embarrass the administration in an election year, because we have everyone in the administration saying, look, it’s jobs, jobs, jobs. And we have the president in the State of the Union address saying let’s not subsidize taking jobs overseas, meanwhile we have – we’re subsidizing – bringing foreign kids – bringing foreign kids to the U.S. I think politically it’s potentially embarrassing. And that – that’s pure speculation on my part, Pamela. But it is interesting to see how the labor unions after that one dramatic action at Hershey seem to have taken a very quiet step back.
Q: Yes. Hi. My name is – (name inaudible). And I just want to say that I’m a foreign student Work and Travel participant. And I feel like on this discussion foreign students being misrepresenting, because actually we’ve been – we’ve been scammed, just like the website – the Russian website showed. It’s a scam. It is scam. Actually, we come here – there’s no job, employers don’t pay us. I don’t know if American kids can work for free so many hours. And they actually treat us very badly. Just hear that we are from Russia, that’s made them even free to abuse students that work there. And I think many American parents should be happy that their kids escape that – what we go through. That’s all I want to say.
MR. KAMMER: If I could just add to add that, I think part of the reason that young people experience this is that they are vulnerable. They’re from another country, and there are some employers who have taken advantage of them.
I have heard of young women from Eastern Europe being sexually propositioned by employers who put them in very difficult positions. I know that the DHS, Department of Homeland Security, is concerned about the trafficking of some young Eastern European women. And we know that – AP did a good story in December of 2010 about kids being brought over here to work in strip clubs and that some agencies in Europe bragged about working with designated American sponsors designated by the State Department to get visas so that they could work in gentlemen’s clubs in the United States.
That is one of the concerns is that the SWT has been infiltrated by some criminal elements, including the indictment of some former SWT workers who were in league with computer hackers in the Ukraine who were penetrating bank accounts in the U.S. and using the kids to go actually get the money from the bank and be money mules taking it home. Now I want to emphasize not in large numbers, but DHS, Department of Homeland Security, and the FBI are increasingly concerned about the vulnerability of the program.
MR. KRIKORIAN: Isn’t – one point I wanted to add here, and this relates – it’s a part of Pamela’s question.
There’s two kinds of critiques or problems. One is bad actors – these kind of examples that Jerry talked about, people exploiting – you know, breaking the rules, exploiting the students, that kind of thing. The other issue is systemic problems. In other words, even if everybody were purer than Caesar’s wife in their management of the program, would there still be problems?
And those are two completely different things in any immigration program, whether it’s SWT or H-1B or anything else. You always have employers, especially the larger ones and the advocacy groups, saying: Well, of course there’s bad actors. And we want to work together, making sure the program is run more cleanly and tightly. What they object to is systemic changes like, for instance, the tax exemptions, the tax preferences had they have – and that, it would seem to me, is much more – a much bigger part of the problem, because, as Jerry says, most of the students aren’t going to be trafficked to strip clubs. They’re going to be more or less doing what they thought they were doing. And they’re going to be paid basically what they were promised to be paid. The question is are the rules themselves appropriate or not.
Was there a question in the back?
Q: Yeah. Jerry, I have a question for you. Just – as you know, the fraction of American youths working has declined a lot. In 2000, about two-thirds of them worked in the summer. These are 18 to 24-year-old(s). And now it’s down to about half, and it declined like 10 percentage points even before the current recession. So by like 2007, it was way down. So we have about 18 million now American-born kids, 16-24 not working each summer. And that’s up, you know, pretty steadily for the last 20 years.
You mentioned in your report – I wonder – and we’ve heard anecdotal stories – you could mention about what the research shows about people who don’t work when they’re young? What happens to them later in life, particularly those who don’t go onto college?
MR. KAMMER: I see. I thought Jeff and Sarah both spoke very well on that very point.
MR. KAMMER: If you don’t acquire the skills of showing up, taking orders, working with a team, understanding how to deal with unruly customers, you don’t develop those skills as a kid, the studies show that you’re at a disadvantage when you’re an adult. And I think some longitudinal studies have shown that that disadvantage persists for many, many years. I mean, the phrase I’ve used is that by disenfranchising kids from the workplace, we’re eating our own seed corn, you know?
As Sarah and Jeff were saying, these kids are our future. And as Sarah was saying, gosh, you know, I’m a product of the ’60s when parents thought we were all going to hell in a hand basket. Well, I’m not going to say we did OK, but we at least survived. (Laughter.) And we – you know, we are invested in these kids. And nothing against the foreign kids. I mean, the one time that I – I’d like –
I would say 98 percent of them I thought were wonderful kids. And it’s great for the sponsors to brag about how they’re preparing the kids for international competition in a globalized world. OK? But if the American kids are being shoved aside, do we have any responsibility to them, in a job program run by our own government, at a time of record unemployment?
I just think that it’s a program that has been – it’s been overwhelmed by the monetary influences and powers in league with a State Department that combines very good intentions with visa diplomacy and very bad management. It’s a toxic combination.
MR. KRIKORIAN: Penny?
Q: Yeah, that’s exactly what I wanted to ask too. There seems to be such a disconnect between all the moaning and groaning in May and June, when American kids aren’t finding summer jobs again, and this whole issue of the foreign kids being brought in for summer jobs. I did some investigation in Rehoboth this summer. And by the way, I think there must be a qualification that every one of those kids has to be gorgeous – (laughter) – because I never saw so many beautiful kids as the ones working at every single ice cream store in Rehoboth. But –
and nice, you know, you just can’t complain about them at all.
MR. KAMMER: Right, right.
Q: And the churches were starting to get involved because they were worried about the abuse of them. But none of them are talking about the American kids who aren’t being employed. And I want to ask Sarah too, is there any way of getting some of these churches involved, you know, who are concerned about kids, American kids who don’t have anything to do, that kind of thing? But how can you explain that disconnect?
MR. KAMMER: The churches in Ocean City have done a really great job too, and I think they responded to the need as they saw it. They saw a lot of kids who were sent over here by sponsors who promised them jobs and there was no job when they got here. And these were kids who were – they were without food, without a place to stay. They were desperate circumstances, and you needed good Samaritans to step in.
But that is a very dramatic need of large groups of people. The American kids are unemployed in ones and twos and they’re dispersed throughout society. The need of the foreign kids was concentrated and dramatic, and concentrated and dramatic is going to win every time.
DAVID NORTH: I want to add two footnotes, if I may. First of all, as you may notice, I’m probably the oldest person in the room at 83, and I have a selfish interest in the part of the Treasury that doesn’t get the money. And I want to give you a couple of numbers on that. We were talking about the Social Security trust fund; we were talking about the Medicare trust fund and the unemployment fund.
If you take the industry’s own calculation, as shown by Jerry’s picture – that little machine that worked out the savings for the employers – and if you also take into account the fact that the employees, the foreign employees, don’t pay Social Security taxes either, it turns out that there’s a $79 million loss every year to the Social Security trust fund and the Medicare and the unemployment insurance fund, $79 million a year.
And these funds are in trouble, and it’s not appropriate, I think, that they should be – continue to be in trouble because of the tax break that these employers and these students get. So that’s the number. And one of the things that we might think about in terms of the question from the lady from Baltimore is the elderly interest groups, particularly AARP, which should be paying attention to this issue and at the moment does not seem to be.
MR. KAMMER Yeah. This, by the way, is David North. If anyone knows any research on immigration and labor issues, back to the Johnson administration you’re going to find testimony and research by David North. And David actually – you did a calculation of what the hit is to those trust funds, right?
MR. NORTH: Right, yeah.
MR. KRIKORIAN: So let’s take one more question, Jerry, and sort of respect people’s time.
Q: Jerry Bisali, a former immigration adjudicator. I was wondering about one aspect of this thing. Inasmuch as these visas are promoted under a cultural exchange program of the State Department, to what extent anybody has kind of put pressure on the State Department to show to what extent exchange is happening – to consider whether one way of controlling the abuses of this system as it now exists would be to have it demand some measure of parity between the U.S. students going abroad to take advantage of cultural opportunities there and the number of people now doing scut work in every, you know, medium-size town in our own country?
MR. KAMMER: Right. And I think that’s a structural issue. You know, first, these kids, to come on SWT, need to be able to speak English, and there are not too many American kids who speak Moldovan or Romanian or Chinese or Portuguese for Brazil, who are thereby qualified to go to work in those countries. And there are not many who are willing to work at the prevailing local wage for unskilled labor.
I should point out that there was an attempt – one recommendation by the GAO back in 1990 that some of these jobs, because they were so clearly scut work and had nothing to do with real educational or cultural exchange – that they be put off limits. Congress stepped in and intervened with legislation basically saying hands off. It’s OK for these kids to do these jobs as part of the cultural exchange.
MR. KAMMER: I think – it’s in the report. I believe it was sometime in the 1990s when there was a suggestion to limit the program and Congress came in, I believe, influenced by the lobby. And if you look at the literature, it suggests that the lobby was really active at that time. Congress responded and protected the availability of these kids to these jobs that GAO thought were inappropriate.
MR. KRIKORIAN: Sarah, do you have any thoughts on this reciprocity idea? It seems sort of common sense. On the other hand, you know, you would only end up getting students from France and Germany and Italy, and obviously we wouldn’t be taking a lot of Ukrainians because there’s not a lot of Americans lining up to sweep streets by hand in Kiev, or whatever it is they do there during the summer.
MS. SMITH: In terms of a true cultural exchange, I think it would be a great idea. But I think the practical logistics of it would make it not feasible. As Jerry’s pointed out, language skills simply don’t exist in this country. Kids speak English and that’s it. To me, what the summer work program has become is essentially tourism with a paycheck. These kids are allowed to come and work and experience the United States, which I think is a great thing, but at what price?
You know, if my kid wants to go overseas, he can’t work in France or in Germany or in Argentina or Australia. They can go and visit. And our younger son was fortunate to go on an international exchange program to Australia last summer for middle school students, and he spent two weeks there and absolutely loved it. And our younger son is the one who’s going to be the gypsy and the traveler. He’s going to be the one that goes to all of these wonderful places in the world and maybe even work there.
But I don’t see sort of a tit-for-tat or equal exchange as being feasible, in addition to which, the United States market is simply so much larger. I think really Congress needs to revisit the rules and regulations that govern the J-1 program. I was surprised when I did look up the rates, because it used to be that it was the exchange student visa. It’s now called the exchange visitor visa. There’s a big difference.
When I was in grad school, it was a program that was set up for mostly kids from Third World, not wealthy countries who were in the United States working on their graduate degrees, to prevent the brain drain – brain drain – and so that they would go back to their own countries and take that knowledge back and bring their own countries up in terms of their economic standing and development. Now it’s significantly expanded.
I can see how an au pair is part of an exchange because you’re living with an American family for an extended period and you’re learning about it. A friend of mine who is an American citizen has German citizen granddaughters, and one of her granddaughters came and worked for an American family for about six months as an au pair. And that was a true exchange. Even though it was relatively unskilled labor, I can see that. But camp counselors? Sorry, that just doesn’t ring true to me. And certainly not washing dishes and working on a factory line at unskilled labor jobs.
MR. KRIKORIAN: OK. Thank you. Well, thank you, Jerry. Do you have any last comments?
MR. KAMMER: Boy, I don’t know. I just, again, I think it’s a program with good intentions that’s had bad management. State is facing up to it now. I’m really sorry to see that Rick Ruth has left the office in which he was attempting to lead the reform. There’s going to be a battle, perhaps, over the proposed regulation that Mr. Ruth has come up with to redesign, to some limited extent, the program.
There will be pushback from the industry. And we will see what happens once the period for public comment begins. That will be after State publishes its proposed regulations for this program.
MR. KRIKORIAN: Well, thank you –
MS. : When will that be?
MR. KAMMER: A couple weeks.
MR. KRIKORIAN: Thank you, Jerry, and thank you, Jeff and Sarah Ann as well. I think those of us physically in the room are willing to hang around and be accosted afterwards, and I think we have Sarah’s contact information for anybody who wants it. So again, thank you for coming and I hope to see you at our next event. (Applause.)