The Foreign Workers Debate

By David North on December 1, 1996

pp. 11-14 in Immigration Review no. 27, Fall/Winter, 1996-97

There was a useful, if somewhat frustrating, debate last year on two of the Department of Labor's (DOL) immigration-related programs. One of them grants permanent resident ("green card") status to workers with labor certifications; the other (the H-1B program) permits employers to hire temporary (nonimmigrant) foreign workers.

The debate was touched off by a report from DOL's Office of the Inspector General (IG) which was critical of the lack of protection of U.S. workers by these two programs. The replies came from allies of employers using the labor certification and H-1B programs.

The debate was helpful in that it shed some light on two often obscure programs that have significant impacts on the U.S. labor market. It was frustrating because the two sides focused so much on procedural detail that they not only missed the forest for the trees, but they missed the trees for impassioned discussions of the thickness of the bark on some of the trees. Further, each side could see little but black-and-white in a policy situation rich with patterns and textures of various shades of gray.

As one who has been studying these matters for three decades (I was an Assistant to the U.S. Secretary of Labor when the Bracero Program was disbanded in the 1960s), I sensed a lack of policy context in the recent debate. For example, all the employee-related immigration slots (except for those admitted under the Chinese Student Protection Act, which is another story) came to about 50,000 in FY'94, not including about 50,000 of their accompanying relatives. These 50,000 employment-based immigrants were a small part of the total immigration flow that year of 1.1 million or so (800,000 legal and 300,000 illegal). Given the low average educational attainment of family-preference immigrants, most of these 50,000 had useful educations and/or good connections with U.S. employers. So, on the positive side, these non-nepotistic immigrants were not very numerous and were much more highly skilled than the immigrant population generally.

On the other side of the coin, the process through which they acquired their green cards is expensive and convoluted, and is a nuisance to the immigrants, to their employers, and to a band of innocent victims ‹ the U.S. workers who responded to advertisements for the jobs that were, in fact, already reserved for specific immigrants, and in most cases, already occupied by those immigrants.

International migration to the United States will continue, though hopefully at something approaching the 1965 Act levels rather than those set by the 1990 Act. As long as it continues, we should want there to be a way that non-relatives with needed skills can come to the United States. A debate of the merits of the Canadian or Australian points system, which (with little regard to the direct petitions of employers or earlier migrants) makes it possible for the talented to migrate, would be useful in U.S. policy considerations. Unfortunately, the DOL and employer debaters were too worried about the thickness of the bark to pay attention to these woods-wide policy issues.

Before discussing the H-1B debate, it is useful to describe the debaters, and speculate a little about them. Joseph E. Fisch, Assistant DOL-IG for Audit, formally issued his 40-page memorandum to Assistant DOL Secretary for Employment and Training, Timothy M. Barnicle, on May 22, 1996. Fisch reported on a survey of DOL documents and site interviews, and writes like a government auditor with a limited policy perspective, but with an interest in U.S. workers.

The critics of the IG's position, who wrote at length in the grand-daddy of immigration-lawyer newsletters, the weekly Interpreter Releases, defended the operation of the labor certification and H-1B programs. Some dealt with the audit specifically, and others with the programs generally.

Interpreter Releases took this controversy seriously, and ran lead articles on the subject in four issues in quick succession (May 13, May 20, June 3 and June 10). On May 13, Stuart Anderson, a visiting policy analyst with the Cato Institute, wrote a stiff, point-by-point rebuttal of the DOL audit; he sounds like a bright, perceptive, deeply pro-business idealogue. A week later, Ted J. Chiappari, a New York immigration lawyer, wrote an interesting survey of DOL administrative decisions on disputed H-1B cases in fiscal years 1991 through 1995. The next two issues of the publication started with really detailed articles by two more immigration lawyers, the California-based Angelo A. Paparelli and J. Ira Burkemper; their point: employers of foreign workers should hire people with these authors' lawyerly skills to keep the employers out of trouble with government regulators.

These last two lawyers wrote of the dire consequences of crossing Uncle Sam on these issues, while Chiappari discussed the fairly minimal resources used by DOL in the enforcement of the H-1B law. I think, unfortunately, that Chiappari got that part of it right.

All the above, however, again missed the forest for the bark of the trees on the H-1B issues. The big picture is something like this: workers brought into any nation without the right to permanent settlement, like the H-1Bs or most other nonimmigrants, and all illegal aliens, are more likely to be abused in the labor market than other aliens (such as those with labor certification) who can move around the labor market freely. Furthermore, aliens brought to the United States in bunches are more likely to be used to displace U.S. workers, or to depress wages, than those introduced one at a time. The H-1B program can be used either for a single recruitment or a massive one, and it currently makes no distinction between these two uses. (One provision in Congressman Lamar Smith's (R-TX) immigration bill in the House last year sought to move in the direction of such a distinction, but it was removed at the insistence of the pro-business lobby.)

It is when the H-1B program is used to bring in groups of foreign workers ‹ computer programmers, junior engineers and physical therapists are the nonimmigrants de jour ‹ that whole departments full of U.S. workers are displaced, and are replaced by low-paid but competent nonimmigrants. This is the most worrisome part of the H-1B (and any other nonimmigrant worker) program; it has been reported heavily in print and broadcast media (e.g., in the New York Times and on 60 Minutes), but this key element has not been discussed much in the on-going debate.

Another missing element: while there are clearly problems with the H-1B program, and DOL's lethargic enforcement efforts, there are labor standards in this program. But there are none, for all practical purposes, in the J-1 (exchange visitor) program run by the U.S. Information Agency, or in the numerous nonimmigrant programs (E-1, E-2, F-1, H-3, O, P, Q and others) run directly by the Immigration and Naturalization Service. Not all of those holding the listed visas are working in the U.S. economy, but many are.

Among the more interesting specifics that surfaced during the recent foreign worker debate are these: Chiappari pointed out that, in the four fiscal years covered by his H-1B survey, there were only 39 administrative determination letters (from DOL's Wage and Hour Division) and only 24 decisions by Administrative Law Judges (ALJs), or 63 formal enforcement actions in all. In most cases, the ALJs softened the penalties against employers and reduced the backpay owed to the employees, according to the administrative determinations that were appealed. (There were something like 400,000 admissions of H-1Bs during these four years; while this is a very large number, admissions cannot be equated with individuals, as some of these aliens were admitted several times in the course of those years.) Chiappari tended to regard the lack of DOL activity as proof of the lack of abuses, rather than a lack of resources (or energy) to pursue more cases, which I think was the situation.

The perceptive Anderson noticed that nearly 20 percent of the modest $1,349,896 in H-1B back wages owed as of July 5, 1995 were owed by three firms in Guam. What he did not say was that the real offshore scandals in nonimmigrant programs are the relentless exploitation of garment and fish-house workers facilitated by the island governments on Saipan and Samoa; the U.S. government has some sway over the situation in Guam, but it has contracted out our immigration policy to local governments in Saipan and Samoa with disastrous results.

Anderson also makes the point, in reply to DOL's IG, that it is probably better all around that those who secure their green cards through a labor certification are often not still working for the original employer a year later. In other words, if they can move freely in the labor market, they are less likely to be exploited or to cause, directly, the lowering of wages for U.S. resident workers.

The DOL audit reported a relatively minor incidence (six percent of the sample) of the use of H-1Bs in contracting out (i.e., employment by job shops). This is the pattern that is most likely to lead to abuse, though it is not the only abusive pattern. Similarly, DOL noted only two instances (among the 600 cases studied) in which alien small business people had, in effect, petitioned for visas for themselves. That practice should be outlawed, but it apparently persists.

The DOL study recommended, as I have for years, that the fees for these labor-related programs be in-creased, and that they be dedicated to financing enforcement within the programs.

In closing, it is important to stress that U.S. workers — both citizens and currently resident aliens — are rarely considered in the formulating or implementing of immigration policy. The overall problem is one of numbers — of flooding the lower end of the labor market with too many low-skilled, desperate people, including both legal and illegal immigrants. This is a problem that must be ad-dressed. At the same time, we must make an effort to tighten the management of our nonimmigrant worker programs, like the H-1B, as the IG suggests. But we should recognize such reforms as adding a few threads — important threads — to a larger tapestry. Making immigration policy, like weaving tapestry, is a long and complicated process.

Mr. North, an Arlington-based immigration researcher, conducted the very first evaluation of the labor certification program in 1971. He also has written extensively on temporary alien (nonimmigrant) worker programs in the United States and elsewhere, and is the author of Soothing the Establishment: The Impact of Foreign-Born Scientists and Engineers on America (Lanham, MD: University Press of America, 1995).