What's New on Cape Cod? Seals from Maine, Summer Workers from Europe

By Stephen Steinlight on November 1, 2011

Spending a part of every summer vacation in South Wellfleet at the far end of Cape Cod was a rite of childhood, one I revived when my daughters were little and then again, many years later, about a decade ago. The Cape is blessedly much the same, though there's more than a touch of the Malling of America on Route 6, the main drag, and Provincetown is more evenly divided nowadays between gays and straight people. But with regard to the essentials time has pretty much stood still, a result of much of the land being included in the Cape Cod National Seashore, a national park where the rules are strictly enforced that preserve the pristine beauty of the ocean beaches and the salt marshes and the land around them. The most exciting recent development has been the arrival from Maine of large colonies of seals that gather at low tide at the Head of the Meadow Beach and the beach off Chatham. Swimming in the icy water at Head of the Meadow, I often find myself exchanging glances with passing seals sporting regulation Lord Kitchener whiskers.

One change is very stark, however, and it's disconcerting. Perhaps because I work on immigration I may spot it a bit sooner than other vacationers, but no one with a history of summers on the Cape can ignore it for long. One of the time-honored traditions of the Cape, a rite of summer itself and a pleasure for all concerned for as long as I can remember, were the hordes of local kids and college students, most from nearby Boston, that came to work at the lobster shacks, the more upscale eateries, the souvenir stores, and gift shops in Chatham and Provincetown. They worked hard, enjoyed the Cape in their limited free time, and had an excellent rapport with customers who, especially if they had kids their age, had an avuncular regard for them.

The local kids and the college students are almost entirely history now. Their absence is palpable; they are missed; and they haunt the Cape like ghosts. In their place – having usurped their place – is a legion of courteous if comparatively stiff young foreigners from Dublin to Dubrovnik. This past August I encountered a sprinkling of Brits, but most came from East/Central Europe, the Adriatic, and the Balkans.

Some 100,000 come here annually on what are termed J-1 visas, under the Summer Work Travel Program, administered not by the immigration authorities but by the U.S Information Agency, part of the State Department. The stated rationale is to bring foreign young people to America to work and interact with ordinary Americans, foster a positive impression of the United States, and send them home as ambassadors of good will. At the conclusion of their officially authorized period of employment they may remain for a "grace period" of 30 days, presumably to provide the opportunity to travel in America. To monitor their whereabouts and ascertain they're in conformity with the program's guidelines, they must report such information as a change of address or of legal name within ten days. Data regarding the J-1's is maintained in the Student and Exchange Visitor Information System (SEVIS), a database utilized by the Department of Homeland Security (DHS). Failure on the part of the J-1's to report these changes within the time allowed may result in the revocation of the visa and deportation. J-1 visa program alums must remain in their countries of origins for two years before they are eligible to apply for a visa to return to the United States.

The J-1 program has been denominated an "exchange program," but it's no such thing. Participants head in one direction only: to the U.S. No young Americans are given the commensurate opportunity to work and travel abroad. This phony descriptor inevitably triggers additional skepticism, and, indeed, this isn't the only aspect of the program that feels fraudulent, where there is a hiatus between lofty rhetoric and grimier reality.

For one thing, to the more prosaic-minded among us it seems unlikely most employers who utilize the program participate first and foremost out of patriotic motives or in order to promote international understanding. It's a very good deal financially. There's a clear economic incentive for employers to hire J-1 visa holders rather than young Americans. The program is structured to make the J-1's comparatively cheap labor, and, as such, this visa program, like others, represents unfair competition to American citizens suffering the highest levels of unemployment since the Great Depression, with young Americans having the hardest time of all demographics. The program provides generous savings to employers on payroll taxes. Since J-1 visa holders don't pay Social Security, Medicare, or Federal Unemployment taxes, those who employ them don't have to pay the matching tax. Depending on how many J-1's are employed, the savings can be substantial.

American employers can legally save 7.79 percent off their total payroll expenses simply by hiring J-1 students. As any employees, foreign students are required to pay Federal, State, and local taxes, but they are exempt from paying Medicare, Social Security, or Federal Unemployment tax. Regularly, the employers match some of the taxes, contributing a sum equal to 6.2 percent of the employee's wages towards Social Security tax, 1.45 percent towards Medicare tax and up to 6.2 percent towards Federal Unemployment tax. Since J-1 students pay zero Social Security, zero Medicare, and zero Federal Unemployment, employers pay nothing to match these taxes, which account for at least 7.79 percent of their total payroll expenses (or 8.45 percent of the total employees' salaries).

In some instances, employers can save even more than 7.79 percent of their payroll expenses. Generally, Federal Unemployment tax rate is 6.2 percent, but employers are allowed to take a credit of up to 5.4 percent for their State Unemployment tax. If your state rate is less than 5.4 percent, your maximum credit for Federal Unemployment tax will decrease, thus increasing total savings from hiring J-1 exchange students.

Truly civic-minded, patriotic employers who wish to lead their lives according to the most fundamental of Judeo-Christian ethical teachings that "charity" begins at home would do well to consider the disastrous impact of introducing additional competition for low-paying jobs. The great majority of young people working during the summer on Cape Cod are waiting or busing tables, scooping ice cream, pumping gas, etc. Some need the money to help with astronomical college expenses; others need it to help their families get by.

Last summer's statistics on youth employment from the Bureau of Labor Statistics – young people from 16-24 – show the worst unemployment since the Bureau began keeping records 63 years ago, and the figures cover the summer months that are traditionally the period of highest youth employment:

From April to July 2011, the number of employed youth 16 to 24 years old rose by 1.7 million to 18.6 million, the U.S. Bureau of Labor Statistics reported today. This year, the share of young people who were employed in July was 48.8 percent, the lowest July rate on record for the series, which began in 1948. (The month of July typically is the summertime peak in youth employment.) Unemployment among youth increased by 745,000 between April and July, more than last year's increase of 571,000, but well below the levels seen in 2008 and 2009 (1.2 and 1.1 million, respectively). (Because this analysis focuses on the seasonal changes in youth employment and unemployment that occur each spring and summer, the data are not seasonally adjusted.)

Labor force

The youth labor force – 16- to 24-year-olds working or actively looking for work – grows sharply between April and July each year. During these months, large numbers of high school and college students search for or take summer jobs, and many graduates enter the labor market to look for or begin permanent employment. This summer, the youth labor force grew by 2.4 million, or 11.8 percent, to a total of 22.7 million in July.

The labor force participation rate for all youth – the proportion of the population 16 to 24 years old working or looking for work – was 59.5 percent in July, the lowest July rate on record. The July 2011 rate was down by 1.0 percentage point from July 2010 and was 18.0 percentage points below the peak for that month in 1989 (77.5 percent).

Thus, it would be an understatement to conclude that a program such as the J-1 visa program adds insult to injury, contributing to the unemployment of young Americans while increasing the profits of the traditional employers of the cheapest labor in the country, business owners in the service sector. Even if its overall contribution to the present catastrophe for young Americans is modest, continuing it under these circumstances is morally indefensible.

It is therefore sardonic in the extreme that in "Foreign students say visa program was abused" (Pamela Constable, Washington Post, October 29) we read that this past August 300 recipients of J-1 visas demonstrated against the Hershey Company in Pennsylvania and went on strike against their exploitation as cheap labor. The students alleged they were assigned to lifting heavy boxes for long hours – one reported being fired for not working fast enough and another that she was told complaining about conditions would be met with firing. They were provided none of the modest perks (pizza parties) or opportunities for practicing English and interacting with the local population that had attracted them to the program. Their demonstration also targeted the U.S. State Department for false advertising: enticing them into a bogus "cultural exchange" program that turned out to be nothing more than an opportunity for a large employer to have yet another source of cheap labor – this one legal and gift-wrapped by the State Department. The publicity from the demonstration and strike gave the program a black eye, and embarrassed Hershey and the State Department.

The J-1 foreign students' cause was taken up by a non-profit guest worker organization that initiated legal proceedings against Hershey, the State Department, and Council for Educational Travel USA (CETUSA) – the last being one of the organizations administering the J-1 visa program on behalf of the State Department. Needless to say, Hershey denied everything, stating there had been no complaints in the past by J-1's, adding that this crop had undoubtedly been led astray by "union organizers." In fact, Hershey went so far as to state the company had no direct involvement in the episode at all. It admitted to owning the building in which the students worked and nothing more. How odd. Then, like many another employer that becomes the subject of negative media attention for hiring foreign workers to take jobs from Americans during a period of historic unemployment, Hershey pointed its finger at the traditional source of all evil: the culprits were subcontractors who had been responsible for hiring and supervising the J-1 foreign students.

Like Hershey, CETUSA had never heard a single complaint before this one:

"If any of them were dissatisfied, we were not hearing it," said Terry Watson, CETUSA's president. "We sponsor thousands of students every summer. The great majority of them have a wonderful experience and go home spreading the good word of America."

In fairness, it must be added the Post story did quote a number of J-1 visa alums who had the experience the program claims it offers, though it appears likely the Hershey case cannot be the isolated one the State Department and CETUSA claim it is. The fact that the State Department has announced it is preparing additional safeguards to protect students in the program from being exploited – that it wants to do a better job for the next batch – is an admission of sorts.

Moreover, the labor activists remain steadfast in their assertion that such exploitation is widespread and that the State Department is winking at the problem.

But labor activists asserted that the alleged abuses were far more typical than officials acknowledge. They said even students in lighter hospitality jobs are often underpaid, poorly housed and threatened with losing their visas or right to return if they complain.

"While the State Department was asleep at the wheel, this entire program has turned into a captive labor source where students are exploited for profit," said Saket Soni, executive director of the guest-worker group. He said the program left U.S. workers "locked out" of steady jobs and foreign students "locked in."

It is axiomatic that under all circumstances mass immigration to a post-industrial, knowledge-based society with a large welfare system is a zero-sum game; there are winners and losers, and especially now – during the second highest era of unemployment in American history – it is a zero-sum game of the most brutal sort. The big winners are the unethical employers that hire illegal or foreign labor. The foreign workers, legal or illegal, who take jobs from American citizens, are also winners, even if their remuneration is modest by U.S. standards, because it is likely to be significantly higher than in their countries of origin. The big losers are the most vulnerable of our fellow citizens: the unemployed; the partially employed; workers with no more than a high school education; young workers just starting out who have been banished from Cape Cod and thousands of other places like it; the elderly who must still work; seasonal workers; and, more than any other racial/ethnic group, African Americans.

A zero-sum game is itself a socio-economic and political evil. It generates conflict, in this case avoidable conflict, and results in great hardship and even countless individual human tragedies. What could be worse? What would constitute a worse scenario? The Washington Post's story of the J-1 visa presents us with a darker one. In a zero-sum game there are winner and losers. In the universe described in "Foreign students say visa program abused" there are only losers.

The losers for whom we must care most – are the Americans – the local kids and college students whose summer employment has been stolen first and foremost by illegal aliens but also by J-1 visa holders here to have a "great experience." Our religious traditions, civic creed, and the bonds of citizenship make that clear. The J-1 students at Hershey were also losers, and it is impossible not to sympathize with their plight, though I suspect in the present climate of unemployment American young people would have lifted those heavy boxes without complaint. In the morally complicated and compromised world of immigration policy and immigration politics the J-1 visitors are relative innocents. Most probably never considered that their "American experience" came at the direct expense of their American counterparts. That's a difficult reach for most to make. To recognize one's own complicity, however unintentional, requires more in the way of moral imagination than most young people, than most people in general possess – or would wish to possess.

But those of us that know the consequences of the J-1 visa can't take refuge in ignorance. We must determine to end this lose/lose game, send the well-mannered foreign students home, and throw a life line, however slender, to young Americans that desperately need to work.