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May 23, 2007

Senate slashes guest worker program

The Senate cuts Bush's proposed guest worker program from 400,000 to 200,000.

That's 200,000 down, and 200,000 to go. Guest workers may seem like a quick fix to immigration woes, but they're actually a way to retrench and legalize all the defects in the current immigration system.

The fundamental problem with guest worker programs is that the workers have no way of asserting their rights. Under the current H-2A and H-2B visa system, workers are tied to the employer who brought them here. If an employer doesn't honor the terms of their agreement, the guest worker can't quit and look for another job. Getting fired means getting sent back, or going out of status.

A better alternative to a guest worker program would be a renewable work visa program where applicants would be granted the opportunity to work in the US for 3 years at a time. If the newcomer is working steadily and obeying the law, he or she deserves a chance to apply for another 3-year work visa without having to leave the country for a year. There needs to be some process by which people who have established long-term residency can apply to become full-fledged citizens.

Working conditions that seem acceptable to someone who has just arrived from a very poor country will seem increasingly less attractive to a worker after they've had a few years to become accustomed to American standards of living. With a guest worker program, you're constantly swapping out one crew of newbies for the next.

By entrenching guest workers as second-class citizens, Bush is giving guest workers an "advantage" over Americans who can assert their rights. That is, unscrupulous employers will choose isolated disorganized guest workers over Americans and other legal residents who can stand up for themselves. 


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Couldn't agree with you more.As the legislation is now it would create the space for a permanent underclass.Good enough to work but not good enough to be entitled to basic rights and protection.
US and international capital has free reign to go where ever to exploit cheap labor,but people...
Seems like someone has their priorities mixed up.

Thom Friedman gets one right now and then. Today, behind the paywal at NYT, he said it was a travesty that all the PhD's in science and engineering that swell the ranks of our grad schools but are then obliged to go back to their own countries are not offered citizenship along with the degree. I don't know that US citizenship is quite the shiny bit of heaven it used to be but fixing it so that only suppressible minorities can manage to work here, without voice and with poor pay and conditions is just plain dumb. Engineering is an activity that requires a critical mass of talents...inability to assemble a full team in the US because of these immigration and visa issues means the entire effort has to be staged somewhere that does NOT have such problems...India is one of the better places just now because they mostly speak ESL there. Whole damn offices are still being set up over there even by big outfits, like Fidelity Investments, who have held out as long as possible by moving from higher cost states like MA to lower cost states like NC. They are not just leaving because of costs. Science and engineering firms have it even worse than finance.

We have an expanding guest worker program in Canada for some tourism jobs (the lowest end ones) and agriculture - harvesting fruits, mainly. If the workers happen to be treated well it's largely due to the character of the employer, because God knows the government doesn't lift a finger to assist or monitor the employment and living conditions of these folks once they are here. A large group of Mexican workers fled home in disgust after enduring gruesome conditions on some shabby-ass farm where they were treated like 19th century slaves. These workers pay into the employment insurance program and are not eligible to collect benefits. They receive no compensation if they are injured and they receive no benefits. It stinks. If workers are being brought in, they should receive the same benefits and working conditions as Canadian workers.

Work visas and guest worker programs provide downward pressure on wages by artificially inflating the labor pool. Leadership is about doing the best you can with limited resources, not about trying to make everyones lives better. Helping the poor in Mexico at the expense of the most vulnerable in our society is wrong. If you want to make legally immigrating here more easy, fine. We have plenty of room and any permanent increase in population acts roughly as natural growth. But frankly, it's disturbing that any lefty would suggest it's good for employers to import cheap labor so they can avoid raising wages. These employers are the same people who lobby endlessly for tax cuts, and then whine that they can't find well educated workers in the US.

We need general amnesty for all current immigrants and massive fines against anyone who hires illegal immigrants further. That will have a strong effect on illegal immigration, and it will bring those currently outside of the system into it. Provide people a real opportunity immigrate here and become citizens, don't create a slave class and a near-slave class of citizens who have to compete with them for work. The truly talented will still be able to come here, and we won't have to deal with social instability that a bill like this will cause.

Soullite, I'm not sure why you think stricter enforcement will do anything to deter illegal immigration. It hasn't so far; why will it in the future?

On another note, the downward pressure on wages is marginal if at all present. The pool of Americans willing to pick lettuce for wages businesses can afford to pay without going under is too small; businesses will just have Mexicans pick lettuce in Mexico for dirt pay, rather than in the US for low pay.

And I'm still not clear on the details of the proposed guest worker program. Is it anything like the H-2B program, or is it a higher-harassment version of H-1B?

The detials of the proposed program are not totally clear to me. But, it seems to get rid of labor certification for the program and to not have the 'double temporary' aspect that made the H-2B program so unuseful (for that you had to be a temporary worker comming for temporary work and that all had to be certified.) It's not a portable work permit which allows for more trouble and is less efficient (basically it's a market restriction.) But, if labor certification is removed or cut back it will likely help everyone except immigration lawyers. But, I'm not fully sure on the details (and there's no clear bill yet) so this might be wrong. You're right, AL, that there is little clear evidence of downward preassure on US wages since immigrant labor is usually complementary rather than competative with native labor. (Even Borjas finds only a small result and I think he cooks his books. He also never shows any other interest in helping the poor so I suspect he's much more anti-immigrant than anti harm to the poor.) I'd tried to post a comment before noting that Lindsay's proposal isn't anti guest-worker but for a better guest worker program. I don't know what happend to it but that's important to note. We'll not get a better program, though, so long as people make ill-informed categorical statements.

Alon, we don't strictly enforce fines on employers who hire illegal workers. I'm not sure why you get the impression that we do. What fines we have are too small to offset the economic advantage of hiring illegal workers, and they are often waived by corrupt regulatory officials. Fine employers 100k per head, and make them mandatory by statute so that they can not be waived. Our current penalties are mostly aimed at making the life of immigrants harder, which is a waste of time. We're not going to be able to make this country worse to live in than Mexico. Plus, these people are here for work, so removing the employment by removing it's cost effectiveness will curtail illegal immigration. Add to that a more liberalized immigration process to reunite families, and the biggest reasons for immigration will be effectively neutralized.

Alon, it's a basic rule of economics that more labor= lower wages. I don't believe that rule can be violated. It stands to reason from everything we know about labor markets that a large labor force that can't unionize or demand a legal wage causes downward pressure on wages, because if they didn't exist employers would have to raise wages to attract more labor. I don't even understand how anyone with even the simplest understanding of economics can deny that. I know that someone once published a study that said that, but that's one study and I don't believe you can really predict where wages would be without these pressures, so I consider that study to be meaningless propaganda. When it's been repeated a few times, then it becomes science. Until then it's one study that flies in the face of our understanding of how the economy works. Seriously, what do you think will happen to unionized workers if we import a huge amount of non-union workers? What do you think the effect on wages will be?

And the guest worker program makes H1-B slaves look like they get to live charmed lives. The Amnesty included is too weak to be effective, and attempts to extort large sums of money from people seeking it. This won't help anyone but employers and people trying to bust unions

Matt, what is the technical definition of a guest worker program? Maybe I'm misapplying the legal terms, but to me the essence of guest-work is short stints where the worker has to leave the country in between.

A system of continuously renewable work permits doesn't seem like a guest worker program to me, especially if the successful completion of a series of permits counts towards citizenship.

What I have found most interesting about this whole debate (not just on this blog) is the complete absence of discussion about guest worker programs in other countries. From what I've heard/read it seems like there are many examples of countries where guest worker programs have created not only a permanent underclass, but other problems due to increased class tensions. (I believe that either Qatar or the UAE is an example of this - but don't quote me - I haven't had a chance yet to hunt down sources.)

I think what they want is a system where there can be a permanent underclass that they can offer less wages to.

If we legalized all the illegals in the country today, wages would go up, because they no longer would have to take crappy wages and hide in the shadows, they could complain, they would get a market wage instead of the below market wages they get when they have to worry about being deported.

When US employers complain they can't get US workers to do certain jobs, what they leave out is 'for the wages they want to pay for the jobs' - you can ALWAYS find workers for a job if you offer enough money for it. Supply and demand. Of course, if the money you can make off of that worker is less than it would cost to pay them, then you just eliminate that job from the economy, because there is no profit in it. But then there's nothing wrong with that - why would you want people to engage in economic activity that ultimately benefits no one?

I have a special sensitivity to immigration having dealt with the INS, turned BCIS, with my wife, who was not originally a US citizen - it was such a pain in the ass and we probably had it easier than most. It is ostensibly a three year process through marriage. It took us seven years. Of course, having had to go through it that way and pay lots of fees in doing so makes me feel somewhat resentful of people who just walked in illegally and now want to avoid all of that and just get citizenship for free. Sort of the same way one would feel after waiting in line all day to get into a show only to see a bunch of other people just let right in without waiting.

I'd want to say that your definition can't be right since the paradigm case of a guest-worker program was the German one (and somewhat similar ones set up in other European countries in the late 50's.) It's largely because of the quite bad German experience that so many liberals oppose guest-worker programs. But the German case didn't require return periodically or, really, at all. Rather, the visas were given for an unspecified time without a right to remain indefinenately. When the German (and wider world) economy turned down in the 70's there was an attempt to finally send the guest-workers home but this proved unsuccessful in part because they had been allowed, legally, to remain in the country for so long. It was no part of the work program that there had to be periodic returns to the home country. But since this is more or less the paradigm case it can't be that periodic return must be part of the meaning. Rather, what is necessary, I think, is that the visa not grant an indefinate leave to remain (like a green card does in the US) and that it be tied in some way to employment. That does not, of course, mean being tied to a particular job (the German plan wasn't like that, at least not after a while) nor that there might not be a program to change to permanent status after a certain number of steps or changes. So, what you're advocating is clearly a guest-worker program. That's good, since there are not really any plausible alternatives to one. But it's worth while to see that and then think of how to make one good as opposed to, at least, massively over complicated and inefficient like the current proposed one would be. (The smaller numbers would also more or less make it impossible to work even in a limited way so unless one hopes the whole bill will tank I don't see this as a good thing.)

Soullite, the fines for bamboozling the shareholders are very high; that didn't deter Ken Lay from doing it.

And as for the basic rule of economics, it can be bent. For instance, in an essay explaining what led to the California energy crisis earlier this decade, Paul Krugman showed that in certain economic models, price controls can increase supply.

Empirical studies done on industries in the US affected by immigration show only marginal decreases in wages. In addition, a comparison of salaries paid to professionals in Canada, which allows every sufficiently skilled person in, and the US, which doesn't, will show that Canadian salaries are no lower than American ones. So given that, I think it's fair to discount economics 101 here.

Disgusted Beyond Belief, the economic activities you describe as benefiting no one do benefit a great number of people. Employers in the US are better off for being able to make money from lettuce-picking, and Mexican immigrants are better off for being able to do it in the US. The activity benefits no one only if you assume everyone in the world has American levels of education, American attitudes toward work, and American salary expectations. And in a globalized world, that makes no more sense than the same statement with "American" replaced by "postgraduate."

Lindsay, a guest worker program is a work visa program for people who the population find unpalatable enough that immigration authorities have to pretend they're only coming temporarily. What matters isn't how it's called, but what it entails, which I'm still not clear about.

In addition to what Alon Levy says, which I'd mostly agree with (I think) it's worth pointing out that the labor market with respect to immigrants is highly segmented. This means that immigrant labor tends to either not compete or to compete imperfectly with native labor. The two rather compliment each other. Consider a fairly trivial example. If some natives have a burger place, and some Chinese people move in and open a Chinese food restaurant there is _some_ competition between the two but it's far from perfect. It's certainly not that if the Chinese didn't immigrate that some Americans would open the Chinese restaurant. And, since my choices are as often or not between burger or eat at home or Chinese or eat at home but not between burger or Chinese the competition between the two isn't direct. Now, sometimes I do choose between the two, so there is some competition. But, the people who work at the Chinese place sometimes eat at the burger place too, and more so spend the money they make at other places allowing others to buy burgers. This makes it possible for the burger place to do as well or better than it would without the Chinese place. Most studies of immigrant labor find examples like this to be much more common than ones where the immigrants hurt the native labor. Given this, I think the claims that immigrants hurt native labor are at best fairly weak

I've just read DMI's report, which by and large makes sense except for its dig at merit-based immigration policies. The two years in, one year out system makes no sense whatsoever for reasons I've already explained, but guest workers employed under the system won't be tied to one employer. The provisions of the program only say that a guest worker will lose his status if he is unemployed for 60 consecutive days.

very well said.

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