Immigration rule fight pits Chamber of Commerce against U.S. workers

Everyone knows U.S. immigration law is broken, but most people don’t know why.  Powerful interests benefit from the system’s failures and lobby hard to prevent change.  Perhaps the biggest beneficiaries are businesses that don’t care where their workers come from as long as their wages are low and they have no bargaining power.  The fight over a regulatory change currently working its way through the courts and the U.S. Labor Department vividly illustrates why the broken system is so hard to fix.

The biggest failure of immigration policy that businesses exploit is, of course, the easy employment of illegal aliens.  Congress created a system that is doubly flawed: by making undocumented workers illegal, it leaves them unprotected from firing and deportation if they complain about unsafe work, ask for wage increases, or join a union.  Yet employers who hire illegal aliens have gotten off scot-free for most of two decades.  Employers have hired approximately 8 million undocumented workers since 1986, but only a handful of businesses have ever been punished.  The law was designed to let employers rely on their employees’ fraudulent documents.

The Labor Department’s proposed immigration rule has much smaller consequences, but it demonstrates how little regard the Chamber of Commerce and other business groups have for U.S. workers, and how they work to keep the system broken.  Every year, the H-2B visa program allows U.S. employers to import 66,000 foreign workers for up to three years, regardless of national or local unemployment, if the employer is unable to find qualified U.S. workers willing to work at the prevailing wage.  The last administration changed the way the prevailing wage is calculated in order to lower it, making it much cheaper to import foreign workers and discouraging U.S. citizens or legal permanent residents from applying.  As a result, despite 10 percent unemployment in many cities over the past two years, many landscape companies were “unable” to find qualified laborers, hotels were “unable” to find qualified maids, and restaurants were “unable” to find qualified dishwashers.

The current rule allows businesses to offer wages that are often 25 percent or more below the average paid to laborers, maids and dishwashers – and dozens of other low-skill occupations that millions of workers already in the country are qualified to perform.  Jobs that normally pay $12 to $14 an hour get transformed into sub-poverty jobs paying $8 to $10.  In many areas with expensive housing and living costs, the H-2B program has lowered wages so far that U.S. workers can’t survive on them.  Prof. Andrew Sum of Northeastern University has identified the H-2B program as a cause of growing youth unemployment, giving summer jobs that could be the gateway to employment for young Americans to foreign workers from thousands of miles away.

Over a million U.S. construction workers have been unemployed for much of the last three years, yet employers imported H-2B welders and sheet metal workers from as far away as India.  Was it easier to find Indian workers than Americans?  No, but it was cheaper. 

In September, the Government Accountability Office published a report documenting how employers defraud, abuse and exploit H-2B workers, and detailing methods they utilize to avoid hiring U.S. workers. 

Fortunately, the Department of Labor has tackled the wage issue with a proposed rule requiring employers to offer U.S. workers a true prevailing wage before importing foreign laborers.  The Department has been met with a lobbying firestorm in Washington, led by the Chamber of Commerce, which argues that holding wage costs to poverty levels and employing tens of thousands of foreigners while 15 million Americans are unemployed is good for the economy.

The Chamber’s anti-worker efforts might pay off.  Advocates report that the White House might delay the rule for a year, and lawyers representing low-skill U.S. workers worry that the higher prevailing wage calculation will be phased in over time, when it ought to be implemented immediately.  Even if President Obama resists the Chamber’s lobbying, most observers expect the Chamber to sue to invalidate the new rule and to lobby Congress to block it.

Whatever the outcome, the H-2B rule shows just how hard it can be to fix a broken immigration system that too often works to undermine the employment and wages of American workers. 

Ross Eisenbrey is the vice president of the Economic Policy Institute.