Commentary | Immigration

A nation of immigrants

Although much of its current research focuses on the jobs shortage in the United States, EPI also recognizes that the country remains dependent on immigrant labor. The problem is not that immigrants come to work in the United States but that immigration levels are not adjusted to correlate with shifting labor market conditions in different segments of the economy. EPI has long  highlighted many of the flaws in the existing immigration system, and last year the EPI book, Immigration for Shared Prosperity, by former U.S. Labor Secretary Ray Marshall, proposed a framework for reform that would preserve the country’s long tradition of welcoming immigrants while also meeting the shifting needs of the labor market and complementing U.S. workers. EPI recently expanded its immigration program with the hiring of Policy Analyst Daniel Costa, who focuses on employment-based immigration.

Recently Costa, along with EPI Vice President Ross Eisenbrey and Living Standards Economist Heidi Shierholz, discussed their work on immigration and how it relates to EPI’s broader mission.


How does immigration policy fit into EPI’s overall mission?

Eisenbrey: EPI’s mission is to promote policies that lead to shared prosperity — a good job, fair pay, and a better future for every working family. That is exactly what we do with immigration. We have proposed a plan for comprehensive immigration reform that would lead to better wages for American workers and fuller employment, while also addressing the needs of U.S. businesses and employers.

EPI recently expanded its immigration program with the hiring of policy analyst Daniel Costa. What sort of work does the team hope to focus on?

Eisenbrey: We were given generous grants from several foundations to increase our work and our impact. Daniel Costa has so far focused on the L visa, a little known but increasingly important avenue for multinational companies to bring workers to the United States, without regard to the availability of U.S. workers or U.S. labor standards. He will soon expand his research into other issues, including migrant farm workers and visa programs for less skilled workers.

Most of the current news coverage on immigration focuses on illegal immigration and on Arizona’s controversial immigration law. What is all of this coverage missing?

Eisenbrey: It misses the tremendous benefit that the United States gets from immigrants. America’s diversity is one of its greatest strengths, but immigrants bring more than their cultures. They bring new ideas and technological innovation, they work hard and have a higher labor force participation rate than native-born workers, and they consume goods and services, which increases demand in the economy and creates jobs. They also pay taxes and contribute to Social Security. We are especially fortunate that highly skilled people around the world want to come here to live and contribute to our economy.

Shierholz: It also makes it seem like all immigrants are low-skilled or are in the country illegally. Last year, over 1 million people became lawful permanent residents of the United States, or “legal” immigrants. And in terms of those that are here illegally, almost half of them originally came to the country legally, but overstayed their visas. Also, many immigrants are highly educated. The pool of immigrants is bi-modal. There are many immigrant workers who do not have high school degrees, but there are also many immigrant workers who have PhDs.

There are also many different reasons that people seek to immigrate – from seeking work to family reunification. Does the current system recognize and account for this?

Eisenbrey: The United States is different from the rest of the world in how we treat immigration. Only a small part of our immigration is employment based, while roughly 70% is motivated by family reunification. This is partly a reflection of the fact that we are a nation of immigrants and we understand that families are crucial to the fabric of society. When EPI calls for legalization of undocumented workers, we believe they should also be able to bring in their immediate family members. If you separate families, you encourage them to reunify illegally.

The fact is that many immigrants who come here for family reunification will work.  It would be useful to know much more about that—for example, what are the occupations and the skills of the two-thirds of immigrants who come to the United States for family reunification—so that we have a better sense of where they might fit into the labor market.

So much of EPI’s current work is focused on the historically high unemployment rates that have made it difficult for American workers to find jobs.  Why are we still dependent on immigrant labor, and at a time of high unemployment, do we need to reframe the discussion about immigration?

Eisenbrey: A large part of what is discussed as immigration is actually non-immigrant labor— temporary employment of foreign workers that sometimes stretches for as much as seven years without the worker ever becoming a permanent immigrant. Many businesses—both foreign and U.S.-based—are taking advantage of such workers for a host of reasons, some good and some bad. We think an independent commission—the Foreign Worker Adjustment Commission proposed by former Secretary of Labor Ray Marshall—could come up with sensible ways to improve these temporary worker programs.

Costa:  A key problem with the existing system is lack of information. We don’t even have an accurate count of how many people have temporary worker visas. In addition, Congress has established fixed levels of visas that don’t fluctuate. There is no correlation between the number of work visas issued and labor market conditions in the United States.

Shierholz: We know immigrants are very beneficial to our economy. We need to make sure that immigrant visas are correlated to the current conditions of our labor markets. A Foreign Worker Adjustment Commission would take into account what is happening in the U.S. economy and adjust the number of work visas accordingly. In times of really weak labor demand, the number of worker visas would go down.

Talk a bit about the Visa programs—the L-1 and H-1B visas—for bringing skilled workers into the country. What are some of the flaws of these programs?

Eisenbrey: The H-1B visas have gotten most of the attention, but the L-1 is the fastest growing of this sort (for high-skilled workers).

Costa: One of the big issues with the L visa category is that there is no labor market test and no minimum wage standard. The H-1B visa also lacks such a test, but it does require an employer to at least “attest” that it could not find a comparably skilled worker in the United States and is paying foreign workers the prevailing wage. There are no such requirements with the L visa category, and there is no overall limit to the numbe
r of L-1 or L-2 visas that can be granted annually. Last year, over 124,000 L visas were issued, and in 2008 the total peaked at nearly 156,000.

Eisenbrey: So, even if there is a U.S. worker—meaning an American citizen or a foreign-born permanent resident—who is available and qualified, these multinational corporations can bring in a worker from overseas, and there is no wage standard for them. Foreign workers in the country on a temporary work visa are more vulnerable because they lack full rights as an employee and are therefore more susceptible to being forced to accept below-market wages. And that can depress wages for everyone.

Costa: Another serious problem with the use of these visas is that they can facilitate the movement of jobs overseas. The top users of the H-1B and L-1 visas are offshore outsourcing firms, which suggests that these temporary visas are not being used just to bring the “best and the brightest” here from around the world, in order to become permanent contributors to the U.S. labor market. In fact, as (EPI Research Associate and Rochester Institute of Technology Professor) Ron Hira’s work has shown, the business model of offshore outsourcing firms is intentionally designed to transfer labor and American jobs overseas, where the work can be done at a lower cost.

What about the impact of immigration on wages. Doesn’t a greater supply of immigrants in the labor force serve to depress wages for all workers?

Shierholz: Not necessarily. Our research shows that, on average, immigrants are beneficial to native-born workers. The wages of most native-born workers are little affected by the presence of immigrant workers, but in general the effect is positive. New research by U.C. Davis economist Giovanni Peri shows, however, that the negative impacts can increase during economic downturns, which is why we should be able to adjust immigration levels according to economic conditions.

Earlier immigrants are actually the ones who experience the biggest negative impact from immigration. These are the workers who are in the most direct competition with new immigrants. The people who take the biggest hits are generally not the native born.

How does an immigrant worker’s legal status impact wages?

Costa: There is clear evidence that the legalization program for the undocumented population that came out of the Immigration Reform and Control Act in 1986 led to significant wage gains for  those  immigrants. Increased wages for the most exploited workers at the lowest income levels ends up raising average wages for all workers. And once an undocumented worker has attained legal status, they no longer fear incarceration or deportation, and therefore will be more likely to make long-term investments, such as buying a home or starting a business, or going back to school to get a degree or learn a trade—all which benefit local communities and the American economy as a whole.

Shierholz: Not having legal status means that you can be extremely easily exploited and this can have a depressing effect on their wages. But if we don’t have any illegal immigrant workers, then we don’t have that depressing effect. When workers are able to come out of the shadows, it is good for everyone.

Costa: That’s right, if you’re afraid that your employer will contact the authorities to have you removed from the country if you complain about any violations in the workplace, such as wage theft or unsafe working conditions, then you’re not likely to speak up.

And this isn’t just a problem with undocumented workers. Legal temporary workers, both high and low skilled, such as those in the country on H-1B, H-2A, H-2B, and L-1 visas, may also be afraid to complain about working conditions or below market wages—because if they’re fired, they have to leave the country. In general, they also can’t accept a competing offer from another employer who may be offering better conditions or better pay. This gives the employers who use these programs an unreasonable amount of power over these workers, and an incentive to keep wages low and not improve working conditions.

See related work on Immigration | Trade and Globalization