Business–Labor Agreement Bodes Well for Immigration Reform

The announcement on March 30 that the United States’ largest business organization, the U.S. Chamber of Commerce, and one of its major labor union federations, the AFL–CIO, had reached agreement on a new program for immigrant workers was heralded by many as a breakthrough in the negotiations surrounding comprehensive immigration reform (CIR).

The agreement calls for the creation of a new visa category—a W visa—that would allow U.S. employers to sponsor foreign nationals to meet temporary and permanent labor market needs and gaps. While the number of visas allocated under the program would start off relatively modest—20,000 visas would be available during its first year—visa levels in later years would fluctuate in accordance with economic conditions, with up to 200,000 visas ultimately available annually.

The new deal is likely but a first step in the legislative process over CIR. Nevertheless, the fact that the agreement has been reached constitutes a significant milestone. Past attempts at CIR, most recently in 2007, faltered in part because of an inability to resolve issues surrounding future flows of workers. Negotiations between business and labor groups over these issues have been especially contentious. Employers generally assert that a large number of additional foreign workers is needed to fill labor shortages, while labor groups argue that an influx of foreign workers would lower wages and depress working conditions. Meanwhile, most analysts agree that one of the biggest failings of the Immigration Reform and Control Act of 1986 (IRCA) was the law’s failure to provide a mechanism for regulating future flows.

The new agreement aims to address four key concerns about the current system for admitting low-skilled workers:

First, the new agreement would allow employers to sponsor immigrant workers to fill certain year-round, non-seasonal jobs when U.S. workers are not available. This change responds to one of the most consistent employer complaints about the current immigration system: that the existing visa channels for low-skilled workers are completely inadequate to meet legitimate employer labor demands. Under current law, just 5,000 permanent visas are available each year for employers sponsoring workers who perform “unskilled” labor (work requiring less than two years of training or experience). While the H-2A and H-2B programs permit employers to hire additional foreign workers for temporary periods, both programs require employers to demonstrate that they are hiring employees solely for temporary or seasonal work. As a result, employers facing long-term labor shortages in industries that are not prone to seasonal labor fluctuations (for example, the dairy industry and food processing) find it all but impossible to hire workers through existing legal channels. The ready availability of such jobs is a magnet for illegal immigration.

Second, the new agreement would provide a mechanism for some low-skilled workers to transition from temporary visa status to lawful permanent residence. At present, such a path is virtually non-existent; the result is a system that is inherently wasteful of human capital. Workers who have developed needed job skills and ties to the United States are prohibited from staying when their temporary visas expire, and employers must replace them with new cadres of untrained, inexperienced workers, or risk violating immigration laws if workers overstay their visas. A system that enables some temporary workers to ultimately apply for permanent status creates an incentive for temporary workers to abide by the terms of their visas, and for employers to invest in the skills development and human capital of their workforce.

Third, the new agreement would allow visa holders to change employers, something that is not permitted for most H-2A and H-2B visa holders. By tying workers to specific employers, the current system limits economic efficiency by not allowing workers to respond to changes in labor market demand. Such a system also allows unscrupulous employers to keep wages and working conditions for foreign-born workers below their fair market value, harming both immigrant workers and their U.S.-born peers working in similar occupations.

Finally, and perhaps most critically, the new agreement would, for the first time, directly link the levels of temporary workers admitted to the United States each year with changing U.S. economic conditions. A new government agency, the Bureau of Immigration and Labor Market Research, would be created for the purpose of measuring labor market conditions, determining industries with labor needs, and providing recommendations to Congress for adjusting future immigration levels. Such a system would for the first time introduce flexibility into setting immigration levels, so that employer needs are better aligned with visa availability, while ensuring that wages and working conditions of U.S. workers are protected.

The Migration Policy Institute (MPI) has been particularly interested in these developments because they incorporate two ambitious new policy ideas that MPI first advanced in its 2006 report Immigration and America’s Future: A New Chapter. The proposals called for a) a new type of employment visa, known as a provisional visa, which would be portable and permit eventual adjustment to permanent resident (“green card”) status; and b) a flexible system for setting labor market immigration levels through advice from a new federal immigration research agency. MPI has been actively making the case for these recommendations in the years since and believes strongly that they would significantly improve the performance of the immigration system, if enacted. Such an outcome may now be in reach.

For more information, go to the MPI website. MPI has collected its research and data most on point to the CIR debate in one location, with easy browsing by topic: www.migrationpolicy.org/cir.