Business Ethos Blog

Immigration: Rational or Emotional?

Dr. David Mielke, Retired Dean of the College of Business at Eastern Michigan University

President Trump created a firestorm with his executive actions to halt immigration from 7 countries.  More chaos seemed to arise as immigration enforcement appeared to increase or at least the media reported that an increase has occurred.  The President also called for hiring thousands of additional border and immigration officers.  Silicon Valley sounded the alarm that many of their foreign workers were potentially threatened.  Funding was requested to build the wall along the Mexican border.  Meanwhile, there are really no plans coming from the Republicans or Democrats to pass comprehensive immigration reform.  Reactions by the Democrats and activists have resulted in emotional demonstrations, rallies and of course court cases.  Is the real problem a hodgepodge approach and a scattering of proposals and initiatives without a real plan to deal with the multitude of issues?  Would it be better to focus on dealing with a couple issues at a time rather than dealing with all of them at once?  Can Congress focus on 2 critical areas of immigration that will have an immediate impact on the US economy: the H-2A and H-1B visas programs?  What is the “Right Thing to do?”  Let’s look at some issues:

  1. The H-2A visa program is a guest worker program that provides temporary foreign workers who are primarily employed in agriculture.  Under the program, farmers are required to advertise in local newspapers for job openings before accepting foreign workers.  Farmers must pay for transportation to and from the foreign country and provide housing and 3 meals a day.  The wages for these workers in Michigan is set at $12.75 an hour.
  2. Undocumented workers are a key part of many US economic sectors including an estimated 26% of the total number in farming, fishing and forestry.  According to a 2014 report by the American Farm Bureau Federation, undocumented workers comprised half of US farm workers.  There is no calculation specific to Michigan where there are about 45,000 seasonal agricultural workers.
  3. Michigan fruit and vegetable farmers are heavily dependent on seasonal workers because most of their crops are hand harvested and as many say, American workers and college kids won’t do it.  It is estimated that fruit and vegetables account for a $1.4 billion economic impact in Michigan alone.  Dairy farmers are also facing challenges, but need permanent workers not the seasonal workers that are covered under the H-2A program.  It is estimated that the H-2A program added only 5,000 workers in Michigan in 2016.
  4. Employers are required by law to accept a variety of forms of identity for employment, including a social security card, birth certificate and driver’s license.  All of which can be forged.
  5. The H-1B visas, which are capped at 65,000 a year are set aside for so-called specialty positions and require applicants to have at least a bachelor’s degree and they must be paid the prevailing wage, with a current minimum of $60,000.  The H-1B visas are used by tech companies, by hospitals looking to hire doctors, especially in under-served areas, universities for faculty positions and by school districts looking to hire language teachers when US teachers are not available.
  6. It is currently estimated that 650,000 H-1B workers in the US, including 100,000 at universities.  The visas are handed out by lottery and the number of applicants continues to swell.  In 2016, the demand was 3 times more than the quota.  The process starts again this year on April 1st.
  7. 13 of the top 15 H-1B filers are global outsourcing firms that feed foreign workers to US companies.  They flood the immigration system with applicants, obtaining visas for foreign workers and then farming them out to tech companies.
  8. Critics of the H-1B program claim that the foreign workers take jobs from Americans and pay the visa workers a lower than market wage.  Technology companies claim they have an ongoing struggle to hire many professionals, especially in computer science.  Executives say that they must look overseas because there is a shortage of home grown math and science graduates.
  9. Others cite surveys that question the shortage of math and science graduates.  In 2013, the Economic Policy Institute released a study concluding the US has more than a sufficient supply of workers available to work in STEM occupations.  Offer Letter, a company that helps negotiate job offers, looked at 500 job offers from tech companies like Google, Twitter and Stripe and found that immigrants with 0 to 10 years experience had salaries actually 10% higher than US residents.
  10. The National Foundation for American Policy found that 50% of US privately held companies deemed to be worth $1 billion or more have at least one immigrant founder.  Those founders have created roughly 760 US jobs each.

 

Is there a plan to deal with immigration in a step by step approach?  Are there two critical areas that could be carved out and need to be addressed now without waiting for a so-called comprehensive immigration reform?  Is it likely that American workers will fill the agricultural seasonal jobs and are there sufficient American STEM graduates to fill the variety of positions open especially for an expanding economy? Should the H-2A program be simplified and expanded to meet the needs in agriculture, especially from the standpoint of the $1.4 Michigan fruit and vegetable economy?  Is there a shortage of STEM workers and are they underpaid and should the H-1B visa program be fixed?  What is the “Right Thing to do?”  In my opinion, comprehensive immigration reform is unlikely to happen any time soon.  When looking at all of the issues and trying to cobble solutions into one bill it is just to big a package.  There needs to be a well developed plan articulated to deal with parts of the whole.  There are 2 critical needs that need attention now and legislation could be passed to address them–H-2A and H-1B visas. Seasonal workers are needed in Michigan and are certainly needed in California, Arizona–in many states that grow the fruits and vegetables that we all take for granted.  If there are concerns with the H-1B program, then build in the controls, accountability and processes to address them. Isn’t that the job of Congress and the President or do they want to continue with the Emotional instead of the Rational?