2016 election, Barbara Mikulski, Cheap Labor Lobby, Donald Trump, George W. Bush, H-1B visa, H-2B visa, Im-Politic, immigrants, Immigration, L-1 visa, Obama, OPT, Optional Practical Training, productivity, technology companies, technology workers, Thom Tillis, visas, wages
Several times recently I’ve reminded America’s political establishment (and its journalistic enablers) that if they were really serious about eliminating the Trump-ist threat to their hold on power, they’d respond seriously to the legitimate security and economic grievances animating his growing legions of supporters. And just as often I’ve noted that the establishment keeps ignoring this advice.
This week, the situation changed fundamentally. Republicans and Democrats in Washington have decided to change their approach. Unfortunately, the new strategy apparently is to squeeze the struggling middle class and working class harder by bringing in more job- and wage-killing legal immigrants.
Keep in mind that the moves I’ll be describing have nothing to do with the debate over stronger curbs on illegal immigration, or over the fate of the country’s current illegal immigrant population (currently estimated at roughly 11 or 12 million). Instead, they concern measures to pump up the supply of workers available to domestic employers still higher at a time when wages for the typical household have stagnated for decade, meaning that business still occupies the labor market’s commanding heights. Moreover, the new legal immigrants won’t simply be coming into the worst-paying industries and occupations. A higher labor supply seems in order for “industries of the future” as well.
And also keep in mind: With a single exception I’ve found, none of these decisions appears to have been covered by the Establishment Media.
So I’m sure none of you read that when President Obama just signed Congress’ big omnibus spending bill into law, thereby ensuring no government shutdown for the medium-term future, he enacted into law a potentially huge increase in the numbers of unskilled immigrants sought on a seasonal basis by parts of the economy ranging from manufacturing to tourism. Visas for these foreign workers (called H-2Bs) had been capped at 66,000 annually, but evidently the Cheap Labor Lobby convinced legislators from both major parties that they faced crippling shortages of such employees, and persuaded (outgoing) Democratic Senator Barbara Mikulski of Maryland and a Republican counterpart, Thom Tillis of North Carolina, to introduce a measure that felt their pain, and that was stuck into the spending bill at the last minute. According to their Alabama Republican colleague Jeff Sessions, the Senate’s leading immigration policy critic, and the AFL-CIO, the changes could triple or quadruple admissions.
As I’ve explained before, the labor shortage claim is patent nonsense, if only because the kinds of wage increases basic that economic tells us result from real labor shortages are nowhere in sight. Moreover, it seems that no one else on Capitol Hill or in the Obama administration thought to suggest to these employers that often in American history, business has responded to labor shortages perceived and real by improving their management acts to boost efficiency or to develop or invest in new machinery and technologies that could substitute for increasingly expensive labor. The latter approach, incidentally, was so common that it largely explains why the United States so quickly grew into a global science, technology, and manufacturing leader. Further, the productivity improvements that resulted keyed the nation’s longstanding world-beating performance on this score.
Nor did the Cheap Labor Lobby hear the equally obvious counter-argument that an industry or company that can’t raise productivity enough to offset higher wages simply doesn’t have a viable business model, and doesn’t deserve an immigration subsidy from Washington.
Another provision in the spending bill seems to limit the use of cheap immigrant labor by high tech companies by doubling the fees charged for using one category of foreign workers with supposedly special skills (the H-1B category), and more than doubling it for another category (L-1s). But there’s much less to these requirements than meets the eye, mainly because firms don’t have to pay the fees if they have fewer than 50 employees, or if they’re larger but fewer than half their workers already hold these visas. As a result, the fees will be highly concentrated in Indian-owned tech firms who make unusually heavy use of H-1Bs and L-1s. But their big American-owned counterparts, like Intel and Google and Microsoft, which also employ many of these foreign workers, will continue getting off scott-free.
In addition, the Obama administration has in the works a stealth increase in the supply of foreign tech workers. The Optional Practical Training (OPT) program has long permitted foreign students to work in the United States for twelve months after graduation. Since employers who use them don’t have to pay payroll taxes on them and since the program includes no minimum wage requirements, many technology firms have found these employees cheaper and therefore more attractive than American workers. At least as important, OPT workers can substitute for H-1Bs, whose use is capped at 65,000 annually.
In 2008, President George W. Bush extended the time-frame to 17 months for graduates with science and technology degrees (Congress’ approval wasn’t needed), but last year, a federal court overturned this policy on the grounds that the Bush decision taken without adequate public notice and comment. Nonetheless, the court also gave the government itself a six-month extension for the 17-month policy, and the same amount of time (until February) to seek the longer OPT period the right way. The Obama administration has not only decided to do so, but has submitted a draft proposal to extend the total time-frame to three years.
Some members of Congress have pushed back, but given the views not only of Trump supporters, but the public at large, it’s amazing (or not?) that such steps are even being contemplated. After all, polls consistently show that when it comes to levels of immigration (again, this has nothing to do with illegal immigration), Americans want them stabilized, or lowered – not increased.
So expect the current Election 2016 dynamic to continue. Growing numbers of voters will become angrier and angrier about their diminished economic prospects and threatened security, establishment politicians in both parties will ignore or actively reject the messages they’re sending, and both they and the equally establishment-oriented media will even more self-righteously condemn the rise of demagoguery in America.