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October 1999, Volume 6, Number 10

Labor Market: H-1Bs, Ethnic Business

The annual limit on the number of H-1B professionals—foreigners who can enter the US for up to six years after US employers "attest" that they are needed—was raised from 65,000 a year to 115,000 a year for FY99. The limit was reached in seven months.

Two bills are pending in Congress to raise the H-1B cap to 200,000 a year, and a third bill would introduce a five-year "T" or Tech Visa for foreign students who graduated from US universities with degrees in engineering or science who had US job offers. This cap would be flexible or pierceable, since foreigners: (1) with at least an MS degree and earning $60,000 a year or more; and (2) those with a BA or more employed by a university, would be exempt from the cap.

Critics argue that more H-1Bs are not needed and that US employers give preference to young foreigners with H-1B visas over older US workers because the immigrants are willing to put in the very long hours common in many high-tech jobs. The author of the T-visa proposal, Rep. Zoe Lofgren (D-CA), attempted to counter this criticism by requiring the INS to report every six months the occupation, employer, salary, degree and degree granting institution for each foreigner with a T visa and requiring that the $1,000 per T-visa fee be deposited in a the High-Tech Education Fund Account to bolster science and engineering education.

The National Research Council's Committee on Workforce Issues in Information Technology held a hearing in September 1999 on whether high-tech firms need more H-1B workers. At the end of the hearing, after which chair Alan Merten said that "It's a very small portion of their workforce, and it's not going to make or break them." Eileen Appelbaum, a committee member, said "There's no evidence in the data to think there's a shortage." For more information: http://www.itworkforce.org />
Some lawyers believe that US employer promises of, for example, three-year H-1B visas may create an obligation to keep such workers in employment for that period. However, H-1B workers who have been terminated despite employer requests to the INS for three-year visas have so far been unable to successfully sue their US employers for breach of contract. US courts have held that US employer promises to obtain an H-1B visa or green card for a foreigner in a petition to the INS that promises to employ a foreign national for a set period of time do not convert an employment at-will relationship into an enforceable contract for a fixed term.

Many foreigners with H-1B visas hope that their US employers will sponsor them for immigrant status under one of the employment preferences that permit 140,000 immigrants (including family members) to be admitted each year because of their outstanding qualifications or because US employers need them.

The Wall Street Journal on September 15, 1999 reported that the high-tech industry had contributed about $850,000 to presidential hopefuls, with nearly half going to Texas Governor George W. Bush.

Ethnic Business. A Los Angeles Times Poll found that minority-owned businesses in Los Angeles have mostly minority employees. Nearly three-quarters of Latino business owners described their work forces as mostly Latino; 41 percent of black business owners reported mostly black employees. About one-third of Asian-owned firms reported mostly Asian workers, and one-third reported mostly Latino employees.

There was little likelihood that blacks would be the majority of workers except at Black-owned businesses—41 percent of Black-owned businesses had majority Black work forces, compared to one percent of Hispanic-owned, three percent of Asian-owned, and four percent of white-owned businesses. Blacks were especially underrepresented in small businesses, which employ about 70 percent of Los Angeles county's four million workers. Hispanics are about 41 percent of Los Angeles county workers; whites, 39 percent; Asians, 12 percent; and Blacks, eight percent.

In the five-county greater Los Angeles area, the highest rates of self-employment are among Israelis, Iranians, Lebanese and Armenians. More than 120 Iranian companies, owned by Jewish, Muslim and Christian entrepreneurs, have helped increase Los Angeles garment sales from $300 million in 1982 to an estimated $20 billion today. In 1994, there were 30,000 Korean-American firms in Southern California, of them, 3,500 were minimarkets and liquor stores; 3,500 were retailers of Asia-imported goods; 2,000 were dry cleaners; and 1,000 were house painting firms.

The Los Angeles Times reported September 23, 1999 on family succession in businesses dominated by immigrant workers, profiling Basic Vegetable Products' work force in King City, California. Basic proposed a two-tiered pay scale that would give newly hired workers $3 an hour less than established workers, or $7.65 an hour to start. The 750 workers represented by the Teamsters went on strike July 7, 1999—they stayed out more than two months on daily strike benefits of $55, and the company bussed in replacement workers from far away.

Family networks helped to maintain the strike—many of the workers had been recruited by co-workers, strengthening solidarity during the strike. Family networks can work for or against unionization. During a 1997-98 organizing drive at the 1,000-employee Farmer John pork processing plant in Vernon, an extended family--the Maldonados—were credited with helping the United Food and Commercial Workers union win recognition. The Service Employees International Union used networks among janitors to demonstrate how much higher union wages were during its Justice for Janitors organizing campaign of the late 1980s and early 1990s.

However, in most cases, family networks impede unionization. Family networks—with pickers related to foremen—are believed to be a major reason why the United Farm Workers lost a bid to represent 1,300 strawberry workers at Coastal Berry Farms in June 1999. Networks permit employers hiring relatively large numbers of unskilled workers to minimize their recruitment investments.

Many states that once required persons practicing certain professions—including accountant, architect, attorney, barber, cosmetologist, nurse, physician and embalmer—to be US citizens are dropping the citizenship requirement. For example, Illinois, which used to require citizenship for 18 of 23 occupations that required licenses, today requires only US citizenship only for full-fledged teachers and gives non-US citizen teachers six-year temporary credentials. New York also requires teachers to be US citizens, and gives non-citizens five-year credentials. California, Florida and Texas dropped citizenship requirements in all 23 occupations that generally require state licenses.

The North American Free Trade Agreement requires a review of the use of citizenship in state licensing requirements; after review, most states dropped US citizenship requirements. For more information:
http://www.trpi.org/press/90899.html />
Labor Market. The Bureau of Labor Statistics reported that in the US there were 21 million more non-farm jobs in July 1999 than in July 1989; about 75 percent of these jobs pay $11 an hour or more.

The number of US union members rose to 16.2 million in 1999, up 100,000 over year-earlier levels. The NLRB reported that unions won 51 percent of the 1,653 elections in 1998, up from 50 percent of 1,591 elections in 1997. The NLRB supervises elections and bargaining among most private-sector nonfarm workers.

The Congressional Hispanic Caucus Institute organized a seminar in Washington, DC in which it was suggested that government agencies substitute the term "essential worker" for unskilled worker when referring to immigrants with little education.


Nancy Cleeland, "Network hiring among Latino immigrants is beginning to shape labor relations in California," Los Angeles Times, September 23, 1999. Lee Romney, "Minority-Owned Firms Tend to Hire Within Own Ethnic Group," Los Angeles Times, September 18, 1999. Don Lee, "Divergent Trends for Entrepreneurs," Los Angeles Times, September 17, 1999. Marjorie Valbrun, "Silicon Valley's Political Gifts May Help Push for More Visas," Wall Street Journal, September 15, 1999. Sally Farhat, "Foreigners Lured by Technology Firms Long for Better Life Back Home, " Seattle Times, September 13, 1999. Joel Kotkin, "The New Ethnic Entrepreneurs," Los Angeles Times, September 12, 1999. Rick Badie, "The American Dream: Immigrants find niche in service industry," Atlanta Journal and Constitution, September 13, 1999.