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July 2002, Volume 9, Number 7

Welfare, Labor, H-1B

The Million Voices for Legalization campaign was launched by labor unions, religious groups and community organizations on May 15, 2002 to send one million postcards to President Bush and members of Congress urging legalization for "hard-working, taxpaying immigrants."

In support of legalization, bills are being introduced in Congress. For example, the Immigrant Adjustment Act of 2002 would grant legal immigrant status to unauthorized foreigners in the US since at least January 1, 2000, and protect others in the US from deportation until they had five years of US residence.

Welfare. The number of US families on welfare fell from five million to two million between 1994 and 2001. Three major reasons are cited for the drop: the booming US economy that reduced unemployment below four percent; new rules that limit recipients to two years of cash assistance without working and a total of five years in a lifetime; and a change in the administration of the welfare system. Case workers who once made eligibility determinations have become managers whose goal is to keep people off the rolls.

The challenge in summer 2002, as the 1996 welfare law is being reauthorized, is what to do about poor women who work but who do not earn as much as the value of welfare cash plus other benefits. The value of welfare benefits in California for a single mother with two children -the typical case- is about $9 an hour plus health and other benefits. However, many women who were on welfare earn only $7 or $8 an hour without benefits. Low-income workers with children are entitled to the Earned Income Tax Credit, and with full-time, 2,000-hour-a-year work, they can earn more than the poverty-line income, $14,300 for three. But this is still less than the value of welfare benefits in California and many other states.

There are 191,000 families on welfare in Los Angeles county, including 16,000 two-parent families. In California, recipients who leave the welfare rolls will lose only the adult portion of the cash grant, and will retain Medi-Cal and food stamps; their children will keep full cash and other benefits.

New studies suggest that one unanticipated effect of "work-first" welfare reform is that fewer single mothers are marrying, either because, with earnings, they become more selective about husbands, or because their jobs leave them little time to develop a relationship. Thus working women are more attractive as marriage partners, but feel less need to marry, while ex-welfare recipients who do not find jobs are more likely to want to marry, but are more likely to be seen as burdens by potential partners.

Back Pay. The California labor commissioner's office in the Department of Industrial Relations in May 2002 announced that the US Supreme Court's ruling in the Hoffman Plastics case would not prevent the awarding of pay to unauthorized workers who did not receive the minimum wage or overtime wages, as required by California law. The labor commissioner's office emphasized that its inspectors obtain unpaid wages for workers for the time they have worked, while the US Supreme Court's decision denied pay to a worker for work that he did not do after he was unlawfully fired.

Two other state agencies that handle work-related complaints, the Department of Fair Employment and Housing and the Agricultural Labor Relations Board, have had similar policies giving equal-treatment to unauthorized workers in the past, but have not announced whether those will continue.

In New York City, a class-action suit accuses Donna Karan International and two sewing shops of not paying the minimum wage and overtime. The companies, citing Hoffman Plastics, asked for the legal status of the workers, but the judge refused, saying that the request could be used to intimidate the workers. The judge said: "Courts have distinguished between awards of post-termination back pay for work not actually performed and awards of unpaid wages pursuant to the Fair Labor Standards Act."

There are 10,500 workers employed on West Coast ports to load and unload ship, have some of the highest blue-collar earnings in the US- about $90,000 a year. The International Longshore and Warehouse Union allowed shipping companies to introduce containers in exchange for guaranteed wages, and the shipping companies are now asking for another round of automation. Shipping companies say that no current workers will lose their jobs as technology is introduced, but union leaders say: "The union doesn't look at these jobs as jobs to trade away. We hold these jobs in trust to pass down to other people in the community. We negotiate for the next generation of longshoremen."

Health Care. US hospitals have 126,000 nursing vacancies, meaning that 12 percent of hospital nursing jobs are vacant, according to the American Hospital Association. The national average nursing salary is $45,500; entry-level wages are $25,000 to $30,000. Some hospitals short of nurses are offering hiring bonuses of $5,000 or $10,000, or up to $30,000 if the newly hired nurse stays three years. Some hospitals pay those who refer nurses who are hired $1,000, with another $1,000 paid if the nurse stays on the job at least six months.

United American Nurses, the country's largest nurses' union, notes that hiring bonuses encourage job hopping, since the nurse gets a bonus each time she changes jobs.

H-1B. The annual limit of H-1B visas, 195,000, is scheduled to revert to 65, 000 in FY04 unless Congress acts to maintain the higher ceiling. About 163,000 H-1B visas were issued in FY01, and the debate over whether the ceiling should remain as high as it was during the bubble has resumed. Rep Tom Tancredo (R-CO) introduced the High-Tech Work Fairness and Economic Stimulus Act of 2001 to return the ceiling to 65,000 immediately.

The Information Technology Association of America, which lobbies for high-tech companies, reported in May 2002 that the US IT work force fell in 2001 to 10 million, from about 10.5 million. There was a drop of over 900,000 jobs in help desk and customer service center employees, traditional entry-level jobs. Entry-level salaries for the best computer science and engineering graduates with BAs were $50,000 a year in spring 2002, down from $55,000 in 2000. ITAA projected 1.1 million jobs offered in 2002, and asserted that 600,000 would not be filled because of a "skills imbalance." ITAA said this means that US employers would be unable to find workers with the specific skills required, and thus the H-1B program is vital.

Jeff Joerres, CEO of Milwaukee-based Manpower Inc., an $11.8 billion a year staffing services company with offices in 61 countries, agreed that the H-1B program is still needed, citing their specific skills, the greater mobility of H-1Bs (unemployed Americans are "not going to move to Des Moines,") and the "better attitude" of H-1Bs. Attitude, he asserted "is going to be more and more part of the decision process in [hiring]." For 2001, ITAA forecast 900,000 new jobs created in IT and asserted that 425,000 would remain unfilled- these numbers proved to be too high.

In June 2002, the INS reported that employers applied for 105,800 H-1B visas, and that the INS approved 44,900-both numbers are down sharply from FY01 numbers.

Employers must pay a fee of $1,000 per H-1B visa, and the $138 million in fees collected from employers has been used to subsidize the training of US workers. The Bush administration wants to end the use of the H-1B fee for training: a message to Congress said: "Unfortunately, DOL's . . . H-1B training program . . . never has filled and has no prospect of filling, these labor shortages… At times, funds wind up training workers for decidedly low-tech jobs. One grant financed training for cable installers; another trained licensed practical nurses, while a third was open only to union members in the entertainment industry."

There continue to be abuses of the H-1B program. In June 2001, Berkeley landlord Lakireddy Bali Reddy was sentenced to eight years in prison for using his son's software company to obtain H-1B visas for Indian teenage girls smuggled into the United States to work in a Bay Area prostitution ring. Reddy was sentenced to eight years in prison.

Sun Microsystems in June 2002 was accused of laying off US citizen workers and retaining or hiring H-1Bs; about 2,000 of Sun's 39,000 employees are H-1Bs, and Sun laid-off about 10 percent of its workers in November 2001. The US Department of Labor says that US employers do not have to retain US citizens over H-1Bs, but the Civil Rights Division of the US Department of Justice is investigating whether Sun systematically selected US workers for lay off.

In order to convert from H-1B nonimmigrant status to immigrant status, US employers must obtain a certification from the US Department of Labor that US workers are not available to fill the job. According to DOL, there were 280,000 applications for labor certifications pending with state employment security agencies and the regional DOL offices in June 2002; there were 250 people in the states and 70 people in the DOL on the certification applications.

DOL plans to change from a certification to an attestation process called PERM for US employers seeking immigration visas for foreigners. PERM would require employers to advertise the wage they are paying, and require employers to offer at least the prevailing wage.

Productivity. The Los Angeles Times reported on June 19, 2002 that the pace of work- assembly-line speeds, productivity requirements for eight-hour days- were increasing, and that many low-wage workers have said the pace of work, not wages or benefits, is their major concern. US productivity gains in the 1990s have been attributed to the spread of computers and to workers working more intensely.

During the 1960s, when unions were strong in assembly-line industries, many contracts included language specifying the speed of the assembly line. Today, fewer workers are covered by union contracts, and employers under profit pressure have speeded up assembly lines.

Students. Economist George Borjas asks, "Why should American taxpayers subsidize the tuition of the hundreds of thousands of foreign students enrolled in public universities? [and concludes] The foreign-student program shows yet again how our immigration policy has failed to serve the national interest."

The Test of English as a Foreign Language is taken by about 800,000 people a year- 80 percent overseas- to test their knowledge of English. Most US college and universities require foreign students to pass the TOEFL test in order to be admitted.

Sierra Club. The Sierra Club may be headed for another debate over immigration. During the 1970s and '80s, the Sierra Club supported immigration curbs, but the Club's position changed in 1990 to neutrality- critics said the club feared a loss of corporate contributions if it was perceived as anti-immigration.

In 1998, Sierrans for US Population Stabilization forced a referendum on the issue and received 40 percent of the votes. In 2002, the top vote getter in an election for five members of the board of directors was UCLA professor Ben Zuckerman, who vows to force another vote on the immigration issue. He says: "the No. 1 environmental problem--and it's not even close--is overpopulation."

Nancy Cleeland, "Production pace is emerging as a top health concern for low-wage employees," Los Angeles Times, June 19, 2002. Rick Green, "As the Tech Economy Goes, So Go Special Visas," New York Times, June 16, 2002. James Ricci, "The Sierra Club and the Immigration Freight Train," Los Angeles Times, June 9, 2002. George J. Borjas, "Rethinking foreign students," National Review, June 2, 2002. Don Tennant, "Manpower's CEO on paranoia and the Y2k hangover," Computer World, May 9, 2002.