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September 2002, Volume 9, Number 9

Labor: Hispanics, H-1B

The US unemployment rate was stable at 5.9 percent in July 2002, but job growth was very slow; employment rose by only 6,000, compared to 66,000 in June 2002 and a peak 400,000 a month during the boom of the late 1990s. Employment needs to expand by 150,000 a month to keep pace with the normal growth of the labor force; the unemployment rate was stable because the labor force shrank.

Average hourly earnings for US workers were almost $15, and ranged from a low of $10 in retail trade to $19 in construction; weekly earnings averaged $510, and ranged from $300 to $750.

DOL's Job Openings and Labor Turnover Survey (Jolts) suggests that there were 8.1 million unemployed workers seeking 3.5 million jobs in July 2002, 2.3 workers for each job. The number of unemployed workers comes from the monthly survey of households, the Current Population Survey, while the number of vacant jobs comes from a monthly survey of employers, the Current Employment Statistics program.

The CPS asks every two years about displacement, permanent separations from jobs, and it is estimated that 10 million US workers were permanently laid off between 1999 and 2001, about eight percent of US workers- 40 percent of those who lost their jobs had been employed three years or more. Most of those who reported being laid off found new jobs, but often at lower pay-- 64 percent were employed in January 2002.

Foreign-Born Workers. As the foreign-born share of the US labor force rises, more supervisors are learning "survival Spanish." Language schools report a growing demand for construction Spanish, health-care Spanish, restaurant Spanish and firefighter Spanish.

Foreign-born workers were48 percent of the 6.7 million net increase in the U.S. labor force between 1996 and 2000. In 2000, foreign-born men were more likely than US-born men to be in the US labor force (80 percent of those 16 and older, compared to 75 percent of US-born men. Foreign-born women, however, were less likely to be in the labor force than US-born women (54 percent of those 16 and older, compared to 60 percent). Counting both sexes, overall participation rates were equal, at 67 percent. One of the largest gaps was for men with less than a high-school education- 78 percent of the foreign-born were in the labor force, compared to 47 percent of the native-born, and the unskilled foreign-born had a lower unemployment rate in 2000, 4.6 compared to six percent

Foreign-born men earned 71 percent as much as native-born men in 2000, and foreign-born women earned 81 percent as much as native-born women. The chief reason for lower earnings is occupation: the foreign-born are concentrated in lower-wage occupations. For instance, 4.4 percent of the foreign-born are in farming, compared to 2.2 percent for native-born and 19 percent are operators or laborers, compared to 13 percent.

Between 1950 and 2000, the US labor force grew 1.6 percent a year, from 62 million to 141 million; between 2000 and 2050, the labor force is expected to expand by 0.6 percent a year, from 141 million to 192 million. In 2000, the US labor force was 53 percent men, 47 percent women and 11 percent Hispanic (15 million of 141 million). In 2050, the labor force is projected to be 52 percent men, 48 percent women and 24 percent Hispanic (45 million of 192 million).

About four million teens were employed in summer 2002, and many experts want the federal government to prohibit them from a wider range of jobs that are deemed too dangerous. Some 200,000 workers a year under age 18 suffer injuries, an injury rate of almost five per 100 workers, or twice the adult injury rate, a reflection of lack of training and supervision. About three-fourths of deaths to workers under age 15 occur in agriculture, often involving teens working on their parents' farms.

Hispanics. Two-thirds of the 28 million foreign-born persons in the 2000 Census said they were white, including half of the Latinos; in 1990, only half of the foreign-born considered themselves white. Many immigrants say they equate whiteness with opportunity and inclusion in America. The census allows respondents to check one or more of six racial/ethnic groups: white; black or African American; American Indian or Native Alaskan; Asian; Native Hawaiian or other Pacific Islander; and "other." Since the concept of Hispanic ethnicity was introduced in 1980, the census has treated it apart from race, asking about ethnicity in a separate question, and indicating that Latinos can be of any race. The Hispanic category is meant for people who trace their origin to a Spanish-speaking nation.

In the first census in 1790, government enumerators placed people in four slots: free white males, free white females, slaves, and "others," a category that included free Native Americans.

A study released in July 2002 found that Hispanics have diffused around the US faster than any previous wave of immigrants. The study grouped destinations into four categories: established metropolitan areas, new destinations, fast-growing hubs and small places. Among 35 states, there were 51 new growth hubs, including Atlanta and Raleigh-Durham, whose Hispanic populations increased ten-fold in the 1990s. In these new hub areas, men outnumber women, which suggests that family unification will increase Latino populations. More than half of US Latinos live in the suburbs.

Social Security. The Social Security Administration in 2002 sent 750,000 "mismatch letters" to employers throughout the United States, informing them they had reported invalid SSNs when they reported employee earnings and SSNs. Some seven to 10 million SSNs a year do not match agency records, and about $5 billion a year in wage reports are not corrected unless, for instance, a worker applies for benefits, notices the missing wages, and gets the SSA to correct its records. If employers do not correct mismatches within 30 days, the IRS can levy a $50 fine for each mismatch, up to $250,000 a year per employer.

SSA says that it wants to correct its records so that all workers receive proper credit for their earnings, and that the mismatch letters are not aimed at curbing illegal immigration. Immigrant advocates have nevertheless teamed up with employers to condemn the SSA push to clean up mismatches, saying "These [SSA] checks only serve to hurt immigrants and to hurt the companies that depend on them." Unions say that some employers use SSA mismatch letters to intimidate or fire employees.

H-1B. The INS reported that 60,500 H-1B visas were issued between October 1, 2001, to June 30, 2002, down from 130,700 in the same period the previous year; another 18,000 requests for H-1Bs are pending. Additional H-1B visas were granted to foreigners requested by educational institutions and nonprofits. The annual limit is 195,000, but is scheduled to revert to 65,000 in FY03; some 163,200 H-1B visas were issued in FY01. Most estimates put the number of H-1Bs in the US at 400,000 or more, including 20 percent in California.

There are more DOL investigations of firms that bring H-1Bs into the US without jobs, and then fail to pay the H-1Bs when they have no work, a practice called benching. The American Competitiveness and Workforce Improvement Act of 1998 outlawed benching, but DOL did not issue regulations implementing this provision until January 2001. The California affiliate of R Systems, a computer consulting firm with over 500 employees worldwide, was investigated for unlawful benching in 2001-02. Most of the H-1Bs involved were Indian programmers who were paid $48,000 a year for work that critics say should pay more-- the average computer programmer earned $66,000 in 2001.

The U.S. Bureau of Labor Statistics reported that unemployment among computer scientists, which includes systems analysts, jumped from 4.8 percent to 5.3 percent during the second quarter of 2002.

Keith Jackson, president of the National Society of Black Physicists (NSBP), charged that there are plenty of Americans with PhDs in the sciences, but that employers prefer foreigners willing to work at low wages: "The influx of foreign students has driven down starting salaries so much that a career in physics or any other science and technology field is unattractive." Postdocs- persons with PhDs gaining experience- earn $39,000 to $55,000 a year in government laboratories. Persons with J-1 visas, which are often used for postdocs, do not pay US income taxes.

Unions. The AFL-CIO claimed 13.2 million members in 2002, about the same number as the membership when the ALF-CIO was formed in 1955. In February, 2000, the AFL-CIO's executive council unanimously called for: (1) the repeal of employer sanctions; (2) legalization of many of the unauthorized foreigners in the US; and (3) new criminal penalties on employers who use labor and immigration laws to exploit vulnerable workers.

The AFL-CIO is supporting a new "Freedom Ride," tentatively set for Spring 2003, to call for amnesty for unauthorized foreigners in the US.

Marilyn Geewax, "Unemployed Americans say too many foreigners get visas," Atlanta Journal-Constitution, August 19, 2002. Mosisa, Abraham T. 2002. The role of foreign-born workers in the U. S. Economy. Monthly Labor Review. May Vol. 125, No. 5.