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October 2004, Volume 11, Number 4

Labor, H-1B, Census, Health

US payroll employment peaked at 132.5 million in March 2001, and was 131 million in summer 2004. About eight million Americans or 5.4 percent were unemployed, and President Bush became the first president since Herbert Hoover to seek re-election with lower employment than when he began his term. The number of American adults who are not in the labor force- not employed or looking for work- has risen by over four million.

There is a discrepancy between the employer and household surveys. The survey of 160,000 employers found 32,000 jobs created in July 2004; the separate survey of 60,000 households found 60,000 new jobs. The employer survey is considered more reliable, but excludes farm workers and the self-employed.

An analysis of employment that makes assumptions about the number of new immigrants finding jobs estimated that employment rose from 136.9 million in 2000 to 137.7 million in 2004, up about 750,000. However, there were an estimated two million more recently arrived immigrants employed in 2004 than 2000, which means that the number of other US workers dropped by at least 1.25 million.

Many of those who have dropped out of the labor force have few skills, prompting some to talk of a "new division of labor," a labor market for college graduates that is expanding, and a labor market for those with a high school education or less that is shrinking. Alan Greenspan, who has repeatedly warned that the United States faces a growing mismatch between the oversupply of low-skilled workers and the unmet demand for people with specialty training, has called for increases in spending on community colleges and vocational training schools.

In Los Angeles, 3,000 port jobs paying at least $21 an hour drew 500,000 applicants. After completing a probation period, some of the newly hired workers can join the International Longshore and Warehouse Union and receive pension and health care benefits. ILWU members average $90,000 a year.

Labor Laws. The US Department of Labor in August 2004 announced that Global Building Services of Newhall, California agreed to pay $1.9 million in overtime wages to 775 immigrant janitors who cleaned Target stores in California, Arizona, Nevada, New Mexico and Texas. In October 2003, DHS agents raided 60 Wal-Mart stores in 21 states to arrest 250 illegal migrant cleaners, prompting critics to say that the commercial cleaning business was rife with violations of labor and immigration laws.

The US Department of Labor in August 2004 implemented new rules on overtime pay for the nation's 72 million white-collar workers, overtime is 1.5 times normal pay for hours in excess of eight a day or 40 a week. About 20 percent of white-collar workers are already exempt from overtime rules because they are executives or professionals. Under the new rules, those earning less than $455 a week ($23,660 a year) are covered by overtime, up from $155 a week, and all workers earning over $100,000 a year are exempt. There is a dispute over how many white-collar workers between these earnings limits will be exempt, since employers could seek to classify athletic trainers and chefs as learned professionals exempt from overtime pay.

When names and social security numbers do not match, the social security taxes paid by employers and employees are placed in an "earnings suspense file," currently $376 billion and growing by $6 billion a year. In many cases, the mis-match is from women changing their name when they get married or data entry errors, but corrections are not made until people apply for benefits. One estimate is that half of this $6 billion involves unauthorized workers. If unauthorized foreigners later legalize their status in the US, they can get credit for past contributions if they have pay stubs and other evidence of contributions. The Social Security Administration collected $534 billion in contributions from employers and employees in 2003.

Federal Reserve Chairman Alan Greenspan warned that the US government may not be able to keep the promises it has made to retirees for cash and health assistance in old age, and urged policy makers to "recalibrate" benefits without raising taxes. At a Federal Reserve conference, most participants agreed the level of immigration needed to offset population aging is politically impossible, and some criticized selective immigration for draining the best and brightest from developing countries. For example, four percent of Nigerians have more than 12 years of school, but 83 percent of Nigerian immigrants to the US have at least 12 years of schooling. Some say that outsourcing can provide the economic benefits of immigration without its social disruptions.

H-1B. The annual limit on H-1B visas is 65,000. US Citizenship and Immigration Services announced on October 1, 2004 that the limit for FY05 was reached on the first day of the new fiscal year. Bills pending in Congress would raise the annual limit or exempt foreign students graduating from master's or doctoral programs at U.S. universities from the cap.

In FY02, some 38 percent of H1-B visas went to computer workers, down from 58 percent in FY01; about 33 percent of the H-1B visas went to Indians in 2002, down from 50 percent in 2001. The number of H-1B visas going to foreigners teaching in high schools and working in universities doubled from five to 10 percent between 2001 and 2002.

The Intel Science Talent Search selects 40 of 1,500 high school student projects for special recognition. In March 2004, 60 percent of the 40 finalists had at least one parent who entered the US with an H-1B visa A fourth of the Intel finalists had parents who originally arrived as foreign students.

The 2000 Census found that foreign-born scientists and engineers were 17 percent of US resident bachelor's-degree holders, 29 percent of master's-degree holders and 38 percent of doctorate holders. Given projections of rising demand for scientists and engineers, and declining applications from foreigners, is there a looming "shortage?"

Past predictions of shortage have proven false. Erich Bloch, director of the National Science Foundation, in 1990 wrote "too few new Ph.D.'s are being produced, and an increasing fraction -- over 50 percent in engineering and mathematics -- are foreign students...the demand for engineers, scientists, and technicians...will exceed supply by 35 percent in the year 2000." However, in 2000 unemployment rates for scientists and engineers were at record levels, and most PhD scientists must work as low-paid postdocs for at least several years before they find "real jobs."

Census. The US population was 294 million in mid-2004, increasing by a birth about every eight seconds and an immigrant every 24 seconds. A death every 12 seconds means that the US population grows by about one person every 11 seconds, or about five persons a minute and 300 an hour. US fertility peaked at 3.5 children per woman in the mid-1950s, and was two in 1970.

Immigrants move to different metro areas than US-born migrants do. The leading destinations for immigrants between 1995 and 2003 were New York, which attracted 1.6 million immigrants and had a net loss of 1.5 million US-born residents; Los Angeles, 1.2 million and 700,000; San Francisco, 613,000 and 557,000; Chicago, 528,000 and 526,000; and Miami, 493,000 and 163,000. Metro areas that had more net domestic in-migration than immigration between 1995 and 2003 include Phoenix, 387,000 compared to 224,000; Las Vegas, 368,000 compared to 99,000; and Atlanta, 338,000 compared to 259,000.

African-American has replaced Black in many discussions of race, and the growth in the number of Black immigrants has led some to distinguish Blacks whose forbearers were slaves from immigrants who arrived in the past half century. Black immigrants and their children tend to achieve at higher levels than native-born blacks, and some US-born Blacks fear that, if Black immigrants are embraced as African-Americans, they will take some of the opportunities made available by the civil rights movement. At Harvard, for example, most Black students are African and Caribbean immigrants or their children.

Poverty. The Census Bureau released its annual report on poverty, income and health insurance, reporting that 36 million or 12.5 percent of US residents (13.4 percent in California) had incomes below the poverty line of $9,393 for an individual and $18,660 for a family of four in 2003. The overall poverty rate reached its nadir of 11.3 percent in 2000; the rate for children was 18 percent in 2003. The Census Bureau includes only cash income in deciding who is poor, but 70 percent of aid to the poor is non-cash, including Food Stamps and nutrition programs, which cost $42 billion a year, and the Earned Income Tax Credit, which transfers $38 billion a year to low-income earners.

Some 22 percent of foreign-born residents were poor in 2003, up from 21 percent in 2002; 12 percent of the US-born were poor, as were 10 percent of foreign-born naturalized US citizens.

Since reforms in 1996, the US welfare system has become 50 state-run programs funded in part by federal grants that also impose rules, such as generally limiting cash assistance to two consecutive years, or five over a lifetime. Even though poverty is rising, the number of people receiving cash welfare transfers has been falling. The number of people on welfare declined by 149,000 at the end of 2003 to 4.9 million, while the number in poverty rose by 1.3 million to 36 million, including a third who were children (there were 12.2 million welfare recipients in August 1996). Across the US, fewer than half of the families eligible for welfare received it in 2001, compared with roughly 80 percent before the 1996 legislation.

Median household income fell slightly to $43,600 in 2003 and was $50,200 in California. The median earnings of professionals were $82,000, compared to $18,300 for those who did not finish high school.

Health. About 45 million or 16 percent of US residents lacked health insurance for at least part of 2003 (over 18 percent in California); estimates of those who are without health insurance during the entire year range from 21 million to 31 million. About 60 percent of Americans received health insurance through their employers, but 27 percent of US residents and 26 percent of California residents are enrolled in government health programs.

The Medicare Modernization Act of 2003 offers $250 million a year beginning September 1, 2004 over four years to reimburse hospitals for the cost of treating unauthorized foreigners, but requires hospitals to ask uninsured patients about their immigration status to get reimbursed. Hospitals would have to put immigration status information in the patient's file, and some say that the prospect of being questioned by hospital admissions staff about their legal status and having IDs copied will discourage foreigners from seeking care. About 55 percent of Hispanics who are not US citizens lack health insurance.

Under 1996 immigration reforms, US sponsors of legal immigrants must sign affidavits promising to cover the costs of the foreigners they want admitted for 10 years. However, many government agencies do not attempt to bill sponsors for the health and other benefits the immigrants they sponsored receive. In August 2004, a suit was filed seeking to force Los Angeles County health officials to ask patients about their immigrant sponsors; the county opposes the suit, saying that obtaining the information on sponsors and billing them would be costly.

Teresa Borden, "Permits meant for tech workers now fill other in-demand jobs," Atlanta Journal-Constitution, August 25, 2004. Robert Pear, "U.S. Is Linking Immigrant Patients' Status to Hospital Aid," New York Times, August 10, 2004.