[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
IMMIGRATION: ECONOMIC IMPACT ON
AMERICAN WORKERS AND THEIR WAGES
=======================================================================
FIELD HEARING
before the
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
of the
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
August 14, 2006, in Gainesville, Georgia
__________
Serial No. 109-52
__________
Printed for the use of the Committee on Education and the Workforce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
or
Committee address: http://edworkforce.house.gov
______
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COMMITTEE ON EDUCATION AND THE WORKFORCE
HOWARD P. ``BUCK'' McKEON, California, Chairman
Thomas E. Petri, Wisconsin, Vice George Miller, California,
Chairman Ranking Minority Member
Michael N. Castle, Delaware Dale E. Kildee, Michigan
Sam Johnson, Texas Major R. Owens, New York
Mark E. Souder, Indiana Donald M. Payne, New Jersey
Charlie Norwood, Georgia Robert E. Andrews, New Jersey
Vernon J. Ehlers, Michigan Robert C. Scott, Virginia
Judy Biggert, Illinois Lynn C. Woolsey, California
Todd Russell Platts, Pennsylvania Ruben Hinojosa, Texas
Patrick J. Tiberi, Ohio Carolyn McCarthy, New York
Ric Keller, Florida John F. Tierney, Massachusetts
Tom Osborne, Nebraska Ron Kind, Wisconsin
Joe Wilson, South Carolina Dennis J. Kucinich, Ohio
Jon C. Porter, Nevada David Wu, Oregon
John Kline, Minnesota Rush D. Holt, New Jersey
Marilyn N. Musgrave, Colorado Susan A. Davis, California
Bob Inglis, South Carolina Betty McCollum, Minnesota
Cathy McMorris, Washington Danny K. Davis, Illinois
Kenny Marchant, Texas Raul M. Grijalva, Arizona
Tom Price, Georgia Chris Van Hollen, Maryland
Luis G. Fortuno, Puerto Rico Tim Ryan, Ohio
Bobby Jindal, Louisiana Timothy H. Bishop, New York
Charles W. Boustany, Jr., Louisiana [Vacancy]
Virginia Foxx, North Carolina
Thelma D. Drake, Virginia
John R. ``Randy'' Kuhl, Jr., New
York
[Vacancy]
Vic Klatt, Staff Director
Mark Zuckerman, Minority Staff Director, General Counsel
------
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
CHARLIE NORWOOD, Georgia, Chairman
Judy Biggert, Illinois, Vice Major R. Owens, New York
Chairman Ranking Minority Member
Ric Keller, Florida Dennis J. Kucinich, Ohio
John Kline, Minnesota Lynn C. Woolsey, California
Kenny Marchant, Texas Timothy H. Bishop, New York
Tom Price, Georgia [Vacancy]
Thelma Drake, Virginia George Miller, California, ex
Howard P. ``Buck'' McKeon, officio
California,
ex officio
C O N T E N T S
----------
Page
Hearing held on August 14, 2006.................................. 1
Statement of Members:
McCollum, Hon. Betty, a Representative in Congress from the
State of Minnesota......................................... 4
Norwood, Hon. Charlie, Chairman, Subcommittee on Workforce
Protections, Committee on Education and the Workforce...... 1
Prepared statement of.................................... 3
Statement of Witnesses:
Black, Gary W., president, Georgia Agribusiness Council, Inc. 14
Prepared statement of.................................... 16
Kent, Phil, national spokesman, Americans for Immigration
Control.................................................... 34
Prepared statement of.................................... 35
King, D.A., president, the Dustin Inman Society.............. 22
Prepared statement of.................................... 23
Written account of Charles Shafer, carpenter,
Lawrenceville, GA...................................... 25
Written account of Jeff Hermann, landscaper, Oxford, GA.. 27
Pearson, Hon. Chip, Georgia State senator.................... 10
Prepared statement of.................................... 12
Wenger, Dr. Jeffrey B., assistant professor of public policy,
the University of Georgia School of Public and
International Affairs...................................... 17
Prepared statement of.................................... 19
Yellig, Terry R., attorney, Sherman, Dunn, Cohen, Leifer &
Yellig, P.C., on behalf of the building and construction
trades department, AFL-CIO................................. 28
Prepared statement of.................................... 30
Additional Materials Supplied:
Owens, Hon. Major R., ranking minority member, Subcommittee
on Workforce Protections, Committee on Education and the
Workforce, additional submissions:
Prepared statement of Ross Eisenbrey and Monique
Morrissey, Economic Policy Institute................... 56
Article from the Lincoln Journal Star, ``Hagel Laments
Immigration Inaction''................................. 59
Article from the Omaha World-Herald (Nebraska), ``Hagel:
Immigration Compromise Probably Stalled for the Year;
the Senator Calls House Leaders' Public Hearings on the
Issue `Complete Folly' ''.............................. 60
Article from AFX News Limited, ``Study: Immigrants Not
Hurting U.S. Jobs''.................................... 61
``Guest Worker Bill Introduced by Georgia Senator Saxby
Chambliss in the 109th Congress''...................... 62
Prepared statement of the Associated Builders and Contractors
(ABC)...................................................... 62
Prepared statement of Bruce Goldstein, executive director,
Farmworker Justice......................................... 65
Prepared statement of Archbishop Wilton D. Gregory,
Archdiocese of Atlanta..................................... 68
IMMIGRATION: ECONOMIC IMPACT ON AMERICAN WORKERS AND THEIR WAGES
----------
Monday, August 14, 2006
U.S. House of Representatives
Subcommittee on Workforce Protections
Committee on Education and the Workforce
Washington, DC
----------
The subcommittee met, pursuant to call, at 11:05 a.m., in
the Federal Building, room 201, 121 Spring Street, S.E.,
Gainesville, Georgia, Hon. Charlie Norwood [chairman of the
subcommittee] presiding.
Present: Representatives Norwood, Price, Deal and McCollum.
Staff Present: Loren Sweatt, Professional Staff Member;
Steve Forde, Communications Director; Guerino J. Calemine III,
Labor Counsel; Rachel Racusen, Press Assistant; and Marsha
Renwanz, Legislative Associate/Labor.
Chairman Norwood. A quorum being present, the Subcommittee
on Workforce Protections will now come to order.
We are meeting today to hear testimony on Immigration:
Economic Impact on American Workers and their Wages. Without
objection, the record shall remain open for 14 days to allow
member statements and other extraneous material referenced
during this hearing to be submitted in the official hearing
record.
Without objection, Mr. Deal shall be allowed to participate
in today's subcommittee hearing.
So ordered.
At this point, I would ask all of you please to turn your
cell phones off.
[Laughter.]
Chairman Norwood. It is not news to anyone in this room
that illegal immigration is the nation's No. 1 domestic policy
concern. Of particular importance to this subcommittee is the
impact of illegal aliens on the American workforce and the
wages of U.S. workers more specifically.
As part of an ongoing series of hearings conducted by the
House Education and Workforce Committee, this morning we are
here to examine the bottom line issue in much greater depth.
Immigration is one issue I have worked on tirelessly throughout
my Congressional career, but I got deadly serious after reading
of one particular case in rural Georgia.
In late 1990, Miguel Angelo Cordova raped a 3-year old girl
in Alma, Georgia, while living there--illegally, I might add.
He was sent to prison to serve a 3-year term. Upon finishing
his short sentence, Mr. Cordova was supposed to have been
deported. Instead, Cordova was released back onto the streets
of Georgia, where he promptly disappeared.
Now you might ask yourself today, how in the world could
that happen. I certainly asked that of myself a few years ago,
and the more I looked into the story, the more I realized that
our nation's immigration laws are broken beyond belief. The
fact is this--failed Federal immigration law allowed Mr.
Cordova to fall through the cracks of society and Congress must
act to make sure that these cracks are filled.
One of the key reasons I supported the House-passed
immigration bill to secure our borders and strengthen the hand
of law enforcement is because it contains the majority of
provisions in the CLEAR Act that I introduced in 2003 that
authorizes and funds local law enforcement to go after people
like Mr. Cordova.
But I wonder if the other side of the Capitol shares our
sentiments. The Senate recently passed legislation that will
make our problems far worse. The Reid-Kennedy-McCain-Martinez
Bill, otherwise known as S. 2611, fails to account for the
likes of Mr. Cordova. Instead, it rewards lawbreakers like him
with amnesty, a path to citizenship and a place at the front of
the line for higher wages than hard-working Americans. I called
today's hearing to shine a spotlight on this matter and expose
the Senate legislation's sorry details. After all, the people
of Georgia have a right to know what type of stew the Senate
Democratic leaders are cooking up with the help of rogue
Republicans, and I do not think they are going to like the
ingredients at all.
If the Senate Democratic leadership has its way, our
government will likely open up a flood of up to 60 million new
legal immigrants over the next 20 years. This avalanche of
humanity across our borders is not only unsustainable, it
threatens the very way of life that American citizens enjoy
today. But I do not have to tell the people of Gainesville or
Hall County, because the influx of illegal immigration has
already turned the city's hospitals, schools and social service
networks upside down.
Yet, the Reid-Kennedy-McCain-Martinez legislation goes even
further. S. 2611 would create a new guest worker program called
the H-2C program. This program will require Davis-Bacon
prevailing wage rates to private sector construction, creating
a dual paying system. Let us say that again: This program
requires Davis-Bacon prevailing wage rates to private sector
construction, for the first time, creating a dual paying
system.
As any employer in the Federal contracting business already
knows, the collection of Davis-Bacon wage data is unreliable.
According to the Department of Labor's Inspector General, he
says the credibility of wage determinations remains
questionable. This is the Department of Labor's Inspector
General says, ``The credibility of wage determinations remains
questionable because of concerns over data on which they are
based. Delays in publishing wage decisions calls their
relevance into question.''
Our witnesses today will discuss the impact of the Senate's
immigration proposal on wages. I think we will demonstrate that
the House Republicans have a far better plan than the Senate
Bill.
First, the Federal Government must secure the border and
immediately stop the flood of illegal immigration. The current
6000 National Guard troops cannot do it, it will take 36,000 to
48,000. And until we sustain that size deployment, we will
continue to fail on the border.
Second, the Federal Government must make certain that the
likes of Miguel Angelo Cordova serves their time and are then
deported from this nation. The only way to accomplish this is
to strengthen existing interior enforcement law and actually
enforce the rules. The CLEAR Act provisions in the House Bill
will do just that.
When these critical demands are met and Congress is fully
satisfied that the borders are secure, then and only then we
can implement perhaps a guest worker program that actually
works. Then and only then, after the border is secure. I want
to underscore this last point and make perfectly clear that
crafting a guest worker program that works is absolutely
critical. I understand personally and know the value of foreign
labor. Certain sectors of the American economy would struggle
without it under current labor conditions. However, it would be
more than foolish to support the legislative solutions offered
up in the Senate Bill 2611. The combination of amnesty,
dramatic expansion of Davis-Bacon prevailing wage rates and
burdensome paperwork on small businesses is sending a toxic mix
that will not work.
At this point, I would like to welcome Congresswoman
McCollum, who has come certainly the furtherest of any of us in
this room to join us in this hearing. Ms. McCollum is a member
of our Subcommittee and Committee, and we would like to welcome
you to Georgia and now you are recognized for 5 minutes.
[The prepared statement of Mr. Norwood follows:]
Prepared Statement of Hon. Charlie Norwood, Chairman, Subcommittee on
Workforce Protections, Committee on Education and the Workforce
It's not news to anyone in this room that illegal immigration is
the nation's number one domestic policy concern. Of particular
importance to this subcommittee is the impact of illegal aliens on the
American workforce--and the wages of U.S. workers more specifically.
As part of an ongoing series of hearings conducted by the House
Education & the Workforce Committee, this morning we're here to examine
this bottom line issue in much greater depth.
Immigration is one issue I have worked on tirelessly throughout my
Congressional career. But I got deadly serious after reading about one
particular case in rural GA.
In the late 1990s, Miguel Angelo Gordoba raped a three year old
girl in Alma, Georgia while living here illegally. He was sent to
prison to serve a three year term. Upon finishing his very short
sentence, Mr. Gordoba was supposed to be deported.
Instead, Gordoba was released back onto the streets of Georgia
where he promptly disappeared. You might ask yourself, ``How could that
happen?'' I certainly did, and the more I looked into the story the
more I realized that our nation's immigration laws are broken beyond
belief.
The fact is this: failed federal immigration law allowed Mr.
Gordoba to fall through the cracks of society, and Congress must act to
make sure those cracks are filled.
One of the key reasons I support the House-passed immigration bill
to secure our borders and strengthen the hand of law enforcement is
because it contains the majority of provisions in the CLEAR Act that I
introduced in 2003 that authorizes and funds local law enforcement to
go after scum like Gordoba.
But I wonder if the other side of the Capitol shares our
sentiments. The Senate recently passed legislation that will make the
problems we face worse.
The Reid-Kennedy bill, otherwise known as S. 2611, fails to account
for the likes of Mr. Gordoba. Instead, it rewards lawbreakers like him
with amnesty, a path to citizenship, and a place at the front of the
line for higher wages than hard-working Americans earn.
I called today's hearing to shine a spotlight on this matter and
expose the Senate legislation's sordid details. After all, the people
of Georgia have a right to know what type of stew the Senate Democrat
leaders are cooking up, and I don't think they are going to like the
ingredients.
If the Senate Democrat leadership has its way, our government will
likely open up a flood of up to 60 million new legal immigrants over
the next 20 years. This avalanche of humanity across our borders is not
only unsustainable; it threatens the very way of life American citizens
now enjoy.
But I don't have to tell the people of Gainesville, because the
influx of illegal immigration has already turned the city's hospitals,
schools and social service networks upside down.
Yet the Reid-Kennedy legislation goes even further. S. 2611 would
create a new guest worker program called the H-2C program.
This program would require Davis-Bacon prevailing wage rates to
private sector construction, creating a dual paying system.
As any employer in the federal contracting business already knows,
the collection of Davis-Bacon wage data is unreliable. According to the
Department of Labor's Inspector General says, ``The credibility of wage
determinations remains questionable, because of concerns over data on
which they are based. Delays in publishing wage decisions call their
relevance into question.''
Our witnesses today will discuss the impact of the Senate's
immigration proposals on wages. I think we will demonstrate that the
House Republicans have a far better plan.
First, the federal government must secure the border and
immediately stop the flood of illegal immigration. The current 6,000
National Guard troops can't do it. It will take 36,000 -48,000, and
until we sustain that size deployment we will continue to fail.
Second, the federal government must make certain that the likes of
Miguel Angelo Gordoba serve their time and are deported.
The only way to accomplish this is to strengthen existing interior
enforcement law and actually enforce the rules. The CLEAR ACT
provisions in the House bill do just that.
When these critical demands are met, and Congress is fully
satisfied that the borders are secure, then we can implement a guest
worker program that works. Then and only then.
I want to underscore this last point and make perfectly clear that
crafting a guest-worker program that works is critical. I know the
value of foreign labor. Certain sectors of the American economy would
struggle without it under current labor conditions.
However, it would be more than foolish to support the legislative
solutions offered up in S. 2611. A combination of amnesty, dramatic
expansion of Davis-Bacon prevailing wage rates and burdensome paperwork
burdens on small business is simply a toxic mix that will not work.
______
Ms. McCollum of Minnesota. Thank you, Mr. Chairman. It is a
pleasure to be here in Georgia.
A recent newspaper quoted the distinguished Republican
Senator from Nebraska, Senator Hagel, calling these House
Republican hearings on immigration complete folly. Well, Mr.
Chairman, unlike Georgia, we have long, cold snowy winters in
Minnesota and so, it is beautiful right now in Minnesota. And I
would not miss a day in August back home in Minnesota to attend
a hearing that was a complete folly. I believe that this
hearing can add much in setting the record straight on
immigration reform.
In Minnesota, we also do not have a Democrat Party, I am a
member of the Democratic Farmer Labor Party, DFL. We believe
hard in representing America's working families and that
includes family farmers and laborers. They are the heart and
soul of America, and I fight for working people every day to
make this country strong and prosper.
I say this because today we are here to talk about the
future of America and our families and the immigration crisis
facing our nation. These issues are not folly or frivolous,
they are important. Immigration is a serious issue; it is an
issue that is deadlocked when Republicans fight with
Republicans. Imagine, Republicans control the White House, the
U.S. Senate and the U.S. House, monopoly in power, yet they
refuse to fix a broken system--our nation's borders.
The American people--my constituents in Minnesota and folks
here in Georgia--we know that our country's borders are broken.
Six years into the Bush Administration, 5 years after the 9/11
terrorist attack, our borders are still broken. Homeland
security is the top priority for Democrats and Republicans.
Homeland security is not a partisan issue, it is an issue all
Americans take seriously.
Our nation's airlines are currently on an elevated level
because of terrorist threats. I had to hand my Chapstick over
the other day at the airport because of the security that had
to be put in place because of these terrorist threats. Yet,
while we turn over our toothpaste and shampoo at the airport to
protect our homeland security, as many as 5.3 million people
have entered our country illegally over the past 10 years. Yes,
most of these people are good people, they are very poor people
looking for a better life in this land of opportunity, which we
are all so blessed to live in. But criminals, terrorists and
drug traffickers also enter this country, and they are likely
still entering today.
The American people want border security and immigration
reform, and the laws of this land enforced and the dollars
provided to our enforcement community so that they can carry
out their job. And the American people are watching to see if
the Republicans in Congress can stop fighting with each other
long enough to pass an immigration bill before they leave
Washington and go home to fight to save their own jobs in this
November's election.
I would like to remind my Republican colleagues here today
that in May, the U.S. Senate passed the bill Senate 2611, the
Specter-Brownback-Hagel-Martinez-McCain Immigration Reform Act.
Now those names might sound like the lineup for the 2008
Republican primary, but this point needs to be made--this is a
Republican Bill, this is a Senate Bill that was written by the
Republicans, passed by Republicans with the blessing and
support of President Bush. My Republican colleagues here today
can attack President Bush's position on immigration and the
Senate Republicans, but I will not.
We need a common sense immigration policy that will secure
our borders and strengthen our economy, and protect American
workers and their wages, allow American farmers and small
business owners to find the workers that they do not have
available to them. But we must make sure every American worker
is offered the job first and foremost. Employers do need to be
able to react to labor shortages. In these cases when there is
a labor shortage, temporary guest workers--not indentured
servants or disposable workers--but guest workers, who are
legally hired by business and farms because there are not
enough American workers to fill the positions, could be a
reasonable solution. In that event, we must make sure that the
wages and working conditions of guest workers do not undercut
the wages and working conditions of America's workers.
I was interested to learn that Georgia State Senator Saxby
Chambliss has offered an immigration bill, S. 2087. It is
called the Cultural Employment and Workforce Protection Act.
And according to our non-partisan Congressional Research
Service, it would expand the current guest worker visa program
and would have guest workers' employers pay the higher of the
prevailing wage or the state's minimum wage. Clearly, Senator
Chambliss recognizes there's a need here in Georgia for guest
workers. And I will be interested in learning if my colleagues
here in the House feel the same way about guest workers and the
prevailing wage.
To keep America's economy and businesses strong, America
needs workers. And I know that there are many locally here in
the poultry industry and the carpet mills that are large
employers and important corporate citizens. And they have a
significant demand for workers. America needs to keep good jobs
at good wages with good benefits to keep our families and our
nation strong. Unfortunately, for far too long, this Congress
has been more interested in exporting American jobs rather than
fighting for America's workers. Honest, hard-working Americans
deserve to have their wages, benefits and workplace safety
protected by the laws Congress has already passed. But in
reality, the enforcement of labor and immigration laws has been
ignored by the Bush Administration and working families suffer
as a result. And I will have more to submit in the record on
that fact. This Republican Congress, all too often, is
complicit in abandoning America's workers by refusing to hold
the White House accountable for this negligence.
Now that immigration reform is being addressed, I want a
common sense plan, but I also want assurances that a guest
worker program will not displace American workers and undermine
wage or living standards in our American families. I am
committed to work for a plan and immigration bill that protects
our borders and protects wages and living standards for
America's workers. And as we move forward with a comprehensive
solution this year or next year--if this Republican Congress
fails to act now, it will be next year--I am willing to work
with both Democrats and Republicans, with organized labor, with
agriculture, with service industries and with the business
community to ensure that all our businesses are growing and our
national economy stays strong, and American workers have good
jobs at good wages.
And Mr. Chairman, I thank you for the courtesies you have
extended me.
Chairman Norwood. Thank you, Ms. McCollum, and thank you
for coming so far to join us in this hearing.
I think it is probably appropriate for the sake of the
record that we point out that Senator Chambliss and Senator
Isakson voted a loud hard no on the Senate immigration bill.
And with that, I would like to yield to not only a very
good friend, but a very valued member of this Subcommittee, Dr.
Tom Price.
Dr. Price. Thank you, Mr. Chairman. I want to thank you for
your leadership on this issue and for calling this field
hearing. I also want to thank Representative McCollum for
coming to the great state of Georgia and for her perspective on
the validity of this hearing. I would, however, respectfully
remind her that demagoguery of this issue or any other issue
does a great disservice to all of us and does not get us any
closer to a solution. This is not a Republican problem or a
Democrat problem, it is an American problem, it is an American
challenge, and we do best when we attempt to solve these kinds
of issues together.
I thank each and every one of you for coming as well to
witness this. Your presence demonstrates clearly the importance
of this matter and that this hearing matters.
I would like to focus in my opening statement on the issue
at hand, which is the issue of illegal immigration and its
economic impact on American workers and their wages.
The economy of every nation is greatly affected by human
capital which has seen wholesale changes over the past 25 years
in the United States. The domestic supply of labor has been
inundated by illegal aliens, fueled primarily by an influx of
cheap, low-skilled labor from south of the border, who make up
40 percent of foreign laborers. And while legal immigration--
legal immigration--in a structured and limited manner makes a
positive contribution to the national economy, it is rampant
illegal immigration that poses a threat to our stability and
our economic well-being. It is also no surprise that these low-
skilled workers are disproportionately impacting the economy in
certain sectors.
A recent study by the Congressional Budget Office, the CBO,
touches upon such a conclusion by stating ``The arrival of
large numbers of immigrants with little education probably
slows the growth of wages of native-born high school dropouts
at least initially, but the ultimate impact on wages is
difficult to quantify.'' The study goes on to conclude that
``Growth in the foreign-born workforce on the average earnings
of native high school dropouts have ranged from negligible to
an earnings reduction of 10 percent.''
And while it is encouraging that an official government
study formally recognizes the impact foreign workers have on
the native-born population, it is my belief that the
conclusions grossly under-estimate the true impact of these
workers and the overall scope of the problem. If there is a
silver lining, then it is the formal confirmation that the
supply of low-skilled foreign workers is depressing the wages
of American workers. Therefore, this evidence of depressed
wages proves an oversupply of cheap labor exists in this
country, not a shortage, as many would have us believe.
Beyond the economics and analysis are the experiences of
the citizens of the state of Georgia. Illegal sources of labor
are forcing our law-abiding citizens out of their livelihoods
and today's hearing will shed greater light on the scope of
that problem.
But all of this begs the question, how did we get to this
point. The United States is witnessing a tidal wave of
inexpensive, low-skilled labor. The lack of willpower
demonstrated by multiple administrations is troubling. And as a
Member of Congress, I expect our laws to be enforced to the
letter. My constituents expect no less.
The numbers compiled by the current administration's own
Department of Homeland Security point to a collapse in the
enforcement of authorized employee hiring. From 1997 to 2004,
the number of arrests due to employer investigations by
immigration authorities plummeted from 17,554 to 159--a 99
percent drop. And while recent news of increased workplace
raids and arrests are interesting, these figures paint the
picture of an administration that is disengaged from their
responsibilities. Of course, this in no way excuses the
employers who engage in illegal business practices by using
unauthorized workers.
As proof that businesses could be doing more, only 2300 of
the nation's 5.6 million employers used the Basic Pilot
Employment Verification Program to check Social Security
numbers and the legality of their new hires in 2004. The most
current figure indicates that just 10,000 employers are using
the Basic Pilot Program to verify. And without a more sweeping
check of new hires in this country, the economic incentive that
brings illegal aliens here will continue to exist.
This is what the facts have demonstrated. There is an
oversupply of inexpensive foreign labor depressing domestic
wages, ample first-hand evidence of Georgians losing their jobs
to illegal aliens, a history of administrations neglecting
their responsibilities and certain business quarters flaunt the
law by hiring illegal workers.
This crisis will be made worse if Congress adopts the U.S.
Senate version of immigration reform. Under the Senate plan,
illegal aliens will become guest workers, gain a clear path to
automatic citizenship and be guaranteed wages greater than that
Americans receive for the same work. The Senate bill is a
formula to exacerbate the situation, further depressing
domestic wages.
Stemming the flow of illegal immigration starts with
certain strategies, but particularly vigorous interior
enforcement and compliance from the business community to
engage in employee verification--not the blanket open-door
policy the Senate proposes.
By undertaking the U.S. House of Representatives' approach
to immigration reform, the Federal Government can buttress
wages, protect the domestic workforce and keep American jobs
for Americans. Without a more complete effort, the United
States will continue to see wholesale changes to the labor pool
with negative consequences for multiple sectors of the economy.
Again, I want to thank the Chairman for holding this
hearing, and I want to thank the panel members who are here to
provide their testimony and I look forward to that testimony.
Thank you, Mr. Chairman.
Chairman Norwood. Thank you very much, Dr. Price.
And last, and happily we welcome not a member of our
Committee, but a valued member of the House of Representative,
Chairman Nathan Deal and we appreciate you allowing us to have
this hearing in your district. Mr. Chairman, you are up.
Mr. Deal. Well, thank you, Chairman Norwood. I appreciate
the fact that you and Ms. McCollum and Dr. Price would come
here today for this hearing. I think this is an appropriate
setting. I want to thank the staff of this Federal courthouse
facility for allowing us to be here. And I really want to thank
you for allowing me to see this courtroom from this
perspective. As many of my friends in the audience know, I
practiced law in this community for about 23 years, and I
always saw it from where the witnesses are right down there. It
is a totally different view, I might add.
[Laughter.]
Mr. Deal. As you know, as Chairman of the Health
Subcommittee of Energy and Commerce, we have also had and will
have tomorrow another field hearing as it relates to the
jurisdictional area of healthcare. We started out with a
hearing last week in Nashville, Tennessee and tomorrow morning
in Dalton, Georgia, we will have another hearing, beginning at
10 in the Trade Center. And we, of course, will have--Dr.
Norwood, I know will be there as a part of that panel. It will
be another look at an aspect of illegal immigration that in my
community and in my district, and I am sure in many of yours,
there are three big categories that we hear first of all, as
the impact.
One is in the healthcare arena. The cost of those who show
up at emergency rooms with no insurance and the burden then
being shifted, not only to the local jurisdiction and the
hospital, but to those who have private insurance because the
uncompensated indigent care component does drive up the cost of
healthcare. We have looked at that and will continue to look at
that in our hearing.
The other area is that of education. We have alluded to it,
and of course, I think all of us recognize that heavily
impacted areas require that new schools be built. The burden of
children who speak no English coming into the traditional
classroom setting has put a tremendous burden on many school
systems and the school systems in the area where we currently
are sitting are fine examples of that.
The third area is that of criminal conduct. To hear some of
my local law enforcement officers say that the No. 1 criminal
concern they have is Hispanic gang activity is certainly a
shocking issue. And that was confirmed this last weekend, the
newspaper reported that a major criminal activity, a gang, has
now been sentenced in the Federal court of the Northern
District of Georgia, which this court is a part of that Federal
court system of Georgia. A major crime activity being disrupted
by virtue of those convictions.
But the other aspect, which is the context of the hearing
today, is that of what impact does illegal immigration have on
the overall labor market. And there are, of course, disputed
claims there. And I hope that this hearing today will give an
insight into those impacts and what, if anything, we should be
concerned about as we try to finalize legislation, hopefully
before the end of this year.
I want to thank you, I want to thank the witnesses for
their time and their energy in coming and being with us, and I
look forward to their testimony.
Thank you for allowing me to participate.
Chairman Norwood. Thank you very much, Mr. Chairman.
We have a very distinguished panel of witnesses today, and
we are all very grateful, gentlemen, for your time and your
energy to come and help us try to determine what Congress
should do about this subject. We are all very eager to hear
your testimony.
I will begin by introducing a panel member and then you
will be allowed 5 minutes. I will not be very strict on that 5
minutes, but I have read your testimony and most of it is much
longer than 5 minutes, so try to summarize just a little bit.
If I had you in Washington, I would have some lights out in
front of you that would show when it is time to stop. And it is
very hard for me to bother people when they are testifying, so
do the best you can to stay within five or so minutes.
Senator Chip Pearson of Dawsonville is first. He is serving
his first term as Senator for the 51st District. He is the
Secretary of the Transportation Committee as well as a member
of the Agriculture and Consumer Affairs, Regulated Industries
and Utilities and Appropriations Committee.
Maybe even more important, Chip Pearson is the founder and
president and CEO of Pecos, Inc., the Paramont Grading Company,
a small business here in Georgia that what we do in Washington
is going to so desperately affect.
With that, I yield time to Senator Pearson.
STATEMENT OF HON. CHIP PEARSON,
GEORGIA STATE SENATOR
Mr. Pearson. Thank you, Mr. Chairman and members of the
Committee. I appreciate the opportunity to be here today. I
will be speaking, by the way, as an employer and as a
contractor, not necessarily as a Senator.
Chairman Norwood. Senator, you need to pass that mic down,
please.
Mr. Pearson. Can you hear me better?
Chairman Norwood. Much better.
Mr. Pearson. All right. Thank you again for the
opportunity, Mr. Chairman, to be here, and members of the
Committee. I will be primarily speaking as an employer and a
contractor. I would add though, for the record, I was just
named this summer as Chairman of the Economic Development
Committee. So also on that standpoint, we are here.
Let me just say, and I am going to try and be brief, you
have seen our testimony, and I will try to paraphrase most of
it. But let me preface my feelings as an employer and as an
American citizen--this was not in the testimony as we could not
get the copyright permission secured before we had to submit
it--but in the Engineering News Record editorial of June 26,
2006, as well as the April 17, the situation of immigration in
construction was brought up. ``Immigration reform starts and
finishes with the rule of law,'' was the title of that text. I
will return to that later for my concluding remarks, but to let
you feel where we feel as a company, as well as a citizen, that
we should be dealing with this situation is right there, what
you have said before, is the rule of law.
As I said, I am going to try to paraphrase what we have
submitted, in the instance of time here.
We started out by saying the following are our views and
points of interest as well as concerns concerning the Senate
Bill 2611 and how they affect our companies. Our philosophies
are for an open workplace that affords all an opportunity to
prosper if they are qualified and can meet the terms and
conditions of employment. Part of those conditions involve the
ability to comply with the I-9 guidelines as well as
verification of Social Security information via the Veri-Check
procedure.
We then continued on the bottom of page one and the rest of
page two to go step by step through our policy, which has been
drafted by our legal counsel and is what is required as of the
law today. If you notice, the bottom of page one and really all
of page two deals with the most exasperating part of the whole
process, which is when there is a no-match letter sent to us
from Social Security.
What happens is after this letter is sent and we go through
a five-step procedure of what the employee's responsibility as
well as ours is, is that it takes a minimum of 67 working days
to get through this five-step process, and the result is that
at the end of that period, if the employee has not been able to
accomplish the requirements of those I-9 or Social Security
laws, then it leads to termination. That is 67 days that we
have to deal with one situation, in which case many times the
employee is unsure of his status, we are unsure of his status
on a crew.
And as it goes to our comments and observations:
Item one, the current method of verifying employment
eligibility does not work--plain and simple, it does not work.
Utilizing Veri-Check only verifies the numbers or the documents
exist. It does not verify that they belong to a particular
individual. And there is the crux of the problem for us as an
employer.
Second, as relating to the language in the Bill, how is a
Blue Card going to be a solution? Any document can be
reproduced, such as a Social Security card, Alien Registration
Receipt, driver's license. So why do we expect this Blue Card
to be a solution to a problem that has the same basic
underlying concerns?
Third, all employers should be held to the same standards
or be penalized for hiring illegal immigrants. The bottom line
is this, there are many construction companies out there of
different sizes in the state and across the country. We are one
of many, but not of the majority, that try to abide by the
laws. But when the laws are too cumbersome to abide by, there
is no help from the Federal Government in making sure that you
are in compliance with them as well as the differentiation in
the wages that often occurs. The situation comes where we are
often bidding against another firm that is not going by the
laws, and therefore, they are at a huge advantage.
Fourthly, is rewarding illegal behavior the answer? Is
allowing illegal workers the opportunity to collect benefits,
welfare, unemployment, Social Security, in-state tuition or
higher education benefits? As we dealt with in 529 this year in
the Senate, we brought up many of those issues and those are
real concerns to the people in Georgia as well as to the
employment and construction community.
Fifthly, a guest worker program may be a positive endeavor,
as long as it is not implemented by providing amnesty for
current illegal workers within the United States. Again,
returning to that reform starts and finishes with the rule of
law concept.
No. 7, is allowing amnesty under Immigration Accountability
Act of 2006, providing for permanent residency for qualifying
illegal aliens and their spouses as well as children the
answer?
Item No. 8, the Bill proposes that English is the language
of the United States with no specifics. However, the Supreme
Court Interpreters Grant Awards Act would provide state court
grants to assist individuals with limited English proficiency
to access and understand court proceedings and allocates funds
for a related court interpreter.
No. 9, the Bill would add additional cost to ensure
compliance along the lines of necessary legal counsel as well
as perpetual monitoring.
And finally under ten, which is of concern to us as a
construction industry, and you as well, Mr. Chairman, under
2611, Davis-Bacon wage rates will be applied to foreign
temporary workers in all construction occupations, even if the
project receives no Federal funds and does not otherwise fall
under the Davis-Bacon Act. Why do we want to reward temporary
workers with the opportunity to earn more for the same job
performed by American workers?
In the prepared remarks, we put in a closing that we
believe that the current law in effect should be strictly
enforced and the borders secured within parameters already
established. Internal I-9 audits, processing potential
candidates for employment under Federal requirements, and
responding to no-match letters as described above is very
costly, inefficient to us, as well as other employers who want
to comply with the law in this country. Those attempts are
aggravated due to a lack of enforcement of the laws already in
place.
With that, I am going to conclude by reading the last
sentence of one of the editorials that I referred to earlier.
And again, if we get the copyright permission, we will forward
these for the record. This is the last sentence of this: ``Any
nation that does not preserve the rule of law is doomed, it is
the rock upon which all economic development and social
progress is based. This is the starting and finishing point for
illegal immigration policy.''
And with that, Mr. Chairman, that concludes my prepared
remarks. I will be glad to answer questions, if there are any.
[The prepared statement of Mr. Pearson follows:]
Prepared Statement of Hon. Chip Pearson, Georgia State Senator
Senate Bill 2611
To follow are my views and points of interest as well as concerns
pertaining to Senate Bill 2611 and how they affect my company.
Paramont's philosophy is to offer an open work place that affords all
an opportunity to prosper if they are qualified and can meet the terms
and conditions of employment. Part of those conditions involve the
ability to comply with I-9 guidelines as well as verification of Social
Security Information via Veri-Check.
The procedure we utilize is policy in order to comply with Federal
Laws.
1. Request a document that establishes both identity and employment
eligibility or,
2. Request 1 document that establishes identity and 1 document that
establishes employment eligibility.
3. Employment is offered after completion of the I-9 and all other
employment requirements are met.
4. Veri-Check is then utilized to insure document credibility.
This brings about concerns with the current system and proposals
under Senate Bill 2611. If Veri-Check indicates a no match, then we
must then follow guidelines giving the employee and opportunity to
correct the error.
No-Match Policy
When employed by Paramont Grading Corp. (PGC) a number of documents
are required, by law or regulation, to be completed and transmitted to
various governmental agencies. For example, the Social Security number
is used as a key identifier to report employment, earnings and taxes to
the Internal Revenue Service, the Georgia Department of Revenue, the
Social Security Administration and other federal and state governmental
agencies. In addition, other documents establish the employee's
authorization to work in the United States. Both the Department of
Homeland Security and the Social Security Administration have begun to
issue no-match letters when the information we provide from these
documents is not consistent with their records. The no-match letters
request PGC's and the employee's prompt resolution and correction of
these inconsistencies.
This policy sets forth the minimum procedural requirements for the
correction of a no-match issue communicated to PGC by an outside
governmental agency. These minimum procedural requirements are
established to provide consistency in the system wide application of
this correctional process.
No matches can be caused by many legitimate reasons, so it should
not be assumed that when a governmental agency reports a no-match that
an employee has intentionally done anything wrong. PGC will notify an
employee, through the Human Resource Department, of all no-match
issues. It is ultimately the employee's responsibility to follow-up
with the proper governmental agency to correct the problem or to
provide alternative documentation establishing the employee's identity
and authorization to work.
The Human Resource Department may not provide legal advice should
it be needed by the employee to correct the no-match issue.
No-Match Notification Process
Over the course of the year PGC is required to provide a number of
outside governmental agencies and employee's with employee information.
The Internal Revenue Service (IRS), the Department of Homeland Security
(DHS) and the Social Security Administration (SSA) are examples of some
of the outside governmental offices which PGC may be required to
provide information too. Periodically, these outside governmental
agencies communicate to PGC that a discrepancy exists when an
employee's record is compared to the outside governmental agency's
record. The outside agency transmits a report to PGC when such a no-
match occurs.
Corrective Process
(A) Step One: Within 14 days of receipt of a no-match letter, PGC
will check its records to determine whether the discrepancy results
from a clerical error in the employer's records or in its communication
to the SSA or DHS. If there is such an error, PGC will correct its
records, inform the relevant agencies and verify that the name and
number, as corrected, match agency records. If there is no error, PGC
will forward the names of employees and no match information to the
Vice President of Human Resources or other designee.
(B) Step Two: When the Vice President of Human Resources or
designee receives no-match information he/she will send a letter to the
employee. Due to the confidential nature of the no-match process, any
and all correspondence should be sent via certified mail to the
employee's home address. This letter shall be transmitted to the
employee within the 14 day time period from receipt of the no-match
letter from the agency. The letter will explain the nature of the no-
match and direct the employee to contact the relevant agency and take
action to correct the error.
(C) Step Three: The employee shall be advised in the letter that
he/she shall have the option of providing PGC with alternative
documentation establishing the employee's identification or work
authorization and that he/she must provide the appropriate
documentation within 63 days of the employer's receipt of the no-match
letter. Please note that no document containing the same information
that is in question by the agency and no receipt for an application for
a replacement document shall be used to establish employment
authorization, identity or both. No document without a photograph may
be used to establish identity or both identity and employment
authorization.
(D) Step Four: Following a 30 day period after the letter in steps
Two and Three, above, has been sent to the employee, if it is
subsequently learned through the no-match process that an individual
previously notified has not attempted to correct an identified problem,
a final letter will be sent to the employee. This letter will strongly
advise the employee of the seriousness of the problem and the necessity
for immediate corrective action. The letter will state that it
represents the final notice to the employee of the no-match problem.
PGC will provide the employee 63 days from the date of PGC's receipt of
the no-match letter to either provide evidence that the no-match issue
has been corrected or to provide alternative documentation of the
employee's identity and authorization to work as outlined in Steps Two
and Three above. If the employee fails to accomplish either alternative
within the 63 day period, the employee will be terminated.
(E) Step Five: If the employee provides PGC with alternative
documentation of the employee's identity and authorization to work as
outlined in Steps Two and Three above, PGC shall record the information
on a new I-9 form and staple the new form to the old I-9 form. PGC
shall retain the new I-9 form for the same period as if the employee
were newly hired at the time the new I-9 form is completed.
As you can see, this is a costly and enduring time period created
by the legalities of complying with the current system and the
potentials of Senate Bill 2611.
Observations and Comments
1. The current method to verify employment eligibility does not
work. Utilizing Veri-Check only verifies the numbers or documents
exist. It does not verify they belong to that particular individual.
2. How will the Blue Card be a solution? Any document can be
reproduced such as a Social Security Card, Alien Registration Receipt
Card, Driver's License, etc. Why would the Blue Card be an exception?
3. All employers should be held to the same standards or be
penalized for hiring illegal immigrants.
4. Is rewarding illegal behavior the answer? Is allowing illegal
workers the opportunity to collect Social Security Benefits, Welfare,
Unemployment, In-State tuition or higher education benefits the answer?
5. The Guest Worker Program may be a positive endeavor as long as
it is not implemented by providing amnesty for current illegal workers
within the United States.
6. Is allowing Amnesty under the Immigrant Accountability Act of
2006 providing for permanent residency for qualifying illegal aliens
and their spouses as well as their children the answer?
7. 2611 proposes that English is the language of the United States
with no specifics, however; the State Court Interpreter Grant Program
Act would provide state courts grants to assist individuals with
limited English proficiency to access and understand court proceedings,
and allocates funds for a related court interpreter technical
assistance program.
8. 2611 will add additional costs to ensure compliance along the
lines of necessary legal counsel as well as perpetual monitoring to
insure compliance.
Closing
In closing, I believe that the current laws in effect should be
strictly enforced and the borders secured within parameters already
established. Internal I-9 audits, processing potential candidates for
employment under Federal requirements, and responding to No-Match
Letters as described above is very costly to me as well as other
employers who want to comply with the laws of this country. Those
attempts are aggravated due to lack of enforcement of laws already in
place.
______
Chairman Norwood. Thank you very much, Senator Pearson, we
appreciate you.
Mr. Gary Black is President of the Georgia Agribusiness
Council. Mr. Black has been an active member of Georgia's
agriculture community serving organizations such as the Georgia
Farm Bureau to his recent services as President of the Georgia
Agribusiness Council. Recently, Mr. Black was appointed to the
U.S. House of Representatives Commission Examining Federal
Payment Limitations.
Mr. Black majored in agricultural education at the
University of Georgia and was the 2004 recipient of the Alumni
Society's Distinguished Professional Award.
Mr. Black, you are now recognized for 5 minutes or so.
STATEMENT OF GARY BLACK, PRESIDENT,
GEORGIA AGRIBUSINESS COUNCIL, INC.
Mr. Black. Thank you, Mr. Chairman, members of the
Committee, it is a delight to be here. I am Gary Black, and I
most recently served for 17 years as President of the Georgia
Agribusiness Council located in Commerce, Georgia.
I appreciate this opportunity to offer, as requested,
remarks on today's subject matter from the viewpoint of the
Georgia farmer. Thank you, Mr. Chairman, for bringing your
Committee to the great state of Georgia today and certainly it
is a state where we do have very many--some great challenges
with regard to immigrant labor. My hope is to join with the
members of the Subcommittee to identify solutions.
In a very complex way, the security of our nation demands
responsible action now. Mr. Chairman, I have met with you and
your staff dozens of times over the years as spokesman for
Georgia agriculture. Many of our meetings have focused on
today's topic. Georgia farmers need a reliable labor force that
is legally documented to work within our nation's borders.
Securing our borders and providing private industry with
government controlled access to visa work programs will provide
the stability needed for our economy, while keeping Americans
that wish to work these jobs gainfully employed.
Let me be clear to the members of the Committee, I oppose
illegal immigration, I oppose amnesty, I oppose new or
accelerated pathways to citizenship. These topics must remain
off the table.
Yet a legal, properly documented and accessible workforce
is critical to Georgia's farm economy. Managing this workforce
in such a way that participants perform work, pay taxes and
return home, is vital to the sovereignty of our nation, in my
view. These issues are of great importance to construction,
hospital and a host of other industries, but I cannot speak on
immigration and the impact to American workers and their wages
on these sectors. But I can offer a perspective on the subject
with regard to our farm and ranch families.
My belief is the impact of immigration on Georgia farm
workers and farm wage rates is virtually zero. The reason is
the shortage of local workers for farm-related jobs at any
affordable wage rate. Unfortunately, many of these roles fall
under the standard industrial classifications in agriculture.
Agriculture must have access to a labor program such as the
existing programs that we have--not new programs, not new guest
programs--the existing visa programs, to continue producing
safe and affordable agricultural products that serve as the
backbone of our nation's economy and security. If we, as a
nation, do not think this is important, simply look to our
dependence on foreign oil and then think again. We need a visa
work program that is inclusive and sensitive to the needs of
all farmers.
While the current Federal H-2A visa work program allows
access to a legal and documented workforce, the costs are
prohibitive for many farm operators. One of the biggest costs
is a result of the adverse effective wage rate. And we have had
a lot of discussions about bringing those individuals in across
the border at a higher rate to our domestic workers. That must
be replaced, and that is one of the impediments to our current
program. I think if we address this and do so--but we have got
to provide the necessary data to appropriately bring these
wages in line with those of similar jobs in the area. We cannot
have that dual system.
Mr. Chairman, farmers are price takers who operate in a
capital-intensive, high-risk environment that is played out in
a tilted global marketplace with respect to every business
regulation, including labor. I strongly agree with you that we
must secure our borders of our great nation. Future solutions
to immigration policy must not include amnesty, nor new or
accelerated pathways to citizenship. We must establish an
orderly, documented procedure that identifies those that seek
to enter to perform temporary work, pay taxes, and return home.
The U.S. unemployment rate is below the average of the last
four decades. When the supply of American workers is exhausted
as it is in many parts of agriculture today, someone must step
in to do these jobs that are not being filled.
For agriculture economic engines located across our state
and our nation, true immigration reform must include a
pragmatic program for obtaining temporary documented
agriculture labor now and in the future.
I thank Chairman Norwood and members of the Committee and I
will look forward to entertaining any questions at the
appropriate time.
[The prepared statement of Mr. Black follows:]
Prepared Statement of Gary W. Black, President,
Georgia Agribusiness Council, Inc.
Introduction
Mr. Chairman and members of the subcommittee, I am Gary Black. I
most recently served for 17 years as President of the Georgia
Agribusiness Council located in Commerce, Georgia. I appreciate this
opportunity to offer, as requested, remarks on today's subject matter
from the viewpoint of the Georgia farmer. Thank you, Mr. Chairman, for
bringing the House Committee on Education and the Workforce,
Subcommittee on Workforce Protections, to the Great State of Georgia,
where we have many immigrant labor challenges. My hope is to join with
members of the subcommittee to identify solutions. In a very complex
way, the security of our nation demands responsible action now.
Georgia Agribusiness Council
The Georgia Agribusiness Council (GAC) is a Chamber-like
organization with a 40-year history of promoting sound policy for the
breadth of Georgia's agricultural industry. Our membership ranges from
farmers to input suppliers and from processors to those in
transportation of food and fiber. Growing a healthy agricultural
economy, promoting environmental stewardship and educating the public
about the importance of agriculture are the hallmark objectives of the
Georgia Agribusiness Council.
General Remarks
Mr. Chairman, I have met with you and your staff dozens of times
over the years as a spokesman for Georgia agriculture. Many of our
meetings have focused on today's topic. Georgia farmers need a reliable
labor force that is legally documented to work within our nation's
borders. Securing our borders and providing private industry with
government-controlled access to visa work programs will provide the
stability needed for our economy while keeping Americans that wish to
work these jobs gainfully employed.
Let me be clear: I oppose illegal immigration. I oppose amnesty. I
oppose new or accelerated pathways to citizenship. These topics must
remain off the table. Yet, a legal, properly documented, and accessible
workforce is critical to Georgia's farm economy. Managing this
workforce in such a way that participants perform work, pay taxes and
return home is vital to the sovereignty of our nation in my view. These
issues are of great importance to construction, hospitality and a host
of other industries. I cannot speak on immigration and the impact to
American workers and their wages on these sectors, but I can offer a
perspective on the subject with regards to our farm and ranch families.
My belief is the impact of immigration on Georgia farm workers and farm
wage rates is virtually zero. The reason is the shortage of local
workers for farm related jobs at any affordable wage rate.
Unfortunately, many of these roles fall under Standard Industrial
Classifications in agriculture.
Agriculture must have access to a labor program, such as the
existing H2A visa program, to continue producing safe, affordable
agricultural products that serve as the backbone to our nation's
economy and security. If we as a nation do not think this is important,
simply look to our dependence on foreign oil and then think again. We
need a visa work program that is inclusive and sensitive to the needs
of all agricultural producers. While the current federal H2A visa work
program allows access to a legal and documented workforce, the costs
are prohibitive for many farm operations. One of the biggest costs is a
result of a USDA survey that produces the Adverse Effect Wage Rate
(AEWR). The AEWR is a mandatory, guaranteed hourly wage presently set
at $8.37 in Georgia and is imposed by the US Department of Labor as a
condition of participating in the H2A program. By replacing this AEWR
wage requirement with a prevailing wage that is calculated with data
from statistically reliable Occupational Employment Surveys (OES)
conducted by the Bureau of Labor Statistics we can bring these wages in
line with those of comparable agricultural jobs. Doing so will provide
the necessary data to appropriately bring these wages in line with
those of similar jobs in the area.
Conclusion
Mr. Chairman, farmers are price takers who operate in a capital
intensive, high-risk environment that is played out in a tilted global
marketplace with respect to every business regulation including labor.
I strongly agree with you: we must secure the borders of our great
nation. Future solutions to immigration policy must not include amnesty
or new or accelerated pathways to citizenship. We must establish an
orderly, documented procedure that identifies those that seek to enter
to perform temporary work, pay taxes and return home. The U.S.
unemployment rate is below the average of the past four decades. When
the supply of American workers is exhausted, as it is today, someone
must step into jobs that are not being filled. For agricultural
economic engines located all across our state and our nation, true
immigration reform must include a pragmatic program for obtaining
temporary, documented agricultural labor, now and in the future.
Thank you again, Chairman Norwood and members of the Committee for
the privilege to be here today.
______
Chairman Norwood. Thank you very much.
If you would pass the microphone over. Is it Wenger
[pronouncing]?
Dr. Wenger. Yes, it is.
Chairman Norwood. Dr. Jeffrey Wenger, Assistant Professor
of Public Policy, University of Georgia. Dr. Wenger's research
focuses on unemployment insurance policy and contingent
employment. His current research focuses on the relationship
between job search and the employer-provided health insurance.
Dr. Wenger holds an undergraduate degree in mathematics
from the University of Southern California-Santa Cruz, and a
doctorate degree in public policy from the University of North
Carolina-Chapel Hill.
We welcome you, Dr. Wenger, and you are now recognized.
STATEMENT OF DR. JEFFREY B. WENGER, ASSISTANT PROFESSOR OF
PUBLIC POLICY, THE UNIVERSITY OF GEORGIA SCHOOL OF PUBLIC AND
INTERNATIONAL AFFAIRS
Dr. Wenger. Thank you very much.
I appreciate the opportunity to be here. Chairman Norwood,
thank you; thank you, Representative McCollum and other Members
of Congress, I appreciate. As I was introduced, that made this
paragraph pretty much irrelevant.
Let me just start by saying----
Chairman Norwood. Pull the mic up just a little closer.
Dr. Wenger. Thank you. Let me just start by saying that I
think this immigration debate in the late 1990's was non-
existent for very good reasons. It was non-existent because the
demand for labor outstripped the supply for labor, and worker
productivity resulted in wage growth across the spectrum. As a
consequence, poverty declined, health insurance coverage
increased and wages for workers in the bottom of the earnings
distribution rose faster than the median wage for other
workers. This is the first time that happened in almost a
generation. Increases in the minimum wage, the expansion of the
earned income tax credit and children's health insurance
coverage were good policies that promoted and rewarded
Americans' hard work. This is all that happened in the late
1990's.
Since 2001, the U.S. labor market has really reversed
course. Poverty is increasing, health insurance coverage is
declining and many workers have been caught off-guard as the
purchasing power of their paycheck continues to erode. Workers
want security--security in their jobs, security in their pay
and security in their workplace. Border security, even if it
were effective, would in the short run fail to address the
harsh effects of a weak job market, declining real wages and
gaps in health care coverage.
For many, the focus has been on border security with an
emphasis on longer and taller walls guarded by greater numbers
of INS agents and National Guardsmen. However, I believe the
more important security threat, the one that is brewing below
the surface of these immigration debates is the economic
security of legal American workers, whether native-born or
foreign-born.
The presence of undocumented illegal immigrants in the low-
wage unskilled workforce is not disputed, but the size of this
population and its real economic impact are less clear.
Economic research on the issue is mixed. Some scholars have
found significant effects on wage, while others have found much
smaller effects. Research also indicates that less educated
immigrants are more likely to receive government aid. However,
surprisingly, little research has focused on the benefits of
immigration.
So while the research is murky, it is clear that illegal
workers work side-by-side every day in the same workplaces and
on the same job sites. This simple fact means that both sets of
workers--both legal and illegal--face the same threats in the
form of job insecurity, wage insecurity and workplace
insecurity. Job, wage and workplace insecurity exist because
much of the low-wage or secondary labor market operates as a
shadow market without proper legal enforcement or oversight.
I would first like to address the issue of job insecurity
as it applies to the low-wage unskilled workforce. According to
a July 2006 GAO Report on worker classification, there are 42.6
million employees in America who are classified as contingent.
This newly released GAO Report is directly relevant to these
hearings, and I hope each of you will find time to read it.
One of the most important findings of this report is that
the Department of Labor failed to consistently investigate and
report employee misclassification when investigating claims
under the Fair Labor Standards Act. This misclassification
systematically leads to more job insecurity.
Wage insecurity is another critical issue that affects a
disproportionate number of contingent workers. The ability of
employers to falsely classify workers as contingent allows them
to withhold both wage and non-wage benefits. Worker
misclassifications result in overtime pay being denied to
workers who would otherwise be eligible to receive it. For
example, in 2005, the Department of Labor recovered $166
million worth of back pay for 219,000 workers. Yet this amount
represents only a small fraction of what is owed to employees
as a result of misclassification. Additionally, workers who are
misclassified as on-call or part time, are not afforded
protection under the Family Medical Leave Act nor are they
guaranteed pension contributions under the Employee Retirement
Income Security Act, or ERISA.
Perhaps the greatest threat to the contingent workforce is
the threat posed by conditions that these workers face each day
upon entering the job site. After the Hamlet, North Carolina
fire in 1991 that left 25 workers dead behind the chained doors
of a chicken processing plant, improving OSHA enforcement of
workplace safety was cited as an imperative need. Yet 11 years
later, the GAO found OSHA's investigative procedures make it
difficult to detect violations of worker protection laws.
The simple truth is that within our current system, there
are laws in place designed to protect all workers, regardless
of status, against these threats to their economic security.
Contingent employment is composed of both legal and
illegal, native and immigrant workers. As long as the U.S.
labor market continues to operate at less than its full
potential, and wages for workers at the bottom of the earnings
distribution continue to stagnate, economic security will be
difficult to achieve. Sources of economic insecurity punish
citizens and non-citizens alike. Millions of workers, native
and immigrant, are faced with limited job opportunities. These
workers need a government that will provide better oversight to
ensure they are paid the full value of their wages and remain
protected from harm in the workplace. The Administration and
Congress should act responsibly to create conditions that
foster job growth, but also provide strong enforcement of
workforce protection laws. Securing our borders is not likely
to secure workers' jobs, workers' pay or workers' safety in the
short run.
Thank you very much for the opportunity to speak.
[The prepared statement of Dr. Wenger follows:]
Prepared Statement of Dr. Jeffrey B. Wenger, Assistant Professor of
Public Policy, the University of Georgia School of Public and
International Affairs
The debate on immigration over the past year has focused largely on
the issue of security. For many, the focus has been on border security
with an emphasis on longer and taller walls, guarded by greater numbers
of INS agents and National Guardsmen. However, I believe the more
important security threat, and the one that is brewing below the
surface of these immigration debates, is the economic security of
legal, American workers, whether native born or foreign born.
The presence of undocumented illegal immigrants in the low-wage
unskilled workforce is not disputed, but the size of this population
and its real economic impact are less clear. Economic research on the
issue is mixed; some scholars have found significant effects on wages
(Borjas, 1994, 2001) \1\ while others have found smaller impacts (Card,
2001).\2\ Research also indicates that less educated immigrants are
more likely to receive government aid. However, surprisingly little
research has focused on the benefits of immigration. This upside-down
type of analysis, where you count the costs but not the benefits, is
unlikely to lead to good policy decisions.
So while the research remains murky, it is clear that illegal
workers work alongside legally documented low-wage American workers
every day in the same workplaces and on the same job sites.
This simple fact means that both sets of workers, both legal and
illegal, face the same threats in the form of job insecurity, wage
insecurity and workplace insecurity. Job, wage and workplace insecurity
exist because much of the low-wage or secondary labor market operates
as a shadow market without proper legal enforcement or oversight.
During the late 1990s, immigration did not spark worker angst or
ire. It was not an issue because the demand for labor outstripped
supply and solid productivity gains resulted in wage growth across the
earnings spectrum. Poverty declined, health insurance coverage
increased and wages for workers at the bottom of the earnings
distribution rose faster than the median wage for the first time in a
generation. Increases in the minimum wage, the expansion of the Earned
Income Tax Credit and children's health insurance coverage were good
policies that promoted and rewarded Americans' hard work.
But since 2001, the U.S. labor market has reversed course. Poverty
is increasing, health insurance coverage is declining and many workers
have been caught off guard as the purchasing power of their paychecks
continues to erode. Workers want security--security in their jobs,
security in their pay and security in their workplace. Border security,
even if it were effective, would still fail to address the harsh
effects of a weak job market, declining real wages, and gaps in
healthcare coverage.
Job Insecurity
I would like to first address the issue of job insecurity as it
applies to the low-wage unskilled workforce. According to a July 2006
GAO Report on worker classification (06-656), there are 42.6 million
employees in America who are classified as contingent employees. The
GAO defines these `contingent employees' as ``workers who do not have
standard full-time employment.'' \3\ Many of these workers work more
than 40 hours per week but are contingent because their work
arrangement is precarious: day laborers, temporary workers and on-call
workers all have unpredictable schedules and unreliable paychecks.
Without the protection of permanent, full-time employment,
contingent workers are more vulnerable to fluctuations in the labor
market as they operate in a largely volatile and unstable environment.
In their report, the GAO focused on the ability of employers to
``exclude some contingent workers from receiving key worker benefits
and protections such as the guarantee of workers' rights to safe and
healthful working conditions, a minimum hourly wage and overtime pay,
freedom from employment discrimination, and unemployment insurance.''
\4\
The GAO concluded that the Department of Labor (DOL) failed to
consistently investigate and report employee misclassification when
investigating claims under the Fair Labor Standards Act (FLSA).\5\ More
importantly, worker misclassification results in overtime pay being
denied to workers who would otherwise be eligible to receive it. This
practice is too common and represents a theft from the employee. For
example, in 2005 the Department of Labor recovered $166 million dollars
in back pay for 219,000 workers.\6\ Yet this amount represents only a
small fraction of what is owed to employees as a result of
misclassification.
Wage Insecurity
Wage insecurity is another critical issue that affects a
disproportionate number of contingent workers. The same GAO report
found that 16% of contingent workers had a family income of less than
$20,000, as compared to 8% of regular, full-time workers.\7\ For
certain subsets of the contingent workforce the percentage is even
higher, for example 21% of on-call and day laborers fall below the
$20,000 household income threshold.\8\
Additionally, the ability of employers to falsely classify workers
as contingent allows them to withhold non-wage benefits. For example, a
worker classified as `on-call' or `part-time' is not afforded
protection under the Family and Medical Leave Act, nor are they
guaranteed pension contributions under the Employee Retirement Income
Security Act.\9\
One of the best ways to protect the paychecks of American workers
is to prevent illegal immigrants from undercutting worker pay. If this
Congress is indeed interested in protecting American jobs then it
should extend the protection of a prevailing wage provided under the
Davis-Bacon Act. With prevailing wage protections, employers and
illegal workers will not be able to undercut American workers by
exploiting the largely unregulated contingent employment market.
Workplace Insecurity
Perhaps the greatest threat to the contingent workforce is the
threat posed by the conditions these workers face each day upon
entering their job site. After the Hamlet, North Carolina fire in 1991
that left 25 workers dead behind the chained doors of a chicken
processing plant, improving OSHA enforcement of workplace safety was
cited as an imperative need. Yet 11 years later, the GAO found in its
report (02-925) on day laborers that the ``WHD's (Wage Hour Division)
and OSHA's investigative procedures make it difficult to detect
violations of worker protection laws involving day laborers who often
have non-standard work arrangements.'' \10\ The GAO report from July
2006 confirms this difficulty, adding that the lack of proper employee
classification makes this protection even more difficult.
These protections are made even more important by some recent
findings of the Labor Department. The Department of Labor has found
that all the poultry processing plants--which employ nearly half
African-American and half immigrant workforce--surveyed by the Wage and
Hour division were out compliance with Federal wage and hour laws in
2000.\11\ Furthermore, DOL has ``estimated more than half the country's
garment factories violate wage and hour laws, and more than 75 percent
violate health and safety laws.'' \12\ The poultry industry employs
more than 231,000 people nationally; the workforce of this industry
alone is bigger than the total number of workers the US Department of
Labor (Wage and Hour Division) recovered back pay for in 2005. If the
Bureau of Labor Statistics is correct, countless thousands of American
workers are being denied their hard earned wages due to a lack of
enforcement by the DOL.
The simple truth is that within our current system there are laws
in place that are designed to protect all workers, regardless of
status, against these threats to their economic security. The ability
of employers to wrongfully classify a large number of employees as
contingent has allowed employers to circumvent current laws. In
addition, the inability to properly track and monitor the growing
underground cash-based labor market provides employers with additional
opportunities to monopolize on the increased instability in the labor
market.
Contingent employment is composed of both legal and illegal, native
and immigrant workers. As long as the U.S. labor market continues to
operate at less than its full potential, and wages for workers at the
bottom of the earnings distribution continue to stagnate, economic
security will be difficult to achieve. Sources of economic insecurity
punish citizens and non-citizens alike. Millions of workers, native and
immigrant, legal and illegal are faced with limited job opportunities.
These workers need a government that will provide better oversight to
ensure that they are paid the full-value of their wages and remain
protected from harm in the workplace. The Administration and Congress
must act responsibly to create conditions that foster job growth, and
provide strong enforcement of workforce protection laws. Securing our
borders is not likely to secure worker's jobs, worker's pay, or
worker's safety.
endnotes
\1\ George J. Borjas The Economics of Immigration Journal of
Economic Literature, Vol. 32, No. 4. (Dec., 1994), pp. 1667-1717.
George J. Borjas Does Immigration Grease the Wheels of the Labor
Market? Brookings Papers on Economic Activity, Vol. 2001, No. 1.
(2001), pp. 69-119.
\2\ David Card Immigrant Inflows, Native Outflows, and the Local
Market Impacts of Higher Immigration. Journal of Labor Economics, Vol.
19, No. 1. (Jan., 2001), pp. 22-64.
\3\ GAO Report 06-656, Employment Arrangements: Improved Outreach
Could Help Ensure Proper Worker Classification, July 2006, p.1.
\4\ Ibid., p. 1.
\5\ Ibid., p. 35.
\6\ http://www.dol.gov/esa/whd/statistics/200531.htm
\7\ GAO Report 06-65, p. 14.
\8\ Ibid.
\9\ Ibid., p. 21-22.
\10\ GAO Report 02-925, Worker Protection: Labor's Efforts to
Enforce Protections for Day Laborers Could Benefit from Better Data and
Guidance, September 2002, p.3.
\11\ U.S. Department of Labor Poultry Processing Compliance Survey
Fact Sheet U.S. Department of Labor January 2001
\12\ AFL-CIO, ``Responsible Reform of Immigration Laws Must Protect
Working Conditions for all Workers in the U.S,'' March 01, 2006,
(http://www.aflcio.org / aboutus / thisistheaflcio / ecouncil /
ec02272006e.cfm).
______
Chairman Norwood. Thank you, Dr. Wenger.
Mr. D.A. King is the founder and president of the Dustin
Inman Society, a coalition of citizens dedicated to educating
the Georgia public on the consequences of illegal immigration.
Mr. King writes a column on illegal immigration in the
Marietta Daily Journal and is featured in several other Georgia
newspapers.
Mr. King is a guest host on nationwide radio broadcasts and
is a frequent guest on radio shows addressing illegal
immigration.
Mr. King is a retired Marine and a 22-year resident of
Marietta, Georgia.
Welcome, Mr. King, and you are now recognized.
STATEMENT OF D.A. KING, PRESIDENT,
THE DUSTIN INMAN SOCIETY
Mr. King. Thank you very much, Mr. Chairman. I wish I were
a retired Marine, I only served for 2 years, but thank you very
much.
Thank you again, Mr. Chairman, members of the Subcommittee,
I am D.A. King and I am President of The Dustin Inman Society.
We are a coalition of citizens and non-citizens who are
demanding that our laws be enforced. Our goal is to educate the
public and ourselves on the consequences of illegal
immigration.
I would like to begin by saying that my adopted sister is a
real, legal immigrant, who happens to come from Korea. Our
focus is on illegal immigration. At least it will be unless the
Senate Bill changes illegal immigration into open borders. Then
we will begin to attack too much immigration. I am very
grateful to be here today.
Because I have made a decision to oppose illegal
immigration on a full time basis, literally thousands of
Americans have come to me via e-mail, telephone and in person
and told me stories about their experiences because of illegal
immigration. They share very common questions, observations and
complaints. Normally they ask why employers are allowed to hire
illegal labor in violation of existing laws, and why a nation
that has put man on the moon and built and maintains more than
46,000 miles of interstate highway, cannot use that same
expertise to secure our borders and prevent illegal crossings
into our country.
Most Americans are aware of the one time amnesty of 1986.
They can see very clearly that it did nothing to stop illegal
immigration. It did not stop employers from hiring illegal
aliens. It did nothing to secure our borders. Ignoring the
climate of fear that has been created to intimidate them,
Americans are now coming out of the shadows and asking why they
are required to obey American laws while many employers and
bankers and people with no legal right to be in this country
suffer no punishment for not obeying the same laws.
For many of us, Congressman, the new American dream is to
have borders as secure as are Mexico's and immigration and
labor laws that are as enthusiastically enforced.
One of the most brilliant examples of the Senate's failure
to protect the American worker is a provision in 2611 that
would effectively expand the Davis-Bacon Act of 1931 to allow
foreign workers to be paid a different and higher prevailing
wage than American workers doing the same job.
I think the Senate bill also, respectfully, requires us to
accept a redefinition of some very basic English words. Not
many of us consider a worker as temporary if that worker is
offered a path to citizenship with permanent resident status
when his work visa expires. Guest workers, by definition, and
if indeed truly noted, should be made to clearly understand
that the period of employment in the United States is finite,
and at the end of that period, they must return home, and that
they are not a temporary or a guest worker if they bring their
family and set up permanent residence and expect to spend the
rest of their life in the United States.
Not many of us believe that American taxpayers should be
required to subsidize that low wage labor. It is sad but true,
I am personally acquainted with Americans who have lost their
family businesses because they refused to violate existing
immigration and employment laws, and could not compete with
others who lacked the integrity to make similar decisions.
A friend of mine, a man named Charles Shafer of
Lawrenceville, Georgia is one example. Mr. Shafer is a second
generation construction framer--a carpenter--who has declared
bankruptcy and endured years of unemployment due to an effort
to compete with contractors who do hire illegal labor for
considerably less than Mr. Shafer was making 10 years ago.
Another friend, Mr. Jeff Hermann of Oxford, Georgia, who I
believe is outside holding a sign right now saying ``Secure our
borders, enforce our laws,'' is in the pine straw, landscaping
business. He has lost considerable business and earnings to
illegal labor and has been forced to apply for welfare as a
result.
Mr. Shafer's and Mr. Hermann's stories are but two of
thousands that have come to my attention from Americans who are
working for a better life in their own country. None of them
sees the Senate Bill as a remedy to their plight. I am
acquainted with many taxpaying Americans who have been denied
employment simply because they do not speak Spanish. I have
never spoken to anyone who can relate a story to me about wages
going up in the United States because of illegal immigration.
It is important and I want everybody to realize this,
please, no reasonable person that I am aware of blames anyone
for wanting to live or work in the United States, just as no
one I am aware of is of the opinion that we can continue to
allow any worldwide willing worker to replace Americans in our
job market or lower American wages. As American citizens, we
understand that if it is possible to verify a credit card
transaction in our local department stores, that it is also
possible to verify employment eligibility in the United States
without putting an undue burden on the employers.
I myself have enrolled the Dustin Inman Society in the
Basic Pilot Program. I have verified myself as being eligible
to work in this country. It took me about 6 seconds. I would
respectfully make the educated observation that making the
Basic Pilot Program mandatory would be one of the first goals
of Congress.
I will close, and I thank you for your time. I respectfully
implore you, Congressmen, to please do all that is possible
from your elected office to secure American borders, to restore
the rule of law to our nation and to create a state of fairness
for the American workers. I do not believe that the Senate Bill
will do any of those things.
Thank you very much. I will be glad to take questions
later.
[The prepared statement of Mr. King follows:]
Prepared Statement of D.A. King, President, the Dustin Inman Society
Mr. Chairman, members of the Subcommittee, good morning.
My name is D.A. King. I am president of The Dustin Inman Society,
which is a Georgia-based coalition of Americans of many backgrounds and
ethnicities dedicated to educating the public on the consequences of
illegal immigration.
I am grateful for the opportunity to provide testimony today
regarding the recently passed Senate bill addressing our borders, the
illegal immigration crisis in America and the impact of the Senate
legislation on the American workforce.
In an effort to make clear my own level of concern with the illegal
immigration crisis in our nation, I would like to make it known that
three years ago I put aside my own business and have exhausted my
personal savings in a full-time effort to educate myself and others on
the issue.
As someone who has chosen to be active in a grass-roots effort to
encourage my government to secure our borders and equally apply
American law, I am in constant contact with countless American citizens
on the issue--including immigrants who have obeyed American laws in
their effort to join the American family.
My adopted sister is a real, legal, immigrant who came from Korea.
The thousands of concerned Americans who have contacted me over the
years share a common theme in their questions, observations and
complaints. They ask why employers are allowed to hire illegal labor in
violation of existing laws--and why a nation that has put men on the
moon and has built, and maintains, more than 46,000 miles of interstate
highways has not used that expertise to stop illegal entries into their
country.
Most Americans are aware of the ``one time'' amnesty of 1986. They
see that it did nothing to secure our borders, end illegal immigration
or discourage employers from hiring illegal aliens. Despite the
concerted effort of many in the Senate to label S 2611 as anything but
amnesty-again, most Americans with whom I speak understand it to be
exactly that.
Ignoring the climate of fear that has been created to intimidate
them, American citizens are coming out of the shadows and asking why
they are required to obey American laws while many employers, bankers
and people with no legal right to be in the U.S. suffer no punishment
for not doing so.
I have no acceptable answers for them. I sadly admit that I find
myself asking similar questions.
For many of us, the new American Dream is to have borders as secure
as are Mexico's and immigration and employment laws that are as
enthusiastically enforced.
Absent their ability to speak here, I respectfully ask that today I
be regarded as a humble voice of the millions of Americans who reject
the senate bill and its intent in its entirety.
Time constraints prohibit even a brief outline of the many flaws in
the Senate bill. Among those mistakes, one of the most brilliant
examples of the senate's failure to protect the American worker is the
provision that would effectively expand the Davis Bacon Act of 1931 to
allow foreign workers to be paid a different--and higher--``prevailing
wage'' than Americans who work at the same job.
While most Americans--including myself--are not experts on Davis
Bacon, we find it easy to understand the injustice involved if the
effect of the senate bill would be to ``legalize'' illegal labor and
then provide an avenue whereby that labor then be rewarded with pay and
benefits not available to all American workers.
Further, most Americans understand that the constant reference to
``temporary'' or ``guest workers'' in the senate bill amounts to an
attempt to redefine very basic words in the English language.
Not many of us consider a worker as ``temporary'' if that worker is
offered a path to citizenship with permanent resident status at the end
of the allotted time on his work visa. I have many American friends who
have been employed in countries all over the world as guest workers.
All of them report the laws that demand their timely departure from the
host nation at the prescribed date are vigorously enforced.
None of these former guest workers were offered citizenship in the
nations in which they temporarily worked.
Guest workers, by definition, and if indeed truly required, should
be made to clearly understand that the period of employment in the
United States is finite and that bringing their families and setting up
permanent residence is not part of the bargain.
American taxpayers should not be required to subsidize the low wage
labor.
We do not have time here today for me to share the many stories
from citizens who report instances of their wages decreasing because of
competition from illegal labor and the willingness of employers hiring
that labor in violation of existing law while bypassing Americans as
job applicants.
Sadly, I am personally acquainted with Americans who have lost
their family businesses because they refused to violate immigration and
labor laws and could not compete with others in their trade who lacked
the integrity to make similar decisions.
Mr. Charles Shafer of Lawrenceville, Georgia is but one example.
Mr. Shafer is a second generation framing contractor--a carpenter--who
has declared bankruptcy and endured years of unemployment due to
competing contractors hiring illegal labor who will work for
considerably less than he was earning ten years ago.
With his permission, I attach to my written testimony Mr. Shafer's
account of his experiences and ask that it be noted that it was written
more than two years ago.
I also submit a written account from Mr. Jeff Hermann of Oxford,
Georgia who operates a pine straw/landscaping business. Mr. Hermann has
lost considerable business and earnings to illegal labor and has been
forced to apply for welfare as a result. Mr. Hermann has agreed to
having his story become record as well.
Mr. Shafer and Mr. Hermann share very similar stories and are but
two of thousands that have come to my attention from Americans who are
working for a better life in their own country.
None of them sees the Senate bill as a remedy to their plight.
I am acquainted with many tax-paying Americans who have been denied
employment because they do not speak Spanish.
I have never spoken to anyone who can recount examples of American
wages increasing because of immigration, either legal or illegal.
Most Americans understand that low-skilled jobs in America pay many
times more than the same jobs in most of the world. The American people
recognize that fact to be a magnet that draws illegal immigration into
the United States. No reasonable person I am aware of blames anyone for
wanting to live and work in the United States, just as no one I am
aware of is of the opinion that we can continue to allow any worldwide
``willing worker'' to replace Americans in our job market.
We also understand that if it is possible to verify a credit card
transaction at our local department store, it is also possible to
verify employment eligibility in the United States without putting an
undue burden on American employers.
As president of the Dustin Inman Society, I have enrolled in the
Basic Pilot Program. I am a program administrator and have used that
system to verify my own eligibility to work in the United States. Until
a better system is designed, it is my educated observation that one
immediate goal for Congress should be to make Basic Pilot verification
mandatory and increase funding to do so.
Please allow me to conclude by saying that with the Immigration
Reform and Control Act of 1986, we were promised that Americans would
have secure borders and equal protection under the law in the
workplace. Not many of us are willing to remain silent while similar
promises are made without real enforcement teeth in whatever new
legislation is made into law.
I respectfully implore you to do all that is possible from your
elected office to secure American borders, restore the rule of law to
our nation and create a state of fairness to American workers.
Remembering the amnesty of 1986, it is my belief that the Senate
legislation would accomplish none of these things.
Thank you Congressmen.
Written Account of Charles Shafer, Carpenter, Lawrenceville, GA
My family has been in the residential construction business in one
form or another for over 5 generations now. In the past 2 generations
of my family most of us (my dad, 3 brothers, 6 uncles, and several
cousins) have been residential framing contractors-carpenters.
As recently as 5-6 years ago we were the most sought after framers
in the business. Our reputations preceded us as being the best of the
best. Now we are all either unemployed or are struggling to survive
economically.
I started my own business in 1988. Until that point I had worked
for my father mostly. We have always had so much work at times we would
turn work down.
I felt I had a very successful and lucrative business until late
1998 and the beginning of the year 1999. Then around the end of 1999
and the start of 2000 the calls slowed down and most of us were not
getting as many from the builders whom we had worked for in the past as
well as no calls at all from any new builders.
I remember it was around the end of 1999 it seemed on a daily basis
someone would come by the job and ask if I needed help or if I knew
anyone who did. They always made the statement even then ``I can have
as much help as you need here in the morning''. Also I would like to
state at that time I was working 2 legal immigrants with proper
documentation, social security numbers, a driver's license, etc. (so I
believed)
I tried every thing I could think of for the next year or so to
save my business and career. At the time I even tried not only getting
out and riding around trying to meet new people, leaving business cards
on job sites, but also sending mailings to almost every builder listed
in the Atlanta Home Builders Association announcing my availability and
desire to work. These efforts were basically fruitless.
Every where I went I saw more and more what appeared to be Mexican
crews and less and less American crews doing the work. For a short
period of time thereafter, about a year or so, instead of the most of
my work being all new work it became more in the field of remodeling.
That eventually went away also.
During the year 2000 the phone calls started slowing down and
eventually stopped. Even though the residential construction in Atlanta
was obviously ongoing at an unbelievable pace I could not find work.
Whenever I did find a new subdivision starting and some one to talk to
I was told I was the wrong color and I have been told I would not work
for the wages they paid. At the wages they were offering, they were
right, there was no way to compete.
There's not any way then or now in my mind to compete with illegal
labor. The work I was offered, when I was offered work was at such a
reduced standard wage, less than half of what the same work paid only a
few years prior, a person could not remain legal and still endure all
the labor cost or insurance cost or taxes associated with trying to run
a proper business.
I even tried for a year or so to employ a mixture of Americans and
Mexicans.
Then all Mexicans. It doesn't take long for them to become
Americanized. By this I'm referring to the fact the only reason they
wanted to work for me instead of one of their own was because it did
not take them long to come to the conclusion an American employer would
pay them a higher wage than a Mexican employer. Then I became aware
that they were all illegally here in the U.S. This resulted in my
having to pay all associated taxes on their behalf. That's when I
decided it was not worth it anymore and basically gave up. I wasn't
getting any phone calls for work and you surely couldn't ride around
and find any work. The illegals had it all.
Even though I have never announced to anyone in this field of my
intentions to quit, to this date I have only had 2 phone calls for work
in the past 3 years or so. These came from people I had done personal
homes for in the past not from any builders. More or less I have tried
to explain to them I had retired, not by choice, but because I could
not compete against an ever increasing immigrant population.
I used to have to be very careful when I was talking to someone not
to use the ``illegal'' terminology. Whenever I did people would respond
with an ignorant comment to the effect these people were not illegal
and I would respond by stating I had personally met several hundred
these past few years and not a one were legal.
Since post 9-11 I have tried repeatedly to find work. My families
work (the one or two remaining) is so sparse they can offer little or
no help and still survive themselves. At almost 51 years old, even
though I feel I have many good years left, no one I have met wants to
employ me.
I have applied for many Superintendent positions to no avail.
Hardly a response for so long, I finally gave that avenue up also. Why
not I often ask myself. I have so much experience and knowledge about
residential construction from start to finish.
It is, believe it or not, almost understandable to me because of
the availability of such a younger work force now. Plus I don't speak
Spanish. I also usually know more about the business, codes etc., than
the people I have tried to go to work for and I think that may have
intimidated them some.
We as Americans will work and have worked with the Mexicans. It's a
fact they will not return the favor. Do you know of any American who
works for a Mexican in the construction business? I don't.
I was taught from day-one a home is usually the largest investment
a person makes in life. It was instilled into my natural behavior from
childhood to do the very best job possible for a person and not to cut
corners or to walk away from an error or mistake. The majority of my
relatives had the same raising and that's what made us once upon a time
the most desirable in the residential construction field. Now this
business seems to be only about profit margins and how fast you can
finish a job. Not many seem to care about quality anymore.
I have continually searched for a job and would now accept one even
if its a floor sweeping job. But I have come to the conclusion that I
am unemployable especially since 9-11 and with all the illegal
immigrants available.
We as a family of 5, a daughter 14, a daughter 10, and a son 5,
have barely survived these past few years. My wife and I filed
bankruptcy last year. We had already refinanced our modest home which
we only owed 3 years on trying to survive.
I am a proud man even to this day. I have absolutely refused any
hand outs in life and will not accept one now.
Please understand residential framing/construction was to be a
career I have looked forward to since childhood. It was a dream job for
me even though the work was hard and the hours long. The pay while it
lasted was great. We lived the American dream--if we wanted something
we got it and got up the next day went to work and paid for it.
I can't imagine what I will do in life now that the illegal
immigrants are present in such enormous numbers in today's society. I
am adamant I will figure it out, how and which way to go; right now I'm
not sure. I'm just not willing to give up just yet. My family surely
deserves more than what illegal immigration has brought into their
lives.
If you have any more questions or need anything else please feel
free to contact me.
Charles Shafer, Jr.,
Lawrenceville, GA.
Written Account of Jeff Hermann, Landscaper, Oxford, GA
My name is Jeff Hermann. My partner and I run a small landscaping
business called ``The Pinestraw Guys''. We've been at it now for almost
eight years. Our work is fairly labor-intensive, as it involves
spreading the pinestraw in the decorative `islands' of peoples' homes
and businesses.
When we started the business, we didn't have any customers, so we'd
load up the truck and knock on doors all day looking for jobs. It was
tough at first, but as time went by we grew. After two years we had
enough customers to stop knocking on doors and hire someone to help us.
Our customers loved our work and referred their friends and
neighbors to us.
Life was getting pretty good. We hired a few more guys, and the
business continued to grow.
That's all changed now.
About two and a half years ago we started noticing a drop-off in
our business.
Several of our accounts had stopped calling. When we called them to
find out why, they said simply that we had been under-bid by a
competitor. I had a hard time believing that because we operate on a
very small mark-up to begin with. Now, I'm not a bashful man by any
means, so I called my competition and asked them how they could do it
so cheap.
``Simple,'' was the reply, ``I hired some Mexicans down at the Home
Depot. They're illegals, so they work really cheap.''
I know of several landscape contractors who now do the same thing.
They pay these illegal aliens 5 or 6 bucks an hour, cash under the
table of course, and pocket the difference. Well, MOST of the
difference. The rest they give to their customers in the form of lower
prices. That's all good for the contractor and the customer, but not so
good for me.
Suddenly I'm in competition with someone who's willing to do this
work for minimum wage or less.
By last fall my income had dropped over 50%, and I had to apply for
food stamps in order to feed my kids. I also applied for Medicaid
because I could no longer afford my health insurance. I qualified for
the food stamps (Thank God) but my income, less than $200 a week by
then, was too high to get Medicaid. While talking to my caseworker
about this, she let it slip that if I had been an illegal alien, I
would have qualified for `emergency' Medicaid and been covered by it
that day. Needless to say, my jaw almost hit the floor.
Let me re-cap what I've been through because of illegal
immigration.
My business has been cut in half.
I've had to lay off American workers.
I can no longer afford health insurance.
I've had to take welfare.
And to top it off, I can't even get Medicaid.
I'm not asking for handouts, I'm asking for that `level playing
field' our President loves to espouse. Secure the border. Deport
illegal aliens. Enforce the law. Give me my life back.
Please.
Jeff Hermann,
Oxford, GA.
______
Chairman Norwood. Thank you, Mr. King.
Next, we have Mr. Terry Yellig, a member of the law firm of
Sherman, Dunn, Cohen, Leifer and Yellig in Washington, D.C. Mr.
Yellig frequently represents the Building and Construction
Trades Department of AFL-CIO before courts and Federal and
state administrative agencies and provides legal advice
concerning legislation.
Mr. Yellig, you are now recognized.
STATEMENT OF TERRY YELLIG, ATTORNEY, SHERMAN, DUNN, COHEN,
LEIFER & YELLIG, P.C., ON BEHALF OF THE BUILDING AND
CONSTRUCTION TRADES DEPARTMENT, AFL-CIO
Mr. Yellig. Thank you, sir.
I appreciate the opportunity to appear today before this
Subcommittee because--and in addition to comments and
statements that have been made over the past 2 months
concerning the prevailing wage requirement applicable to the
recruitment and employment of foreign guest workers as provided
for in Title IV of S. 2611--I really want to address and there
have been comments by members of the panel already to that
effect. I think many, if not most, of these comments and
statements generally reflect a misunderstanding and a confusion
concerning the intended purpose and effect of the prevailing
wage requirement in S. 2611 that requires some clarification
and explanation.
The Senate Bill creates a new temporary guest worker
program called the H-2C visa program. The bill includes
numerous labor protections intended to assure that admission of
H-2C guest workers does not adversely affect American workers'
wages and living standards. I want to repeat that. The purpose
of these labor protections is, first and foremost, to ensure
that the admission of an H-2C guest worker does not adversely
affect American workers' wages and living standards, while at
the same time preventing exploitation of the guest workers.
S. 2611 prohibits employers from hiring temporary foreign
guest workers under the H-2C visa program unless the employers
have first tried to recruit American workers for a job vacancy.
In attempting to recruit American workers--and when I use the
term American workers, I mean citizens and others who are not
native-born but are in the United States legally, I am not
talking about undocumented aliens in any way, shape or form.
And in fact, Title IV does not address undocumented workers.
Title VI does and there is no prevailing wage requirement that
applies to undocumented aliens under Title VI, it does not
apply.
In attempting to recruit American workers, employers must
offer to pay not less than the wage rate they actually pay
comparable employees in their incumbent work force or the
prevailing wage for the occupation, whichever is higher. Then,
in the event that the employer is unable to recruit a qualified
American to fill the job vacancy, the employer must submit an
application to the United States Department of Labor for a
determination and certification. The certification by the
Department of Labor confirms that American workers who are
qualified and willing to fill the vacancy are not available and
that employment of a foreign guest worker will not adversely
affect the wages and living standards of American workers
similarly employed.
The Senate Bill contains additional provisions intended to
ensure that employers do not hire temporary foreign guest
workers to replace American workers who are on layoff, on
strike or locked out of their jobs in the course of a labor
dispute. In addition, the Senate Bill requires employers to
provide the same benefits and working conditions to temporary
foreign guest workers that they provide to their American
employees in similar jobs. Furthermore, employers would be
required, under the Senate Bill, to provide workers'
compensation insurance to temporary foreign guest workers they
hire.
In addition, there is a provision in Title IV that would
prohibit an employer of a temporary guest worker from
classifying that person as an independent contractor. And I
think that is a very important provision as well, for many of
the same reasons that Dr. Wenger referred to when he was
talking about the contingent workforce.
Most of the criticism of the prevailing wage requirement
applicable to foreign guest workers under this H-2C visa
program in S. 2611 is that it entitles these workers to payment
of a higher wage rate than American workers similarly employed
receive. This is a misperception of the prevailing wage
requirement in the bill, based on a misunderstanding of its
purpose and intent.
The perceived impact of foreign workers on our labor market
has been a major issue throughout the history of the United
States immigration policy. And in fact, as I indicate in my
written statement, going back to 1885, the original immigration
laws absolutely prohibited the admission of foreign aliens for
the purpose of employment. It was not until 1952 that Congress
passed the Immigration and Nationality Act, which, for the
first time, permitted the admission of aliens for the purpose
of employment. And at that time, Congress included in the bill
as Section 212, which requires the Secretary of Labor to
certify to the Attorney General and the Secretary of State that
there are not sufficient Americans ``able, willing and
qualified'' to perform the work proposed to be performed by the
alien immigrant, and that the employment of such foreign
workers would not adversely affect the wages and living
standards of similarly employed American workers.
For many years, beginning in 1967--and I think this is
important to understand--the Department of Labor's labor
certification regulations implementing the Immigration Act
provided that in order to determine whether prospective
employment of both immigrants and non-immigrants seeking to
perform skilled or unskilled labor in the United States, will
adversely affect wages or working conditions of American
workers, the Secretary of Labor must determine, under this
provision, whether such employment will be for wages and fringe
benefits not less than those prevailing for American workers
similarly employed in the area of intended employment of the
foreign worker.
Thus, from 1967 until March 28, 2005, the Department of
Labor's regulations implementing the labor certification
requirement in the Immigration Act provided that, where
available, the prevailing wages applicable to foreign workers
shall be the wages, the rates determined to be prevailing in
the occupations and in the localities involved, pursuant to the
provisions of the Davis-Bacon Act or the McNamara-O'Hara
Service Contract Act, depending on the occupation. These
prevailing wage rates are applicable to job openings for which
employers sought Department of Labor certification, without
regard to whether they were otherwise covered by the Davis-
Bacon Act or the McNamara-O'Hara Service Contract Act.
Consequently, the idea of using prevailing wage rates
determined under either the Davis-Bacon or the Service Contract
Act is not new or expansionary. It has been in effect since at
least 1967.
In fact, until the 1990's, the only time the Department of
Labor regulations permitted use of a prevailing wage rate other
than one issued under the Davis-Bacon or the Service Contract
Act for alien labor certification purposes was when there was
no such rate available. And in those instances, the Department
of Labor used as a standard the Bureau of Labor Statistics'
most appropriate wage rates.
In May of 2002, however, the Secretary of Labor published
proposed changes in the labor certification regulations, which
essentially codified the Department of Labor's guidelines
permitting use of prevailing wage rates based on the wage
component of the BLS--the Bureau of Labor Statistics--
Occupational Employment Statistics wage survey or employer
provided wage survey data that meets the requirements described
in the Department of Labor guidelines. In addition, the
Secretary's proposed regulations that eliminated mandatory use
of the prevailing wages determined pursuant to the Davis-Bacon
Act and the Service Contract Act where otherwise applicable.
For this reason, the Building and Construction Trades
Department believes and urged the Senate to codify a
requirement that applies in the first place, the Davis-Bacon
Act or the Service Contract Act, as the prevailing rate for
purposes of determining whether there is an adverse impact on
Americans' wages and living standards whenever there is an
application for admission of a temporary guest worker.
Otherwise, the American people can have no real confidence that
the admission of a foreign guest worker is not just as a source
of cheap labor that will undermine the wages and living
standards of American workers. And that is the purpose, and
that is the intended effect, of this provision. It is to
protect American workers.
And finally, I would like to point out that if there was a
situation where an employer found that it was necessary to hire
a foreign guest worker under this program and pay, let us say,
the Davis-Bacon rate if it was a construction job; if that was
the circumstance and in reality that wage rate was higher than
that employer is paying the rest of his workforce, in reality,
the truth is that that employer will either opt not to hire the
foreign guest worker because of the impact it will have on his
current workforce, or he will probably adjust the wages of his
incumbent workforce upwards so as to be the same as the foreign
guest worker. Either way, it is not undermining or adversely
affecting American workers' wages and living conditions. If
anything, it will benefit them. And that is important, because
I have heard so much misunderstanding about the purpose and
effect of this, and it is just wrong.
Thank you.
[The prepared statement of Mr. Yellig follows:]
Prepared Statement of Terry R. Yellig, Attorney, Sherman, Dunn, Cohen,
Leifer & Yellig, P.C., on Behalf of the Building and Construction
Trades Department, AFL-CIO
Mr. Chairman: My name is Terry Yellig, and I am an attorney with
the law firm of Sherman, Dunn, Cohen, Leifer & Yellig, which is located
in Washington, D.C. I am appearing today on behalf of the Building and
Construction Trades Department, AFL-CIO, the eleven (11) national and
international labor unions affiliated with it, and more than three
million workers engaged in the building and construction industry in
the United States.
I appreciate the opportunity to appear today before this
subcommittee because there have been numerous erroneous comments and
statements made over the past two months concerning the prevailing wage
requirement applicable to the recruitment and employment of foreign
guest workers in Title IV of S. 2611, the Comprehensive Immigration
Reform Act of 2006, passed by the Senate in May 2006, which I want to
address. These comments and statements generally reflect
misunderstanding and confusion concerning the intended purpose and
effect of the prevailing wage requirement in S. 2611 that requires some
clarification and explanation.
The Senate bill creates a new temporary foreign guest worker
program called the ``H-2C visa program.'' The bill includes numerous
labor protections intended to assure that admission of H-2C guest
workers does not adversely affect American workers wages and living
standards while at the same time preventing exploitation of the foreign
guest workers. S. 2611 prohibits employers from hiring temporary
foreign guest workers under the ``H-2C visa program'' unless they have
first tried to recruit American workers for a job vacancy. In
attempting to recruit American workers, employers must offer to pay not
less than the wage rate they actually pay comparable employees in their
incumbent workforce or the prevailing wage for the occupation,
whichever is higher. Then, in the event an employer is unable to
recruit a qualified American to fill the job vacancy, the employer must
submit an application to the U.S. Department of Labor for a
determination and certification. The certification confirms that
American workers who are qualified and willing to fill the vacancy are
not available, and that employment of a foreign guest worker will not
adversely affect the wages and living standards of American workers
similarly employed.
The Senate bill contains additional provisions intended to ensure
that employers do not hire temporary foreign guest workers to replace
American workers who are on lay off, on strike, or locked out of their
jobs in the course of a labor dispute. In addition, the Senate bill
requires employers to provide the same benefits and working conditions
to temporary foreign guest workers that they provide to their American
employees in similar jobs. Furthermore, employers would be required
under the Senate bill to provide workers compensation insurance to
temporary foreign guest workers they hire.
Most of the criticism of the prevailing wage requirement applicable
to foreign guest workers under the ``H-2C visa program'' in S. 2611 is
that it entitles them to payment of a higher wage rate than American
workers similarly employed. This is a misperception of the prevailing
wage requirement in S. 2611 based on a misunderstanding of its purpose
and intent.
The perceived impact of foreign workers on our labor market has
been a major issue throughout the history of U.S. immigration policy
and law, because such workers can present a threat of unfair wage
competition. This perception is because foreign workers whose
desperation for jobs, low cost of living in their countries of origin,
and restricted status in the United States can cause them to accept
wages and living standards far below U.S. standards. Thus, Congress
enacted the Foran Act in 1885, which made it unlawful under any
circumstances to import foreign workers to perform labor or service of
any kind in the United States.
This bar on employment-based immigration lasted until 1952, when
Congress enacted the Immigration and Nationality Act, which brought
together many disparate immigration and citizenship statutes and made
significant revisions in the existing laws. The 1952 Act authorized
visas for foreigners who would perform needed services because of their
high educational attainment, technical training, specialized
experience, or exceptional ability. Prior to admission of these
employment-based immigrants, however, Section 212 of the 1952 Act
required the Secretary of Labor to certify to the Attorney General of
the United States and the Secretary of State that there were not
sufficient American workers ``able, willing and qualified'' to perform
this work and that the employment of such foreign workers would not
``adversely affect the wages and living standards'' of similarly
employed American workers. Under this procedure, the Secretary of Labor
was responsible for making a labor certification. In 1965, Congress
substantially changed the labor certification procedure by placing the
responsibility on prospective employers of intended immigrants to file
labor certification applications with the Secretary of Labor prior to
issuance of a visa.
The current statutory authority that conditions admission of
employment-based immigrants on labor market tests is set forth in the
exclusion portion of the Immigration and Nationality Act, which denies
entry to the United States of immigrants and nonimmigrants seeking to
work without proper labor certifications. The labor certification
ground for exclusion covers both foreigners coming to live as permanent
legal residents and as temporarily admitted nonimmigrants. Section
212(a)(5) of the Immigration and Nationality Act, 8 U.S.C.
Sec. 1182(a)(5), states:
Any alien who seeks to enter the United States for the purpose of
performing skilled or unskilled labor is inadmissible, unless the
Secretary of Labor has determined and certified to the Secretary of
State and the Attorney General that-(l) there are not sufficient
workers who are able, willing, qualified (or equally qualified in the
case of an alien described in clause (ii)) and available at the time of
application for a visa and admission to the United States and at the
place where the alien is to perform such skilled or unskilled labor,
and 01) the employment of such alien will not adversely affect the
wages and working conditions of workers in the United States similarly
employed.
For many years beginning in 1967, the Department of Labor's labor
certification regulations implementing Section 212(a)(14) (since
recodified as Sec. 212(a)(5)) provided that, in order to determine
whether prospective employment of both immigrants and nonimmigrants
seeking to perform skilled or unskilled labor in the United States will
adversely affect ``wages'' or ``working conditions'' of American
workers, the Secretary of Labor must determine whether such employment
will be for wages and fringe benefits no less than those prevailing for
American workers similarly employed in the area of intended employment
of the foreign worker.
Thus, until March 28, 2005, the Department of Labor's regulations
implementing the labor certification requirement in Section 212(a)(5)
of the Immigration and Nationality Act provided that, where available,
the prevailing wages shall be the rates determined to be prevailing for
the occupations and in the localities involved pursuant to the
provisions of the Davis-Bacon Act or the McNamara-O'Hara Service
Contract Act. See e.g., 32 Fed. Reg. 10932 (July 26, 1967) (codified as
29 C.F.R. Sec. 60.6). These prevailing wage rates were applied to job
openings for which employers sought Department of Labor certifications
without regard to whether they were otherwise covered by the Davis-
Bacon Act or the McNamara-O'Hara Service Contract Act. Consequently,
the idea of using prevailing wage rates determined pursuant to the
Davis-Bacon Act and the McNamara-O'Hara Service Contract Act is not new
or expansionary.
In fact, until the 1990's, the only time the Department of Labor
regulations permitted use of a prevailing wage rate other than one
issued under the Davis-Bacon
Act or the McNamara-O'Hara Service Contract Act for alien labor
certification purposes was when there was no such rate available. See
20 C.F.R. Sec. 656.40(a)(2) (2004). In that case, DOL guidelines, which
were initially adopted in October 1997 and modified in April 1999,
provide that prevailing wage rates for labor certification purposes can
be based on wage surveys conducted under the wage component of the
Bureau of Labor Statistics' expanded Occupational Employment Statistics
(``OES'') program or an employer-provided wage survey. DOL's guidelines
further provide that alternative sources of wage data can be used where
neither the OES survey nor the employer provides wage data upon which a
prevailing wage determination can be established for an occupation for
which an employer is seeking a labor certification, so long as the data
meets the criteria set forth therein regarding the adequacy of
employer-provided wage data
On May 6, 2002, however, the Secretary of Labor published proposed
changes in the labor certification regulations, which essentially
codified DOL's guidelines permitting use of prevailing wage rates based
on the wage component of the OES wage survey or employer-provided wage
survey data that meets the requirements described in the DOL
guidelines. 67 Fed. Reg. 30466 et seq., 30478-79 (May 6, 2002). In
addition, the Secretary's proposed regulations eliminated mandatory use
of prevailing wages determined pursuant to the Davis-Bacon Act and the
McNamara-O'Hara Service Contract Act where otherwise applicable. Id. at
30478.
The Secretary of Labor's May 6, 2002 Notice of Proposed Rulemaking
explained that she had decided that it is inappropriate to use
prevailing wage rates determined pursuant to the Davis-Bacon Act and
the McNamara-O'Hara Service Contract Act as the minimum rates that will
not adversely affect the wages of American workers similarly employed.
The reason offered in the Notice of Proposed Rulemaking for this
conclusion was that the procedures used to determine Davis-Bacon Act
and McNamara-O'Hara Service Contract Act prevailing wage rates are
significantly different from those set forth in DOL's guidelines for
determining prevailing wage rates for labor certification purposes in
occupations for which a prevailing wage rate under one of these laws is
not available. Id. at 30479. Hence, the Secretary's reason for
eliminating mandatory use of prevailing wage rates determined pursuant
to these two federal prevailing wage laws was not that they were less
accurate than the wage component of the OES program, but merely because
their respective methodology is different. Id. Eventually, the
Secretary of Labor adopted the changes proposed in the 2002 Notice of
Proposed Rulemaking on December 27, 2004, which became effective on
March 28, 2005. 69 Fed. Reg. 77326 et seq., 77365-66 (December 27,
2004).
Notwithstanding, the Republican Policy Committee's July 11, 2006
report and many others have argued recently that audits of the Davis-
Bacon wage survey process demonstrate that it is less accurate than the
wage component of the OES program. It is doubtful, however, that the
OES program or any other wage survey process could withstand the kind
of scrutiny applied to the Davis-Bacon wage survey process. After all,
both the OES program and the Davis-Bacon wage survey program depend
entirely on the voluntary participation of employers to submit wage
data, and the Davis-Bacon wage survey process now includes a nationwide
employer payroll-auditing component, which better assures the accuracy
of the wage data submitted by participating employers. The OES program
does not include an auditing component.
In any event, this recitation demonstrates that use of prevailing
wage rates determined pursuant to the Davis-Bacon Act and the McNamara-
O'Hara Service Contract Act as minimum wage rates that will not
adversely affect the wages of American workers similarly employed is
not a concept introduced for the first time in S. 2611. On the
contrary, use of prevailing wage rates determined pursuant to the
Davis-Bacon Act and the McNamara-O'Hara Service Contract Act as the
minimum rates that will not adversely affect the wages of American
workers similarly employed was integrally intertwined for nearly 40
years in the labor certification process. Use of prevailing wage rates
based on these federal prevailing wage laws was regarded as best
serving the intended purpose of the labor certification process, which
is to protect American workers from unfair wage competition by foreign
workers seeking permanent and temporary employment opportunities in the
United States.
It was always understood that, in rare instances, this process
might result in payment of higher wages to newly hired foreign workers
than to an employer's incumbent workforce. The possibility that
mandatory use of prevailing wage rates determined pursuant to the
Davis-Bacon Act and the McNamara-O'Hara Service Contract Act might
create such a wage disparity is minimal inasmuch as it is highly
unlikely that an employer will opt to hire a foreign worker if it
upsets the employer's wage structure, unless the employer truly has no
other choice. In that case, the employer is more likely than not to
raise the incumbent workforce's wage rate. In any event, this dynamic
provides the greatest assurance that employers cannot take advantage of
a pool of foreign workers willing to accept employment at a depressed
wage rate because they are desperate for jobs, come from countries that
have low costs of living, and have restricted status in the United
States.
In addition, Congress recently enacted the Consolidated
Appropriations Act of 2005 that added Section 212(p)(4) to the
Immigration and Nationality Act, 8 U.S.C. Sec. 1182(p)(4), which
provides:
Where the Secretary of Labor uses, or makes available to employers,
a governmental survey to determine the prevailing wage, such survey
shall provide at least 4 levels of wages commensurate with experience,
education, and the level of supervision. Where an existing government
survey has only 2 levels, 2 intermediate levels may be created by
dividing by 3, the difference between the 2 levels offered, adding the
quotient thus obtained to the first level and subtracting that quotient
from the second level.
The Secretary of Labor's recent adoption of new regulations that
eliminated mandatory use of prevailing wage rates determined pursuant
to the Davis-Bacon Act and the McNamara-O'Hara Service Contract Act,
coupled with enactment of Section 212(p)(4) of the Immigration and
Nationality Act, has undoubtedly reduced the prevailing wage rates used
in the foreign worker labor certification process. These actions have
adversely affected the wages of American workers similarly employed,
because the minimum wages employers are now required to pay foreign
workers issued permanent and temporary employment-related visas are
more likely to be lower. This is exactly the opposite effect intended
by Congress when it incorporated the labor certification process in the
Immigration and Nationality Act in 1952 and amended it in 1965.
It was precisely because of these regulatory changes that the
Senate decided to codify the prevailing wage provision applicable to
the new ``H-2C guest worker visa program'' created by S. 2611, so that
American workers' wages will not be further adversely effected. Thus,
contrary to the assertions of some, use of prevailing wage rates
determined pursuant to the Davis-Bacon Act and the McNamara-O'Hara
Service Contract Act as the minimum wage rates that will not adversely
affect the wages of American workers similarly employed is harmonious
with the intended purpose and intent of the labor certification process
that has been consistently applied to applicants for employment-based
permanent and temporary visas seeking to perform skilled and unskilled
labor since 1952. As such, codification of the prevailing wage
requirement in the new ``H-2C guest worker visa program'' created by
Title IV of S. 2611 in no way represents an expansion of the Davis-
Bacon Act, nor will it provide greater wage protection to foreign guest
workers than to American workers similarly employed.
______
Chairman Norwood. Mr. Phil Kent, National Spokesman,
Americans for Immigration Control. AIC is a non-partisan
grassroots organization founded in 1983.
Mr. Kent is an author, columnist and media commentator. Mr.
Kent served in Washington, D.C. as press secretary and public
affairs advisor to the late Senator Strom Thurmond and appears
frequently on national news shows.
Mr. Kent holds a journalism degree from the Henry W. Grady
School of Journalism at the University of Georgia and he is
from Augusta, Georgia.
Welcome, Mr. Kent.
STATEMENT OF PHIL KENT, NATIONAL SPOKESMAN, AMERICANS FOR
IMMIGRATION CONTROL
Mr. Kent. Thank you, Mr. Chairman. I am here on behalf of
the Americans for Immigration Control, the oldest immigration
control group in the country, founded in 1983.
The heart of my testimony is this--importing cheap, low-
wage labor does not a prosperous economy make. The massive
influx of unassimilated foreign laborers pushes our economy
ever closer to the Third World economies of the countries that
they flee. We are importing poverty by allowing uncontrolled
immigration.
The research in this area is not really murky. There is a
huge caseload of research. For example, the National Research
Council reports that an immigrant to the U.S., without a high
school diploma, consumes $89,000 more in government services
than he pays during his lifetime. The Center for Immigration
Studies and my group have consistently seen research that shows
that most of the illegal immigrants coming into this country
make less than $10,000 a year and have less than an eighth
grade education.
I should probably point out that yes, Mr. Black is right,
we do have a need for guest worker programs, we have guest
worker programs, especially in agriculture. Some work, some are
broken. But we do not need any new guest worker or amnesty
program that is liable to depress the wages of the American
laborer on a larger scale than that which we have already seen.
Here is a quick example, Mr. Chairman, that is not in my
testimony. You will remember after Hurricane Katrina hit
Alabama, Mississippi and Louisiana, you had American workers
promised jobs for the cleanup, the contractors were ready to
go. What happened? According to the Washington Times and other
news outlets, 30,000 illegals swarmed into that area and took
the jobs, stole the jobs, from the American workers. In fact,
the Washington Times quoted one employment contractor, Linda
Swope, as saying we promised the Americans jobs and then had to
tell them they could not have the jobs. They were crying and we
were crying too, because the illegals took those jobs.
Illegal aliens are wage thieves, and they are taking jobs
from unemployed Americans, especially low-income whites, blacks
and teenagers. In fact, the teenage unemployment rate is at the
highest since World War II because of illegal immigration.
Let us talk a little bit about some of the provisions of S.
2611 that some of the other witnesses and the Chairman have
covered. They have talked about the Davis-Bacon Act of 1939
extensively. But let me remind you of this, why was it--and I
would address this especially to Members of Congress--that we
could allow the Department of Homeland Security to actually
waive the Davis-Bacon requirements after Hurricane Katrina to
allow those illegals to come in? I think we need to stop that.
So we can talk about the language in all the sections of Davis-
Bacon all we want and you can write anything you want, but we
should not allow the executive branch to use that sweeping
power to just get rid of Davis-Bacon requirements.
This bill, S. 2611, would supposedly protect American
workers by ensuring that new immigrants would not take away
jobs. However, get a load of this--I want to re-emphasize what
Mr. King pointed out, the bill's definition of ``United States
worker'' includes temporary foreign guest workers. So the
protection is meaningless. Then there is a provision saying
foreign guest workers cannot be terminated from employment by
any employer except for just cause. That is the language of the
Senate Bill. However, as we know, American agriculture workers
can be fired for any reason whatsoever. Is that fair?
The Senate Bill also creates a totally unnecessary new F-4
visa category. It is essentially an automatic green card for
any foreign student who earns a graduate degree in engineering
or the physical sciences at a U.S. university. As Professor
Norman Matloff at the University of California at Davis has
extensively researched, there is absolutely no shortage of
American masters and Ph.D. engineers. There is no need for this
new visa category. Another example of foreigners trying to
steal American jobs.
Progress toward achieving sustainable yearly immigration
levels can come only by rejecting the massive and expensive
amnesty and guest worker programs in S. 2611 and hopefully, Mr.
Chairman, winning House-Senate conference approval of the
enforcement only House Bill 4437.
Thanks.
[The prepared statement of Mr. Kent follows:]
Prepared Statement of Phil Kent, National Spokesman,
Americans for Immigration Control
Members of the Committee, thank you for the opportunity to address
the critical policy issue of massive immigration's impact on American
workers and their wages and, in particular, the effect as it relates to
S. 2611 (the Senate-passed Hagel-Martinez immigration bill). I am the
national spokesman for Americans for Immigration Control, headquartered
in Monterey, Va., and executive director of its sister group the
American Immigration Control Foundation. I am a longtime journalist,
author and president of my own media/communications consulting company
in Atlanta.
Please remember that importing cheap, low-wage labor does not a
prosperous economy make. Hard as it may be to believe, the massive
influx of unassimilated foreign laborers pushes our economy ever closer
to the Third World economies of the countries they flee. These
immigrants are usually willing to settle for slave-like wages, and
contribute to an ever-growing underclass. The United States--a country
built on innovation, technology, and higher education--cannot continue
to flourish in the 21st Century if its chief burden is to put to work a
class of unskilled, uneducated labor which consumes more of our
country's resources than native-born Americans.
In the past immigration levels were much smaller and the welfare
infrastructure--from which illegal and legal immigrants
disproportionately draw from--could handle the flow. But the U.S. has
never had such a massive influx of illegal immigrants, to the tune of
over 1 million every year from 1990-2005. Also, an additional one
million legal immigrants arrive annually.
In this context, before analyzing the workforce/workplace specifics
of S. 2611, let's reflect on some ``urban myths'' relating to illegal
immigration.
Urban Myths about Illegal Labor
Illegal immigrants do the jobs that Americans refuse to do. This is
false. There are jobs that Americans will not do without proper
compensation. Americans are ready and willing to fill most jobs in the
country in most job categories, but there is a powerful job magnet for
illegals because of employers who slip low-wage workers cash under the
table and thus evade paying payroll taxes and benefits.
The U.S. benefits from increased output. While many will argue this
point, the cost that the foreign labor passes onto the American
taxpayer far outweighs that percentage gained in output. If higher
outputs were the sole concern of the nation, then why would there even
be a cap on any immigration? A large majority of illegal immigrants
currently come from Mexico alone. They take jobs in the U.S. and send
their earnings back home to their families. They are the chief
industrial asset that funds the economy of their home country, and thus
take away money that would be spent by American workers on American
goods and services. Journalist and publisher Ed Marston notes in a
February 3, 2003 essay:
It would be good for Americans to clean our toilets, write our
computer programs, slaughter our chickens and cattle, and pick our
strawberries.
And it would be good for Mexicans to cope with their population and
economy without using the United States as an overflow tank, and
without using the poor Mexican people as cash cows, to be exported as
if they were crude oil or cattle.
The U.S. suffers from labor shortages.
The sheer supply of illegal laborers who will work for slave wages
creates no need for employers to improve the positions they have,
restructure to create jobs that offer worthy compensation, or innovate
for a future that does not rely solely on manpower. Some employers
claim the need to hire a workforce of illegal immigrants as necessary
to run their businesses successfully or even at all. What they should
be focused on is obeying our existing labor laws and finding ways to be
successful without hurting the American laborer.
Illegal immigration is ``bad''; legal immigration is ``good.'' Any
type of guest-worker or ``amnesty'' program that would make it legal to
work is liable to depress wages of the American laborer on a larger
scale than that which has already been seen. In the short term, profits
for these employers would increase but, alternatively, there are major
expenditures passed on to the American taxpayers ranging from
healthcare to education.
The Losers
Low-Skilled American workers
Adding more immigrants to our own labor force means that Americans
who do not have high school or college degrees will now have even more
competition in finding work. According to the Center for Immigration
Studies, in a 2005 study titled ``Immigrants at Mid-Decade'' by Steve
Camarota:
In 2005, about 30 percent of immigrants age 18 and over in
the labor force had not graduated from high school.
For immigrants who arrived between 2000 and 2005, 34
percent had not completed high school.
This means that any effect immigration may have on the
wages or job opportunities of natives will disproportionately affect
less educated workers, who are already the lowest paid workers.
This study also went on to describe how states with a high
concentration of immigrants saw the largest numbers of unemployed
native Americans. Also, for the first time since the end of World War
II, teenage unemployment is at its highest rate due to illegal
immigrants stealing traditional teen summer job slots.
Black Americans and Other American-born Minorities
The effects of illegal and legal immigration are most widespread
among the workforce of black and other native-born Americans. Evidence
published by the group Numbers USA includes the following information:
A study by Harvard professor Dr. George J. Borjas finds that, by
increasing the supply of labor, immigration between 1980 and 2000 cost
native-born American men an average $1,700 in annual wages by the year
2000. However, the effects of immigration on wages were most profoundly
felt by native-born black and Hispanic Americans who suffered 4.5-5%
wage reductions as compared with the 3.5% wage loss felt by native-born
white Americans.
For minority groups, this is great cause for concern and its
leaders and elected representatives must take issue with politicians
willing to further open the door to foreign labor.
Technology and Innovation
The use of the current stream of cheap imported labor is stifling
innovation. As a world leader, we lose ground and become less likely to
be technological trailblazers. My colleague and immigration researcher
Mark Krikorian explains that ``by holding down natural wage growth in
labor intensive industries, immigration serves as a subsidy for low-
wage, low-productivity ways of doing business, retarding technological
progress and productivity growth.''
Small Businesses
On May 4, 2005 Matthew Reindl, the operator of a family owned
business--Stylecraft Interiors of NewYork--presented testimony to the
Subcommittee on Immigration, Border Security and Claims:
Illegal immigrant labor hurts American workers and legal immigrant
workers that respect our laws. Working Americans have seen their wages
and their working conditions decline every time they compete with
illegal immigrant labor * * * If my competitors are allowed to break
the law, and hire low-wage illegal immigrant workers, they gain an
unfair and illegal advantage over my company and depress the wages of
my employees. My competitors will undercut my prices, and could
possibly cause me, and other employers who follow the law, to go out of
business.
Financial Compensation and Benefits
Companies willing to hire illegal employees can clearly see their
law-abiding competitors and their American employees suffer. Law-
abiding businesses are left vulnerable and question why they must
suffer if they are honest and responsible employers. Stagnant and
depressed wages, and poor benefits, all are effects of the non-
enforcement of existing employment laws. Reindl continues by saying:
I have not been able to give my employees raises because illegal
aliens are depressing the labor wages of my industry. My product price
has not gone up because competitors have either dropped health
insurance for their employees or hired cheaper help, many of whom I
believe are illegal aliens. I know this to be true from the many job
applicants I interview. When I put a help wanted ad in the paper, half
of those applying admit to being illegal immigrants and admit they have
worked in nearby factories.
It's a Lawless Business
An article by Karen Rives in the Feb. 26, 2006 issue of The
Charlotte News and Observer says, ``In North Carolina, not a single
business has been fined for hiring illegal immigrants since 1999.
That's in spite of Section 247A of the Immigration and Nationality Act,
the federal law that prohibits employers from knowingly hiring illegal
aliens.'' She reports on the sentiments of Tom O'Connell of the US
Immigration and Customs Enforcement Center in Cary, North Carolina. He
explained the emphasis of his limited staff is to arrest felons and
laborers in worksites like nuclear power plants versus arresting
truckloads of blue collar illegal immigrants. ``I can't arrest every
truck full of painters going to some job in Apex,'' he said. This
scenario is repeated in every state throughout the country, and must be
ended. (By the way, if there is an arrest just one truck full of
painters, the word will spread in a community fast.)
Cheap Labor, Not So Cheap
Companies utilizing the sheer abundance of foreign and all-too-
often illegal manpower are able to profit while the government turns a
blind eye toward their offenses against the American worker. These
companies pass along the resulting costs to the taxpayer. They neglect
to pay payroll taxes and health insurance that would have been
necessary in providing a salaried position for an American citizen.
Local taxpayers foot the cost of educating the children of the illegal
and foreign laborers, and hospitals are forced to manage the paying the
bills for the uninsured laborers and their families. Reflect on what
columnist Phyllis Schlafly notes about the growing cash-only,
underground economy:
The employers commit a double offense if they pay the illegal
workers with cash in order to evade paying payroll taxes and providing
benefits to workers. For our government to tolerate the vast
underground economy is unjust honest businessmen who pays their taxes.
Bear Stearns estimates that taxes lost from the underground economy
could wipe out our entire federal deficit of $400 billion. The Los
Angeles Times reported December 13, 2005 that Los Angeles County's
underground cash economy is allowing employers to evade $2 billion a
year in taxes needed to support the social safety net.
The government's already existing default ``amnesty'' allows the
practice to continue, and the buck gets passed all the way down to the
employer of illegal immigrants. A North Carolina businessman explained
to The News and Observer, ``If we don't want them here, why doesn't the
government send them back? * * * The government lets them cross the
border, so why should we worry about it?'' Unfortunately this sentiment
permeates the minds of many who employ an illegal workforce and assume
that they are not responsible for their own actions because the
government has not worked to uphold the law.
While some would call this aiding and abetting, this same
businessman also went a step further as many others do: He helped his
illegal employees get tax ID numbers. This allows the illegal
immigrants to apply for car loans, housing leases, utilities, and other
essentials. The tax ID number acts in the same manner as what U.S.
citizens would normally use a Social Security number for. The fact that
the government is still basically turning turn a blind eye to illegal
immigrants in many areas further promotes the ideology that hiring them
is a just practice.
The Impact If S. 2611 Becomes Law
The Center for Immigration Studies and other researchers estimate
nearly 20 million illegal aliens will receive amnesty under the Hagel-
Martinez bill. And remember, too, this number does not include the
bill's huge increase in future legal immigration, which is expected to
double or triple from one million a year under current law.
The bill will not only reward millions of illegals with amnesty,
taxpayer-subsided services and a road to citizenship, it will also
greatly increase the flow of cheap labor by dropping the cap for H-1B
worker visas. Professor Norman Matloff of the University of California,
Davis, writes in a CIS Backgrounder that the ``H-1B program has long
been criticized by U.S. programmer and engineering groups as a cheap
labor program that adversely affects job opportunities for American
workers. The critics charge that another reason industry is so keen on
hiring foreign workers is that they are de facto indentured servants.
This gives employers leverage * * * to force foreign workers to put in
long weekend and evening hours. * * *''
Dr. Matloff reveals another threat to potential American
engineering students with the bill's creation of a new F-4 visa
category. He rightly labels this ``a dangerous threat to the
employability of American programmers and engineers * * * a new F-4
visa category that would lead to an essentially automatic green card
for any foreign student who earns a graduate degree in engineering or
the physical sciences at a U.S. university.''
Perhaps one of the most outrageous features of S. 2611--aside from
rewarding lawbreakers with services like college tuition breaks and
eventual citizenship--is requiring employers to pay foreign workers
higher wages at construction jobs. We need to get the message out to
the public--and to senators who may not have even realized they voted
for this provision--that aliens in construction jobs as part of the
guest worker program created by S. 2611 would receive higher wages than
American workers at the same job site. GOP lawmakers, especially, ought
to heed the conclusion of a report by their own Republican Policy
Committee on Capitol Hill. ``This is unfair to U.S. workers,
inappropriate and unnecessary,'' the report states.
Mr. Chairman, as you well know, the Davis Bacon Act of 1939
requires that the local prevailing wage be paid to all workers employed
in federally-contracted construction projects, or in work done for the
District of Columbia. Those wages, which are up to four or five times
higher in some construction fields than the federal minimum wage of
$5.15 per hour, are set by the U.S. Labor Department. The Senate bill
incredibly requires that the higher wage must be paid to temporary
foreign workers in all construction occupations, even if the project
isn't federally funded or otherwise under the jurisdiction of the
Davis-Bacon Act.
This bill would supposedly protect American workers by ensuring
that new immigrants would not take away jobs. However, the bill's
definition of ``United States worker'' includes temporary foreign guest
workers, so the protection is meaningless. Also, as I read a provision
of S. 23611, foreign guest workers admitted cannot be ``terminated from
employment by any employer * * * except for just cause.'' However,
American agriculture workers can be fired for any reason.
There are other unfair provisions of S. 2611 which expand the
paperwork burden for contractors who utilize subcontractors, and I am
concerned that Americans who don't speak foreign languages in some
workplaces will be involved in serious safety issues and other
communications concerns. To cite just one example, I have in my files
the 2004 resignation letter of a Miami-Dade Water and Sewer Department
employee who quit because she was discriminated against for not
speaking Spanish.
Heritage Foundation researcher Robert Rector discovered yet another
dangerous part of the 614-page bill. Because unskilled laborers would
be allowed to ``self-petition'' under the amnesty proposal, obtaining
permanent residency would bypass the Department of Labor--the agency
that is supposed to monitor immigration to ensure that American workers
are not displaced by foreign immigrant labor. And, as Dr. Rector
underscores, there is nothing ``temporary'' about the guest worker
program in S. 2611. Nearly all ``guest workers'' would have the right
to become permanent residents and then citizens. And there are
virtually no enforcement aspects of the Senate bill.
Breaking the Addiction
Our country was founded on laws to protect and serve our citizens.
The U.S. attorneys in all 50 states must begin to vigorously prosecute,
fine and even jail those employers who knowingly hire illegal
immigrants. More local and state law enforcement agencies must become
involved in this effort. By cracking down and holding companies
responsible for their illegal actions, the flow of immigrants into all
50 states will decrease. This type of self-deportation will take time,
since the demand has evolved over several decades. But an immigration
reduction will still occur, and none too soon to help the American
worker.
Progress toward achieving sustainable yearly immigration levels can
come only by rejecting the massive and expensive guest/worker amnesty
in S. 2611 and winning House-Senate conference committee approval of
the ``enforcement only'' House Bill 4437.
______
[Applause.]
Chairman Norwood. Order. Thank you very much. Order,
please.
I want to remind the members of the panel that we will now
be asking questions of the witnesses and Committee Rule 2
imposes a 5-minute limit on all questions. I will try to hold
us to the 5 minutes, but we will have two or three rounds, so
be prepared for me to come back to you at a later point.
I now recognize myself for 5 minutes.
Mr. Kent, since you ended, I will start with you. Your
testimony, in addition to what you were able to say, states
that any new amnesty plan that is called for in the Reid-
Kennedy bill and McCain and Martinez, will likely impact the
American taxpayer in terms of healthcare and education costs.
Can you estimate what these costs will amount to, given a
potential absorption of 20 million current illegal aliens into
the country?
Mr. Kent. Yes, sir, Mr. Chairman. In fact, I would refer
you and the Committee to a study that I think you are very
familiar with that came out right after May 15, and it was by
Heritage Foundation researcher Robert Rector, and he pointed
out that the cost could run into the billions. And I will just
leave it at that. It is an incredible, staggering statistic,
especially when you realize that unskilled laborers would be
allowed to self-petition under this amnesty proposal, thereby
obtaining permanent residence and bypass the Department of
Labor. And that is the agency, of course, that is supposed to
monitor immigration to ensure that American workers are not
displaced by foreign immigrant labor. So as Dr. Rector
underscores, there is nothing temporary about the guest worker
program. They will all have a right to be here, and they can
all bring in, as you know, their families under chain
migration.
Chairman Norwood. The Federation of American Immigration
Reform, FAIR, estimates that in Georgia alone, the cost of
illegal immigration on the social infrastructure, that would
be, Mr. Kent, including uncompensated emergency medicine,
education and incarceration, amount to nearly $1.2 billion. And
these numbers expand to $2.1 billion in 2010, 3.6 billion in
2020 if the Reid and Kennedy and McCain and Hagel Bill get
their way. These are staggering statistics and figures.
Can you corroborate these figures and/or have any
additional information for the record regarding these figures?
Mr. Kent. I agree with the Federation of American
Immigration Reform numbers. We have seen other numbers from the
Washington-based Center for Immigration Studies, my own group
corroborates that. And Mr. Chairman, that is right, there is no
such thing as cheap labor being cheap.
Chairman Norwood. Mr. Black, in your testimony, you stated
that--and you started out by saying ``I oppose illegal
immigration. I oppose amnesty. I oppose new or accelerated
pathways to citizenship.''
Mr. Black. Yes, sir.
Chairman Norwood. ``These topics,'' you further say, ``must
remain off the table. Yet a legal, properly documented and
accessible workforce is critical to Georgia's farm economy.''
These sentiments are quite different from many I hear every
day in Washington, D.C. Many believe that the only way to meet
the challenges facing agricultural labor is to offer amnesty to
illegal aliens. Now that is what we hear in Washington--not
what I am saying.
Mr. Black. Yes, sir.
Chairman Norwood. Given your experience, how can farmers
and producers in Georgia agriculture meet their labor
challenges without amnesty?
Mr. Black. Well, just through the development of hopefully
some adjustments in H-2A program. That is a program that has
been, as you know, Mr. Chairman, been available for well over
20 years. I mentioned earlier about the adverse effective wage
rate that is one of the challenges that establishes I believe
$8.37 that you must pay a worker, that actually you are
bringing in a group of workers that actually supplant some of
those other jobs at really an elevated wage rate. It is much
like some of the discussions that we have already had here,
setting up a dual system. I believe that will be one of the key
changes to the existing H-2A program, to give some flexibility.
One thing that is important to point out to Georgia farmers,
those in vegetable production and those that usually pay on a
piece rate, actually there are very competitive wage rates out
there that actually surpass, far beyond, the minimum wage. But
there are still some jobs just in warehouses where we need the
flexibility in the wage rate. Those adjustments to H-2A I think
would be very advantageous.
Some earlier issues with regard to housing and others that
could be amendments or issues that we can talk about later, but
certainly I think working within the framework of the existing
H-2A program with some adjustments could provide us the legal
workforce that we need.
Chairman Norwood. Why do more people not use H-2A today?
Mr. Black. Well, there are just some streamline issues of
dealing with the bureaucracy that I think could make that
paperwork easier for farmers to deal with. Not to make it
easier for people to get here, but easier for the farmers to
actually deal with that--I think improving our verification
system that Senator Pearson mentioned earlier. Those additional
tools could be provided that would streamline the program,
still provide strong verification and that they come here on a
temporary basis, perform the task that they are assigned, and
go home.
And those certainly could be aspects of minor adjustments
to H-2A that I think would be, again, advantageous to Georgia
producers, and you would see more of them using it.
Chairman Norwood. Ms. McCollum, my time is up. You are now
recognized for 5 minutes for questions.
Ms. McCollum of Minnesota. Well, thank you, Mr. Chairman,
and I appreciate the opportunity for a second round of
questions.
I would just like to go back to what Mr. Kent was talking
about and that is, because of what happened after Katrina. I
went down to Louisiana and the 9th Ward and had an opportunity
to talk to people there. And Davis-Bacon was waved off. Well,
we have had an emergency here, you do not have to pay the
prevailing wage, so there were contractors who took gross
advantage of that, bringing in lower wage workers while
citizens of Louisiana, citizens of the United States, residents
of Louisiana were told that if they wanted to do a job, rebuild
their city, they would have to do it for next to nothing. And
we repeatedly asked for hearings and finally, the Democrats I
think, along with some of our Republican colleagues, and there
were Republicans who joined us on that issue, convinced the
President that he had to change his mind on that issue. And
then we saw American workers able once again to help rebuild
their city. But that was not a decision that this Member of
Congress made, to remove Davis-Bacon down in the Louisiana
area.
I would like to ask Mr. Yellig, you know, this whole issue
of how Davis-Bacon somehow is not going to protect American
workers, and Mr. King mentioned a friend of his who was being
paid less wages than he needed to survive. My understanding is
that the Davis-Bacon and Service Contract are going to be used
as a benchmark. In other words, you have to offer, you have to
post the job for American workers at that salary, and if no
American worker applies, none whatsoever, then you can go
through the steps it would take to hire the guest worker, but
that guest worker gets hired at that wage. So that the next
time that there is an opening, the American worker is not
competing for a low ball wage without any opportunity for
benefits.
Could you elaborate on that more? My understanding is it is
to protect American workers.
Mr. Yellig. That is correct. That is what the purpose and
intent of the labor certification process, relying upon the
prevailing wage standard, has been, as I said before, for 40
years. This is not a new idea, it has been applied under the H-
2B visa program which applies to the same category of workers
as the H-2C guest worker category would apply to, just in a
broader--for a longer period of time. The H-2B only applies to
people coming here temporarily for a period not to exceed 1
year. The H-2C program would allow a guest worker to remain in
the United States for a period up to 3 years, provided that
that person remained employed and was not unemployed for I
believe a period longer than 45 days. If they were unemployed
for a period of longer than 45 days, they would have to go
home.
But, as you indicated, the intended purpose of the use of
the Davis-Bacon and Service Contract wage rates is to establish
a benchmark. It is not to apply the Davis-Bacon Act per se to
employers that hire guest workers. For example, the Davis-Bacon
Act has a provision in it that requires employers to file
weekly certified payroll reports because they are government
contractors. That requirement does not apply to employers of
guest workers. Also, employers----
Ms. McCollum of Minnesota. So the extra paperwork does not
apply?
Mr. Yellig. That does not apply.
Ms. McCollum of Minnesota. Thank you.
Mr. Yellig. The same thing is true with regard to the
penalties for violating the Davis-Bacon Act, in addition to
requiring a violator to pay the underpayments of wages for
violating the Act. In addition to that, an employer under the
Davis-Bacon Act or the Service Contract Act is subject to
debarment for a period of 3 years. Meaning that the employer is
ineligible to receive government contracts or subcontracts for
3 years--a very, very serious penalty.
If an employer violates the prevailing wage requirement in
the immigration statute, the matter will be between the
employer and, not the INS any more, but the Department of
Homeland Security. It will not be subject to debarment under
the Davis-Bacon Act. None of the provisions of the Davis-Bacon
Act would apply to an employer hiring a guest worker under this
legislation or any of the other temporary visa programs. Only
the wage--it is merely a point of reference to establish what
is generally acknowledged to be the prevailing wage rate for a
construction worker as far as Davis-Bacon is concerned, and a
service worker as far as the Service Contract Act is concerned.
Ms. McCollum of Minnesota. Thank you, Mr. Chair.
Chairman Norwood. Thank you, ma'am.
Mr. Price, you are now recognized for 5 minutes.
Dr. Price. Thank you, Mr. Chairman, and I want to thank all
of the witnesses for your testimony. I think the discrepancies
in the testimony highlight really the challenge that many of us
in Congress have in making certain that we identify true facts,
real facts, and come up with appropriate solutions.
I want to concentrate for a few minutes on employee
verification. I am troubled by, Senator Pearson, your comments
that it takes 67 days to be able to go through, in the minimum,
the shortest time to be able to verify whether an individual is
appropriate to hire. Is that accurate?
Mr. Pearson. It is inaccurate, my math was incorrect, it is
actually 77 days.
Dr. Price. Seventy-seven days.
Chairman Norwood. Pass the mic down, please.
Dr. Price. I am going to start down here if I may. I want
to talk about the Pilot Employment Verification Program. And as
I mentioned in my opening statement, only 2300 of the nation's
5.6 million employers utilize that pilot program. I would like
the opinion--I assume that we all believe that no employer goes
into business to be a policeman for illegal aliens. That being
the case, I also assume that employers want to, by and large,
follow the law. Is it a good idea to make that program
mandatory? That is one of the things that Congress is
considering. Mr. Kent, do you mind starting there and just
passing it on down?
Mr. Kent. Yes, our group does want to make that mandatory
and I know some states have already done that, and there are
some good examples where it has worked very well.
Mr. Yellig. As far as I understand, the AFL-CIO, which I do
not represent, but the Building Trades is part of it and the
Building Trades Department has no problem with making that
employer verification process mandatory. We have no problem
with that, we agree with it.
Dr. Price. Mr. King, I know you stated that you believe it
ought to be mandatory.
Mr. King. Yes, Congressman. I am a program administrator in
the Basic Pilot Program. It is important to realize that Basic
Pilot can only be used to verify a newly hired employee. It is
not a screening process. Once hired, you can then run the
Social Security number and the pertinent information through.
It does go through DHS files and Social Security databases, and
it will give you a reflection of whether or not the Social
Security number matches the person and whether or not that
person is in this country legally. It has a 94 percent approval
rate. Much is made about the trouble--and I quote, the
trouble--with Basic Pilot. It normally comes from people who
desperately do not want it to be used. There is an appeal
process. If you get a false negative from a newly hired
employee that would give you the indication that this employee
is not eligible to work in the United States, there is an
extensive appeal process and the employee is not fired or
released from employment until that appeals process has been
completed.
If the question is do I support the use of the Basic Pilot
Program on a mandatory basis; yes, sir.
Dr. Wenger. It seems clear to me that the answer should be
yes. I mean we have to take care of both the supply side of
this equation and the demand side of this equation. So we
clearly have a bunch of people coming into the country
illegally looking for work. That is the supply of these
laborers, and they would not come here if there were no jobs
for them. So the demand side of this equation must be taken
care of and an employee verification system is an absolute
must. You do not get an equilibrium without both the supply and
the demand.
Mr. Black. Yes.
Mr. Pearson. Yes.
Dr. Price. Does doing that, making that mandatory, does
that help your situation, Mr. Pearson?
Mr. Pearson. It certainly does. One of the aggravating
things that we face is that, as Mr. King said, all this is for
new employees and we do have--in the past, have gotten no-match
letters for existing employees. In one case, the man was with
us for 8 years. We sent him notice of the no-match letter,
expecting him to come in and deal with it. We simply never saw
him again, meaning he knew he was not going to get through the
process. But that does not mean he went back, I believe he was
from Honduras, that means he went right down the road to
another employer and was probably hired on the spot the same
day. That is the reality of what we face.
Dr. Price. Thank you. I want to--I think everybody agrees
or believes that we ought not be hiring illegals, I am not sure
about you, Dr. Wenger, but I am going to come back to that.
I am interested in knowing----
Ms. McCollum of Minnesota. I hope you do because I do not
think so.
Dr. Price. Well, I will be glad to point to some of his
testimony, and we will talk about that on my second round.
I am interested in knowing who on the witness panel
believes the Senate Bill would not stop an employer from hiring
illegals, anybody want to comment on that? Mr. King.
Mr. King. I hope I have the question right, Congressman. If
it was, do I believe the Senate Bill would not stop employers
from hiring illegals; that is my belief, yes, sir.
Dr. Price. That it would not stop.
Mr. King. I do not believe that the 2611 bill would do any
more to stop hiring of illegal aliens than did the Simpson-
Mazoli Act of 1986 because I have little faith in my government
to enforce the laws in that bill. I have seen what happens when
Congress, respectfully--I am not a member of any political
party--when Congress passes laws about illegal immigration.
Most of the American people that I am in contact with are
demanding that our borders be secured and at the same time our
employers suffer some real sanctions. And I do not subscribe to
the enforcement first. I simply subscribe to enforcement. But
no, sir, I do not believe that the Senate Bill or the people
who wrote it have any intention of enforcing that law.
And if I may, in 20 seconds, in 1986, Simpson-Mazoli had a
provision in it, it's 1324(a), paragraph (i), I believe, that
addresses preemption by the states. At present, the states are
prohibited, under the preemption clause in Simpson-Mazoli from
going after the employers. There is a very small loophole there
dealing with licensing. That exact same provision is in 2611. I
do know that section, it's 274(a) paragraph (j). It stops the
states from criminally punishing the employers. I see some
doubt up there, but I will be glad to provide that text if
required.
Thank you.
Mr. Kent. May I address that, Mr. Chairman, just very
quickly too?
Not only are there not any enforcement mechanisms in S.
2611 but there are more magnets to bring in illegals into the
country. As we all know, we found out later, that you get
tuition breaks for college for illegals, you of course get the
path to eventual citizenship, and you get your Social Security
wages paid for as you come into this guest worker program. So
there are more magnets to bring in more illegals into this
country under S. 2611.
Chairman Norwood. Thank you very much, Mr. Price; which has
something to do with the fact that many of us believe that if
you do not secure the border first, you absolutely have done
nothing, no matter what you write into a bill.
With that, I recognize Chairman Deal for 5 minutes for
questions.
Mr. Deal. Thank you, Mr. Chairman.
There is a huge skepticism that prevails, I believe, in the
public's mind, and I believe prevails to a large extent in much
of the Congress' mind about the effectiveness of enforcing any
law as it relates to illegal immigration. The testimony I have
heard today about a new bill; i.e., the Senate Bill versus the
House Bill, has a presumption that we are going to enforce the
new law. I have great skepticism, if we cannot enforce the
current law, how do we have any confidence we are going to
enforce an even more difficult law to enforce.
[Applause.]
Mr. Deal. Let me point out some of the fallacies that exist
now. And Mr. Black, I will start with you. You mentioned the H-
2A program where we bring in agricultural workers, they are
supposed to be here for a limited period of time. Do you have
any idea how many of them disappear into our economy?
Mr. Black. Many.
Mr. Deal. Many of them, many of them.
Chairman Norwood. Let the record reflect the witness said
many.
[Laughter.]
Mr. Deal. We have a reform that we put in place as a part
of the 1996 immigration reform package that said that for
people who were going to sponsor immigrants to come into this
country, that they would be assuring the government at every
level that those that they sponsored would not become a burden
on the social system, that they would be responsible for
medical bills, they would be responsible for other expenses
that their sponsored individual incurred.
I would ask this panel, have any of you ever heard of a
single case where a sponsor has been held accountable for an
individual they sponsored?
[No response.]
Mr. Deal. That is the information I have--none.
Chairman Norwood. Let the record reflect, nobody.
Mr. Deal. Now if we want to get serious about this, we have
got to begin to get serious about the enforcement side of it.
We have heard a debate here about whether the prevailing wage
or the Davis-Bacon wage rate is what we should adopt. There are
certainly arguments on both sides, one of the arguments being
that if we do not adopt the higher wage rate, then we are going
to bring down and displace American workers because of that. On
the other hand, you would have employers I am sure saying that
if you raise it up to an inappropriate level, then there is no
real advantage there of being able to attract anybody to work
after all.
Now those are the anomalies that I think we have existing
here. But let me tell you some anomalies that I think, and
problems that are in the current system, and I am sure Mr.
Pearson has probably seen this. A 17 or an 18 year old worker
who comes in and he claims as he fills out his employment forms
that he has either seven or eight dependents. Have you seen
things like that?
Mr. Pearson. Yes, sir.
Mr. Deal. And we do not do anything about it. What that
means in practical terms is, for those who say well, these
people that are coming into our country are paying their
taxes--what that means is there is no withholding of income tax
because he claims enough dependents to make him over the exempt
amount.
Now those are the kinds of things that we ought to be
tightening up in our current law. Does anybody have a problem
with us trying to tighten those up?
Mr. Pearson. No, Congressman.
Mr. Black. No, sir.
Mr. Deal. They are not in either of our bills, quite
frankly, and I think they honestly need to be.
Mr. Chairman, I have taken more than my time, but I
appreciate the fact that despite our differences of perspective
here, hopefully we have a common interest of doing what is best
for our country.
Thank you.
Chairman Norwood. Thank you, Mr. Deal. Members, we will
start and go around again, if that is agreeable with everyone.
I want to get back to--I recognize myself for 5 minutes of
questions.
I would like to get back to Davis-Bacon. We talk as if that
is the most wonderful law that we have ever put on the books.
And I am going to tell you, folks, without this expansion in
the Senate Bill, it really still is not a very good idea. All
it really amounts to is that when we build this courthouse here
in Hall County, the contractor who builds this courthouse is
told by the Labor Department in Washington, D.C. what he has to
pay in terms of wages. Now the Labor Department in Washington,
D.C. has no ability to determine that with any sense. They do
not get it right, they never have gotten it right. In fact, I
would like to submit for the record an executive summary from
the Office of the Inspector General.* It simply lists a
platitude of reasons why the Labor Department never gets the
Davis-Bacon wages correct.
---------------------------------------------------------------------------
*Submitted and placed in permanent archive file, ``Executive
Summary,'' Concerns Persist with the Integrity of Davis-Bacon Act
Prevailing Wage Determinations, Office of Inspector General, U.S.
Department of Labor, No. 04-04-003-04-420, 30 March 2004, http://
www.oig.dol.gov / public / reports / oa / 2004 / 04-04-003-04-420.pdf.
---------------------------------------------------------------------------
In an economy that we have so much employment, I promise
you, the wages are not low. It is hard to get people to work
today. You have to pay good wages if you want somebody to come
in and help you build this courthouse. And we do not need one
bit of help from Independence Avenue in Washington, D.C.,
people who never get outside the beltway, to determine what we
need to do right here in Hall County.
Now the Senate Bill, this immigration bill, takes it a step
further. Now it says you have to have Davis-Bacon wages for
illegal immigrants, people who have broken our law, who have
come across our borders illegally and you have to pay them
those wages. It does not matter if Federal tax dollars are
involved now, it does not matter that the taxpayer is not
paying for a grading job Senator Pearson's company is doing.
Maybe I hired him to do it, a citizen. And now the Labor
Department in Washington, who cannot get it right under Federal
building, wants to tell us how to do it in all other
construction projects across the country. That makes absolute
no sense to me. Happily, it made no sense to 38 Republicans in
the Senate.
We talk about well, is this a Democratic bill, is it a
Reid-Kennedy bill or is this a McCain-Hagel-Martinez bill.
Well, it is hard to tell. But I can tell you this, 38 Democrats
voted for it and 23 Republicans voted against it. We do not
control the Senate. Nobody controls the Senate.
[Laughter.]
Chairman Norwood. Not even the Vice President of the United
States controls the Senate and he is the President. You have to
have 60 votes in there to get anything done. We cannot get
anything done there unless you have 60.
So I know whose bill this was. This was a Democratic bill
that most Republicans voted against and this panel has already
enumerated some, just some, of the terrible things that are
inside this Senate Bill.
I promise you, we do not have enough days this week to go
on over all the bad parts of that Senate Bill. It is the worst
piece of legislation I have seen in 12 years in the U.S. House
of Representatives. And for those of you who may wonder, you
can rest assured it is not becoming law. We are not going to
let that happen.
[Applause.]
Chairman Norwood. We are not going to let that happen
through the House of Representatives.
But the bad news is we need an immigration bill. We need to
secure the borders. I mean shut her down, folks. Then we need
to deal with a good guest worker program and we need to deal
with the fact that we have got 20 million illegal immigrants in
this country right now. But we cannot deal with those facts
until we get some kind of something out of the Senate that you
can sit down with and have a discussion about. The bill they
have got now is not one. You could throw half of it away, and
you could not conference with it. Hopefully when we go back
after the elections, in a lame duck session, maybe, just maybe,
we can sit down and have some grown ups try to turn up a good
immigration bill.
My question is to each of you. If you were sitting in the
U.S. Senate, starting with you, Mr. Kent, would you have voted
for that bill?
Mr. Kent. Well, I would not have voted for the bill. In
fact, it is very interesting, as all of you know, all too often
lawmakers do not read what is in the bill. There was a U.S.
Senator just a few weeks ago--I will give him an A for
honesty--actually admitted he did not know some of these
sections, these horrible sections, were in the bill. And so I
think there is a lot of re-thinking on the part of some of the
U.S. Senators. And it was very instructive to see that our own
U.S. Senator, Johnny Isakson, did receive 40 votes when he did
try on the U.S. Senate floor, and it was bipartisan, to try to
get an enforcement only bill in the Senate. So I think that
gives you in the House of Representatives a lot of hope that
there is at least a base of 40 U.S. Senators that are thinking
straight.
Chairman Norwood. My time is up, but I am coming back in
the next round and ask that question.
Ms. McCollum of Minnesota. You can ask it.
Chairman Norwood. Well, if you have no objections.
Ms. McCollum of Minnesota. No.
Chairman Norwood. Mr. Yellig, how would you have voted on
the Senate Bill?
Mr. Yellig. I would have voted for the bill with the
understanding and expectation that in conference, the bill
would have been made better.
[Laughter and applause.]
Chairman Norwood. Mr. King, how would you have voted?
Mr. King. Congressman, I would have voted a very clear no.
I watched C-Span the day that the Senate voted on that, and I
would hate to say the wrong name, but I watched one of the
Senators minutes before the final vote be alerted by his staff
members that there was a provision in 2611 that would require
the United States government to consult with the government of
Mexico before we secure our own border.
There are a myriad of reasons that I would not have voted
for the bill, sir, but that would have done it right there.
Chairman Norwood. We cannot even build a fence on our own
United States property under that bill, without getting Mexico
to OK it. I think that is unbelievable.
Mr. King. I am a clear no, Congressman.
Chairman Norwood. Mr. Wenger.
Dr. Wenger. I have not read the bill, so I----
Chairman Norwood. Do you know enough after today?
Dr. Wenger. No, I do not actually.
Chairman Norwood. Oh, you do not?
Dr. Wenger. My inclination is that I would have voted for
it, but having not read all the specifics, I cannot say for
certain.
Chairman Norwood. Your inclination is you would have.
Dr. Wenger. Yes, sir.
Mr. Black. Crystal clear, no.
Chairman Norwood. Senator.
Mr. Pearson. No.
Chairman Norwood. Thank you for your indulgence. My time is
now up. Ms. McCollum, you are now recognized.
Ms. McCollum of Minnesota. Well, you know, we can come back
after the election, but I think it was a total missed
opportunity for the leadership--forgive me for stating what is
fact--the leadership is not in the Democratic Party, we control
nothing. For the leadership in the Republican Party not to take
those bills and go to conference, we have wasted months. We
should be in a conference setting and at least see if we could
move forward.
[Applause.]
Ms. McCollum of Minnesota. And as we are wasting time by
not going to conference, we are missing an opportunity. The
reason why there is not any enforcement, the number of
apprehensions at the border has declined 31 percent since the
year 2000. The number of apprehensions inside the country of
illegals has declined 36 percent since the Bush Administration.
The Bush Administration has cut personnel for work site
immigration enforcement by 63 percent. The number of work site
immigration enforcement fines against employers has fallen
drastically. The number of work site immigration enforcement
arrests have fallen drastically. And I have got the numbers all
here, I will submit them.
Let me give you the numbers arrested in work site
enforcement since 2000. 1999, 2849 arrests; 2003, 445. And the
number of immigration fraud cases have completely fallen
drastically under the Bush Administration. In 1999, we had 6455
fraud cases completed; 2003, 1398. Now if we do not have the
wherewithal to put our money where our mouth is, when these
budgets are moving forward, to put the dollars into coming up
with a verification, to put the dollars in enforcement, we
should all be held accountable for that, based on what we do
with the budget.
It is all about choices. We are building bridges to
nowhere, but we are not funding to secure our borders.
I would just ask any of the witnesses if they know of any
place where we have increased funding to protect our borders,
increased funding to help employers verify, increased funding
under the majority control that we currently have in
Washington, to protect American wages, jobs. Is anyone aware of
any increases?
Chairman Norwood. Yes, I am.
Ms. McCollum of Minnesota. What have we increased?
Chairman Norwood. In the appropriations bill, there was a
considerable amount of increased funding for border patrol,
homeland security measures for this particular immigration
thing. And I have to tell you, and I do not want to go here
very far, but most Democrats voted against it. Not you, I am
sure, but most of them did.
Ms. McCollum of Minnesota. But I am asking about what we
are talking about, the onsite job investigations. Those have
all been cut, unfortunately.
Thank you, Mr. Chairman.
Mr. King. Ms. McCollum, I am familiar with the figures that
you quoted, and if you are asking a member of the panel, a lot
of people who pay attention realize that the last President who
really went after interior enforcement as far as illegal
immigration was Dwight Eisenhower. We are not entirely
convinced that it is a matter of continually increasing funding
more than it is to get people in Washington in elective office
on the same page, to enforce existing law; and again, to hold
people in this country illegally and their employers and their
bankers up to the same rule of law that the American citizens
are held to.
Ms. McCollum of Minnesota. As long--if the Chair would
indulge me for a second.
Chairman Norwood. Go ahead.
Ms. McCollum of Minnesota. In the President's latest
budget, the request for OSHA, that is job safety, work site,
was cut 8 percent. It was a loss of 197 total positions. I mean
when you are cutting that many positions, then you know you do
not have people out on the work site being able to do the
inspections. The number of wage and hour investigators dropped
from 946 in 2000 to 788 in 2004, that is 200 fewer people out
there able to do those job site investigations.
So we have a responsibility I think to go back and work
together to increase these parts of the budget.
Mr. King. May I, Ms. McCollum?
Chairman Norwood. I think I need to go to Dr. Price because
he has a time schedule.
Dr. Price, you are recognized for 5 minutes, and then I
will get you back.
Dr. Price. Thank you, Mr. Chairman, I appreciate that and I
do have a time crunch and I apologize. I am going to have to
leave after this series of questions.
But there are a couple of things that need to be pointed
out. One, the reason that this bill has not gone to conference
is because there has been no evidence shown by the other body
that they are interested in negotiating on any of the
provisions that they have. So it makes no sense to negotiate
with one's self in this matter, especially when the kinds of
security arrangements for control of the border that we in the
House believe are so doggone important, would not be considered
in the same vein.
To intimate that there have been no proposals to have more
resources put into controlling the border or assisting in
identifying illegals is just folly. To sit before a public
group and say that this House has done nothing as it relates to
that is simply wrong. It is again, the kind of demagoguery that
we see and it does a disservice to the debate and it does not
further a positive solution.
I just got back from visiting the border in El Paso this
past week, and our border security folks are doing a whale of a
job with the resources that they have. What we have not
demonstrated in the Federal Government is the will to
accomplish the task. And the task before us is to control the
border. I think it is the No. 1 job, and it is the No. 1 job
because the American people do not trust us to do the No. 2
job. That is the reason. And there is good evidence for that,
as Congressman Deal stated.
I do want to take a few moments and talk very briefly with
Dr. Wenger because I am troubled by some of the comments that
you made in your written testimony. In your written testimony
you state that this simple fact, talking about illegal workers
on job sites, means that both sets of workers, both sets of
workers, both legal and illegal, face the same threats in the
form of job insecurity, wage insecurity and workplace
insecurity. I am curious as to what kind of job security, wage
security and workplace security you believe is due illegal
workers in the United States.
Dr. Wenger. Illegal workers do not have standing, and they
should not be protected by law. They are here illegally.
Dr. Price. I would agree with you, and I would encourage
you to review your----
Chairman Norwood. You need a microphone, please. Greg, take
care of the microphone.
Dr. Wenger. Workers who are here illegally have no legal
standing and are not entitled to the rule of law.
Dr. Price. And I would----
Dr. Wenger. As a consequence, I would say though that they
do create hardships, potential hardships, when they are
unprotected, for American workers who are here legally, who
work.
And I would also like to say about the wage issue that we
have talked about in the past, I have heard that there is some
research that indicates that wages have been dramatically
declining as a result of this. Having read the literature, the
academic literature, the peer-reviewed literature on this, I
think that this is a complete overstatement about the impacts
of immigration on wages. There is a lot of research out there
on this, it is very mixed. The difference between what we
observe for native American workers who face competition from
immigrants is a mixed and murky bag of tricks. It is not clear.
The most prestigious researcher on this issue, George Borjas,
who is at Harvard University, has written a compendium of the
literature and his estimates--and he is clearly no fan of
illegal immigrants or much legal immigration for low
educational status workers--indicates that depending on the
era, the 1970's, the 1980's or the 1990's, you get very
different effects of legal immigration impacts on workers in
the United States.
So to say that this is not a mixed bag or a murky mess is
really disingenuous.
Dr. Price. I appreciate your verbal testimony. I would----
Mr. Kent. Can I just answer----
Chairman Norwood. Speak to the Chair, please.
Dr. Price. I would ask you to revisit your written
testimony because I think it connotes things that you may in
fact not agree with.
Please, Mr. Kent.
Mr. Kent. Just a quick point, Congressman.
You do quote Dr. Borjas, who is an expert in the area, and
he is pretty clear about what he says. And I will read you a
quote that is in my written testimony, he is a Harvard
professor of course, and he found by increasing the supply of
labor, immigration between 1980 and 2000 cost native-born
American men an average $1700 more in annual wages by the year
2000--very clear.
Dr. Wenger. That directly contradicts what he wrote in his
handbook of general economics chapter.
Chairman Norwood. Gentlemen, we do not do it that way.
Dr. Price. I appreciate those comments and my time has
expired, Mr. Chairman. I appreciate you holding this hearing.
Thank you for your leadership.
Chairman Norwood. Mr. Deal, you are now recognized for 5
minutes.
Mr. Deal. Well, thank you, Mr. Chairman.
I want to set a tone here that may be a little different
than we have set up to this point.
What we have all talked about, and the reason that so many
people are here to hear what we have to say, is that this is a
very contentious issue. It is not one that lends itself, quite
frankly, to simplistic solutions. I want to say this on behalf
of those guest workers that we have in our community here. By
and large, they are hard workers; by and large, they are family
oriented people. They are the kind of people that can make a
difference if they return to their countries because they need
to establish that kind of work ethic, that kind of respect for
the work and family that their countries need to bring them up
in the world community.
Now, that having been said, the two differences that exist
between the House bill and the Senate bill, if you want to
narrow it all down, is that the House bill is an enforcement
first, interior and border. It does not have the guest worker
provisions, it does not have amnesty built into it.
Now I think all of us recognize that at some point, we have
a shortage of workers in this country, and we will need to
address the guest worker portion and that issue. The point we
want to make on the House side is you cannot do that
simultaneously. And let me tell you why. I do not think you can
make a guest worker program effective and function if the
border is still porous. Why? Because I think a guest worker
program has to have some conditions attached to it, some
conditions attached to the worker in terms of how long they can
stay, et cetera. I think it should also have some conditions
attached to the employer. Why would anybody want to come to a
program that has a time limit fixed as to how long you can be
here if you can continue to come across the border and work
with no time limits and no restrictions? Common sense says you
have to have security of the border as a pre-requisite to
making a guest worker program work, in my opinion.
Now let me ask specifically this question: We have talked
about the wage issue and whether or not it should be a
mandated, legislatively fixed higher wage standard. One could
very well argue that all that does is to assure that there will
be more dollars earned in the United States shipped across our
border to the home country of the worker. The problem that
people feel in my community--I have alluded to the three big
ones, healthcare, education and crime--those all have social
costs that are affected immediately while you are present in
our country.
For example, should an employer who has a guest worker have
responsibility for their medical bills? You are saying well, we
are just going to pay the employee more money. Do you presume
that they are going to use that extra compensation to buy
health insurance that they are not buying now? I do not think
so. Who is going to pay for those health care costs? I would
like to hear somebody say, how are we going to fix those social
problems that are attached with any proposed new guest worker
plan.
Mr. Yellig. May I respond to that, sir?
Mr. Deal. Sure.
Mr. Yellig. I know for sure that if there was a provision
in immigration reform legislation that mandated that employers
of foreign guest workers must provide medical insurance, I can
assure you that my clients would get behind that 175 percent.
But I am afraid, speaking candidly, that you would get the same
response that we get about requiring the payment of a
prevailing wage rate, saying why should a temporary foreign
guest worker be provided with medical insurance when American
workers are not provided with that same protection.
Nevertheless, I think that the requirement is an
appropriate one because it addresses the kind of problems that
you have alluded to.
Mr. Deal. But let me tell you the problem in practical
terms here. Many of our employers already provide health
insurance, they offer it as they offer their American workers
health insurance, and the foreign workers elect not to
participate. And the reason why? Because they can show up at
our emergency room and get all the free care they want and they
do not necessarily have to use the same name that they used the
day that they signed up to be employed.
Now you say that that is unfair competition with American
workers? I want to tell you that the low wage American workers
in this community and across this country, they cannot show up
and use a false name. They cannot go somewhere else and
disappear into the economy. Their house will be foreclosed on,
their car will be foreclosed on. Those are sanctions that are
not currently applied in the current system.
Voice. Preach it, brother.
[Applause.]
Mr. Deal. I have incited enough trouble, I will yield back
my time.
Mr. Yellig. Just for the record, organized labor I know
would support a mandatory requirement that all employers
provide medical insurance, not that is optional, but mandatory.
I want to make sure that is clear. We would support that,
again, 175 percent or more.
Chairman Norwood. I do not think there is any doubt amongst
any of us that that is clear.
Ms. McCollum, you are now recognized for 5 minutes.
Ms. McCollum of Minnesota. Thank you, Mr. Chair.
This has been a robust debate, and I am going to stress
again, unfortunately, this debate is not taking place in a
conference committee. The House says, you know, I am not going
to do this unless--go to conference unless we guarantee we are
going to get our position to win and the Senate says we want
our position. That is what usually happens with all conference
committees. We should be in conference committee, we should be
working on this issue. We cannot afford to let our borders go
unprotected.
[Applause.]
Ms. McCollum of Minnesota. And it is clear that we need to
put dollars back into the enforcement sections that are
currently in law to protect workers that are here legally and
to protect American workers.
But I think there is another discussion that has also been
taking place, and I think it is helpful and that is should we
have a benchmark, an expectation of what a person is to be
paid, so that if--and I am using prevailing wage numbers which
have not been updated in this county since 1990--if I am an
asphalt raker, an American asphalt raker born here in the
U.S.A. and I am raking asphalt, I know I am guaranteed $7.51 an
hour, if it is a Federal contract. Why should that American
worker know that a guest worker or an illegal worker can come
in here and take that job away from them at another site? That
is wrong. And what the Senate Bill attempts to address and why
I think it is important we go to conference committee--this is
going on right now, folks, American workers are having to
compete with people who are here illegally, who are not being
paid the same wage for doing the job.
Voice. Secure the border.
Ms. McCollum of Minnesota. Mr. Chairman----
Voice. Secure the border.
Ms. McCollum of Minnesota [continuing]. Would you ask this
gentleman----
Voice. Have I got to leave?
Ms. McCollum of Minnesota. No, you do not have to leave.
Chairman Norwood. We are not going to do it that way or you
will have to leave. You have to be quiet in the audience.
Sorry.
Ms. McCollum of Minnesota. I have not once said we should
not focus on securing the borders, but the fact of the matter
is, without putting a benchmark in for wages to protect
American workers, American workers will not have the
opportunity to compete for jobs here at home. We need to have a
benchmark for wages. This discussion with Bacon-Davis gives us
the opportunity to make sure American workers, their jobs and
their benefits are protected. And we have to do that.
And these are concluding remarks, so I know people have
their hands up. Mr. Chair, you have been very gracious. Thank
you for hold this hearing, and I hope that when we go back, we
do not wait until a lame duck session to do something about
securing our borders and protecting American workers.
Chairman Norwood. Thank you, Ms. McCollum, I appreciate
your effort to be here, and I thank the witnesses a great deal
for their time and their effort to be here and go through this.
In conclusion of our hearing today, I just want to point
out that if all of my Democratic colleagues were as wise as Ms.
McCollum, then we probably could solve this problem as soon as
we get back. The different points that she brings out, I agree
with in so many different ways, but I have to tell you that
most Democrats in Washington do not want to do this, they voted
against securing the border, 164 of them in the House voted
against securing our border. In my district and in Mr. Deal's
district, that number who agree that we should secure our
borders first is somewhere between 88 and 90 percent. The
American people catch on to what is going on with this and they
know what they want us to do. But the reason we cannot get in
conference is that Senator McCain and Senator Reid keep sending
letters out to all members of the House saying we cannot
possibly come to conference unless you pre-agree there can be
no changes in the Senate Bill. Well, now that is pretty hard to
have a conference committee under those circumstances.
Hopefully, after being home this month, working with our
constituents around the United States, some Senators and some
members of the House will come back to Washington having
learned a few lessons from the people. If we will just listen
to the people of the United States, the citizens of this
country, there is a very clear message as to what we should do
and how we should do it. This is not as hard as some people
like to make it seem.
You have to secure the border. That is not that hard to do.
At the same time, you have to start border patrol boot camps.
You actually start training people to secure the border other
than the National Guard. This is not the first time this
thought has ever come up, ladies and gentlemen. In 1916, the
Georgia National Guard went to the border in New Mexico, along
with 100,000 other National Guard troops that were Federalized.
Why did they go? To secure the border of the United States from
Poncho Vila. He had come across and killed 19 Americans in New
Mexico.
Today, from illegal immigrants, we lose 25 American
citizens a day from illegal immigrants and we still do nothing
about it. That is either from DUIs or murder. That is going on
right here, and you know what is going on in Hall County in
terms of the criminal statistics.
As soon as we secure that border, which can be done, and I
love my President, but he is wrong about this. He needs to
send----
[Applause.]
Chairman Norwood. He needs to send the requisite number of
National Guard down there now. They can do it within 6 weeks,
ladies and gentlemen, if we will just make up our mind to do
it. The President can send all the budgets he wants to to
Congress, he does not get to write the budget, the House of
Representatives gets to write the budget. And Ms. McCollum is
correct, we have not done our job in the House of
Representatives in terms of funding what needs to be done. When
that border is secure, then you can go about the business of
writing a guest worker program that actually does work, without
giving illegal immigrants advantages over American citizens.
My son would pay more to go to the University of South
Carolina--God forbid----
[Laughter.]
Chairman Norwood [continuing]. In tuition than would an
illegal immigrant from Juarez. That makes no sense of any kind
to me. Why should I be penalized and reward someone who has
broken the law? All you have got to do is come across the
border under the Senate Bill, you can become a citizen, you can
bring all of your family, we are going to pick up about 20
million new immigrants in the next 20 years and Georgia is
running out of water now. Are we not concerned about the
population of 100 million new people in this country over the
next century under this Senate Bill?
Are you concerned that they can get on Medicaid, Medicare,
although Mexico has a Medicaid and Medicare too. I refer
Hispanics I see to go to the Mexican Consulate, try their
Medicaid program rather than our Medicaid program that can
hardly fund itself any more. You can get earned income tax
credits under the Senate Bill. Does anybody know the cost of
this? Does anybody know the cost of the Social Security program
that is known by all to be going broke? What kind of
legislation did they put out over there? It is not the kind
that will ever pass or see the light of day. I promise you, at
least not with any of these votes here, and I am pretty sure
they cannot get it done.
But we do need to go back and work out a guest worker
program, we need to go back and work out a way to deal with the
20 million that are here. There is such a thing as a bullet-
proof work card. You can make a card that is tamper proof. If
we can go to the moon, we can make a card that is tamper proof.
We need to encourage these people to turn themselves in to
Ellis Island centers. Why would they do that? Because if they
do not, under the new bill, they will be a felon. If they do
not, the employer is going to pay $50,000 per. That is why they
will turn themselves in. If they are not a terrorist, if they
are not a drug dealer, then come on and turn yourself in and we
will do a health check and we will check your background and we
will let you stay for two or three more years. And then go home
like everybody else and get in line, like all the other people
from around the world that are trying to come to this great
country.
We all understand why everybody wants to come here. But
immigration should be about what is right for the American
citizen first and what is right for America, not what is right
for people from all around the world. No other country in the
world has immigration laws the way we do. All we really have to
do is pass the same immigration laws Mexico has, that will stop
it, I promise you, dead in its tracks.
[Applause.]
Chairman Norwood. Thank you for your patience and your
tolerance. If there is no further business, then this
Subcommittee stands adjourned.
[Whereupon, the Subcommittee was adjourned at 1:15 p.m.]
[Additional materials submitted for the record follow:]
[Mr. Owens submitted the following statements and
articles:]
Prepared Statement of Ross Eisenbrey and Monique Morrissey, Economic
Policy Institute
A key issue of evolving immigration policy in the United States is
whether employers should be able to hire temporary or ``guest'' workers
from other countries when workers are scarce and wages are rising.
Though popular with employers, guest worker programs are generally
opposed by labor unions and others who say these programs risk
displacing U.S. workers or pushing down their wages.
The immigration bill passed on a bipartisan basis by the U.S.
Senate--the McCain-Kennedy bill, or S. 2611--tries to balance these
competing concerns by requiring employers who want to recruit temporary
guest workers in the construction and service industries to first offer
the jobs, at the prevailing industry wage, to U.S. workers. If no
qualified U.S. workers apply for the jobs, employers can hire guest
workers but must pay them the prevailing wage.
In a report issued in July 2006, the Senate Republican Policy
Committee (RPC) attacked the prevailing wage provision in the McCain-
Kennedy bill, as ``unfair to U.S. workers'' because it would
``guarantee wages to some foreign workers that could be higher than
those paid to American workers at the same worksite'' (RPC 2006). This
claim is false, since the law requires employers to first offer each
job, at the prevailing wage, to any qualified U.S. worker who applies.
The RPC (chaired by Sen. Jon Kyl (R-Ariz.), co-sponsor of a rival
immigration bill) also claims that prevailing wage measures are
inflated. In fact, the same government studies cited by the RPC show
these measures to be accurate. But even if this claim were true, it
would strengthen, not weaken, the argument for including such wage
protections in an immigration bill since they ensure that guest workers
are only hired in tight labor markets when wages are rising.
Finally, the RPC claims that the law expands the reach of the
Davis-Bacon Act, which requires construction companies with federal
contracts to pay employees the prevailing wage. But the McCain-Kennedy
bill specifies only that the wage employers offer to construction
workers must be the prevailing wage, as measured under the Davis-Bacon
Act, and none of Davis-Bacon's wage reporting or enforcement provisions
is applied to guest workers.
Should Immigration Reform Include Prevailing Wage Protections?
The rationale for expanding guest worker programs is to increase
the supply of workers during labor shortages. Most economists would
dispute the notion of a labor shortage in the case of low-skilled
workers, since employers can always find workers to fill these jobs if
they offer high enough wages. However, if we understand ``labor
shortage'' to mean a tight labor market, then, at a minimum, guest
worker visas should be granted only when the market is demonstrably
tight, i.e., when wages are rising.
This is the purpose of the prevailing wage provision in S. 2611, as
well as similar provisions in earlier guest worker laws. They require
employers who want to hire guest workers to pay the prevailing wage,
defined as the wage paid to the majority of workers in a particular job
category and local labor market, or, barring that, the average wage
paid to these workers. Prevailing wages are based on periodic surveys
of employers and third parties, and so they always lag in time behind
current wages.
Requiring employers who want to hire guest workers to pay the
prevailing wage serves two purposes. First, it ensures that employers
do not hire guest workers when wages are falling because, if they did,
they would have to pay them the higher previous year's wage (recall
that the prevailing wage is measured with a lag). Second, it ensures
that employers do not undercut the market wage by hiring foreigners
willing to work for less than U.S. workers.
The prevailing wage language is the only assurance in the McCain-
Kennedy bill that guest workers will be recruited only when labor
markets are tight, as intended. This protection is somewhat weakened by
the fact that the law still allows employers to hire guest workers when
nominal wages are stagnant or rising but real (inflation-adjusted)
wages are falling. However, lowering or abolishing prevailing wage
measures would only make the situation worse.
Is the Prevailing Wage Provision Unfair to U.S. Workers?
The RPC claims that the prevailing wage provision ``would guarantee
wages to some foreign workers that could be higher than those paid to
American workers at the same worksite.'' This argument implies that
some employers would be willing to hire guest workers even if they had
to pay them more than their other workers (an expense that would be
worth it, perhaps, because guest workers' vulnerability might make them
more compliant employees).
Even if this were true, S. 2611 requires that employers first offer
the jobs, at the prevailing wage, to U.S. workers. Thus, the scenario
envisioned by the RPC could only occur if employers were breaking the
law or if U.S. workers were somehow unwilling to apply for higher-
paying jobs. Because the RPC ignores the fact that McCain-Kennedy
requires employers to first offer the jobs to U.S. workers, it does not
specify whether it believes employers to be lawbreakers or U.S. workers
to be oblivious to their own well-being.
It should be noted that building trade unions, which have
experience with similar language in previous immigration laws, support
the prevailing wage provision, while the U.S. Chamber of Commerce, an
employer group, opposes it.
Are Prevailing Wage Measures Biased and Inaccurate?
The RPC claims that ``Davis-Bacon wages tend to be inflated because
of the bias caused by the wage-setting process that relies solely on
voluntary wage data reporting.''
The RPC does not explain the source of this supposed bias, except
to say that ``there is no incentive (and perhaps there is a
disincentive) for private sector employers to provide wage information
that may aid their competitors.'' The RPC seems to imply that low-wage
employers will not participate in the survey because they do not want
their employees recruited by competitors offering higher wages. The
problem with this theory is that all company-specific wage data
collected by the Department of Labor are confidential.
Another possibility is alluded to in a later paragraph: ``Bias is
inherent since the DBA (Davis-Bacon Act) relies only on information
volunteered by employers and third parties, some of whom could have an
interest in influencing the outcome of the prevailing wage
determinations.'' Again, the RPC does not explain what would motivate
an employer or third party to withhold information from the survey.
In fact, both high-wage and low-wage employers have an incentive to
participate in prevailing wage surveys. High-wage employers, unions,
and these employers' business associations participate in an effort to
keep the prevailing wage high and prevent low-wage competitors from
undercutting them on federal contracts or from hiring guest workers.
Low-wage employers, on the other hand, participate in an effort to keep
the prevailing wage low so they do not have to raise wages when bidding
on federal contracts or recruiting guest workers. Competitive pressures
therefore encourage participation by all employers and promote
accuracy.
The fact that all employers are motivated to participate in
prevailing wage surveys is enhanced by the fact that construction labor
markets are highly competitive, so that wages for, say, drywall
finishers do not typically vary much between employers (though there
can be differences between union and non-union contractors). Thus, it
is not surprising that a 1999 General Accounting Office report cited by
the RPC found that errors averaged only 76 cents per hour (GAO 1999).
These errors generally fall within the statistical margin of error used
in Bureau of Labor Statistics surveys (Lipnic 2004).
Does It Matter If Prevailing Wage Measures Are Too High?
It is important to note that even if prevailing wage measures are
slightly inflated, as the RPC claims, this would actually improve wage
protections for U.S. workers, who must first be offered jobs at the
prevailing wage before an employer seeks to recruit guest workers.
Because the prevailing wage is measured with a lag, this also ensures
that the local labor market is tight and wages are rising before guest
workers are brought in, in keeping with the intent of the law.
Do Other Measures Better Capture the Prevailing Wage?
The RPC does not say whether it supports wage protections in any
form. However, it repeatedly contrasts what it calls ``biased''
prevailing wage determinations under the Davis-Bacon Act with
``statistically valid'' wage data from the Occupational Employment
Statistics (OES) survey. In fact, both wage measures are similar in
relying on voluntary surveys conducted by the Department of Labor.
The RPC's focus on the OES survey is misguided and misleading,
since the OES survey does not gather information on benefits and
therefore cannot be used to construct prevailing wage measures. Other
factors that make the OES survey an inappropriate source for prevailing
wage determinations include differences in geographic scope (prevailing
wages are reported at the county level, whereas the OES provides only
national, state, and metropolitan area wage data) and occupational
categories (prevailing wage measures include more occupational
classifications as well as breakdowns by construction type).
Even if such obstacles could be overcome, however, it is not clear
why the RPC prefers OES data, unless the hope is that the OES survey,
even if expanded to include information from other surveys on vacation,
health, retirement, and other benefits, would tend to underreport wages
and benefits. The Department of Labor's Wage and Hour Division, which
is responsible for issuing the Davis-Bacon prevailing wage
determination, currently surveys unions and business associations to
ensure the accuracy of wages and benefits covered under collective
bargaining agreements.
The only real problem with wage data from the Department of Labor--
not just prevailing wage data, but also OES survey data--is that it is
often out of date. In both cases, wage measures can be based on surveys
conducted as many as three years earlier (BLS 2004; OIG 2004). Though
the RPC expresses concern with the timeliness of prevailing wage
determinations, it does not call for an increase in the DOL's budget in
order to increase the frequency of these surveys, perhaps because
increasing the frequency of surveys would generally raise prevailing
wage measures, not lower them.
Is There a Labor Shortage in the Construction Industry?
Despite a recent building boom, construction wages have been rising
slowly in nominal terms and actually falling in real terms (Figure A),
a situation that is not consistent with a labor shortage or a tight
labor market.
However, because wages are still nominally rising, prevailing wage
measures are somewhat lower than the actual market wage, since they are
measured with a lag. This means that, under the prevailing wage
provision of S. 2611, employers could recruit guest workers at or below
the real market wage, even though the labor market is stagnant. This
effect would be countered if wage measures were slightly inflated, as
the RPC claims. In other words, given a survey lag, there is a strong
argument for requiring employers to pay above the prevailing wage.
Thus, if the RPC claim is true, so much the better, for slightly
inflated guest worker wages would help ensure that guest workers do not
displace U.S. workers or undercut their wages.
Is McCain-Kennedy an Unwarranted Expansion of the Davis-Bacon Act?
The RPC's focus on the supposed expansion of the Davis-Bacon Act to
the private sector appears to be an attempt to galvanize members of the
business community who oppose the Davis-Bacon Act, and does not add any
substantive points to its argument. Nor is there anything novel or
precedent-setting about the prevailing wage provision of S. 2611; it is
similar to provisions in earlier guest worker laws, going at least as
far back as the Bracero program of 1942-1964.
Conclusion
The RPC has attacked the prevailing wage protections in the
Senate's comprehensive immigration bill as ``unfair to U.S. workers,''
but just the opposite is true. In fact, by making it more difficult for
employers to qualify for temporary foreign guest workers, the
prevailing wage provision protects U.S. workers from employers who
would otherwise replace them with foreign workers willing to work at a
lower wage. Without the provision, the guest worker program would truly
be unfair to U.S. workers.
Experience with foreign guest worker programs over the last half
century tells us that many employers prefer to hire foreign workers
rather than U.S. residents, even when there are many qualified U.S.
workers available. The reason is obvious: foreign workers can almost
always be found who are willing to work for lower wages, for longer
hours, and in worse conditions than U.S. workers. They are, therefore,
less expensive to employ. Given the opportunity, many employers would
seek visas for guest workers rather than offer work to U.S. residents,
especially since temporary guest workers' reliance on employers for
visas makes them highly dependent on employers, even more so than
immigrants who are legal permanent residents.
If Congress goes along with President Bush and the U.S. Chamber of
Commerce and creates a large guest worker program--potentially bringing
hundreds of thousands of temporary foreign workers to the U.S. for
employment--then mechanisms must be created to ensure that U.S. workers
are not displaced and that employers do not pay wages so low as to
undercut the market wage for U.S. workers. That is the purpose of the
Senate immigration bill's prevailing wage requirement.
Business groups oppose the prevailing wage requirement for obvious
reasons: they want foreign guest workers at the cheapest possible wage.
Their public position, however, is not that the provision is unfair to
employers, but rather that it is unfair to U.S. employees because it
will lead to foreign guest workers being paid more than U.S. residents.
This claim is demonstrably untrue.
The prevailing wage provision in the McCain-Kennedy bill, like
similar provisions in earlier guest worker laws, is designed to prevent
employers from recruiting guest workers willing to work for a wage that
will adversely affect the living standards and wages of American
workers. It also helps to ensure that guest workers are hired only when
labor markets are tight, though it does so imperfectly since prevailing
wage measures are always out of date. The prevailing wage provision of
S. 2611 is thus a minimum, but necessary, standard.
references
Bureau of Labor Statistics (BLS). 2004. ``Technical Notes for May 2005
OES Estimates.'' Available at http://www.bls.gov / oes /
current / oes--tec.htm
General Accounting Office (GAO). 1999. ``Davis-Bacon Act: Labor Now
Verifies Wage Data, but Verification Process Needs
Improvement.'' Washington, D.C.: GAO.
Lipnic, Victoria A. (Assistant Secretary for Employment Standards).
2004. Memorandum for Elliot P. Lewis, Assistant Inspector
General for Audit. ``Re: Draft OIG Audit Report on Davis-Bacon
Wage Determinations,'' February 18.
Office of Inspector General (OIG), Department of Labor. 2004.
``Concerns Persist With the Integrity of Davis-Bacon Act
Prevailing Wage Determinations'' Washington, D.C.: DOL.
Republican Policy Committee (RPC). 2006. ``Davis-Bacon Expanded to
Private Projects in Senate Immigration Bill.'' Washington,
D.C.: RPC.
______
[From the Lincoln Journal Star (Nebraska), August 8, 2006]
Hagel Laments Immigration Inaction
By Art Hovey
House members are using the issue to `polarize voters' before the
November election, senator says.
Omaha--Maybe the students can do a better job.
As Nebraska Sen. Chuck Hagel vented his frustrations Monday with
the failure of Congress to pass immigration reform so far this year, an
audience of high school teachers had to be thinking about a coming
Capitol Forum on America's Future in Lincoln in March.
That's when their junior and senior students will gather at an
event sponsored by the Nebraska Humanities Council to try to come up
with immigration answers that Hagel and his peers can't agree on.
Hagel called it ``a tragedy'' that the House and Senate have been
unable to settle on a plan for dealing with an estimated 12 million
people who are in the United States illegally, mostly from Mexico and
other countries south of the border.
Hagel, a leading advocate of a Senate approach that would give some
of those people a path to citizenship, criticized House counterparts
who decided to hold a series of 21 immigration hearings across the
United States during a summer recess.
It's ``complete folly, silly'' to do that, he said, for purposes
other than crafting legislation. With no immigration bill in the
formative stage, he later told teachers, ``what they're doing is using
this to polarize voters'' before the November election.
Monday's question-and-answer session in Omaha will help teachers
Trent Goldsmith of Utica-based Centennial, Roy Ferris of Valentine and
others plan their annual approach to student problem solving.
The next school year's range of thorny issues, said teacher team
leader Robin Kratina of Bellevue West, also includes nuclear
proliferation, terrorism, global trade and global environmental
challenges.
``What is the fear of this bill?'' Goldsmith asked Hagel at one
point in a 45-minute dialogue on immigration.
``It's an irrational fear,'' Hagel responded.
He pointed out, for example, that there's no reason to worry about
immigrants taking jobs away from Americans when unemployment is
comparatively low.
``So the whole idea about immigrants taking American jobs is not
true,'' he said. ``It just doesn't work.''
Cast out millions of workers at a time of low unemployment, he
said, and ``you would bring much of the economy to its knees.''
Ferris wanted to know what he should tell students when they ask
him why current immigration laws are not being enforced.
The truth, Hagel said, is that stopping illegal border crossings
needs attention on both sides of the Mexico border.
``A lot of this responsibility rests with the Mexican government,
and we really have no control over it,'' he said.
Meanwhile, the U.S. commitment to securing the border ``has changed
a lot over the last two years'' and will become even more rigorous.
Although he's not hopeful of meaningful compromise on immigration
reform when lawmakers return to their desks after Labor Day, Hagel said
the House's summer hearings should not be the center of attention.
``Where the focus should be is on the conference committee to
resolve differences between the two.''
House language did not address what many critics of the Senate
approach have portrayed as amnesty. It emphasized securing the border
and enforcing existing immigration law.
But Hagel said the Senate bill should not be regarded as soft on
enforcement. ``More than half the bill was about enforcement,'' he
said. ``The Senate bill actually does more for enforcement than the
House bill.''
______
[From the Omaha World-Herald (Nebraska), August 8, 2006]
Hagel: Immigration Compromise Probably Stalled for the Year; the
Senator Calls House Leaders' Public Hearings on the Issue ``Complete
Folly''
By Cindy Gonzalez, World-Herald Staff Writer
It's unlikely that Americans will see comprehensive immigration
legislation approved by Congress this year, Sen. Chuck Hagel said
Monday.
``That is a tragedy,'' Hagel said. ``We need to fix the problem.''
The Nebraska Republican helped craft the Senate immigration bill.
It includes a path to legalization for many of the 12 million illegal
immigrants already in the country, a guest worker program and stricter
border enforcement.
But the U.S. House approved an enforcement-focused bill, and
lawmakers have yet to work out differences between the two measures.
Speaking to an Omaha audience of about 30 teachers whose classes
touch on immigration, Hagel on Monday described as ``complete folly''
the public hearings on immigration that House leaders have decided to
hold across the country this summer.
After each chamber passed its immigration proposal, the next order
of business should have been a House-Senate conference committee where
a compromise could be worked out, Hagel said.
But the process has stalled, and time is running out for the
current session of Congress.
Hagel said the delay in finding a compromise has further polarized
people on both sides of the debate. One side wants a path to
citizenship for illegal immigrants already in the country; the other
calls that ``amnesty'' and prefers only increased border and workplace
enforcement.
Effective immigration legislation must include a solution for many
of the 12 million illegal immigrants already in the United States,
Hagel said. He said Americans' ``irrational fear'' of losing jobs is
partly to blame for opposition to such provisions.
Even if the country could round up and deport all illegal
immigrants, Hagel said, ``you'd bring much of the American economy to
its knees.''
Hagel said low job approval ratings reflect public frustration with
the inability of President Bush and Congress to achieve solutions on
issues such as immigration. ``The American people have had it with all
of us,'' he said.
There is a ``built-in selfcorrection process'' called an election,
Hagel said. He said an upshot could be a lot of new faces in public
office after the November elections.
Hagel was featured speaker at the downtown Omaha event co-sponsored
by the Nebraska Humanities Council. Participating teachers from across
the state will prepare students for the annual Nebraska Capitol Forum
on America's Future.
Immigration will be one of the key topics for students to debate at
this year's spring forum. Their recommendations will be reported to
Congress.
Roy Ferris, a teacher from Valentine, Neb., asked Hagel how he
would respond to his students' most common immigration-related
questions: Why aren't current laws being enforced? What is the role of
the Mexican government? And what changes might come from the new
Mexican president's administration?
Hagel said the Mexican government has failed in its responsibility
to curb illegal emigration.
Although Hagel said the United States has ``not done enough'' to
stop illegal immigration, he said about $9 billion was newly
appropriated this year for more Border Patrol agents and other security
measures.
______
[From AFX News Limited, August 10, 2006]
Study: Immigrants Not Hurting U.S. Jobs
Washington (AFX)--Big increases in immigration since 1990 have not
hurt employment prospects for American workers, says a study released
Thursday.
The report comes as Congress and much of the nation are debating
immigration policy, a big issue in this fall's midterm congressional
elections.
The Pew Hispanic Center found no evidence that increases in
immigration led to higher unemployment among Americans, said Rakesh
Kochhar, who authored the study.
Kochhar said other factors, such as economic growth, played a
larger role than immigration in setting the job market for Americans.
The study, however, did not look at whether wages were affected by
immigration. Advocates for tighter immigration policies argue that
immigrant workers depress wages for American workers, especially those
with few skills and little education.
Immigration supporters argue that foreign workers often take jobs
that Americans don't want and won't take.
The Pew Hispanic Center is a nonpartisan research organization that
does not advocate policy positions. The center studied census data on
the increase in immigrants from 1990 to 2000, and from 2000 to 2004,
for each state. It matched those figures with state employment rates,
unemployment rates and participation in the labor force among native-
born Americans.
The U.S. had 28 million immigrants--legal and illegal--age 16 and
older in 2000, an increase of 61 percent from 1990. By 2004, there were
32 million.
Among the study's findings:
Twenty-two states had immigration levels above the
national average from 1990 to 2000. Among them, 14 had employment rates
for native-born workers above the national average in 2000, and eight
had employment rates below the national average.
Twenty-eight states and the District of Columbia had
immigration levels below the national average from 1990 to 2000. Among
them, 16 had above average employment rates for native-born workers in
2000, and 13 had below average employment rates.
Twenty-four states had immigration levels above the
national average from 2000 to 2004. Among them, 13 states had
employment rates for native-born Americans above the national average
in 2004, and 11 had employment rates below the national average.
Twenty-six states and the District of Columbia had
immigration levels below the national average from 2000 to 2004. Among
them, 12 had employment rates for native-born Americans above the
national average, and 15 had employment rates below the national
average.
Immigrants tend to be younger and have less education than American
workers. The study, however, found ``no apparent relationship between
the growth of foreign workers with less education and the employment
outcome of native workers with the same low level of education.''
However, Steven Camarota, director of research for the Center for
Immigration Studies, said his research shows that many young workers
with little education are hurt by competition from immigrants.
``Employment for less educated natives has declined, and their
wages have declined,'' said Camarota, who advocates stricter
immigration policies. ``There is no shortage of less educated workers
in the United States.''
______
Guest Worker Bill Introduced by Georgia Senator Saxby Chambliss in the
109th Congress
The Agricultural Employment and Workforce Protection Act of 2005
(S. 2087), introduced by Senator Chambliss (R-GA), would reform the H-
2A program. It would work and would broaden the definition of
agricultural labor or services for purposes of the H-2A visa to cover
labor or services relating to such activities as dairy, forestry,
landscaping, and meat processing. S. 2087 proposes to streamline the
process of importing H-2A workers. A prospective H-2A employer would
file a petition with DHS containing certain attestations. Among them,
the employer would have to attest that the employer will provide
workers with required benefits, wages, and working conditions; that the
employer has made efforts to recruit U.S. workers; and that the
employer will offer the job to any equally qualified, available U.S.
worker who applies. Unless the petition is incomplete or obviously
inaccurate, DHS would have to approve or deny the petition not later
than seven days after the filing date.
S. 2087 would change current H-2A requirements regarding minimum
benefits, wages, and working conditions. Under S. 2087, H-2A employers
would have to pay workers the higher of the prevailing wage rate or the
applicable state minimum wage; employers would not be subject to the
adverse effect wage rate (discussed above). Employers could provide
housing allowances, in lieu of housing, to their workers if the
governor of the relevant state certifies that adequate housing is
available. Under S. 2087, an H-2a workers would be admitted for an
initial period of employment of 11 months. The workers's stay could be
extended for up to two consecutive contract periods.
S. 2087 would establish subcategories of H-2A non-immigrants. It
would define a ``Level II H-2A worker'' as a nonimmigrant who has been
employed as an H-2A worker for at least three years and works in a
supervisory capacity. The bill would make provision for less than five
years, to file an application for an employment-based adjustment of
status for that worker. Such a Level II H-2A worker could continue to
be employed in such status until his or her application was
adjudicated. Under the bill, an ``H-2AA worker'' would be defined as an
H-2A worker who participates in the cross-border worker program the
bill would establish. These H-2AA workers would be allowed to enter and
exit the United States each work day in accordance with DHS
regulations.
In addition, the bill would establish a blue card program through
which the Secretary of DHS could confer ``blue card status'' upon an
alien, including an unauthorized alien, who has performed at least
1,600 hours of agricultural employment for an employer in the United
States in 2005 and meets other requirements. An alien may be granted
blue card status for a period of up to two years, at the end of which
the alien would have to return to his country.
______
[The prepared statement of the Associated Builders and
Contractors follows:]
Prepared Statement of the Associated Builders and Contractors (ABC)
Associated Builders and Contractors (ABC) appreciates the
opportunity to submit the following statement for the official record.
We would like to thank Chairman Norwood, Ranking Member Owens and
members of the House Subcommittee on Workforce Protections for holding
today's hearing on ``Guest Worker Programs: Impact on the American
Workers and their Wages.''
ABC is a national trade association representing more than 23,000
merit shop contractors, subcontractors, materials suppliers and
construction-related firms within a network of 79 chapters throughout
the United States and Guam. Our diverse membership is bound by a shared
commitment to the construction industry's merit shop philosophy. This
philosophy is based upon the principles of full and open competition
unfettered by the government, nondiscrimination with regard to labor
affiliation, and the award of construction contracts to the lowest
responsible bidder through open and competitive bidding. This process
assures that taxpayers and consumers receive the most for their
construction dollar.
The construction industry is a vital part of the American economy.
According to the U.S. Census Bureau, construction growth significantly
outpaced national gross domestic productivity growth over the last 12
years, increasing 137 percent while the Gross Domestic Product (GDP)
increased about 88 percent in the same period. Today, the annual value
of construction is worth more than $1.16 trillion, representing more
than 9 percent of the national GDP.
Of the nation's 5.6 million employer firms, more than 12 percent
are construction firms, according to the U.S. Small Business
Administration. Over the past 12 years construction continues to
outpace the nation's other industry sectors in employment growth. In
1993, construction firms employed 4,779,000 people and today, the
industry employs 7,227,000. The growth of 2,498,000 represents a 52.27
percent increase, based on numbers from the Bureau of Labor Statistics
(BLS). The construction employment increase far outpaces overall U.S.
employment growth, which was only 20 percent during the same period.
However, construction growth is not projected to slow. The BLS
reports that another 792,000 new construction jobs will be created
between 2004 and 2014. Therefore, ABC's member companies continue
facing an ever-growing worker shortage problem. Despite, ABC's
continued efforts promoting workforce recruitment, education and
training in the construction industry through school-towork programs,
college and university outreach, professional development of training
staff and the building of a strong chapter delivery system, the
industry still faces difficulty in filling jobs. Combined with an aging
domestic workforce and historically low American birthrates, the
construction industry's future labor needs are especially acute unless
additional labor sources are identified. An industry of this size
demands significant human resources both now and in the future.
While today's hearing specifically focuses on guest worker programs
and the impact on American's wages, ABC has remained steadfast in its
belief that this is one element in a comprehensive approach required to
effectively reform our immigration policies. Any successful immigration
reform measure must work to ensure the enforcement of our laws, the
security of our borders, interior enforcement and the prosperity of our
economy.
As one of the nation's largest employers, the construction industry
needs to be able to employ foreign workers when it is unable to find
U.S. workers to fill jobs. Yet, the current immigration system today
does not provide sufficient opportunity for workers to enter the
country legally. While some have suggested relying on H-2B visas,
bureaucratic red tape combined with limited availability of H-2B visas
render that option unavailable. Furthermore, in most cases that
category is not an option for ABC member firms as it is only useful to
those employers with seasonal or one-time occurrence needs. The
construction industry works year-round and employees must attend many
job training and safety courses before setting foot on a jobsite. While
some employees can learn their job in a few days, the skills required
for many of the construction trades often take years to learn and are
usually taught through a combination of classroom instruction and on-
the-job training. It is vital to the industry that any guest worker
program takes into account both the length of time which may be
required to properly train our employees and that a project may not
necessarily be completed within a few years.
While ABC is very supportive of a guest worker program, we are
troubled by a Senate bill provision that would greatly expand the
Davis-Bacon Act (DBA) (40 U.S.C. Sec. 3141 et seq.). Specifically, the
provision would require DBA prevailing wage rates for guest workers
employed on private construction projects, despite well documented
problems with the DBA wage determination process. Currently, the DBA
only applies to federal construction projects and some federally
supported projects. According to the U.S. Census Bureau the vast
majority of construction work in the United States is done privately
and includes most homebuilding. Already, any foreign workers currently
in construction are covered by prevailing wage protections under the
U.S. Department of Labor (DOL) foreign labor certification regulations,
and a citation to the flawed and fraud-prone DBA wage determinations is
ineffective. Thus, the bill would greatly expand reliance on the flawed
Davis-Bacon wage surveys.
The DBA requires federal contractors and their subcontractors
working on contracts for construction, alteration, and/or repair in
excess of $2000 to pay employees the local prevailing wage rates and
benefits for each class of worker. Over the years, the DBA requirements
have been extended to other laws which provide federal assistance for
construction through grants, bans, loan guarantees and insurance. These
are known as Davis-Bacon Related Acts (DBRAs). Some estimate that the
DBA and DBRAs covers as much as 25 percent of the nation's construction
work, according to the Office of Management and Budget, Prevailing Wage
Determination Program Assessment.
The DBA requires the Secretary of Labor to determine the prevailing
wage rate for each locality. Under current regulations, DOL's Wage and
Hour Division sets the wage for each class of worker in each locality
by conducting its own voluntary wage surveys of contractors and other
interested parties.
By the Wage and Hour Division's own admission in its Prevailing
Wage Resource Book, the accuracy of its wage determinations is
completely dependent upon identifying the correct interested party and
successfully securing their participation. Not surprisingly, there have
been consistent problems with the accuracy of the DBA wage
determinations.
In fact, a series of audits by outside agencies as well as the
DOL's own Office of Inspector General (OIG) have revealed substantial
inaccuracies in Davis-Bacon wage determinations and suggested that they
are vulnerable to fraud. The Government Accountability Office (GAO) has
issued multiple reports dating from the late 1970s to the late 1990s
detailing problems with the determinations. In addition, DOL's OIG
released three reports highly critical of the wage determination
program.
In an effort to address these concerns, the Wage and Hour Division
made some modifications to the wage determination program in the late
1990s and early this century. These modifications, however, have
resulted in little improvement. In 2004, the OIG released a report
stating that the $22 million the Wage and Hour
Division spent to modify the program had yielded limited
improvement and that the problems with inaccuracies identified in past
reports remain. In fact, the OIG found one or more errors in 100
percent of the wage surveys they reviewed. It also concluded that
because response to the survey is voluntary, employers and third
parties with a stake in the outcome of wage determinations are more
likely to participate. As a result of GAO and OIG audits and its own
research, OMB concluded in a 2003 assessment report that the DB wage
determination program is not performing.
Despite the DBA's inclusion in the Senate immigration measure, ABC
applauds the Senate's efforts which have resulted in a comprehensive
immigration reform bill that includes the need for a guest worker
program and to deal with the nation's undocumented workers. To address
the concerns created by the ongoing influx of undocumented workers, and
to keep our nation's economy growing, Congress must deal with the need
for a guest worker program that can serve as a legal vehicle to help
meet our economy's labor demands.
Again, thank you for your commitment and leadership on this
essential issue. ABC looks forward to working with your committee to
ensure comprehensive immigration reform is reached.
SOURCES
Government Accounting Office Reports HRD-79-18 4/27/79, HEHS-96-177R,
http://archive.qao.gov / paprpdfl / 157164.pdf, HEHS-99-21 1/
11/99, http://www.qao.gov / archive / 1999 / he99021.pdf, and
HEHS-99-97 5/12/99, http://www.gao.gov / archive / 1999 /
he99097.pdf.
Office of Management and Budget, Prevailing Wage Determination Program
Assessment http://www.whitehouse.gov / omb / expectmore /
summary.10001099.2005.html and http://www.whitehouse.gov / omb
/ expectmore / detail. 10001099.2005. htm I.
U.S. Census Bureau, Construction Spending http://www.census.gov / const
/ C30 / total.pdf
U.S. Census Bureau, Annual Value of Construction Put in Place http://
www.census.qov / consVwww / c30index.html
U.S. Department of Commerce. Current-dollar and Real Gross Domestic
Product http://www.bea.qov / bea / dn / gdplev.xls
U.S. Department of Labor, Bureau of Labor Statistics, Employees on
nonfarm payrolls by major industry sector historical. ftp://
ftp.bls.gov / pub / suppl / empsit.ceseebl.txt
U.S. Department of Labor, Bureau of Labor Statistics, Office of
Occupational Statistics and Employment Projections,
``Employment by major industry division, 1994, 2004, and
projected 2014,'' http://www.bls.qov / emp /
empmajorindustry.pdf
U.S. Department of Labor, Bureau of Labor Statistics, Occupational
Projections and Training Data, 2004-05 Edition, http://
www.bls.gov / emp / optd / home.htm
U.S. Department of Labor, Bureau of Labor Statistics, Job Openings and
Labor Turnover Survey. Obtain data from 2001 to 2005 by
selection ``Total separations rate, construction
JTS230000000TSR'' on http://data.bls.gov / cqi-bin /
surveymost?jt
U.S. Department of Labor Prevailing Wage Resource Book, November, 2002,
page 3 of Section 15 ``Davis-Bacon Surveys.''
U.S. Department of Labor, Office of Inspector General, Inaccurate data
were Frequently Used in Wage Determinations made under the
Davis-Bacon Act Report No. 04-97-013-04-420 (March 10, 1997)
http://www.oig.dol.gov / public / reports / oa / pre--1998 /
04-97-013-04-420.pdf; Review of Davis-Bacon Modernization
Funding Report No. 04-98-003-04-420 (February 19, 1998) http://
www.oig.dol.gov / public / reports / oa / 1998 / 04-98-003-04-
42Or.htm; and Concerns Persist With the Integrity of Davis-
Bacon Prevailing Wage Determination Report No. 04-04-003-04-420
(March 30, 2004) http://www.oig.dol.gov / public / reports / oa
/ 2004 / 04-04-003-04-420.pdf.
U.S. Department of Labor, Title 20, Code of Federal Regulation, Part
656.40
U.S. Small Business Administration, ``Major Industries by NAICs Codes:
Private Employer Firms, Establishments, Employment, and Annual
Payroll by Firm Size, 1998-2001,'' http://www.sba.gov / advo /
research / us--tot--mi--n.pdf
U.S. Small Business Administration, Office of Advocacy, from data
provided by U.S. Census Bureau, Nonemployer Statistics,
Nonemployers Firms and Receipts by Industry, 2002, 2003, ftp://
ftp.bls.qov / pub / suppl / empsit.ceseebl.txt
______
[The prepared statement of Bruce Goldstein follows:]
Prepared Statement of Bruce Goldstein, Executive Director, Farmworker
Justice
Mr. Chairman and Members: Thank you for the opportunity to submit
this testimony regarding the important issues of labor and immigration
that are under consideration by this Subcommittee. There is an
immigration crisis in agriculture, where the majority of farmworkers in
the fields are unauthorized workers. Farmworker Justice, a national
advocacy organization for migrant and seasonal farmworkers, believes
that the solution to this crisis is comprehensive immigration reform
that includes an opportunity for undocumented workers to earn permanent
legal immigration status. The opportunity for undocumented workers to
earn legal immigration status will help create a stable supply of farm
labor in the United States, guaranteeing our food security. Deporting
the large number of undocumented farmworkers is not feasible and would
harm our agricultural production. We must offer unauthorized immigrants
the opportunity to come forward out of the shadows and end the massive
underground system of employment in this country.
We reject proposals to create harsh, large-scale guestworker
programs based on temporary work visas because such programs subject
both U.S. workers and foreign guestworkers to low wage rates,
substandard working conditions, and little hope of government oversight
protection. Guestworker programs impose a restricted non-immigrant
status that deprives participants of America's fundamental economic and
political freedoms. All workers suffer when a segment of the labor
force lacks basic freedoms. To the extent that guestworker programs are
used, they must be designed to prevent adverse effects to U.S. workers'
jobs, wages and working conditions and to minimize exploitation of
vulnerable foreign workers. Such programs should include job standards
that truly prevent adverse effects to U.S. workers' prevailing wage
levels and benefits and minimize exploitation of vulnerable
guestworkers as well as vigorous labor law enforcement to prevent job
displacement and wage depression where guestworkers are hired. This
letter will focus on the issue of wage protections in guestworker
programs.
Guestworker programs can facilitate the hiring of large numbers of
temporary foreign workers whose desperation for jobs, low cost of
living in their home countries, and restricted status in the U.S. cause
them to accept wages and working conditions far below U.S. standards.
The presence of guestworkers in the labor supply can therefore lead to
wage depression and other negative effects on U.S. workers, including
displacement from jobs. Recognizing these risks long ago, Congress
included a ``prevailing wage'' requirement in the Bracero guestworker
program, which operated as an agreement between the U.S. and Mexico
from 1942 to 1964. The Bracero program became notorious for abuse in
part because the ``prevailing wage'' standard was not sufficient to
stop wage depression among U.S. workers in the occupations where
Braceros were hired. Wages in areas and jobs where Braceros worked
stagnated at a time when other wage rates were increasing. The
Government responded by revising the Bracero program's wage protections
to achieve the statutory language that has been in most guestworker
legislation: the hiring of guestworkers shall not ``adversely affect''
the wages and working conditions of similarly employed U.S. workers.
The ``adverse effect wage rate'' became part of the Bracero program and
what later became the H-2A agricultural guestworker program (which
began during World War II and continued after the Bracero program
ended). Different formulas have been used to set the wage rate at
levels that do not allow wage depression.
This letter explains why a ``prevailing wage'' standard is
necessary but not adequate by itself and why the ``adverse effect wage
rate'' under the H-2A program is too low to achieve the statutory goal
of preventing the presence of foreign workers from adversely affecting
the wage rates of U.S. farmworkers. The AEWR formula is based on annual
surveys of agricultural employers' wages paid to non-supervisory farm
and ranch workers and is therefore market-based. Nonetheless, the
current methodology for determining the wage rates in the H-2A program
is not adequate because it does not prevent the hiring of guestworkers
and undocumented workers from depressing the wage rates of U.S. workers
and the farm labor market generally. Any future guestworker program
should recognize these facts.
The H-2A Program Wage Requirements
Under the H-2A program (8 U.S.C. Sec. 1101(a)(15)(H)(ii)a) and
Sec. 1188), the Department of Labor has issued regulations (20 CFR
Sec. Sec. 655.90-655.112) establishing the minimum required wages and
benefits (see 20 CFR Sec. 655.102(b). The regulations
(Sec. 655.102(b)(9) require employers to pay the highest of three
minimum wages:
the federal or state minimum wage;
the local ``prevailing wage,'' as determined by the
Department of Labor using state agency wage surveys for each crop in
the local area. It is expressed in the prevailing method of payment
(for example, a piece rate or an hourly wage rate). The prevailing wage
rate methodology is the local median wage for that particular job (half
the workers make less and half the workers make more), except where
there is a single wage rate that is paid to 40% or more of workers in
that crop and in that local geographic area (in which case that rate is
the prevailing wage). In some instances, the prevailing wage rate may
be a piece rate that has not changed in many years and may yield
earnings that are below legal minimum hourly wage for most workers.
the H-2A ``adverse effect wage rate or ``AEWR.'' The AEWR
is the regional weighted average hourly wage rate for nonsupervisory
field and livestock workers combined. 20 CFR Sec. 655.107. It is
determined by the Department of Agriculture's annual Farm Labor Survey
of employers' reported wage rates to non-supervisory farm and ranch
workers. Most regions include more than one state. Each year, the
Department of Labor (DOL) issues the USDA survey rates as the H-2A
program adverse effect wage rate for each state. The AEWRs for each
year (e.g. 2006) are based on the average wages paid during the prior
year (e.g. 2005).
Origins of the Adverse Effect Wage Rate Adjustment to the Prevailing
Wage
The Bracero guestworker program, as bad as it was, nonetheless
required agricultural employers to pay at least the ``prevailing wage''
to prevent the importation of guestworkers from negatively affecting
the wages of U.S. agricultural workers. The AEWR was established, after
years of debate, near the end of the Bracero program (which ended in
1964), and was applied to the H-2A program. The AEWR's purpose was to
overcome the depression in ``prevailing wage'' rates caused by the
presence of foreign workers (whether guestworkers or undocumented
workers) from poorer countries who will generally accept lower pay to
obtain U.S. jobs.
The President's Commission on Migratory Labor (1951, at p. 133),
for example, said: ``* * * the regions in which farm wages are well
below the national average * * * are those regions containing the
States in which the major portion of the postwar foreign labor
contracting has entered. Florida has been the principal user of British
West Indian contract labor and Texas has been the principal user of
Mexican contract labor. Both States have wage rates much below the
national average.''
The AEWR was intended as an approximate measure to compensate for
the wage depression caused by the hiring of guestworkers. The
methodology has varied over the years. The expression of the AEWR as an
hourly rate where the prevailing wage is a piece rate also offers
farmworkers protection against abuses associated with piece rates.
The AEWRs are almost always higher than the H-2A program's formula
for the local ``prevailing wage.'' When the prevailing wage is a piece
rate, the AEWR frequently is higher than workers' piece-rate earnings;
H-2A employers must pay at least the AEWR. Some of the H-2A AEWR's for
the years 2002 and 2006 are:
------------------------------------------------------------------------
Year
State ---------------------------------
2002 2006
------------------------------------------------------------------------
Arizona............................... $7.12 $8.00
Georgia............................... $7.28 $8.37
Pennsylvania.......................... $7.46 $8.95
California............................ $8.02 $9.00
North Carolina........................ $7.53 $8.51
Vermont............................... $7.94 $9.16
Colorado.............................. $7.62 $8.37
Oregon................................ $8.60 $9.01
West Virginia......................... $7.07 $8.24
------------------------------------------------------------------------
The ``Adverse Effect Wage Rate'' or AEWR Is Too Low
The current methodology for the adverse effect wage rate does not
achieve the statutory purpose of avoiding adverse effects on U.S.
workers' wage rates. In 1987, during the Reagan Administration, the
Department of Labor changed the H-2A AEWR methodology and thereby
lowered the wages of affected U.S. and foreign workers by an average of
20%. The U.S. Court of Appeals, in a case brought by the AFL-CIO and
farmworker advocates, ruled that the new methodology fell within DOL's
broad discretion. This ``new'' AEWR formula suffers from several flaws:
The USDA Farm Labor Survey's average-wage surveys include
wage rates earned by guestworkers and unauthorized immigrants, whose
wages tend to be lower than those of U.S. workers. Nationally, about
one-half (53%) or more of the farm labor force is undocumented workers;
these vulnerable workers accept lower wages than will documented
workers. In crops where guestworkers are used, the jobs quickly become
dominated by guestworkers (as in North Carolina tobacco, cucumbers and
sweet potatoes), rather than U.S. workers. As guestworkers dependent on
their employers to obtain a visa, the H-2A workers are in no position
to demand wage increases. The AEWR should be based on surveys only of
U.S. workers' wage rates.
The declining real value of the federal minimum wage has
suppressed increases in the AEWR. Many farmworkers are paid the federal
minimum wage ($5.15), a state minimum wage (e.g., $6.75 per hour in
California), or a piece rate based on the minimum wage. For example, in
Washington State, where the minimum wage was $7.35 in 2005, the online
America's Job Bank listed a job opening for a hay farm equipment
operator in Kittitas County for $7.35 per hour. A farmer in Morven,
Georgia was offering $6.00 per hour for cabbage planting. In some
cases, the employer sets a piece rate wage under which the average
worker, working diligently, would make perhaps 20%-30% more than the
minimum wage, with slower workers making less per hour (although faster
workers often work fewer hours per day than hourly workers). If the
minimum wage had kept pace with inflation, average wages and,
therefore, the AEWR, would be higher.
The AEWR is an inadequate labor market test because
employers who claim difficulty finding workers should offer a
competitive wage that is higher on the range of wage rates, rather than
the average wage rate. Unemployment rates among U.S. farmworker have
been high. For example, California's state-wide unemployment rate in
December 2004 was 5.7%, while the rates in the important agricultural
counties of Kern, Merced, and Tulare were 9.7%, 10.6% and 11.9%
respectively. A group of employers claiming a labor shortage and
requesting guestworkers should be expected to improve its wage offer to
attract workers to its job. In general, if the employer is already
offering the local ``prevailing wage,'' it is likely that the
prevailing wage is too low to entice U.S. workers to the job. The
employers who offer higher than the average wage rate are much more
likely to attract workers. Indeed, it is unfair to the agricultural
employers who are paying higher than the average wage to allow
employers to claim a ``labor shortage'' and gain access to guestworkers
by offering only the uncompetitive, average wage.
The AEWR's issued annually are an outdated measure of wage
competition because they are based on a survey of the prior year's
average wages. The H-2A growers are always one year behind any wage
increases that might occur, which is especially problematic for
attracting U.S. workers in a labor market that is allegedly tightening.
AEWR's do not automatically increase and at times decline.
The AEWR formula does not contain a cost-of-living increase mechanism.
Because they merely echo the average regional wage level, the AEWR's
may increase, stagnate or decrease. For example, Florida's AEWR
declined from $8.18 per hour in 2004 to $8.07 in 2005.
The Adverse Effect Wage Rate does not protect farmworkers
against poverty. The AEWR reflects the survey findings of sub-poverty
level wage rates paid to farmworkers and establishes for H-2A employers
a below-poverty wage rate. Consider the extremely rare farmworker who
managed to find 52 weeks of full-time farm work during the year,
cobbling together one job after another to support a spouse and two
young children. In 2004, a family would have earned $18,158 at the
Oregon-Washington AEWR of $8.73 per hour, still less than the federal
poverty guideline of $18,392 that year for a family of four. Of course
most farmworkers do not work 52 weeks per year. Partly due to
employers' inefficiency, the seasonal nature of jobs, and a labor
surplus, the average worker finds only about half that amount of work
per year. More typically, both adults would work only intermittently
and, at the AEWR level, their combined annual earnings would still not
even reach the poverty level.
The H-2A guestworker program suppresses wage improvements
because, by law, it permits employers to reject any job applicant who
demands a wage rate higher than the minimum H-2A wage rate. A worker
who demands a higher wage rate can be rejected or fired as
``unavailable'' for the job and replaced by a guestworker. By shielding
employers from workers' and labor unions' demands for higher wages and
other market forces, a guestworker program's ``minimum'' standards
often become the employer's maximum offer. The AEWR should compensate
for this suppression of wage rates but does not.
The AEWR's, by themselves, do not prevent employers from
imposing very high productivity standards that desperate foreign
workers will accept but that would cause U.S. workers to insist on
higher wage rates.
To conclude, the minimum wage rates under the H-2A program are
based on market rates and are not too high, but rather too low,
reflecting that most farmworkers live in poverty. The adverse effect
wage rate currently does not adequately protect against depression in
``prevailing'' wage rates caused by the presence of guestworkers. U.S.
workers suffer harm and foreign workers are exploited.
Congress, in deliberating over guestworker programs, should
recognize that requiring the ``prevailing wage'' is a minimum standard
that is not sufficient to ensure decent treatment of both U.S. workers
and guestworkers.
______
[The prepared statement of Archbishop Gregory follows:]
Prepared Statement of Archbishop Wilton D. Gregory, Archdiocese of
Atlanta
I am pleased that the U.S. House of Representatives has chosen to
host field hearings on immigration in Gainesville and Dalton.
Immigration impacts all of us and there are strong feelings involved.
It is vital that the many voices be heard and that the public be
educated about these complex issues. We must overcome the
misunderstanding, ignorance, competition, and fear still standing in
the way of policy solutions that are just and humane.
The current house bill containing primarily enforcement measures
does not solve the problems facing our society. The Archdiocese of
Atlanta, along with the U.S. Conference of Catholic Bishops (USCCB),
supports a comprehensive approach to immigration reform which includes
the following elements: 1) policies to address the economic root causes
of migration; 2) reform of our legal immigration system, including a
viable and workable path to citizenship; 3) a temporary worker program
which protects the rights of all workers; 4) family-based immigration
reform which reduces waiting times for family reunification; and 5) the
restoration of due process protections for immigrants.
I and my brother bishops support these reforms because every day we
witness the human consequences of an immigration system which is
severely flawed. Families are separated; migrant workers are abused and
exploited by human smugglers; and, tragically, human beings die in the
desert. We must reform the system and restore to it respect for basic
human rights and human life.
As our community continues to engage this important issue, I ask
that the debate be conducted through civil dialogue, in the spirit of
cooperation and love. It is my hope that participants on both sides of
the issue will refrain from harsh rhetoric and address the substantive
issues at hand.
I and the Catholic Archdiocese of Atlanta continue to reach out to
the people who are most vulnerable through Catholic Charities and the
ninety-five parishes and missions in North Georgia. We are working with
members of the community and with our elected officials toward a
comprehensive and humane solution to the immigration crisis in our
nation.
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Submitted and placed in permanent archive file, statements
submitted by public attending hearing. Gainesville, GA, August 14,
2006.
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