Immigration Laws: January, 2004 - Number #05

The US unemployment rate was six percent in October 2003, 5.9 percent in November 2003, and 5.7 percent in December 2003, as the labor force shrank to 146.9 million. Job growth remained weak: the US economy generated fewer than 100,000 jobs a month for the past 11 months, and has lost 2.3 million jobs since President Bush took office in January 2001. There are about 8.7 million jobless Americans, including two million unemployed six months or more, despite a resumption of economic growth and a rising stock market.

The US labor force participation rate- the percentage of those 16 and older working or looking for work- fell from a peak 67.3 percent in 2000 to 66 percent in 2003.

Almost 20 percent of the net new jobs in Fall 2003 were in restaurants. The National Restaurant Association says that restaurants account for 6.6 percent of US GDP and employ 11.7 million workers. Self-employment has been rising: 6.6 percent of those in the surveys conducted with 60,000 household say they are self-employed, up from 6.1 percent in January 2001. Payroll employment, derived from a survey of 400,000 of the 8.5 million US businesses or establishments, remained 2.3 million lower in December 2003 than in January 2001.

Some economists say that the reason why the household and establishment surveys have been diverging is unauthorized workers, who are counted in the household survey, but not in the establishment survey.

Pressure on agencies enforcing safety rules is increasing. A New York Times profile of a plumbing company in Cincinnati on December 21, 2003 pointed out that the deaths of two employees in trenches did not result in OSHA seeking criminal prosecution of the employer, even after investigators concluded that the employer "willfully" violated safety laws. "Willful" safety violations are those that exhibit "intentional disregard" or "plain indifference" toward safety laws; OSHA in FY02 found 404 of 83,539 cited safety violations that were willful.

Between 1982 and 2002, there were 170,000 on-the-job deaths in the US. OSHA investigators concluded that 1,242 workers had died because of their employer's "willful" safety violations. Some 196 worker death cases were referred to state or federal prosecutors, resulting in 81 convictions and 16 jail sentences of employers that totaled less than 30 years. The 500-lawyer US Department of Labor Solicitor's office is reluctant to refer OSHA worker death cases to the Attorney General for prosecution, fearing a loss of control over the cases as they leave DOL. Many employers retain Littler Mendelson, a law firm with a reputation for the scorched-earth defense that has some Cal-OSHA inspectors calling it Hitler Mussolini.

California has taken the lead in prosecuting employers whose willful neglect of safety rules leads to worker deaths. Federal OSHA can fine employers a maximum $500,000 and levy up to six months in jail for safety violations that kill workers, while state law allows Cal OSHA to fine employers up to $1.5 million and incarcerate offenders up to three years. Under the California Circuit Prosecutor Project, specialists in prosecuting employers for workplace deaths travel from Sacramento to help local district attorneys.

In Gustine California, two unauthorized Mexicans died on a 1,700-cow dairy operated by well-established Portuguese immigrants from the Azores who got their start working for Dutch immigrant dairy farmers. The employer was charged with a willful violation, since it was shown that he knew cattle manure produces lethal gases that, when concentrated in the concrete towers next to lagoons that hold pumping equipment, can kill workers. The result of prosecuting the dairy operator for the "willful" deaths of changed attitudes, prompting dairies to take worker safety far more seriously.

H-1B. The USCIS approved 217,340 petitions for H-1B visas in FY03, including 105,314 for initial employment; 19 percent of the petitions for initial employment were exempt from the 195,000 cap, which has reverted to 65,000 a year. About 78,000 H-1Bs counted against the cap in FY03, and 79,000 in FY02.

There were 710,000 H-1B holders in the US in 2002. To receive H-1B visas, foreigners must have a BA degree or the equivalent of a BA obtained through experience; they also must have any required license in the state where the H-1B will be employed.

The American Electronics Association reported that the number of high-tech US jobs was 6.5 million, and that high-tech salaries averaged $66,300 a year. The San Francisco Bay Area and the Austin area each lost a third of their IT jobs.

The 2002 Immigration Yearbook includes a special section on H-1Bs. Of the 196,000 "beneficiaries" or H-1B visa recipients in FY02, 52 percent were first-time H-1Bs, 48 percent were in the US and renewing their visas. The median age of H-1B visa holders was 30, their median earnings were $53,000, and 48 percent had an MA or more. About 38 percent of those granted H-1B visas in FY02 were in computer-related occupations, 13 percent were in engineering or architecture, and 11 percent each were in administrative jobs or teaching. Though most had PhDs, foreign teachers had the lowest median earnings, $36,000 a year. A quarter of the H-1B beneficiaries were from India and 10 percent from China; in 2001, half of H-1Bs were from India.

US-citizen workers in the same occupations are older than H-1B workers. For example, US citizen electrical engineers had a median age of 41, while H-1Bs had a median age of 32. Half of the H-1Bs in engineering had a graduate degree, compared to 20 percent of the US citizen electrical engineers. About 75 percent of US employers of H-1Bs refused to talk to GAO investigators and, of the quarter who did, most said they based hiring and layoff decisions strictly on merit, not a worker's immigration status. Most employers put the cost of hiring an H-1B at $2,500 to $7,500, including the $1,000 premium processing fee for speedy decisions and a $1,000 training fee sent to the US government.

The annual ceiling on new H-1B admissions is 65,000 a year, but H-1B visas requested by universities and nonprofit R&D organizations are exempt from this cap, and there is no ceiling on how many H-1Bs can be renewed each year. There are moves in Congress to increase the number of H-1B visas exempt from the cap by, for example, exempting foreigners who received degrees at US universities from the cap, perhaps by linking additional exemptions from the cap with a return of the $1,000 training fee, which expired on October 1, 2003.

Does the US need more scientists? Demographer Michael Teitelbaum reviewed past projections suggesting shortages of scientists and engineers and found that most were wrong. Many of the studies that projected shortages had an incentive to do so, especially those funded by employers wanting to hire foreigners. However, it takes longer than ever before to get a "real job" after completing most advanced degrees in sciences, so US students tend to avoid fields of study marked by six or more years of graduate study followed by five to 10 years of low-paid postdoctoral research, the pattern in many basic sciences.

Foreign students, on the other hand, are often welcomed into basic science and engineering graduate programs that cannot attract US students. According to one study, bioscientists can expect to earn $1 million less than MBAs graduating from the same university in their lifetimes, and $2 million less if stock options are taken into account. Such different lifetime earnings profiles help to explain the very different composition of students in MBA programs and graduate science programs. (www.thepublicinterest.com/)

Nurses. Of the 2.7 million people qualified in the US as nurses in 2002, 18 percent were not employed as nurses. Of the 2.2 million who were working as nurses, 1.8 million were employed in hospitals. Nurses stay an average of four years in hospital jobs before changing employers, shifting to other health care providers, or leaving nursing.

Nursing associations want minimum staffing levels set by the government. Beginning in January 2004, California's Safe Staffing Law requires at least one nurse per six patients in main hospital wards "at all times." Hospitals say they have been unable to hire enough nurses to meet the requirements of the four-year old law.

Offshoring. "Offshoring" means moving jobs, such as those in call centers, overseas. The accelerating movement of white-collar jobs overseas is a growing concern among well-educated US workers, marked by protests from New York to California and legislation pending in eight states that would restrict the movement of taxpayer funded-jobs overseas. India's National Association of Software and Service Companies argues that offshoring or outsourcing is a win-win situation for the US and India.

In order to compensate for declines in other sources of revenue, US consulting firms are advising clients on how to move white-collar jobs overseas, and how to consolidate overseas functions that are not particular to the company and are not part of its essential business. So-called rules-based business operations such as employee compensation, benefits, finance and accounting, would be performed abroad, while judgment-based operations such as developing a corporate strategy would be kept in the US. Companies such as I.B.M. and Accenture are offering advice on offshoring, and also offering to provide services not central to firms, hiring thousands of people in places like Bangalore and Shanghai to provide services that firms decide to outsource.

David Barstow, "California Leads in Making Employer Pay for Job Deaths," New York Times, December 23, 2003. Aaron Davis and Margaret Steen, "Caught in the pull of globalization," San Jose Mercury News, November 10, 2003. Teitelbaum, Michael. 2003. "Do we need more scientists?" The Public Interest. Fall. No. 153, pp 40-53. www.thepublicinterest.com/