In April 2017, President Trump signed his “Buy American and Hire American” executive order. The order restricts U.S. employers’ ability to recruit foreign labor, in particular temporary H-1B visa holders, in the name of “protecting American workers.” But a closer look at the order reveals that it is doing the opposite by failing to give citizens and foreign workers higher pay, better benefits and stronger employment protections.
How so? It relies on anti-fraud investigations rather than rights. Under Buy American and Hire American, the U.S. Citizenship and Immigration Services will increase H-1B inspections and commence site visits of businesses employing foreign workers holding “specialized knowledge” under the L visa. The agency’s stated aim under the broadened Administrative Site Visit and Verification Program: to prosecute employers who purposely misuse a subset of the 800,000-plus visa workers in today’s economy.
Government has long debated how to grapple with the tension between business needs in a global economy and protecting U.S. workers from foreign labor competition. But the recent turn to a fraud-based approach without robust employment standards has left both citizens and foreign workers with fewer entitlements and remedies on the job both in ongoing employment relationships and those that break down. The fraud-based approach creates the illusion of market regulation when, in fact, it may even promote lower standards.
In contrast to Trump’s executive order, in the early 1990s, Congress made rights for citizens and foreigners a priority as part of expanding foreign temporary work programs. A nursing shortage during the AIDS epidemic and a perceived skills lag amid general fears of economic decline vis-a-vis Europe and Japan had revealed a need for increased employment-based immigration.
In response, Congress undertook its most far-reaching immigration reforms since it abolished national-origins quotas in 1965. As part of the legislative overhaul, hospital and internationalist employer groups, such as those represented by the American Business Immigration Coalition (i.e., the National Foreign Trade Council and the U.S. Chamber of Commerce), pushed for increased access to foreign temporary workers. Loosening the educational standards for entry under both the H and L visa programs helped to remedy the “workforce crises.”
At the same time, however, Congress wanted to limit the negative impact of foreign labor on U.S. workers. Accordingly, legislators put into place rights-based protections such as wage guarantees for citizens and foreigners under the H-1B program. Rather than subject each employer’s foreign-worker petition to a labor market “test” and mandate citizen recruitment, such employment standards satisfied U.S. labor groups concerned with maintaining the wages and working conditions long associated with professional occupations in the United States.
The recession of 2001 brought the problem of “protecting American workers” to a new fever pitch, however. Congress had become increasingly concerned about the negative impact of foreign workers upon college-educated citizens. At a congressional hearing on the L visa, for example, Pat Fluno, a U.S. citizen, testified that her employer, Siemens Corp., had replaced her and her co-workers with foreign visa holders through the outsourcing company Tata Consultancy Services. According to her testimony, which provoked the “outrage” of congressional members in both parties, the U.S. workers holding $75,000-a-year jobs in data processing had been required to train their $36,000-per-year replacements before their employment termination.
Despite testimonials such as this, a now-conservative Congress opted not to increase damages for citizens and foreigners injured under the H-1B program or to enact any employment standards for the L visa. Instead, the H-1B and L-1 Visa Reform Acts of 2004 levied a fee upon employer-users in the name of developing Labor Department, USCIS and State Department anti-fraud capacity to police the programs. Congress thus promoted penalizing only “bad actor” employers instead of raising existing standards for citizens and foreign workers alike under the programs.
This decision was a win for corporate interests and conservative-leaning citizen groups, which had moved toward the fraud-based approach in lieu of increased general employment standards. At the hearings on the bills, the American Council on International Personnel, an internationalist advocacy group representing 300 U.S. corporations; the National Association of Computer Consultant Businesses, a lobbying group of U.S. technology-staffing companies; and the Federation for American Immigration Reform, a conservative anti-immigration group, had all suggested that it was unnecessary to impose higher employment standards upon all users. After all, they argued, only a subset of foreign labor contractors “are not playing by the same set of rules a domestic company plays by.”
The political nature of the legislation was made even clearer by its rejection of the AFL-CIO’s proposal for increased damages for injured citizens and foreigners under the H-1B program and employment standards and Labor Department jurisdiction over the L visa program.
Trump has pitched Buy American and Hire American as a challenge to globalist corporate hegemony in the name of the citizen worker. But, like the 2004 legislation, its expanded fraud-based approach to governing the H-1B and L visa programs is more a sop to conservative political interests and their anti-regulation ethos than an actual attempt to prioritize the U.S. worker.
This is a problem for both citizens and foreign labor. In response to H-1B complaints, the Labor Department has levied millions of dollars of fines on program users across presidential administrations. Many of these penalties applied to foreign labor contractors such as Tata Consultancy Services. But all of this enforcement has not discouraged their evasion of the rules. Without increased damages and penalties under H-1B and any standards at all under the L visa, employers still find it cheap to displace U.S. workers by paying foreign workers less.
For the Buy American and Hire American executive order to truly address the problem, it must be complemented by congressional H-1B and L visa reforms. Members of both the Senate and the House continue to propose bills on the topic (such as S.140, co-sponsored by Sen. Charles E. Grassley (R-Iowa) and Bernie Sanders (I-Vt.) in 2017, and Sen. Orrin G. Hatch’s (R-Utah) 2018 “I-Squared Act”). When it considers these proposals, Congress will be debating not only employer access to foreign workers (i.e., entry requirements and caps, etc.) but also visions of post-entry program enforcement. What to watch for: a contest between those who support policing only the “bad actors” through anti-fraud measures, and interest-groups who support rights-based reforms in the name of higher employment standards for citizens and foreign workers alike.