[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                   PROTECTING U.S. AND GUEST WORKERS:
                     THE RECRUITMENT AND EMPLOYMENT
                       OF TEMPORARY FOREIGN LABOR

=======================================================================




                                HEARING

                               before the

                              COMMITTEE ON
                          EDUCATION AND LABOR

                     U.S. House of Representatives

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

              HEARING HELD IN WASHINGTON, DC, JUNE 7, 2007

                               __________

                           Serial No. 110-45

                               __________

      Printed for the use of the Committee on Education and Labor


                       Available on the Internet:
      http://www.gpoaccess.gov/congress/house/education/index.html




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                    COMMITTEE ON EDUCATION AND LABOR

                  GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice       Howard P. ``Buck'' McKeon, 
    Chairman                             California,
Donald M. Payne, New Jersey            Ranking Minority Member
Robert E. Andrews, New Jersey        Thomas E. Petri, Wisconsin
Robert C. ``Bobby'' Scott, Virginia  Peter Hoekstra, Michigan
Lynn C. Woolsey, California          Michael N. Castle, Delaware
Ruben Hinojosa, Texas                Mark E. Souder, Indiana
Carolyn McCarthy, New York           Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts       Judy Biggert, Illinois
Dennis J. Kucinich, Ohio             Todd Russell Platts, Pennsylvania
David Wu, Oregon                     Ric Keller, Florida
Rush D. Holt, New Jersey             Joe Wilson, South Carolina
Susan A. Davis, California           John Kline, Minnesota
Danny K. Davis, Illinois             Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona            Kenny Marchant, Texas
Timothy H. Bishop, New York          Tom Price, Georgia
Linda T. Sanchez, California         Luis G. Fortuno, Puerto Rico
John P. Sarbanes, Maryland           Charles W. Boustany, Jr., 
Joe Sestak, Pennsylvania                 Louisiana
David Loebsack, Iowa                 Virginia Foxx, North Carolina
Mazie Hirono, Hawaii                 John R. ``Randy'' Kuhl, Jr., New 
Jason Altmire, Pennsylvania              York
John A. Yarmuth, Kentucky            Rob Bishop, Utah
Phil Hare, Illinois                  David Davis, Tennessee
Yvette D. Clarke, New York           Timothy Walberg, Michigan
Joe Courtney, Connecticut            Dean Heller, Nevada
Carol Shea-Porter, New Hampshire

                     Mark Zuckerman, Staff Director
                   Vic Klatt, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 7, 2007.....................................     1
Statement of Members:
    Altmire, Hon. Jason, a Representative in Congress from the 
      State of Pennsylvania, prepared statement of...............    48
    Bishop, Hon. Timothy H., a Representative in Congress from 
      the State of New York, question for the record.............    59
    McKeon, Hon. Howard P. ``Buck,'' Senior Republican Member, 
      Committee on Education and Labor...........................     4
        Prepared statement of....................................     6
    Miller, Hon. George, Chairman, Committee on Education and 
      Labor......................................................     1
        Prepared statement of....................................     3
        Prepared statement of Michael Dale, Northwest Workers' 
          Justice Project, and Laura K. Abel, Brennan Center for 
          Justice at NYU School of Law...........................    70

Statement of Witnesses:
    Bauer, Mary, director, Immigrant Justice Project, Southern 
      Poverty Law Center.........................................    10
        Prepared statement of....................................    11
        Access to report, ``Close to Slavery''...................    69
    Holt, Dr. James S., president and principal, James S. Holt & 
      Co., LLC...................................................    16
        Prepared statement of....................................    18
    Hiatt, Jonathan P., general counsel, American Federation of 
      Labor and Congress of Industrial Organizations (AFL-CIO), 
      prepared statement of......................................    49
    Marshall, Ray, former U.S. Secretary of Labor, president 
      emeritus, LBJ School of Public Affairs, University of Texas     8
        Prepared statement of....................................     9
        Response to question from Mr. Bishop.....................    59
        ``Getting Immigration Reform Right''.....................    60
    Velasquez, Baldemar, founder and president, Farm Labor 
      Organizing Committee (FLOC)................................    22
        Prepared statement of....................................    23


                   PROTECTING U.S. AND GUEST WORKERS:
                     THE RECRUITMENT AND EMPLOYMENT



                       OF TEMPORARY FOREIGN LABOR

                              ----------                              


                         Thursday, June 7, 2007

                     U.S. House of Representatives

                    Committee on Education and Labor

                             Washington, DC

                              ----------                              

    The committee met, pursuant to call, at 10:30 a.m., in Room 
2175, Rayburn House Office Building, Hon. George Miller 
[chairman of the committee] presiding.
    Present: Representatives Miller, Woolsey, McCarthy, Wu, 
Holt, Davis of California, Bishop of New York, Sanchez, 
Sarbanes, Hirono, Yarmuth, Hare, Clarke, Courtney, Shea-Porter, 
McKeon, Petri, Platts, Wilson, Boustany, Foxx, Davis of 
Tennessee, and Walberg.
    Also Present: Representative Kaptur.
    Staff Present: Aaron Albright, Press Secretary; Tylease 
Alli, Hearing Clerk; Jordan Barab, Health Safety Professional; 
Jody Calemine, Labor Policy Deputy Director; Fran-Victoria Cox, 
Documents Clerk; Lynn Dondis, Policy Advisor for Subcommittee 
on Workforce Protections; Carlos Fenwick, Policy Advisor for 
Subcommittee on Health, Employment, Labor and Pensions; Jeffrey 
Hancuff, Staff Assistant, Labor; Brian Kennedy, General 
Counsel; Thomas Kiley, Communications Director; Joe Novotny, 
Chief Clerk; Alex Nock, Deputy Staff Director; Megan O'Reilly, 
Labor Policy Advisor; Michele Varnhagen, Labor Policy Director; 
Michael Zola, Chief Investigative Counsel, Oversight; Mark 
Zuckerman, Staff Director; Robert Borden, Minority General 
Counsel; Steve Forde, Minority Communications Director; Rob 
Gregg, Minority Legislative Assistant; Richard Hoar, Minority 
Professional Staff Member; Victor Klatt, Minority Staff 
Director; Jim Paretti, Minority Workforce Policy Counsel; Molly 
McLaughlin Salmi, Minority Deputy Director of Workforce Policy; 
Linda Stevens, Minority Chief Clerk/Assistant to the General 
Counsel; Loren Sweatt, Minority Professional Staff Member; and 
Cameron Coursen, Minority Assistant.
    Chairman Miller. The Committee on Education and Labor will 
come to order for the purposes of holding a hearing this 
morning on Protecting U.S. and Guest Workers: The Recruitment 
and Employment of Temporary Foreign Labor, and I want to thank 
our witnesses who are here today, and I am going to begin with 
an opening statement and then recognize Mr. McKeon.
    Welcome to today's hearing on the recruitment and 
employment of temporary foreign labor. Hundreds of thousands of 
guest workers come to the United States each year under 
existing programs, and immigration legislation now pending in 
the Congress would further expand these sources of temporary 
foreign labor. As a country and a Congress, the debate is to 
reform our Nation's immigration system. It is critical that we 
pay particular attention to the treatment of guest workers and 
how well our current guest worker programs work. Examining 
guest worker programs and proposals for new programs raises a 
lot of questions.
    One question is whether or not and to what extent temporary 
foreign labor is actually needed. That is, are we accurately 
measuring our labor needs? Are U.S. workers truly unavailable 
to fill the jobs? Is temporary foreign labor the right way to 
fill those needs?
    Another question is this: If we have a new guest worker 
program, do those programs include adequate protections for 
both guest workers and U.S. workers?
    While they are in this country, guest workers should 
receive basic labor protections and adequate legal safeguards. 
Denying or failing to enforce basic rights for guest workers 
who are here is harmful both to U.S. workers and to the overall 
U.S. economy. Yet, as we have seen in various reports and news 
accounts, our current guest worker programs are sorely lacking 
in meaningful labor protections. Problems with these programs 
occur from the very start of the process. In foreign countries, 
where guest workers are first recruited in exchange for 
thousands of dollars in fees, unscrupulous labor recruiters 
lure workers to the United States by promising them good jobs 
and a better life. Many of these workers who live in poverty in 
their home countries sell their land or take out high-interest 
loans or borrow from their neighbors so they can afford the 
recruiters' fees.
    Guest workers come to this country with the hope of 
providing their families with a better life, but in far too 
many cases they arrive here only to find that they were cruelly 
deceived. They earn unlivable wages for extremely difficult 
jobs to which they have never agreed. They find themselves 
unable to repay their deep debts to their recruiters. Sadly, 
those are the least of their worries. Guest workers often 
endure sweatshop conditions and back-breaking work and 
inhumanely long hours. They are forced to work through illness 
and injury, sometimes with only one day of rest per week. 
Employers frequently withhold wages from guest workers, and in 
some cases they automatically deduct a majority of the worker's 
weekly pay to cover room and board. Meanwhile, the housing that 
is provided guest workers is often severely substandard with no 
electricity, hot water, doors or windows. There are cases where 
guest workers suffer physical violence at the hands of their 
employers and are threatened if they should try to leave. 
Consequently, they are left with little or no money, no voice 
and, quite often, more in debt. Unable to pay off the debt 
manufactured by the recruiters and their employers, the workers 
are trapped by fear.
    It may seem impossible that I could be describing the 
working conditions in the United States in 2007, but I am not 
exaggerating. These deplorable practices not only undermine 
living standards; they ruin lives.
    In their worst form, these practices constitute the closest 
thing we have in this country to modern day slavery or 
indentured servitude. These practices drive down wages and 
working conditions for American workers, too, who must now 
compete to work alongside workers who are treated shamefully. 
Before we invite any more guest workers or create a new program 
to this country, we must fix the serious flaws in the current 
system.
    First and foremost, we need to ensure that, if U.S. 
employers are permitted to hire guest workers or to fill job 
openings, it is only when there are absolutely no American 
workers or workers here with legal status available and willing 
to fill these jobs. Then we should allow new guest workers who 
we must provide with adequate labor rights and protections. If 
and when the abuses of these rights occur, we must enforce the 
law and hold employers and recruiters accountable.
    I have introduced legislation, the Indentured Servitude 
Abolition Act of 2007, that would help put a stop to these 
practices. Among these things, the bill would hold recruiters 
and employers responsible for the promises that they make to 
prospective employees and for their treatment as guest workers. 
By preventing U.S. employers from exploiting cheap foreign 
labor, we will not only end these serious human rights 
violations, but we will also help fight against a race to the 
bottom in wages and benefits for all workers in this country. 
Dealing with labor recruiters, however, is just one part of the 
solution. We need strong, meaningful protection for all 
workers, and we need to ensure that those protections are 
vigorously enforced.
    This morning's hearing is critically important to the work 
that we are doing to reform the Nation's immigration laws, and 
we have an incredibly distinguished panel of witnesses with us 
today, and I am pleased to welcome them again to the committee.
    At this time, I would like to recognize Mr. McKeon.
    [The prepared statement of Mr. Miller follows:]

   Prepared Statement of Hon. George Miller, Chairman, Committee on 
                          Education and Labor

    Good morning. Welcome to today's hearing on the recruitment and 
employment of temporary foreign labor.
    Hundreds of thousands of guest workers come to the United States 
each year under existing programs, and immigration legislation now 
pending in Congress would further expand these sources of temporary 
foreign labor.
    As the country and the Congress debate reforms to our nation's 
immigration system, it is critical that we pay particular attention to 
the treatment of guest workers and how well our current guest worker 
programs work.
    Examining guest worker programs raises a lot of questions. One 
question is whether and to what extent temporary foreign labor is 
actually needed. That is, are we accurately measuring our labor needs? 
Are U.S. workers truly unavailable to fill jobs? Is temporary foreign 
labor the right way to fill any needs?
    Another question is this: To the extent that we have guest worker 
programs, do those programs include adequate protections for both guest 
workers and U.S. workers?
    While they are in this country, guest workers should receive basic 
labor protections and adequate legal safeguards. Denying or failing to 
enforce basic rights for guest workers who are here is harmful to both 
U.S. workers and the overall U.S. economy.
    Yet, as we have seen in various reports and news accounts, our 
current guest worker programs are sorely lacking in meaningful labor 
protections.
    Problems with these programs occur from the very start of the 
process, in foreign countries where guest workers are first recruited. 
In exchange for thousands of dollars in fees, unscrupulous labor 
recruiters lure workers to the United States by promising them good 
jobs and a better life.
    Many of these workers, who live in poverty in their home countries, 
sell their land or take out high interest loans so that they can afford 
the recruiters' fees.
    Guest workers come to this country with the hope of providing their 
families with a better life. But in far too many cases, they arrive 
here only to find out they were cruelly deceived.
    They earn unlivable wages for extremely difficult jobs to which 
they never agreed. They find themselves unable to repay their deep 
debts to their recruiters.
    Sadly, those are the least of their worries. Guest workers often 
endure sweatshop conditions and back-breaking work for inhumanly long 
hours. They are forced to work through illness and injury, sometimes 
with only one day of rest per week.
    Employers frequently withhold wages from guest workers. In some 
cases, they automatically deduct the majority of workers' weekly pay to 
cover room and board. Meanwhile, the housing that is provided for guest 
workers is often severely substandard, with no electricity, hot water, 
doors, or windows.
    There are cases where workers suffer physical violence at the hands 
of their employers and are threatened if they should try to leave. 
Consequently, they are left with little or no money, no voice, and 
quite often, more debt. Unable to pay off debt manufactured by 
recruiters and their employers, the workers are trapped by fear.
    It may seem impossible that I could be describing working 
conditions in the United States in 2007. But I am not exaggerating. 
These deplorable practices not only undermine living standards, they 
ruin lives.
    In their worst form, these practices constitute the closest thing 
we have in this country to modern-day slavery or indentured servitude.
    These practices drive down wages and working conditions for 
American workers, too, who now must compete for work alongside workers 
who are treated shamefully.
    Before we invite any more guest workers to this country, we must 
fix the serious flaws in the current system.
    First and foremost, we need to ensure that U.S. employers be 
permitted to hire guest workers to fill job openings only when there 
are absolutely no American workers available, able, and willing to fill 
them.
    Then, we must provide guest workers with adequate labor rights and 
protections. When and if abuses of these rights do occur, we must 
enforce the law and hold employers and recruiters accountable.
    I have introduced legislation, the Indentured Servitude Abolition 
Act of 2007 (H.R. 1763), that would help put a stop to these practices. 
Among other things, the bill would hold recruiters and employers 
responsible for the promises they make to prospective employees and for 
their treatment of guest workers.
    By preventing U.S. employers from exploiting cheap foreign labor, 
we will not only end these serious human rights violations, but we will 
also help fight against a race to the bottom in wages and benefits for 
all workers in this country.
    Dealing with labor recruiters, however, is just one part of the 
solution. We need strong, meaningful protections for all workers--and 
we need to ensure that those protections are vigorously enforced.
    This morning's hearing is critically important to the work that we 
are doing to reform the nation's immigration laws.
    We have an incredibly distinguished panel of witnesses with us 
today, and I am pleased to welcome them to the Committee.
    Thank you.
                                 ______
                                 
    Mr. McKeon. Thank you, Chairman Miller, for convening this 
morning's hearing.
    I thank each of our witnesses for joining us today, and I 
look forward to your testimony.
    Last year, this panel held a series of hearings on the 
subject of illegal immigration, and I am pleased we are 
continuing our participation in the ongoing debate on this 
subject, a debate that is raging not just on the Senate side of 
Capitol Hill but here in the House and in communities 
throughout our Nation as well. One of those communities is my 
hometown, the Los Angeles suburb of Santa Clarita. Southern 
California is the epicenter of the immigration debate, so this 
hearing hits home for me both literally and figuratively.
    Last week, when I returned home for the Memorial Day 
recess, this topic was on the minds of just about everyone I 
visited with, from business and government leaders to local 
press and rank and file constituents. So I come to this 
hearing, first and foremost, as someone who understands the 
unique challenges faced by those who most directly are impacted 
by illegal immigration and the issues associated with it.
    I also come to this hearing as a former small business 
owner, acutely aware of many of the staffing and employee 
benefits issues employers face each and every day. As such, I 
understand how and why an expansion of guest worker programs, a 
topic of today's hearing, would be embraced by many in the 
employer community. It would more directly avail them of a new 
pool of workers in a supposedly organized, orderly and legal 
way.
    However, while I recognize the views of those who favor an 
expansion of guest worker programs, particularly programs in 
agriculture, which Chairman Miller and I both know are very 
important to our State, to the economy and to the Nation, I am 
not convinced that we can find a workable solution to our 
illegal immigration crisis without addressing border security 
first. While some see such an expansion as a pathway to 
citizenship, I, instead, see it as a slippery slope toward 
amnesty, and I believe history, in particular the ramifications 
of the 1986 immigration law, bears that out.
    The immigration law Congress passed in 1986 asked for us to 
secure the border and put in place a reliable employer 
verification system. Twenty-one years later, this still has not 
been done. This was made crystal clear to me about a year ago 
when I had the opportunity to tour the U.S.-Mexico border near 
San Diego. Though we have made advances in our ability to stop 
illegal immigrants as they cross the border, especially since 
my previous visit to the border a few years earlier, the 
illegals and their smugglers have made advances as well, and as 
a result, for lack of a better phrase, it is a warlike 
atmosphere down there. That visit more than anything else 
convinced me that we simply cannot tackle this issue without 
first prioritizing border enforcement. It is an economic 
security priority, and it is a homeland security priority, and 
it simply is not prudent to expand or to add further programs 
as part of a new effort until we address what is still left 
unresolved.
    Just as in the last Congress when we first held hearings on 
this important issue, we would not be here today if not for the 
debate over how to best get a firm grip on our borders and how 
that debate is playing out in the halls of Congress and at 
kitchen tables across the Nation.
    With that being said, existing guest worker programs do 
play a vital role in our economy and in our strategy on illegal 
immigration. That is why I am so pleased to have before us 
today a balanced and diverse panel of witnesses who will offer 
us testimony on guest worker programs--their past, their 
present and their future. Again, I look forward to gathering 
valuable input from them as our committee fulfills its 
responsibility to engage in this critical debate.
    I thank you all for being here.
    [The prepared statement of Mr. McKeon follows:]

Prepared Statement of Hon. Howard P. ``Buck'' McKeon, Senior Republican 
                Member, Committee on Education and Labor

    Thank you, Chairman Miller, for convening this morning's hearing, 
and I thank each of our witnesses for joining us today. I look forward 
to your testimony.
    Last year, this panel held a series of hearings on the subject of 
illegal immigration, and I am pleased we are continuing our 
participation in the ongoing debate on this topic--a debate that is 
raging not just on the Senate side of Capitol Hill, but here in the 
House and in communities throughout our nation as well. One of those 
communities is my hometown: the Los Angeles suburb of Santa Clarita.
    Southern California is the epicenter of the immigration debate, so 
this hearing hits home for me, both literally and figuratively. Last 
week, when I returned home for the Memorial Day recess, this topic was 
on the minds of just about everyone I visited with--from business and 
government leaders to local press and rank-and-file constituents. So, I 
come to this hearing--first and foremost--as someone who understands 
the unique challenges faced by those most directly impacted by illegal 
immigration and issues associated with it.
    I also come to this hearing as a former small business owner, 
acutely aware of many of the staffing and employee benefits issues 
employers face each and every day. As such, I understand how and why an 
expansion of guest worker programs--a topic of today's hearing--would 
be embraced by many in the employer community. It would more directly 
avail them of a new pool of workers--in a supposedly organized, 
orderly, and legal way.
    However, while I recognize the views of those who favor an 
expansion of guest worker programs--particularly programs in 
agriculture, which Chairman Miller and I both know is as important to 
California's economy as it is anywhere else in our nation--I am not 
convinced that we can find a workable solution to our illegal 
immigration crisis without addressing border security first. While some 
see such an expansion as a pathway to citizenship, I instead see it as 
a slippery slope toward amnesty. And I believe history--in particular, 
the ramifications of the 1986 immigration law--bears that out.
    The immigration law Congress passed in 1986 asked for us to secure 
the border and put in place a reliable employer verification system. 
Twenty-one years later, this still has not been done. This was made 
crystal clear to me about a year ago, when I had the opportunity to 
tour the U.S.-Mexico border near San Diego. Though we have made 
advances in our ability to stop illegal immigrants as they cross the 
border, especially since my previous visit to the border a few years 
earlier, the illegals and their smugglers have made advances as well. 
And as a result--for lack of a better phrase--it's a warlike atmosphere 
down there.
    That visit, more than anything else, convinced me that we simply 
cannot tackle this issue without first prioritizing border enforcement. 
It's an economic security priority, and it's a homeland security 
priority. And it simply is not prudent to expand or add further 
programs as part of a new effort until we address what's still left 
unresolved. Just as in the last Congress, when we first held hearings 
on this important issue, we wouldn't be here today if not for the 
debate over how to best get a firm grip on our borders--and how that 
debate is playing out in the halls of Congress and at kitchen tables 
across the nation.
    With that being said, existing guest worker programs do play a 
vital role in our economy and in our strategy on illegal immigration. 
That's why I am so pleased to have before us today a balanced and 
diverse panel of witnesses, who will offer us testimony on guest worker 
programs--their past, their present, and their future. Again, I look 
forward to gathering valuable input from them, as our Committee 
fulfills its responsibility to engage in this critical debate. And I 
thank them for being here.
                                 ______
                                 
    Chairman Miller. Thank you.
    Our first witness will be Secretary Ray Marshall, who is an 
old friend and longtime friend to this committee, who currently 
holds the Audre and Bernard Rapaport Centennial Chair in 
Economics and Public Affairs at the University of Texas at 
Austin. He is President of the Ray Marshall, Incorporated 
research and consulting firm. He served as U.S. Secretary of 
Labor from 1977 to 1981 under President Jimmy Carter. Secretary 
Marshall holds a Ph.D. in Economics from the University of 
California at Berkeley.
    Mary Bauer has directed the Immigrant Justice Project of 
the Southern Poverty Law Center, a program designed to protect 
immigrant workers in the Southeast United States since its 
inception in 2004. Ms. Bauer is a graduate of the College of 
William and Mary, and she received her law degree from the 
University of Virginia.
    James S. Holt is the President and Principal of James S. 
Holt & Company, Washington, D.C. Dr. Holt is formerly a senior 
economist with the law firm of McGinnis & William, serving as a 
consultant on labor and immigration matters, primarily those 
related to agriculture. Prior to that, he spent 16 years on the 
agriculture economics faculty at Pennsylvania State University.
    Without objection, I would like to recognize our friend and 
colleague, Marcy Kaptur from Ohio, to introduce our next 
witness. Hearing no objection, Congresswoman Kaptur, please 
proceed.
    Ms. Kaptur. Thank you, Chairman Miller, Ranking Member 
McKeon, and all of the distinguished members of this 
extraordinarily important committee of the House. Thank you for 
allowing me a moment this morning to introduce a very 
significant citizen.
    I never had the opportunity to meet Cesar Chavez, but I can 
tell you I have known Baldemar Velasquez for nearly half a 
century. He is a resident of our community in Ohio but was born 
to migrant farmers in 1947. He is the first member of his 
family to graduate from college with a sociology degree from 
Bluffton College, but he has spent his life truly laboring in 
the vineyards, both figuratively and practically. He has been 
laboring in the vineyards of justice, and he is here today, I 
know, to speak truth to power. I know how dedicated this man 
is, and I really wanted to be here today to make sure that, on 
the record, a citizen of this gravitas would be given a moment 
before the Congress of the United States to tell the story of 
the people that he has been struggling to give recognition to 
and justice to his entire life.
    In 1967, he founded a group called the Farm Labor 
Organizing Committee, which is based in Toledo, Ohio, and it 
began by handing out leaflets to northwest Ohio farm workers. 
Nearly a decade later, there was an effort made by FLOC to 
demand union recognition and a multi-party bargaining 
agreement. In 1983, he led a 600-hundred-mile march from Toledo 
to Campbell Soup headquarters in New Jersey.
    That is not the purpose of today's hearing, but it is 
important for people here to understand this gentleman was 
responsible for organizing both farmers and farm workers to 
deal with a major processing company in order to get proper 
treatment of the workers. I do not know of any person in our 
country who has achieved what he has achieved on the labor 
front.
    Finally, in 1998, he led a 5-year boycott in protest of Mt. 
Olive Pickle Company in North Carolina and organized workers in 
our country as well as in Mexico and helped to sign the only 
binational labor agreement that I am aware of, including the 
opening of an office in Monterrey, Mexico so that workers could 
come to our country free of the kind of coyote bounty that they 
have to pay with unscrupulous labor traffickers, and he is here 
to talk about what happened as a result of that.
    In 1990, Mr. Velasquez received the MacArthur Foundation 
Genius Award, so truly deserved. In 1994, the Governor of 
Mexico and its President awarded him the highest award they 
give to a noncitizen, the Aguila Azteca Award.
    Mr. Velasquez presents as a very humble and religious man. 
Let me tell you he is one of the finest people I have ever met, 
and I am proud to introduce him this morning.
    Chairman Miller. Thank you, Congresswoman Kaptur. Thank you 
very much.
    Mr. Velasquez, I do not have to tell you of Marcy's 
commitment to workers and to economic and social justice, and I 
assume you are very proud to be introduced by her. She is a 
remarkable Member of Congress.
    Marcy, thank you so much for joining us.
    Secretary Marshall, we are going to hear from you. We are 
going to turn the lights on here. There will be a green light 
and then an orange light when you should think about wrapping 
up and then a red light when you are more or less finished, but 
we will let you complete your sentences and paragraphs. Thank 
you, and welcome to the committee again.

  STATEMENT OF RAY MARSHALL, FORMER U.S. SECRETARY OF LABOR, 
PRESIDENT EMERITUS, LBJ SCHOOL OF PUBLIC AFFAIRS, UNIVERSITY OF 
                             TEXAS

    Mr. Marshall. Thank you, Mr. Chairman and members of the 
committee. I appreciate your invitation to present my views on 
immigration reform, guest workers and H.R. 1763.
    I have studied immigration for many years. I had 
responsibility for foreign worker matters in the Carter 
administration, and served on the Select Commission on 
Immigration and Refugee Policy and, more recently, on the 
Council on Foreign Relations Advisory Committee on Immigration. 
I have prepared a paper which I have submitted but would like 
to summarize the paper with the following points.
    The first point is that, because of the slowdown in the 
growth of our native workforce, American economic growth for at 
least the next 20 years will depend heavily on immigration, 
which has contributed greatly to the vitality of the American 
economy.
    The second point is that illegal immigration, however, 
subjects immigrants to grave dangers and exploitation, 
depresses wages of and working conditions for the most 
vulnerable American workers, undermines the rule of law, 
perpetuates marginal, low-wage industries, and makes it hard to 
relate immigration to economic and social policies to achieve 
broadly shared prosperity.
    The basic cause of illegal immigration is the magnetic 
relationship between desperate foreign workers and employers 
who prefer compliant farm workers willing to accept lower wages 
and substandard working conditions. Once illegal immigrant 
networks become institutionalized, a coherent, comprehensive 
array of policies will be required to reduce their size, and 
these include border and internal security, adjusting the 
status of unauthorized immigrants and appropriate trade 
investment and aid policies with Mexico and other immigrant 
source countries. For a number of reasons, however, I believe a 
large new guest worker program is not a good idea.
    First, these programs subject guest workers to the 
exploitation and depressed conditions of American workers.
    Second, there is no evidence that a large new guest worker 
program is necessary. First, the adjustment of status of 
unauthorized immigrants will produce a large but unknown number 
of newly legalized workers. Second, we already have temporary 
worker programs which should be improved to better meet the 
legitimate needs of employers and to prevent the abuse of guest 
workers and the adulteration of American jobs. H.R. 1763 would 
be a necessary part of this reform.
    Third, for nontemporary workers, it would be better to 
admit workers as permanent residents with full employment and 
legal protections, including the right to earn citizenship. 
Because of the continuing importance of immigration and 
temporary worker programs for the American economy and society, 
an independent entity should be created to generate high-
quality data, analyses and estimates concerning the need for 
foreign workers and the impact of foreign workers on the 
American economy and workforce. This entity should issue annual 
reports.
    Thank you, Mr. Chairman and members of the committee. I 
will be glad to respond to your questions.
    [The statement of Mr. Marshall follows:]

  Prepared Statement of Ray Marshall, Former U.S. Secretary of Labor, 
 President Emeritus, LBJ School of Public Affairs, University of Texas

    Thank you Mr. Chairman and members of the committee. I appreciate 
your invitation to present my views on immigration reform, guest worker 
programs, and HR 1763.
    I hold the Audre and Bernard Rapoport Centennial Chair in Economics 
and Public Affairs at the University of Texas at Austin. I have studied 
immigration for many years, had responsibility for immigrants and 
foreign worker matters in the Carter administration, and served on the 
Select Commission on Immigration and Refugee Policy and the Council on 
Foreign Relations advisory committee on immigration.
    I have submitted a paper on immigration reform which makes the 
following points:
    1. Because of the slowdown of our native work force growth, 
American economic growth for at least the next 20 years will depend 
heavily on immigration, which has contributed greatly to the vitality 
of the American economy.
    2. Illegal immigration, however, subjects immigrants to grave 
dangers and exploitation; depresses wages of, and working conditions 
for, the most vulnerable American workers; undermines the rule of law; 
perpetuates marginal low-wage industries; and makes it hard to relate 
immigration to economic and social policies to achieve broadly shared 
prosperity.
    3. The basic cause of illegal immigration is the magnetic 
relationship between desperate foreign workers and employers who prefer 
compliant foreign workers willing to accept lower wages and substandard 
working conditions.
    4. Once illegal immigrant networks become institutionalized, a 
coherent, comprehensive array of policies will be required to reduce 
their size, including border and internal security; adjusting the 
status of unauthorized immigrants; and appropriate trade, investment, 
and aid policies with Mexico and other immigrant source countries.
    5. For a number of reasons, a large new guest worker program is not 
a good idea:
    a. These programs subject guest workers to exploitation and depress 
conditions for American workers.
    b. There is no evidence that a large new guest worker program is 
necessary.
    i. The adjustment of status for unauthorized immigrants will 
produce a large, but unknown, number of newly legalized workers.
    ii. We already have temporary worker programs, which should be 
improved to better meet the legitimate needs of employers, and to 
prevent the abuse of guest workers and the adulteration of American 
jobs. HR 1763 would be a necessary part of these reforms.
    c. For non-temporary jobs, it would be better to admit workers as 
permanent residents with full employment and legal protections, 
including the right to earn citizenship. Although family unification 
should remain an important part of US immigration policy, we should 
give greater attention than we now do to education, skills, and work 
force experience.
    6. Because of the continuing importance of immigration and 
temporary worker programs for the American economy and society, an 
independent entity should be created to generate high quality data, 
analyses, and estimates concerning the need for and impact of foreign 
workers on the American economy and work force. This entity should 
issue annual reports.
    Thank you Mr. Chairman and members of the committee. I would be 
glad to respond to questions.
                                 ______
                                 
    Chairman Miller. Thank you, Mr. Secretary.
    Ms. Bauer.

 STATEMENT OF MARY BAUER, DIRECTOR OF THE IMMIGRATION JUSTICE 
              PROGRAM, SOUTHERN LAW POVERTY CENTER

    Ms. Bauer. Thank you, Mr. Chairman and members of the 
committee, for inviting me to speak today.
    My employer, the Southern Poverty Law Center, recently 
published a report entitled ``Close to Slavery'' based upon 
interviews with thousands of guest workers, and that report was 
about the H-2 guest worker programs in the United States. The 
H-2 program in the U.S. has led to the creation of a quasi-
criminal army of recruiters in Mexico, Guatemala and other 
countries to locate and hire H-2 workers for employ in the U.S. 
It has also led to the systematic exploitation of workers once 
they arrive in the U.S. H-2 workers can work only for an 
employer who files a petition for them to enter the country; 
the employer decides if he can come; the employer decides how 
long he can stay, and the employer holds all of the power over 
the most important aspects of a worker's life. Fear of 
retaliation under this system is a recurring theme of a 
worker's life. When recruited to work in their home countries, 
workers are often forced to borrow enormous sums of money, up 
to $20,000, borrowed at high interest rates to obtain the right 
to be employed at a temporary low-wage job in the U.S. Many 
workers have been required to leave collateral, often the deeds 
to their homes, in exchange for a chance to come to the United 
States to obtain an H-2 visa.
    Once in the U.S., guest workers routinely receive less pay 
than the law allows, even far less than the minimum wage. In 
some industries that rely upon guest workers for the bulk of 
their workforce, wage and hour violations are the norm rather 
than the exception. Workers report to us time and time again 
that they have been lied to at the time of recruitment. They 
arrive in the U.S. to find that things are not as they 
expected, but by then they are deeply in debt and without 
options.
    Guest worker programs also permit the systematic 
discrimination of workers based on age, gender and national 
origin. Under the system, workers simply lack the ability to 
combat exploitation. The DOL conducts very few investigations 
of employers, and workers have little realistic opportunity or 
chance of enforcing rights on their own. The DOL contends that 
it even lacks the authority to enforce the rights of H-2B 
workers to receive sufficient work or to receive the prevailing 
wage that is theoretically due to the workers.
    None of the significant protections that exist at least on 
paper for H-2A workers have even been adopted relative to H-2B 
nonagricultural workers, as DOL has never promulgated 
substantive labor protections for those workers. There is no 
requirement for transportation, no requirement for free housing 
in the H-2B context, no requirement that the housing provided 
be decent, and when they are abused on the job, H-2B workers 
are not even eligible for legal services.
    Congress should pass the protections of Chairman Miller's 
bill. This bill would make clear that the systematic 
discrimination entrenched in this program is illegal. It would 
regulate recruitment costs, and it would make employers 
responsible for the actions of the recruiters that they choose. 
It is an important first step in the reform of these programs.
    Congress should also make H-2B workers eligible for 
federally funded legal services. There is simply no reason that 
these workers who have come to the U.S. under the auspices of a 
government-sponsored program should be excluded from 
eligibility.
    I would suggest that Congress should hold further hearings 
on the issue related to the administration of guest worker 
programs. In particular, Congress should ask the Department of 
Labor what actions it is taking to protect workers and 
similarly situated U.S. workers on the job. Why are there so 
few inspections? Why are there no substantive labor protections 
for H-2B workers?
    In conclusion, the abuses of these programs are simply too 
common to blame on a few bad apple employers. They are the 
foreseeable outcomes of a system that treats foreign workers as 
commodities to be imported as needed without affording them 
adequate legal safeguards.
    I thank you for this opportunity, and I await any questions 
you might have.
    [The statement of Ms. Bauer follows:]

Prepared Statement of Mary Bauer, Director, Immigrant Justice Project, 
                      Southern Poverty Law Center

    Thank you for the opportunity to speak about the abuse of 
guestworkers who come to the United States as part of the H-2 program 
administered by the U.S. Department of Labor (``DOL'').
    My name is Mary Bauer. I am the Director of the Immigrant Justice 
Project of the Southern Poverty Law Center. Founded in 1971, the 
Southern Poverty Law Center is a civil rights organization dedicated to 
advancing and protecting the rights of minorities, the poor, and 
victims of injustice in significant civil rights and social justice 
matters. Our Immigrant Justice Project represents low-income immigrant 
workers in litigation across the Southeast.
    During my legal career, I have represented and spoken with 
literally thousands of H-2A and H-2B workers in many states. Currently, 
the Southern Poverty Law Center is representing workers in seven class 
action lawsuits on behalf of H-2A and H-2B guestworkers. We have also 
recently published a report about guestworker programs in the United 
States entitled ``Close to Slavery,'' which I have attached to these 
comments as part of my written testimony.
    The report discusses in much further detail the abuses suffered by 
guestworkers and is based upon thousands of interviews with workers as 
well as review of the research related to guestworkers and the 
experiences of legal experts from around the country. As the report 
reflects, guestworkers are systematically exploited because the very 
structure of the program places them at the mercy of a single employer 
and provides no realistic means for workers to exercise the few rights 
they have.
    The H-2A (agriculture) and H-2B (non-agriculture) guestworker 
programs permit U.S. employers to import human beings on a temporary 
basis from other nations to perform work when the employer certifies 
that ``qualified persons in the United States are not available and * * 
* the terms of employment will not adversely affect the wages and 
working conditions of workers in the U.S. similarly employed.'' \1\ 
Those workers generally cannot bring with them their immediate family 
members, and their status provides them no route to permanent residency 
in the U.S.
    Both the H-2A and H-2B programs are rife with abuses. The abuses 
typically start long before the worker has arrived in the United States 
and continue through and even after his or her employment here. Unlike 
U.S. citizens, guestworkers do not enjoy the most fundamental 
protection of a competitive labor market--the ability to change jobs if 
they are mistreated. If guestworkers complain about abuses, they face 
deportation, blacklisting or other retaliation.
    Passage of Chairman Miller's bill, the Indentured Servitude 
Abolition Act of 2007 (HR 1763), would be an important first step 
toward reforming the guestworker program by addressing many of the 
serious abuses that routinely occur in the recruitment and hiring of 
guestworkers.
Guestworker Programs Are Inherently Abusive
    When recruited to work in their home countries, workers are often 
forced to pay enormous sums of money to obtain the right to be employed 
at the low-wage jobs they seek in the U.S. It is not unusual, for 
example, for a Guatemalan worker to pay more than $2,500 in fees to 
obtain a job that will, even over time, pay less than that sum. Workers 
from other countries may be required to pay substantially more than 
that. Asian workers have been known to pay as much as $20,000 for an H-
2A job. Because, generally, only indigent workers are willing to go to 
such extreme lengths to obtain these jobs, workers typically have to 
borrow the money at high interest rates. Guatemalan workers routinely 
tell us that they have had to pay approximately 20% interest per month 
in order to raise the needed sums. In addition, many workers have 
reported that they have been required to leave collateral--often the 
deed to a vehicle or a home--in exchange for the opportunity to obtain 
an H-2 visa. These requirements leave workers incredibly vulnerable 
once they arrive in the U.S.
    Guestworkers under our current system live in a system akin to 
indentured servitude. Because they are permitted to work only for the 
employer who petitioned the government for them, they are extremely 
susceptible to being exploited. If the employment situation is less 
than ideal, the worker's sole lawful recourse is to return to his or 
her country. Because most workers take out significant loans to travel 
to the U.S. for these jobs, as a practical matter they are forced to 
remain and work for employers even when they are subjected to shameful 
abuse.
    Guestworkers routinely receive less pay than the law requires. In 
some industries that rely upon guestworkers for the bulk of their 
workforce--seafood processing and forestry, for example--wage-and-hour 
violations are the norm, rather than the exception. These are not 
subtle violations of the law but the wholesale cheating of workers. We 
have seen crews paid as little as $2 per hour, each worker cheated out 
of hundreds of dollars per week. Because of their vulnerability, 
guestworkers are unlikely to complain about these violations, and 
public wage-and-hour enforcement has minimal practical impact.
    Even when workers earn the minimum wage and overtime, they are 
often subject to contractual violations that leave them in an equally 
bad situation. Workers report again and again that they are simply lied 
to at the time they are recruited in their home countries. Another 
common problem workers face is that they are brought into the U.S. too 
early, when little work is available. Similarly, employers often bring 
in far too many workers, gambling that they may have more work to offer 
than they actually do. Because the employers are not generally paying 
the costs of recruitment, visas, and travel, they have little incentive 
not to overstate their labor needs. Thus, in many circumstances, 
workers can wait weeks or even months before they are offered the full-
time work they were promised. Given that workers bring a heavy load of 
debt, that many must pay for their housing, and that they cannot 
lawfully seek work elsewhere to supplement their pay, they are often 
left in a desperate situation.
    Guestworkers who are injured on the job face significant obstacles 
in accessing the benefits to which they are entitled. First, employers 
routinely discourage workers from filing workers' compensation claims. 
Because those employers control whether the workers can remain in or 
return to the U.S., workers feel enormous pressure not to file such 
claims. Second, workers' compensation is an ad hoc, state-by-state 
system that is typically ill-prepared to deal with transnational 
workers who are required to return to their home countries at the 
conclusion of their visa period. As a practical matter, then, many 
guestworkers suffer serious injuries without any effective recourse.
    The guestworker program appears to permit the systematic 
discrimination of workers based on age, gender and national origin. At 
least one court has found that age discrimination that takes place 
during the selection of workers outside the country is not actionable 
under U.S. laws.\2\ Thus, according to that court, employers may evade 
the clear intent of Congress that they not discriminate in hiring by 
simply shipping their hiring operations outside the U.S.--even though 
all of the work will be performed in the U.S. Many foreign recruiters 
have very clear rules based on age and gender for workers they will 
hire. One major Mexican recruiter openly declares that they will not 
hire anyone over the age of 40. Many other recruiters refuse to hire 
women for field work. Employers can shop for specific types of 
guestworkers over the Internet at websites such as www.get-a-
worker.com, www.labormex.com, www.landscapeworker.com or www.mexican-
workers.com. One website advertises its Mexican recruits like human 
commodities, touting Mexican guestworkers as ``happy, agreeable people 
who we like a lot.''
    In order to guarantee that workers remain in their employ, many 
employers refuse to provide workers access to their own identity 
documents, such as passports and Social Security cards. This leaves 
workers feeling both trapped and fearful. We have received multiple 
reports of even more serious document abuses: employers threatening to 
destroy passports, employers actually ripping the visas from passports, 
and employers threatening to report workers to the Immigration and 
Customs Enforcement agency if those workers do not remain in their 
employment.
    Even when employers do not overtly threaten deportation, workers 
live in constant fear that any bad act or complaint on their part will 
result in their being sent home or not being rehired. Fear of 
retaliation is a deeply rooted problem in guestworker programs. It is 
also a wholly warranted fear, since recruiters and employers hold such 
inordinate power over workers, deciding whether a worker can continue 
working in the U.S. and whether he or she can return.
    When the petitioner for workers is a labor recruiter or broker, 
rather than the true employer, workers are often even more vulnerable 
to abuse. These brokers typically have no assets. In fact, they have no 
real ``jobs'' available, since they generally only supply labor to 
employers. When these brokers are able to apply for and obtain 
permission to import workers, it permits the few rights that workers 
have to be vitiated in practice.
Few Legal Protections Exist for Guestworkers
            The H-2A Program
    The H-2A program provides some legal protections for foreign 
farmworkers. Unfortunately, far too many of the protections exist only 
on paper.
    H-2A workers must be paid wages that are the highest of: (a) the 
local labor market's ``prevailing wage'' for a particular crop, as 
determined by the DOL and state agencies; (b) the state or federal 
minimum wage; or (c) the ``adverse effect wage rate.'' \3\
    H-2A workers also are legally entitled to:
     Receive at least three-fourths of the total hours promised 
in the contract, which states the period of employment promised. (This 
is called the ``three-quarters guarantee. '')
     Receive free housing in good condition for the period of 
the contract.
     Receive workers' compensation benefits for medical costs 
and payment for lost time from work and for any permanent injury.
     Be reimbursed for the cost of travel from the worker's 
home to the job as soon as the worker finishes 50 percent of the 
contract period. The expenses include the cost of an airline or bus 
ticket and food during the trip. If the guestworker stays on the job 
until the end of the contract the employer must pay transportation 
home.
     Be protected by the same health and safety regulations as 
other workers.
     Be eligible for federally funded legal services for 
matters related to their employment as H-2A workers.\4\
    To protect U.S. workers in competition with H-2A workers, employers 
must abide by what is known as the ``fifty percent rule.'' This rule 
specifies that an H-2A employer must hire any qualified U.S. worker who 
applies for a job prior to the beginning of the second half of the 
season for which foreign workers are hired.
            The H-2B Program
    The basic legal protections afforded to H-2A workers do not apply 
to guestworkers under the H-2B program.
    Though the H-2B program was created two decades ago by the 
Immigration Reform and Control Act (IRCA) of 1986, the DOL has never 
promulgated regulations enacting substantive labor protections for 
these workers.\5\
    Unlike the H-2A program, the procedures governing certification for 
an H-2B visa were established by internal DOL memoranda (General 
Administrative Letter 1-95), rather than regulation. An employer need 
only state the nature, wage and working conditions of the job and 
assure the DOL that the wage and other terms meet prevailing conditions 
in the industry.\6\ Because the H-2B wage requirement is set forth by 
administrative directive and not by regulation, the DOL takes the 
position that it lacks legal authority to enforce the H-2B prevailing 
wage.
    While the employer is obligated to offer full-time employment that 
pays at least the prevailing wage rate, none of the other substantive 
regulatory protections of the H-2A program apply to H-2B workers. There 
is no free housing. There is no access to legal services. There is no 
``three-quarters guarantee.'' And the H-2B regulations do not require 
an employer to pay the workers' transportation to the United States.
Guestworkers Cannot Enforce the Few Rights They Do Have
    The legal rights of guestworkers can be enforced in two ways: 
through actions taken by government agencies, mainly the DOL, or 
through litigation. Neither method has proven effective at protecting 
workers from ongoing abuse.
    Although abuses of guestworkers are routine, the government has not 
committed substantial resources to addressing these abuses. In general, 
Wage and Hour enforcement by the Department of Labor has decreased 
relative to the number of workers in the job market. The major agencies 
that might protect these vulnerable workers--the Department of Labor, 
the Occupational Safety and Health Administration, and state workers' 
compensation divisions--simply do not have sufficient resources or 
political will to do the job.
    The DOL also takes the position that it cannot enforce the 
contractual rights of H-2B workers, and it has declined to take action 
against employers who confiscate passports and visas.
    Government enforcement has proven largely ineffective. The DOL 
actively investigates only H-2A workplaces. In 2004 the DOL conducted 
89 investigations into H-2A employers.\7\ Today, there are about 6,700 
businesses certified to employ H-2A workers.
    There are currently about 8,900 employers certified to hire H-2B 
workers, but there do not appear to be any available data on how many 
investigations the DOL conducts of these employers. Our experience 
suggests it is far fewer than the number of H-2A employers 
investigated, something that is predictable, unfortunately, given the 
DOL's stance that it is not empowered to enforce the terms of an H-2B 
worker's contract.
    Though violations of federal regulations or individual contracts 
are common, DOL rarely instigates enforcement actions. And when 
employers do violate the legal rights of workers, the DOL takes no 
action to stop them from importing more workers. Because of the lack of 
government enforcement, it generally falls to the workers to take 
action to protect themselves from abuses. Unfortunately, filing 
lawsuits against abusive employers is not a realistic option in most 
cases. Even if guestworkers know their rights--and most do not--and 
even if private attorneys would take their cases--and most will not--
guestworkers risk blacklisting and other forms of retaliation against 
themselves or their families if they sue to protect their rights. In 
one lawsuit the Southern Poverty Law Center filed, a labor recruiter 
threatened to burn down a worker's village in Guatemala if he did not 
drop his case.\8\
    Although H-2B workers are in the U.S. legally, they are ineligible 
for federally funded legal services because of their visa status. As a 
result, most H-2B workers have no access to lawyers or information 
about their legal rights at all. Because most do not speak English and 
are extremely isolated, it is unrealistic to expect that they would be 
able to take action to enforce their own legal rights.
    Typically, workers will make complaints only once their work is 
finished or if they are so severely injured that they can no longer 
work. They quite rationally weigh the costs of reporting contract 
violations or dangerous working conditions against the potential 
benefits.
    Historically farmworkers and other low-wage workers have benefited 
greatly by organizing unions to engage in collective bargaining, but 
guestworkers' fears of retaliation present overwhelming obstacle to 
organizing unions in occupations where guestworkers are dominant.
    As a result of these enormous obstacles to enforcing workers' 
rights, far too many workers who are lured to the United States by 
false promises find that they have no recourse.
Substantial Changes Are Necessary to Reform These Programs
    The SPLC report ``Close to Slavery'' offers detailed proposals for 
reform of the current guestworker programs. The recurring themes of 
those detailed recommendations are that federal laws and regulations 
protecting guestworkers from abuse must be strengthened; federal agency 
enforcement of guestworker programs must be strengthened; and Congress 
must provide guestworkers with meaningful access to the courts.
    The passage of the Indentured Servitude Abolition Act of 2007 (HR 
1763) or the inclusion of these protections in upcoming guestworker 
legislation would be an important first step toward reforming the 
guestworker program and leveling the playing field between guestworkers 
and their employers. It would make unlawful the recruitment charges 
that so oppress workers. It would require that workers be provided 
accurate information at the time of hire to permit them to make a 
reasoned choice about the job. It would make discrimination in the 
hiring of guestworkers for employment in the U.S. clearly unlawful in 
the same way that that discrimination would be unlawful if the hiring 
took place in the U.S. It would make employers jointly liable for 
violations committed by recruiters in their employ, and it would make 
possible the imposition of fines against recruiters and employers who 
violate their promises to workers. It is a good first step to 
strengthening workers' rights.
    In addition, Congress must provide meaningful, substantive labor 
protections for H-2B workers. The Department of Labor has never 
promulgated substantive labor protections for these workers. Congress 
should demand that it do so promptly. Congress should also address the 
common problem of employers or persons who confiscate guestworker 
documents in order to hold guestworkers hostage.
    Our government must take responsibility for stopping the abuses 
that routinely occur in the recruitment of guestworkers. While the 
abuses may begin in foreign countries, the abuses are directly related 
to the workers' employment in the U.S. and affect workers' ability to 
assert their rights to basic fair treatment in the U.S.
    Congress must work to make the enforcement of workers' rights more 
possible in the real world. For too long, guestworker rights have 
existed mostly on paper. Congress needs to both demand that federal 
agencies do a better job and provide workers a real mechanism to obtain 
an attorney to enforce their legal rights when necessary. To that end, 
all low-income guestworkers should be made eligible for federally 
funded legal services, and there must be additional money allocated for 
those services.
    Lastly, Congress should provide strong oversight of these programs. 
Specifically, Congress should hold hearings specifically related to 
guestworker program administration. A review of available evidence 
would amply demonstrate that these programs have led to the shameful 
abuse of workers. Congress must not allow that abuse to continue.
Conclusion
    Guestworker programs currently in existence in the U.S. lack worker 
protections and lack any real means to enforce the protections that 
exist. Vulnerable workers desperately need Congress to take the lead in 
demanding reform.
    Thank you again for the opportunity to testify. I welcome your 
questions.
                                endnotes
    \1\ U.S.C. Sec. 1188(a)(1); 1101(a)(15)(H)(ii); 20 CFR Part 655
    \2\ Reyes-Gaona v. NCGA, 250 F.3d 861 (4th Cir. 2001). For a 
discussion of this case, see Ruhe C. Wadud, Note: Allowing Employers to 
Discriminate in the Hiring Process Under the Age Discrimination in 
Employment Act: The Case of Reyes-Gaona, 27 N.C.J. Int'l Law & Com. 
Reg. 335 (2001)
    \3\ 20 C.F.R. Sec.  655.102(b)(9)
    \4\ 45 C.F.R. Sec.  1626.11
    \5\ See Martinez v. Reich, 934 F. Supp. 232 (D. Tex. 1996)
    \6\ GAL No. 1-95 (IV)(D) (H-2B); See DOL ETA Form 750
    \7\ Lornett Turnbull, ``New State Import: Thai Farmworkers'' The 
Seattle Times, February 20, 2005. See also Andrew J. Elmore, 
Reconciling Liberty and Sovereignty in Nonprofessional Temporary Work 
Visa Programs: Toward a Non-subordination Principle in U.S. Immigration 
Policy (unpublished 2007, on file with authors)
    \8\ Recinos-Recinos v. Express Forestry, Inc., 2006 U.S. Dist. 
LEXIS 2510 (D.La. 2006)
                                 ______
                                 
    Chairman Miller. Thank you very much.
    Dr. Holt.

STATEMENT OF DR. JAMES S. HOLT, PRESIDENT AND PRINCIPAL, JAMES 
                       S. HOLT & CO., LLC

    Dr. Holt. Thank you, Mr. Chairman, for the opportunity to 
participate in this hearing. I am an agricultural economist, 
and I have spent more than 30 years in research and consulting 
on agricultural labor and employment issues and the H-2A 
temporary agricultural worker program.
    The H-2 temporary worker programs were enacted 55 years 
ago. In fiscal year 2006, 59,112 seasonal agricultural job 
opportunities were certified for H-2 employment. This comprised 
less than 1 percent of U.S. agricultural job opportunities. 
Many H-2A aliens fill two or more certified jobs within the 
same season, so only about half that number of aliens are 
actually admitted each year as the number of job opportunities 
certified.
    The most recent U.S. Department of Labor National 
Agricultural Worker Survey, or NAWS, illustrates the heavy 
dependence of U.S. agriculture on alien labor. Seventy-eight 
percent of hired crop workers in the U.S. are foreign-born, and 
75 percent are born in Mexico. One of every 6 is a foreign-born 
newcomer, working their first season in the U.S. Fifty-three 
percent of all hired crop workers and 99 percent of newcomers 
report in the NAWS survey that they are not authorized to work 
in the United States. Experience on the ground suggests that 
closer to 75 percent of U.S. farm workers are not work-
authorized.
    In short, we currently have two agricultural guest worker 
programs operating in the U.S.--a legal guest worker program 
filling about 1 percent of the jobs and an illegal guest worker 
program filling more than three-quarters of U.S. agricultural 
jobs. This situation exists as a result of a cascade of 
failures--the failure of our border control system, the failure 
of our system for interior enforcement, the failure of the work 
authorization documentation procedures, the failure of our 
immigration laws to address realistic labor force needs, and 
the Labor Department's antagonistic administration of the H-2A 
program.
    A legal, workable, agricultural guest worker program 
benefits farmers, alien workers, domestic farm workers, and the 
Nation. It benefits farmers by providing assurance of an 
adequate supply of seasonal workers at known terms and 
conditions of employment in an industry where more than 80 
percent of jobs are seasonal and our workforce must be 
reassembled every year. It provides assurance that when farmers 
and their families invest millions in farm production assets 
there will be a workforce to perform the work. A workable guest 
worker program benefits alien workers by providing a legal, 
regulated way for aliens to work in the United States in jobs 
where their services are needed.
    It may surprise members of the committee to learn that the 
pressure on employers to participate in the H-2A program often 
comes from their illegal workers who pay exorbitant costs to be 
smuggled into the U.S., often under life-threatening 
conditions, and who face fear and abuse while they are here.
    The program benefits domestic workers. It assures open 
recruitment for and access to certified job opportunities for 
domestic workers, and it provides labor standards and 
employment guarantees that are above the norms for most 
agricultural jobs.
    Equally important, the H-2A program assures the viability 
of the jobs of U.S. workers. Every on-farm production job in 
the U.S. supports approximately 3.5 upstream and downstream 
jobs that are dependent on U.S. agricultural production and 
which would not exist if our agricultural products were 
imported.
    An adequate supply of legal labor also benefits the Nation. 
It is not in our national interest to be significantly 
dependent on foreign sources for such commodities. However, it 
is also clearly not in our national interest to have such a 
basic industry as food and fiber production almost entirely 
dependent on a workforce which has entered and is working in 
the U.S. illegally.
    This is what works about the guest worker program. What 
often does not work are the cumbersome bureaucratic procedures 
of the program. Notwithstanding statutory performance 
deadlines, certifications are often issued late. The problem is 
compounded by processing delays and approving petitions of the 
Department of Homeland Security and the issuance of visas at 
U.S. Consulates.
    In the 2007 season, the arrival of many H-2A workers were 
seriously delayed, imposing substantial costs on producers of 
perishable agricultural commodities. The H-2A certification 
process is also unnecessarily complicated. Even though 97.5 
percent of H-2A labor certification applications and 92 percent 
of the job opportunities on those applications were certified 
in fiscal year 2006, it nevertheless required an extremely 
labor-intensive and paper-intensive process for individually 
processing, recruiting on and adjudicating every single one of 
the 6,716 H-2A applications.
    Critics of guest worker programs have characterized these 
programs as involuntary servitude because workers are admitted 
to work in a specific job opportunity and cannot change jobs 
without authorization. In my view, ``involuntary servitude'' is 
a bumper sticker slogan and is inaccurate. All guest worker 
programs admit workers for specific job opportunities. Workers 
are free to choose to take available guest worker jobs or not 
to do so. There is no legal impediment on their leaving a job 
with or without the employer's permission, provided they 
legally transfer to another guest worker job or depart the U.S. 
The fact that season-on-season return rates of H-2A workers is 
typically 75 to 80 percent and that illegal workers seek the 
protection of the program belies the slavery charge. 
Ironically, the same employers who are accused of enslaving 
their workers are often accused of exploiting the desire of 
alien workers for these jobs. With respect both to enslavement 
charges and recruiting abuses, it is useful to bear in mind 
that the overwhelming majority of immigrants emigrate 
illegally. It is not necessary for an alien to subject himself 
to enslavement or to extortive recruitment to secure an 
agricultural job in the U.S. If such practices occurred with 
any degree of frequency, they would be self-defeating.
    In conclusion, it is clear that the status quo of the U.S. 
agricultural industry, almost completely dependent on 
unauthorized workers who have entered the U.S. illegally, is 
untenable. It is equally clear that ceding U.S. production of 
food and fiber to foreign producers is untenable.
    The bipartisan AgJOBS' legislation is the appropriate way 
to protect U.S. workers, U.S. and alien farm workers and U.S. 
security.
    Thank you.
    [The statement of Dr. Holt follows:]

Prepared Statement of Dr. James S. Holt, President and Principal, James 
                           S. Holt & Co., LLC

    Mr. Chairman, thank you for the invitation to provide testimony for 
this hearing. This statement supplements and expands on my oral 
testimony at the hearing of this Committee on June 7, 2007.
    I am an agricultural labor economist, and a former professor of 
agricultural economics at The Pennsylvania State University. I have 
spent more than 30 years in research and consulting on agricultural 
labor and employment issues and the H-2A temporary agricultural worker 
program with government agencies, universities and private 
organizations. I have been a consultant to many of the grower 
associations who use the H-2A program as well as to national 
agricultural employer organizations who have an interest in immigration 
legislation, principally the National Council of Agricultural Employers 
(NCAE). However, I am not representing any specific organization here 
today.
    I have also had the privilege of serving on two Dunlop Commissions, 
named for the late former Secretary of Labor Dr. John Dunlop. These 
Commissions were created to oversee and mediate collective bargaining 
agreements between agricultural growers and the Farm Labor Organizing 
Committee (FLOC), whose president is my colleague on this panel, 
Baldemar Valazquez. One of these collective bargaining agreements is 
particularly relevant to this hearing, because it is between FLOC and 
the H-2A grower's association in North Carolina.
    I have also had experience with the H-2B non-agricultural temporary 
worker program, particularly for agriculturally-related occupations, 
and the H-1B high tech guest worker program. However, my focus in this 
testimony is primarily on lessons learned from the H-2A.
Background on Agricultural Employment and the Hired Farm Work Force
    The H-2 agricultural and non-agricultural temporary worker programs 
were enacted 55 years ago as a part of the Immigration and Nationality 
Act of 1952. From 1952 until 1986, they were both ``H-2'' programs. 
However, almost from the outset the Department of Labor promulgated 
separate regulations governing the requirements for H-2 agricultural 
and non-agricultural programs, and this distinction was recognized 
statutorily in the division of the H-2 admission category into H-2A and 
H-2B in the Immigration Reform and Control Act of 1986. At present 
there are voluminous regulations governing the issuance of H-2A 
agricultural labor certifications, while the requirements for H-2B 
labor certifications remain minimal, and exist primarily in the form of 
guidance memoranda to Department of Labor certifying officers.
    From 1970 through the late 1990's the number of H-2 and H-2A 
agricultural job opportunities certified fluctuated from about 15,000 
to 25,000 annually. In the past decade usage has increased 
substantially, with 59,112 seasonal agricultural job opportunities 
certified in FY 2006. Many alien workers fill two or more H-2A 
certified job opportunities within the same season, so only about half 
as many H-2A aliens are actually admitted each year as the number of 
job opportunities which are H-2A certified.
    Despite its recent dramatic growth, use of the H-2A program is 
miniscule in comparison with U.S. agricultural employment. There are 
about 3 million agricultural job opportunities in U.S. agriculture 
annually filled by hired workers. An estimated 2.5 million persons are 
employed to fill one or more of these job opportunities during the 
year. These 2.5 million persons constitute what we call the ``hired 
farm work force''. Thus, fewer than 2 percent of U.S. agricultural job 
opportunities are H-2A certified, and only about 1 percent of the hired 
farm work force are H-2A aliens.
    The most recent U.S. Department of Labor's National Agricultural 
Worker Survey (NAWS) documents the heavy dependence of U.S. agriculture 
on alien labor. Seventy-eight percent of hired crop workers in the U.S. 
are foreign born, and 75% were born in Mexico. One of every six was a 
foreign born newcomers working his or her first season in the U.S. 
Fifty-three percent of all hired crop workers, and 99 percent of 
newcomers reported in the NAWS survey that they were not authorized to 
work in the U.S. Experience on the ground suggests that closer to 75 
percent of U.S. farm workers are not legally entitled to work in the 
U.S.
    The above statistics underscore that we currently have two 
agricultural guest worker programs operating in this country--a legal 
guest worker program that fills a miniscule 1 percent of U.S. 
agricultural jobs, and an illegal guest worker program that fills at 
least half, and likely more than three quarters, of U.S. agricultural 
jobs. This situation exists as a result of a cascade of failures--
failure of our border control system, failure of our system for 
interior enforcement, failure of our work authorization documentation 
procedures, failure of our immigration laws to address realistic labor 
force needs, and the Labor Department's antagonistic administration of 
the H-2A program.
Benefits and Problems of the H-2A Program
    A legal, workable agricultural guest worker program benefits 
farmers, alien farm workers, domestic farm workers, and the nation.
    It benefits farmers by providing assurance of an adequate supply of 
seasonal workers at known terms and conditions of employment. In an 
industry where more than 80 percent of jobs are seasonal, and a work 
force must be reassembled at the beginning of every season, it provides 
assurance that when farmers and their families invest millions in farm 
production assets, there will be a labor force to perform the work. It 
also promotes continuity, stability and productivity in agriculture. 
While there are no official statistics, anecdotal evidence is that 
three-quarters or more of the H-2A work force in any given year are 
returning workers, and H-2A employers almost universally find that this 
stable, experienced work force is more productive, and employers can 
get by with fewer workers than when they are recruiting a new, 
inexperienced work force every year.
    A workable guest worker program benefits alien workers by providing 
a legal, regulated way for aliens to work in the United States in jobs 
where their services are needed. It may surprise members of the 
Committee to learn that the pressure on employers to participate in the 
H-2A program often comes from their illegal workers, who pay exorbitant 
costs to be smuggled into the U.S., often under life threatening 
conditions, and face fear and abuse while they are here. As H-2A guest 
workers, they enter legally and work with rights and guarantees. Not 
withstanding the allegations of opponents of the program, H-2A aliens 
value their jobs, are careful to comply with program requirements, and 
return as legal workers year after year. In the words of one former 
illegal alien whose employer got into the H-2A program, ``I thank God 
every day for the H-2A program''.
    The program also benefits domestic farm workers. It assures open 
recruitment for and access to H-2A certified job opportunities for 
local and non-local domestic workers who want such work. It assures 
that U.S. workers have preference in these jobs, even if they are 
already filled by aliens. It provides labor standards and employment 
guarantees that are above the norms for most agricultural jobs and for 
many rural non-agricultural jobs. Equally important, the H-2A program 
assures the viability of the jobs of U.S. workers in the upstream and 
downstream jobs that are dependent on agricultural production in the 
U.S. Every on-farm production job in the U.S. supports approximately 
3.5 additional off-farm jobs that are dependent on U.S. agricultural 
production, which would not exist if our agricultural products were 
imported. These are long term seasonal and year round jobs at good 
wages and benefits which U.S. workers want.
    An adequate supply of legal labor also benefits the nation. Food 
and fiber are basic commodities. It is not in our national interest to 
be significantly dependent on foreign sources for such commodities. 
However, it is also clearly not in our national interest to have such a 
basic industry as food and fiber production almost entirely dependent 
on a work force which has entered the U.S. and is living and working 
here illegally and without control. In a mature economy like that of 
the U.S., where the native born work force is growing at a 
substantially lower rate than job growth, our only policy options are a 
workable agricultural guest worker program or dependence on foreign 
producers for our food and fiber.
    That is what works about the H-2A program. What often doesn't work 
are the cumbersome, bureaucratic procedures of the program. Many 
employers are daunted by imposing administrative processes, and simply 
never try to use the program. Those who do use it must navigate a 
gauntlet of obstacles. Not withstanding statutory performance 
deadlines, H-2A labor certifications are often issued late and after 
interminable haggling over the wording of documents. The problem of 
late labor certifications is compounded by processing delays in 
approving petitions at the Department of Homeland Security and issuance 
of visas at the U.S. consulates. To date in the 2007 season, the 
arrival of many H-2A workers has been seriously delayed, imposing 
substantial costs and potential losses on employers who are paying a 
premium to do things right and comply with the law. Even brief delays 
in the arrival of workers can be disastrous to producers of perishable 
agricultural commodities.
    The H-2A certification process is also unnecessarily complicated. 
Even though 97.5 percent of H-2A labor certification applications, and 
92 percent of the job opportunities on those applications, were 
certified in FY 2006, it nevertheless required an extremely labor 
intensive, paper intensive process for individually processing, 
recruiting on and adjudicating every single one of the 6,717 H-2A 
applications certified. This process is repeated annually, not 
withstanding the fact that approval rates have not changed 
significantly in decades, and the availability of legal U.S. workers as 
a percentage of the need has been in single digits. Undertaking a labor 
intensive process for demonstrating that there are not sufficient able, 
willing and qualified eligible (i.e. legal) workers to take the jobs 
offered for each and every application, even when the same labor market 
is tested multiple times a week and month for identical job 
opportunities, and when the USDOL's own statistics show that more than 
half of the work force is illegal, is government bureaucracy at its 
worst.
The Agricultural Job Opportunities and Benefits Act (AgJOBS)
    In 2001 agricultural employers and farm worker advocates and unions 
achieved an historic milestone in negotiating an H-2A reform 
legislation package known as the Agricultural Job Opportunities and 
Benefits Act, or AgJOBS. AgJOBS has broad bipartisan support in 
Congress as well as among ethnic groups, religious groups, and farm 
worker and agricultural organizations that have historically battled 
over agricultural guest worker policy and procedures. It is intended to 
address many of the economic, justice and administrative problems with 
the current H-2A program.
    AgJOBS reforms the administrative structure of the H-2A program to 
make it more efficient and more reliable as a source of timely legal 
labor. It also reforms the conditions for use of the program, making it 
more economically accessible to agricultural employers. It does this in 
a way that protects U.S. farm workers and assures access to 
agricultural jobs for those who want them. It also protects alien farm 
workers. Finally, it addresses the heavy reliance of U.S. agriculture 
on a currently illegal work force by providing a pathway to adjustment 
of status for illegal farm workers that is humane, and which will not 
cause chaos and disruption in the U.S. agricultural economy.
    It is impossible to overstate the significance of the broad support 
AgJOBS has among historic adversaries. AgJOBS has the support of the 
two major U.S. farm worker unions, the United Farm Workers and the Farm 
Labor Organizing Committee, hundreds of other immigrant advocacy and 
labor advocacy groups, religious organizations, and the overwhelming 
majority of agricultural employer organizations.
Regulation of Foreign Worker Recruitment and H.R. 1763
    Critics of guest worker programs, including the H-2A program, have 
characterized these programs as ``involuntary servitude'' because 
workers are admitted to work in a specific job opportunity, and can not 
change jobs without authorization. ``Involuntary servitude'' is a 
bumper sticker slogan. It is a pejorative characterization of guest 
worker programs that generates heat but not light.
    All guest worker programs admit workers for specific job 
opportunities. None allow workers to enter the U.S. and simply roam 
around taking jobs at will. Control of the employment of guest workers, 
and assurance that they will work in the jobs for which they were 
recruited and needed, and not compete with U.S. workers in other jobs, 
is a fundamental principle of guest worker programs. This does not mean 
that the foreign workers are enslaved. Workers are free to choose to 
take available guest worker jobs or not to do so. There is no legal 
impediment to their leaving a job, with or without the employer's 
permission, provided they legally transfer to another guest worker job 
or depart the U.S. The fact that season-on-season return rates of H-2A 
workers is extremely high, and that illegal workers seek the protection 
of the program, belies the ``slavery'' charge.
    Ironically, the same employer's who are accused of ``enslaving'' 
their workers are often accused of exploiting the desire of alien 
workers for these jobs. With respect both to enslavement charges and 
recruiting abuses, it is useful to bear in mind that only a tiny 
fraction of alien farm workers enter the U.S. through legal programs. 
The overwhelming majority immigrate illegally. It is not necessary for 
an alien to subject himself to enslavement or extortive recruitment to 
secure an agricultural job in the U.S. If such practices occurred with 
any degree of frequency, they would be self defeating. Guest workers 
would simply abandon the programs and enter and work in the U.S. 
illegally in the same manner that the vast majority of other alien farm 
workers do. The fact that they choose to enter legally, and in fact 
seek the protection of guest worker programs, belies the enslavement 
allegation. Evidence that the annual return rate of H-2A aliens in the 
program, and usually to the same employer, is in the high double 
digits, and that they are not abandoning the program and resorting to 
the illegal immigration path chosen by the vast majority of their 
peers, further belies the enslavement charge. While occasional 
incidents in which foreign recruiters take advantage of foreign 
workers, especially first time participants in the program, undoubtedly 
occur, just as recruiting abuses occur in the U.S., the allegation that 
such practices are systemic, rampant, or even common is simply untrue.
    H.R. 1763, provocatively entitled the ``Indentured Servitude 
Abolition Act of 2007'', would regulate all U.S. employers of workers 
recruited in foreign countries as well as the persons who recruit them. 
In other words, this bill seeks to regulate the activities of foreign 
nationals in foreign countries. Among other things it would make the 
U.S. employers strictly liable for any violations of the Act committed 
by a foreign recruiter ``to the same extent as if the employer had 
committed the violation''. Further, it would compel employers to notify 
the USDOL of any violations of which they became aware (though it would 
not absolve the employer of liability for the violation by so doing). 
The bill directs the USDOL to compile a list of foreign recruiters that 
it believes ``have been involved in violations of the Act.'' It would 
be unlawful for an employer to employ any workers recruited by persons 
or entities on the list.
    Proposals such as H.R. 1763 that impose strict liability on U.S. 
farmers for alleged violations of recruitment practices of alien 
workers in foreign countries are unreasonable and unworkable. It is not 
possible for U.S. employers to know about or control the actions of 
foreign nationals in foreign countries. Yet employers have no 
alternative but to rely on foreign nationals to perform at least some 
farm labor contracting activities in foreign countries. For example, in 
Mexico it is a violation of Mexican law for a foreign employer to 
recruit workers for employment outside the country. Such recruitment 
can only be done by Mexican nationals credentialed by the Mexican 
government.
    Neither U.S. employers nor U.S. labor unions nor any other U.S. 
entity, no matter how well intended, has the ability to control the 
actions of foreign recruiters in a foreign country. This must be done 
by the foreign governments. Making U.S. employers of foreign guest 
workers strictly liable for the actions of foreign recruiters in 
foreign countries can only have the effect of making the liability 
incurred in employing legal guest workers so high that employers will 
be afraid to do so, and incentivize alien workers to resort to illegal 
immigration, where the high incidence of worker abuse is well 
documented.
Conclusion
    The United States faces a serious economic, labor market and 
security challenge. The demographics of the U.S. population are such 
that we are barely replacing the existing work force through native 
born workers. We are not coming close to producing enough native born 
workers to meet the requirements of our growing economy. This has been 
true for more than a decade. Yet our legal immigration policies have 
been largely blind to the labor force needs of the economy. As a 
consequence, we now have millions of persons living and working in the 
U.S. illegally. And a good thing for us that this is so. Our economic 
growth over the past decade has been sustained and nourished by our 
failed immigration policies.
    Agriculture has been particularly affected by the shortage of legal 
native born and immigrant workers, for reasons that are obvious on 
their face. With more available jobs than legal workers, the legal 
workers have migrated to the more skilled, year round, more pleasant, 
urban, higher paying jobs. This is not an indictment of U.S. 
agricultural jobs. It is a reflection of the reality that when there 
are more jobs than workers, the less attractive jobs are more likely to 
go unfilled. If these jobs were not critical to our national economy 
and security, this would not necessarily pose a problem. But when they 
are in an industry as critical as the food and fiber sector, it poses a 
serious problem.
    It is clear that the status quo--a U.S. agricultural industry 
almost completely dependent on unauthorized workers who have entered 
the U.S. illegally, is untenable. It is equally clear that ceding U.S. 
production of food and fiber to foreign producers is untenable. The 
bipartisan AgJOBS legislation is the appropriate way to protect U.S. 
agriculture, U.S. and alien farm workers, and U.S. security and address 
the severe shortage of legal agricultural labor in the U.S. AgJOBS and 
other legal guest worker options should not be compromised and made 
unworkable by imposing unreasonable and unworkable conditions on their 
use such as those of H.R. 1763.
                                 ______
                                 
    Chairman Miller. Thank you.
    Mr. Velasquez.

 STATEMENT OF BALDEMAR VELASQUEZ, FOUNDER AND PRESIDENT, FARM 
               LABOR ORGANIZING COMMITTEE (FLOC)

    Mr. Velasquez. Mr. Chairman and members of the committee, 
thank you for having me here today.
    My union represents more than 12,000 workers, of which some 
6,000 are in the H-2A guest worker program. As Chairman Miller 
has stated, until we can protect the basic human rights of 
current guest workers, it is difficult to talk about expanding 
these programs, which would also mean the expansion of the 
corruption that plagues the countries of origin.
    The H-2A workers we represent are part of a collective 
bargaining agreement we signed with the North Carolina Growers 
Association, NCGA, and the sidebar agreement with the Mt. Olive 
Pickle Company. The 7,000 workers in this operation are the 
only ones in the Nation who have a dispute resolution mechanism 
through our grievance procedure, and the NCGA is the only group 
of employers to have a credible oversight of the recruitment 
efforts with our presence in Mexico and because I have seen it 
work. Indeed and although sometimes contentious, we have 
processed more than 4,000 inquiries, grievances and 
irregularities over the past 2 years.
    I applaud Congressman Miller in calling attention to the 
problems posed by the recruitment of foreign workers. Some of 
the initiatives proposed by H.R. 1763 are timely and overdue. 
FLOC has paid the price for speaking out against the criminal 
elements that constantly latch onto any opportunity to bribe, 
extort or blackmail other human beings.
    Foreign recruitment programs provide an additional 
opportunity for those types of criminals to flourish. After a 
series of attacks, burglaries, harassment by runners connected 
to recruiters, we were stunned by the tragic attack of our 
staff person, Santiago Rafael Cruz, who was bound and beaten to 
death on April 9th of this year. The police or the State of 
Nuevo Leon have detained but not charged an accomplice in that 
tragic murder. The detainee's criminal record bears out what we 
have suspected, that the attackers was a criminal element 
involved in predatory activity and human trafficking. The 
detainee had previously been arrested in the U.S. for human 
trafficking, drug trafficking and, if I recall, armed robbery.
    If one were to ask us for recommendations gleaned from our 
experience to make a guest worker program viable, we would 
offer the following: It is important that we remove the 
prospects for any money changing hands in Mexico. It has been 
common practice for recruiters to collect up-front fees for 
visa interviews, visas, transportation, and recruiting costs. 
This opens the door for bribery and other invitations to pad 
the amount. The more desperate pay what they have to to be 
hooked into the system.
    Secondly, H.R. 1763 offers some important measures like 
making the employer jointly liable for a recruiter's action, 
and more importantly, it protects workers from retaliation if 
he should complain.
    The American Consulate should be allowed to keep a registry 
of repeat workers to minimize the reapplication process from 1 
year to the next. This would lessen the logistics in managing 
large numbers of workers to be hooked into the system every 
year and lessen the contact with the recruiters in the foreign 
countries.
    Third, a worker should be afforded the same labor rights as 
any other worker. The right to form a union should be made 
easier. Workers should be given full access to all labor forums 
in courts to redress grievances and problems. Lacking a 
collective bargaining agreement, the worker should be able to 
transfer his visa to another employer. As it is now, if a 
worker gets into a contentious situation with an employer, he 
cannot complain, and if he leaves, he becomes undocumented and 
cannot work for another employer.
    Fourth, in the case of corporate contracted crops, most 
corporations should be charged a fee to offset the grower/
supplier costs for the processing fees and expenses of the H-2A 
guest worker. It is unfair for the grower/supplier to shoulder 
all of the risks and expenses of a legal workforce. For large 
corporations, to balk at engaging this responsibility is to 
invite the further institutionalization of the thousands of 
undocumented workers currently harvesting crops who could be 
transitioned to a legal workforce.
    Lastly, having demonstrated an agreed-upon number of years 
of faithful work and service, a worker should be allowed to 
obtain a temporary residence or at least to adjust to a visa 
where he will not have to repeat an application process. This 
is why we support the currently pending AgJOBS' legislation.
    Finally, in all of these matters, with respect to the great 
religions of the world, I call on my own Judeo-Christian 
heritage. We are reminded that some of the best laws of our 
Nation have been those that adopt scriptural principles. On 
this very issue, what comes to mind are Exodus 22:21, ``Do not 
mistreat or oppress the alien.'' Leviticus 19:34, ``Treat the 
alien like your native-born,'' and especially Numbers 15:15, 
you are to ``govern the alien with the same laws as you govern 
yourself.''
    I thank the committee, and I will be happy to answer any 
questions.
    [The statement of Mr. Velasquez follows:]

 Prepared Statement of Baldemar Velasquez, Founder and President, Farm 
                   Labor Organizing Committee (FLOC)

    Mr. Chairman, members of the committee, my name is Baldemar 
Velasquez, President of the Farm Labor Organizing Committee (FLOC, AFL-
CIO). My union represents more than 12,000 workers of which over 6000 
are in the H2A guest worker program. I appreciate the invitation to 
testify before your Committee on Education and Labor and ``Protecting 
U.S. and Guest Workers: the Recruitment and Employment of Temporary 
Foreign Labor.''
    While the current debate on immigration reform focuses in large 
part on the issue of a guest worker program, there has been little 
attention paid to the conditions under which current guest workers live 
and work, or to the systematic violations of their labor and human 
rights in both their countries of origin--especially Mexico--and in the 
United States. Until we can protect the basic human rights of current 
guest workers, it is premature to talk about expanding these programs 
which would also mean the expansion of the corruption that plagues the 
country of origin.
    Mr. Chairman, I will have been organizing farm workers for 40 years 
this coming September. I was raised as a migrant farm worker and from 
my earliest memory have come in contact, worked through and for 
countless of labor contractors. My family was originally contracted by 
Ohio and Michigan sugar beet companies from our home in the Rio Grande 
Valley in South Texas in the l950's. We worked in Ohio, Michigan, 
Indiana, Wisconsin, Texas and Florida, always in search and lured by 
promises of lucrative wages, conditions and good housing. The fruit of 
our labor was usually, poverty, housing and working conditions so bad 
that they could not even be described or chronicled in it's entirety by 
Edward R. Morrow's ``Harvest of Shame'' or any of Woody Guthrie's 
tragic ballads. The sub-minimum wages, was not because we were bad 
workers, but time after time I watched hopelessly my father being taken 
advantage of by unscrupulous crew leaders, contractors, farmers, 
company field men and even local merchants and businessmen. Do not take 
me wrong, I do not mean to castigate all farmers, crew leaders, 
contractors etc. as bad people, most of them were just doing what was 
standard in the industry. We worked for many farmers who although 
compassionate and friendly would still house us in chicken coops, barns 
and sheds. That was just the way things were done. Maybe because it's 
the way their fathers had done it before them or maybe it's the way the 
companies they sold their produce to instructed them. My desire is that 
others not experience the same fate.
    As I became more aware of the farmer's economic plight, I realized 
that he too was working within a set of constraints. Most farmers were 
contracted in the crops we harvested and paid an amount per unit, ton, 
100 weight, etc. Our piece rate had to surpass the break-even point or 
else the farmer would make no profit. The company pressed the farmer 
and the farmer pressed us for productivity and I wondered if the 
company ever had any appreciation for those of us at the bottom of the 
supply chain of which he was the beneficiary.
    Today's migrant simply reflects the globalized nature of the 
workforce and the nature of markets in general. Not only are we 
domestic migrants anymore, but also the integration of economies has 
caused the movement of people to correspond with the fluctuations of 
market shifts and pressures making us joined by Mexican and Central 
American migrants. NAFTA having displaced four million corn farmers in 
Mexico, who can longer compete with our heavily mechanized and highly 
subsidized U.S. farmers, cannot be absorbed into Mexico's lightweight 
job market. While we preach much about free markets when it comes to 
commodities and products we lack the same zeal when it comes to the 
labor market. Is it not the supply and demand that governs this market 
as well? Would it not behoove us to reflect on the treatment of labor 
as a commodity in relation to workers' human rights?
    Water will run to a dry spot, like labor will run to where there is 
work, this is true for everybody, no matter what your trade is or what 
your profession is. But we migrants want the same thing as everybody 
else; the ability to feed, educate and clothe our families, no matter 
what it takes. Some of us come poor, illegal or contracted, all sharing 
one dream to better the lives of that next generation the follows us. 
So it is with the people that we in FLOC represent, migrant workers, 
domestic, undocumented and H2A visa workers.
    I applaud Congressman Miller's initiative on H.R. 1763 in calling 
attention to the problems posed by the recruitment of foreign workers. 
It makes me recall the Farm Labor Recruiter's Registration Act. 
Oversight of foreign recruiters is long overdue and should be 
scrutinized as much as we do our domestic recruiters.
    We probably know more than we would like to know as to the natural 
iniquities of foreign recruitment programs. But let us set things in 
perspective as to who the major players are and for whose benefit we 
all labor. Of all the crops we harvested, there is not a single one 
that is not a major industry. Cucumbers for pickles, what comes to mind 
are Vlasic Pickles, Mt. Olive Pickle Company, Heinz USA, Dean's Foods, 
etc. Tomatoes, Campbell's Soup, Hunts, Heinz etc. Tobacco, Phillip 
Morris, R.J. Reynolds, sweet potatoes, Gerber's, etc. All these 
companies understand the need for a labor supply to harvest the raw 
produce and fruit that goes into their final product. Their domestic 
supply chain goes from national to local companies, farmers and labor 
contractors, and this is simply their procurement system. Most of these 
companies, some publicly have supported ``guest worker programs'' to 
some degree. I contend that while many growers would like to see some 
way to legalize their work force that would compel workers to stay in 
agriculture, the real beneficiaries are the corporations who end up 
selling the finished product.
    In 2004, we signed a collective-bargaining agreement with the North 
Carolina Grower's Association (NCGA) with a sidebar agreement with the 
Mt. Olive Pickle Company after a four and \1/2\ year boycott. The 
unusual feature of the NCGA workforce was that they were almost 
entirely H2A workers. 8000 workers employed on some 1000 farms after 
year-end transfers. This agreement compelled FLOC to open an office in 
Monterrey, Mexico to oversee the seniority clauses in the agreement and 
serve as an education center for workers about the rules, obligations 
and rights before coming to the U.S. With the exception of the NCGA, we 
soon discovered the corruption endemic in the recruitment of the 
workers in their villages and towns. If we discovered an irregularity 
with the recruiters of the NCGA, we had a grievance procedure that we 
could use and as in many cases, no grievance was necessary and have 
been able to process matters through inquiries and fact sharing. 
Unfortunately, we had no way to redress problems with other recruiters 
especially in subsequent years when union members switched recruiters 
to try other types of employment in the U.S. Over the past two seasons 
we have processed over 4000 inquiries, grievances and irregularities. 
Some serious, some not but that is for some 6000-7000 workers, imagine 
what is happening to the other 50,000 H2A workers that came in 2006!
    Indeed, more and more workers would come to us reporting abuses, 
overcharges and downright thefts by ``runners'' that worked 
independently to connect workers with recruiters. I personally did a 
speaking tour in March in four towns in Mexico to warn workers not to 
be mis-lead. I toured Cuidad Victoria in Taumalipas, Cuidad del Maiz, 
Tamazunchale and Tompamolon in San Luis Potosi. I spoke to a couple 
hundred workers in person in meetings and reached many more through 
radio and newspapers and told the workers about not paying any fees 
this year. Everywhere I spoke, workers approached me that had been 
taken advantage of and some gave up their passports with money never to 
hear from the recruiter or runner again!
    FLOC supported a legal case known as Garcia-Alvarez that was 
mandated by a Federal case known as DeLuna that essentially eliminated 
the collection of fees from workers in Mexico. Prior to this legal 
precedent, workers had to pay their own expenses for the American 
Consulate interview and visa which was $100 a piece. They were also 
charged transportation and recruiting fees all totaled about $346.00. 
While the NCGA was immediately compliant, other ``runners'' and 
recruiters found it easy to prey on new workers or those who had little 
experience in the programs. Some workers ended up paying as much as 
$1500.00 to $2000.00. Garcia-Alvarez compelled those fees to be paid by 
the employers. Over the last two years for the 6000 to 7000 workers 
that came to work under the NCGA agreement, the employers paid what had 
been the ``legitimate fees'' ($346.00) that represented a savings to 
the workers about 4.8 million dollars. We have no idea of how many of 
the other 50,000 H2A workers ended up paying or not as the decision 
extended to them also.
    Because of FLOC's continued pressure, we were continuously harassed 
and attacked by business and elements connected to the runners from the 
rural areas. Our offices were broken into twice, computers stolen and 
finally our staff person Santiago Rafael Cruz was bound and beaten to 
death in our office on April 9th. One of the suspects that has been 
detained in the murder in fact carries a criminal record for human 
trafficking, drug trafficking and armed robbery! We have suffered 
attacks by the local police, for no reason other than talking to 
workers in public places, they abducted three members and robbed them 
and dumped them out of town. The criminal elements seemed to have 
wanted to create a hostile atmosphere for FLOC and have succeeded in 
doing so. However, if intimidation was the purpose, it has backfired 
because there has been a global outcry and thousands of letters have 
been sent to the Governor of Nuevo Leon and President Calderon of 
Mexico calling for justice in the Santiago murder. The O.A.S.'s Inter-
American Commission on Human Rights has taken this case and imposed 
protective measures for FLOC and our staff on the Mexican Government.
    If one were to glean lessons from our experiences, we see certain 
measures that would be important in any guest worker program. First, 
there would have to be a way so to insure that no money is changing 
hands in Mexico. Not just recruiting fees but also the required 
payments to our Consulate for the visa interview and visa itself. For 
the Committee's information, the collection of fees is already against 
the law in Mexico but again there is a terrible enforcement problem 
there. The only reason that a worker might have to put up some deposit 
(perhaps in one of the national banks), is to secure the visa interview 
appointment. No shows become a problem for employers getting their 
workers in a short window of time and it is not simple for the 
Consulates to reschedule interviews. The grower tries to time the 
recruitment and interviews so that the workers arrives with no down 
time and can begin work right away. The deposit becomes an incentive 
for a worker to keep his appointment.
    Secondly, H.R. 1763 initiates some important measures, like making 
the employer jointly liable for a recruiter's action, and protecting 
workers from retaliation if he should complain. It would seem that one 
could go a bit further by perhaps the Consulate keeping a registry of 
repetitive workers and minimize the recruiter's role in hooking workers 
into the system. In the end, this may help the employers and the 
Consulates cut down on logistics of processing the large number of 
workers.
    Third, workers should be afforded the same labor rights as any 
other worker. The right to form a union, access to all labor forums and 
courts to redress grievances and problems. The most important of these 
rights is to withhold his labor if there is a lack of a dispute 
resolution mechanism. Lacking a collective-bargaining agreement, the 
worker should have the right to apply to transfer his visa to another 
employer. As it is now, if the worker gets in a bad situation with an 
employer, he cannot complain, if he leaves, he automatically becomes 
undocumented and cannot work for another employer with his visa.
    Fourth, company beneficiaries should be charged a fee to offset 
their supplier's costs for the processing fees and expenses of H2A 
workers. It is unfair for the grower/supplier to shoulder all the risks 
and expenses of a legal workforce. For large corporations to balk at 
engaging this responsibility is to invite the further 
institutionalization of the thousands of undocumented workers that 
could be transitioned to a legal work force. H2A growers are already 
paying over $1000.00 per worker for processing and transportation and 
in the case of North Carolina, paying an adverse effect wage rate of 
over $9.00 per hour as compared to the Federal $5.15 minimum wage that 
non-H2A growers pay. The playing field is not level with those growers 
that continue to utilize undocumented workers.
    Lastly, having demonstrated an agreed on numbers of years of 
faithful service and work, a worker should be allowed to obtain a 
temporary residence or a least adjust to a visa where he would not have 
to repeat an application process. If Congress can suggest the likes of 
a Z visa, why not a visa to travel and work with the above labor rights
    If I may end with respect for the great religions of the world but 
calling on my own Judeo Christian heritage, let us remind ourselves 
that some of the best laws of our Nation have been those founded on 
Scriptural principles. On this issue, what comes to mind are Exodus 
22:21 ``do not mistreat or oppress the alien'' and Leviticus 19:34 
``treat the alien like your native born'' and especially Numbers 15:15 
``govern the alien with the same laws as you govern yourself.''
    I thank the Committee and would be happy to answer any questions.
                                 ______
                                 
    Chairman Miller. Thank you very much, and thank you all for 
your testimony, and I think--well, you can all comment on this 
question.
    Secretary Marshall, in your statement, you say, ``We 
already have temporary worker programs which should be improved 
to better meet the legitimate needs of employers and prevent 
the abuse.'' it is in your recommendation.
    Ms. Bauer, you cite some of that abuse.
    Dr. Holt, you point out the fact that, in the case of the 
H-2A program, it is minuscule when you compare it to the size 
of the agricultural economy and the number of workers needed, 
and it is also cumbersome; it is bureaucratic; people get 
delayed. All of these things happen for those people who try to 
use it.
    My thought always was--and I have not been deeply involved 
in this for a number of years, but now I am back in the saddle 
here, trying to catch up. It was that it did not have to be 
efficient; it did not have to work; it did not have to protect 
people because you always had the safety valve of illegal 
workers who you could turn to, so you were never really 
prejudiced if it did not work out. You made the attempt. You 
did this. The fact of the matter is you could fill in all of 
the gaps with those people who did not have any status.
    I just wondered if that is somewhat of an accurate 
perception or if I am missing something here, but there have 
been complaints about this for two decades, but it never seems 
to quite get fixed, and it looks to me like the pressure is off 
because of the relatively easy access to those without any 
status in the country.
    Dr. Holt. Mr. Chairman, I think one of the ironies is that 
the H-2A workers--or the H-2A employers are basically the ones 
who are in the process of trying to do it right, trying to 
employ legal labor. We have been at this process for two 
decades. I remember the first vote on the first piece of 
legislation, the first vote in Congress on what has now become 
AgJOBS, which took place in 1994. It is now 2007, but we have 
not done anything.
    I think that what has happened in the interim is that, in 
2001, there was a very historic coming together of farm worker 
interests, agricultural employer interests, church groups, 
ethnic groups, all recognizing that the time had come when it 
was necessary to really make the legal program workable so that 
this illegal program that is employing the vast majority of 
farm workers could be dispensed with, and that is where AgJOBS 
came from, and I think it is time for----
    Chairman Miller. Ms. Bauer, are you comfortable with that, 
with the pressure to get this right as suggested in the AgJOBS 
bill?
    Ms. Bauer. Well, I do think that we have unanimity here 
that AgJOBS is a reasonable compromise. There is no doubt that 
it is not the perfect bill that everybody wants, but it is a 
bill upon which there is broad agreement and of which would 
reform the H-2A program in a way that is good for farm workers.
    Chairman Miller. Secretary Marshall, you raised the 
question of--and this was played out, I think, in a debate in 
the Senate over the last couple of days or certainly within the 
last week on the question of the size of the guest worker 
program and when you start a guest worker program. I guess now 
there will be a sunset on that program as the bill currently 
stands in the Senate. It is changing all the time, so I do not 
know if I am current or not.
    There is this question that we are going to go through the 
process of trying to regularize the status of some 11 million 
people--the figure is 11 million or more or less in the 
country--and at the same time you are going to have--you know, 
the purpose is to have a fairly large guest worker program at 
the same time. You suggest that those two things may not make 
the most sense to do it at exactly the same time until we know 
the status and redetermine the status of people who are already 
here.
    Mr. Marshall. Yes, that is correct, Mr. Chairman.
    My view about it is that we really do not know how many 
people are here. Having looked at this over many years, I can 
tell you that the estimate of 12 million, which has become 
received wisdom, is wrong, but we do not know, and I think that 
is part of the problem nor do we know how many we really need 
in different industries. Employers would like to have a labor 
surplus. You know, that is understandable given their basic 
position. They would like to have more workers around. That is 
particularly true of agriculture workers. It has been our 
history.
    Therefore, it seems to me that an important issue is do we 
really have a fair labor market test to see if there are people 
in the United States who can do that work. My view is, no, we 
did not have it when I was responsible for it, and we do not 
have it now, and we will not have it until we gain control of 
the illegal immigration problem and until we get serious about 
legalizing the whole process.
    Now, I believe you can have a fair labor market test, but I 
do not think we have been doing it now. I would add to the fair 
labor market test a thing that I tried to do periodically, and 
that is to test the market myself. When the apple pickers said 
they could not find American workers to do the work, I 
recruited apple pickers for them. They did not like that, but I 
did it. When Senator Hatch of Utah told me that they could not 
find cherry pickers if we kept illegal workers out of the 
country, we recruited cherry pickers in Utah. I believe that we 
should not just leave it up to the employers to attest that 
they have made an effort to recruit people. We should have a 
serious effort to determine if there are people in the country 
who can do the work and, once we do that, to then allow the 
foreign workers to come in.
    I agree that the process now is too bureaucratic and time-
consuming, but we can fix that. I think you will always have 
some time in order to make an accurate and an adequate labor 
market test.
    Now, the other issue that you have to address is what 
should be the standard for the recruitment of the foreign 
workers. Now, what employers would like to do is to make the 
standard that the foreign workers can have the work unless you 
can find a domestic worker who can do the work as well as those 
foreign workers. That is an illegitimate standard in my 
judgment because what the employers frequently do is to cream 
the workforce in other countries. If it is agriculture, they 
would like to have prime working age males. Well, is that a 
standard? No. A good bit of what the recruiters do would be 
illegal if done in this country. It would violate our anti-
discrimination laws. So it is fixing the standard, and I think 
that can be done, but there needs to be agreement on that, and 
the question is what is the legitimate minimum standard 
required to test the market. If you only want to get heroes and 
super workers to be your standard, then you will have a hard 
time finding a lot of people in the United States to do it, but 
I do not think that is a legitimate standard.
    Chairman Miller. Thank you.
    You know, I was a number of years ago involved in a 
situation with the cane cutters in Florida where you had a huge 
population of Haitians who were here illegally as refugees and 
otherwise. They would not hire them, but they wanted to bring 
in Jamaicans under the H-2A program. So the workers could walk 
to the cane fields, but they were not available, apparently, 
and this does happen. Thank you.
    Mr. McKeon.
    Ms. Foxx.
    Ms. Foxx. Thank you, Mr. Chairman.
    I would like to ask Mr. Velasquez a question.
    You talked about the agreement that you entered into with 
the North Carolina Growers Association in 2004. This would seem 
to be a fairly significant event given that the North Carolina 
Growers Association is one of the largest, if not the largest, 
user of H-2A workers.
    Could you elaborate a little bit on how this agreement 
benefits both the farm workers and the growers association and 
why you have not gone farther or had not gone farther in terms 
of doing this in other States? Is North Carolina the only place 
you have done it? Why haven't you done it in other places?
    Mr. Velasquez. Well, we are going to be launching a new 
campaign this summer. If you want to support us, we can 
definitely enjoy having that support.
    The truth of the matter is that one of the obstacles to 
expanding such a representation has to do with the right-to-
work laws in the South, and the other matter has to do with the 
fact that most of these employers are small family farmers, 
similar to what we have in Ohio and Michigan and where their 
crops are contracted to large corporations. As I said in my 
testimony, it is difficult to go and say, ``We are going to 
organize these farms,'' without having a broader strategy to 
involving the top of the supply chain, so to speak, and I think 
the large corporations who are the beneficiaries of these 
employees, these workers, whether they be undocumented or H-2A 
workers, are let off scot-free in terms of any responsibility. 
So, if you leave the farmer holding the bag, so to speak, for 
all of the expenses and costs and risks involved in that, that 
is really unfair, and so there has to be a broader effort to 
include the participation of these large corporations.
    When we did the Mt. Olive Pickle Company, we were able to 
get a sidebar agreement with them to increase the price of 
cucumbers by 11 percent over a 3-year period. They get their 
last increase this year. If we could engage the other companies 
that support this, maybe then it would be easier to expand the 
representation of these workers whether they be undocumented or 
H-2A.
    So that is the initiative that we are going to try to 
launch, and hopefully, if we are successful, we can get broader 
representation and spill this representation over to other H-2A 
guest workers in surrounding States.
    Ms. Foxx. Thank you.
    Mr. Chairman, just one brief comment. I live in an area 
that is very high in agriculture. There is Christmas tree 
growing especially in my area, but all kinds of agriculture, 
and particularly from Christmas tree growers I have heard that 
over and over and over the H-2A process is too complicated, too 
cumbersome, too bureaucratic. I have asked repeatedly from 
growers ``tell me what is wrong with the system and how to make 
it better. I will try to work on legislation to do that.'' I 
never get any specific recommendations on how to do it. 
Everything in the Federal Government is too bureaucratic.
    I wonder if any of you have real specific suggestions on 
how we could make the process better. I would certainly love to 
see that so that we could work on doing that because I do think 
that is one of the big impediments that we have.
    Thank you, Mr. Chairman, and thanks to Mr. McKeon.
    Chairman Miller. Thank you.
    Ms. McCarthy.
    Mrs. McCarthy. Thank you, Mr. Chairman. Thank you for this 
hearing. I think the timing is perfect being that it seems we 
will be debating sometime this year an immigration bill, and I 
guess that is what brings me to part of my questions. When we 
talk about having the guest worker program in whatever the 
immigration bill is going to be, the guest worker program will 
be staying here 3 years, going home, possibly coming back, and 
then never coming back again.
    How do you think that would ever work out being that 
seasonal workers come in for the agriculture or the fields? 
Wouldn't more of those people go underground? I guess one of 
the things that--as to those who are actually here on the 
visas, you had mentioned in your testimony that a lot of times 
their documentation is kept by the employer and not given back 
to them so that they cannot move on or leave.
    How would that even work in the future? Are we setting up 
more possibilities of infringes on these workers?
    Ms. Bauer. I think that is a really good question.
    What we have said is, you know, before contemplating a 
gigantic expansion of these programs, we should look closely at 
how they operate, not on paper but in the real world, and in 
the real world the number one complaint that we get in our 
office is workers whose documents have been seized by their 
employers. That is under the H-2A program and the H-2B program. 
Sometimes workers call us, and they just want to go home. They 
just want to go back to Mexico or to Guatemala, and they cannot 
do it because they do not have their documents. That is really 
fundamentally abusive.
    I think there is no doubt that a program that requires 
workers to return at some specific interval is going to fail as 
to some percentage of those workers. I mean we see that now. A 
lot of the workers we talk to cannot pay back their debt during 
the time that their visas are valid. They just cannot. The 
money does not work. When you see workers coming from Thailand 
paying $10,000 or $20,000 for an H-2A job that pays 7 bucks an 
hour, the math does not work out, and they have no choice but 
to remain and work unlawfully after they do that work, and I 
think, you know, absent some very substantial reform of this 
system, that will continue because--it will continue by 
necessity that workers will have to work unlawfully.
    Mrs. McCarthy. Thank you.
    Does anyone else want to make a comment?
    Dr. Holt. Yes, I would like to comment on that.
    The abscond rate, if you will, the leakage out of the H-2A 
program, for example, is in the single digits and in the low 
single digits, and the reason for that is that aliens value and 
want to protect their opportunity to enter the United States 
legally and to work in a legal environment with labor force 
protections, so they are careful to abide by the rules. Now, 
there are, of course, a small number--but as I say, it is in 
the low single digits percentagewise--who see this as a vehicle 
to get into the United States and then scamper off. That is 
very small.
    We have this notion that somehow or other temporary workers 
want to come here and live here forever, and the reality is 
they do not. The earnings of a farm worker in the H-2A program, 
for example, allow them to live and support their families 
handsomely in Mexico; whereas, it would be tough to get by were 
they living in this country so that up to 10 months--which is 
the limitation on seasonal work--so that up to 10 months of 
seasonal work and then returning to their home country, in 
fact, works extremely well.
    Mrs. McCarthy. Thank you, Mr. Chairman. I yield back the 
balance of my time.
    Chairman Miller. Mr. McKeon.
    Mr. McKeon. Thank you, Mr. Chairman.
    Dr. Holt, what mechanisms are in place for temporary farm 
worker programs to ensure that alien workers do not overstay 
their visas? I understand that a lot of the people who are here 
illegally came legally and then just overstayed their visas.
    Dr. Holt. That is apparently correct, but that is not true, 
as I have just mentioned, in the H-2A program. The fact of the 
matter is that the abscond rate, the failure to return, is in 
the low single digits, typically 4, 5 and 6 percent. Again, the 
reason for that is that, once in a program where they can 
support their families in Mexico and work seasonally in the 
United States, workers value the ability to stay in such a 
program, and if they abscond and violate their visas they 
cannot return. A worker, for example, who does not return in a 
timely manner is barred from participating in a program for 5 
years under Federal law, so----
    Mr. McKeon. So what I have heard then on that regard is not 
accurate?
    Dr. Holt. Yes. Now, I think what you are referring to are 
nonagricultural workers on tourist visas and so forth and other 
kinds of visas, and I think clearly--I mean the reality here in 
taking the economy as a whole is our native-born workforce is 
growing at the rate of approximately .2 percent a year. Job 
growth in this country is growing at the rate of approximately 
1.2 percent a year. Now, that is the reality. We are creating 
far more jobs than we are producing native-born workers to 
fill. There is only one other way that those jobs can get 
filled, and that is through immigration. Our legal immigration 
programs at this point are totally inadequate to fill that 
need. Now, of course, we could also decide, as a matter of 
national economic policy, that we do not want job growth, but 
that is not the path we have been following. We have been 
promoting job growth, but you cannot have job growth unless you 
have people to fill those jobs, and there are only two ways 
that they can arrive here, either be born here or emigrate. 
That is the reality.
    Mr. McKeon. In your testimony, you noted that 75 percent of 
the U.S. farm workers are not legally entitled to work in the 
United States. How can a guest worker program actually reduce 
unauthorized immigration? What can be done to such programs to 
encourage foreign labor who would otherwise come and work 
unauthorized to participate within the legal guidelines of a 
guest worker program?
    Dr. Holt. That is a very important question, and it is 
really the whole point behind the AgJOBS' legislation is to 
provide a workable legal path. Obviously, it is not going to 
work without strict border enforcement and effective control of 
illegal immigration, but the two have to go together. There 
needs to be a way to--we need to effectively control illegal 
immigration, but at the same time we need to have a workable, 
effective way for workers to enter the United States legally, 
and that is precisely what the AgJOBS' legislation is designed 
to do.
    Mr. McKeon. If the legal program only allows enough workers 
to come in to fill 10 percent of the jobs or 25 percent of the 
jobs, then there is going to be some other way that those jobs 
are filled, and that actually encourages illegal immigration 
then.
    Dr. Holt. That is absolutely right. The current system is 
in so many ways--it would be impossible to--we do not have the 
time here to--but in so many ways, it is set up to fail, and 
one of the ways that it is set up to fail is that there is not 
a mechanism--the numerical limitations and so forth are such 
that we simply cannot bring enough workers in legally to fill 
the jobs we are creating. Fortunately, that does not exist in 
agriculture, but that is certainly the situation in the 
nonagricultural arena.
    Mr. McKeon. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Miller. Thank you.
    We have a vote on. As you can tell, members have gone to 
vote. We should be back here in about 20 minutes. If you can 
stay, we would deeply appreciate it. Thank you.
    [Recess.]
    Chairman Miller. Mr. Velasquez, if I might--excuse me, I 
have another--I was going to----
    Mr. Yarmuth. Thank you, Mr. Chairman. I want to thank the 
panel, and I would like to provoke a free-ranging discussion of 
maybe a little bit on the philosophical nature, and I pose it--
this is primarily directed to Secretary Marshall, but I would 
welcome responses from others.
    When I talked about during the campaign, my campaign last 
year, and since then the issue of the minimum wage, I always 
tried to postulate the scenario that if we had a business or an 
industry that relied on essentially zero-cost labor, that this 
country wouldn't allow that industry to survive. It seems to me 
that when we talk about many of these questions involving guest 
workers and the industries or businesses that they serve, that 
we are getting close to the same type of issue that in some of 
these cases it appears as if the market, the free market, 
doesn't work in these industries in that if the agriculture 
industry could survive or was a viable, free market business, 
that it could pay living wages, and it could attract the 
workers that it needed. And the fact that it doesn't, at least 
presumably is not able to pay those wages, and survive and find 
the labor that it needs out of the existing marketplace, that 
our discussion becomes kind of an admission that the free 
market doesn't work in this business, and then we have to kind 
of go from those conclusions.
    And I would like to hear your observations on that, in 
fact, whether we are faced with a situation, particularly with 
regard to agriculture, that the free market has broken down, it 
doesn't work in this country, or that, in fact, we might be 
faced with a possibility of having an industry that isn't 
viable.
    Mr. Marshall. My view about it is that the market does not 
work very well in labor markets generally, not just 
agriculture, for a very important reason: People are not 
commodities, and therefore, you have got to consider the effect 
of the wage on the family, on the ability to preserve and 
promote human resources, which we all argue is one of the our 
most important resources.
    And I agree with that completely, and that is the reason 
that I am in favor of restrictions on how low wages can get and 
favor the minimum wage and prevailing wage legislation. And I 
think the rationale for that is that you don't want to 
subsidize people who can't make it by paying a living wage, 
because if you let people operate without paying the living 
wage, they are being subsidized. Why would you want to 
subsidize your least deficient industries?
    One of the problems in the immigration debates is that 
people will argue that having unlimited immigration and even 
illegal immigration, undocumented immigration improves the 
competitiveness of the American economy. My response to that is 
what do you mean by competition? I know what many economists 
mean, and that is low wages increase competition. My view, that 
is a losing strategy.
    There are always countries with lower wages. There are 
always places with lower wages, and that is a contest you 
wouldn't want to win because what it implies is more unequal 
wages, which is what we have been getting in this country since 
the 1970s.
    The other way to compete, which supports regulations and 
prevailing wage legislation, is we ought to be trying to 
compete by improving productivity and quality. That is a high-
road, high-value-added approach to competitiveness. If that is 
your definition, then having wage-suppressing immigration 
destroys the competitiveness of the system, not supporting it.
    Mr. Yarmuth. So my follow-up is I assume you would consider 
guest worker programs as some form of subsidy to these 
industries?
    Mr. Marshall. Yeah. My view is unless you pay prevailing 
rates, and unless you really make a labor market test--if you 
made a labor market test, if you paid the adverse effect wage 
rate, then you are not allowing immigration to suppress wages; 
but if you didn't do that, you are allowing them to suppress 
wages, and I don't think you ought to do that.
    A lot of my colleagues in economics defend it by saying it 
strengthens the competitiveness of the American economy. It is 
even short-sighted there. Take the H-1B program for the highly 
educated workers. If you suppress the wages for science and 
engineers, you will not have many American workers who want to 
get in--many American students. The anecdotal evidence tells me 
that is already happening, that they don't want to get into 
that because it is easier to get into something where 
immigration is not suppressing the wage, like law or business 
or some other field.
    Now, how are we going to solve that? We have legislation 
being proposed. We solve that by giving a subsidy to people who 
will get into science and engineering. What you have done is 
try to fix one, and that might be one way to do it.
    One of the reasons I believe we ought to embed immigration 
policy in overall economic and social policy is it cannot be 
considered apart from that, nor do I think you can consider it 
apart from international economic policy. Unless we pay 
attention to what is happening in the countries that are not 
creating adequate jobs for their people, then we are going to 
have to continue to fight the problem, and I don't think that 
is necessary.
    Mr. Yarmuth. Thank you. That was the answer I was looking 
for.
    Dr. Holt, you wanted to comment.
    Dr. Holt. Congressman, I would like to shed a little 
statistical light on this. The notion that agriculture is a 
minimum-wage industry is simply not correct.
    You might be interested to know--and I just had a funny 
feeling that this question was going to come up at some point 
or other today, and so last night I went and rechecked the 
statistics. The average hourly wage of field and livestock 
workers in agriculture for 2006 was $9.15. This is for 
production workers, field and livestock workers; in other 
words, it is not the veterinarians and crop technicians and so 
forth, it's the field and livestock workers. The average hourly 
wage is $9.15.
    I also thought it would be interesting to look at what 
happened to these wages in agriculture during the last decade 
when we have had this period of explosive growth, if you will, 
in the proportion of agricultural workers that are illegal 
aliens just to see, because if the notion that H-2A employment 
is depressing agricultural wages when it constitutes less than 
1 percent of employment is clearly not true on its face, but, 
after all, agriculture is 75 percent illegal.
    So let us take a look at the wages. In the last decade, a 
period of explosive growth in illegal alien employment in 
agriculture, agricultural wages, the field and livestock worker 
hourly wage, increased 37 percent. The average wage for all 
production workers in the economy, nonagricultural workers, 
increased 34 percent.
    Agricultural wages, even in a period of explosive growth in 
illegal employment, actually increased faster than the wages of 
production workers by a small margin. So it is not wages that 
make agricultural jobs unattractive, it is the fact that they 
are seasonal, first of all, and in an economy where we are 
producing only 2 percent--only.2 percent of our native-born 
workers, and the jobs are expanding at 1.2 percent, there are 
plenty of better year-round jobs. These jobs are in rural 
areas----
    Chairman Miller. I am going to ask you to----
    Mr. Boustany. Thank you.
    Dr. Holt, in your testimony you described the Department of 
Labor's administration of the H-2A program as antagonistic. Can 
you explain what the Department is doing to improve the 
administration of that program, the H-2A program? What steps 
should they take administratively, and are any legislative 
changes needed, in your opinion?
    Dr. Holt. Again, I don't want to sound like a broken 
record. The ag jobs legislation, one of the reasons why it is 
over a 100-page piece of legislation, and the H-2A provisions 
are 60-some pages of that, is that it spells out and creates or 
sets out many reforms.
    The problem with the administration of the program in the 
Department of Labor--and I don't want to--I have great respect 
for Dr. Marshall, and I don't--I am certain he dealt with these 
issues when he was Secretary, but this has been true for 
decades. The culture of the Labor Department is to obviously 
protect the jobs of United States workers, and that culture has 
created an antagonistic attitude towards foreign workers, guest 
workers, H-2A, H-2B whatever categories, in which at the 
working level the personnel in the Department sort of see it as 
their mission to try to make these programs as difficult to 
access and as unattractive as possible. And, frankly, much of 
the--many of the provisions of ag jobs are intended to try to 
hold that in check.
    Mr. Boustany. Certainly judging from what I hear in my 
district, which is a very agricultural-based district where we 
have both H-2A and H-2B visa workers that are greatly in 
demand, it would certainly verify what you just said, that it 
is a very difficult process.
    Secretary Marshall, would you like to comment on that?
    Mr. Marshall. Yeah. I think that it is a fair 
characterization, but it takes two to tango, as they say. If 
all you can get is cooperation, both sides have to cooperate.
    My operating philosophy was the agricultural employers 
dealt with me in good faith when I was Secretary, and we were 
very cooperative with them, and we didn't go to the lengths of 
testing the market or anything else, but had experiences with 
agricultural employers who would not do that. They would say 
that they were going to do something. Take the onion growers in 
Texas, for example. They told me they are going to do--if we 
would admit workers 1 year, then they would observe the law the 
next year. Well, they didn't do that. And I tried to enter into 
an agreement.
    So I think that it would be better for everybody if you 
could have--I don't believe that it is necessarily true that 
you have to be antiemployer to be proworker. In fact, I think 
it makes sense to be proemployer and proworker, but if you are 
going to have legitimate concerns--and try to do things that 
will really protect the interest of the American workers. But 
the Labor Department is the only Department of government whose 
mandate is to protect the interest of American workers. That is 
its main mandate. But as I say, that doesn't mean that you have 
to be antiemployer where employers were willing to work, as 
most were.
    Chairman Miller. Thank you, sir.
    Mr. Boustany. Dr. Holt, one last question. In looking at 
the Department of Labor's enforcement rule regarding the H-2A 
and H2-B programs, can you comment on how the roles are 
different in that enforcement?
    Dr. Holt. Well, they are very different in that the 
Department by statute has an enforcement role in H-2A. There is 
no similar statutory mandate in the H-2B program. Now, I think 
it stretches credulity to say that the Labor Department, 
therefore, has no enforcement authority over H-2B, but 
unfortunately that is pretty much the attitude that they have 
taken, and the reality is that there is little or no 
enforcement in the H-2B program, I have to say.
    Mr. Boustany. Thank you, sir.
    Ms. Bauer.
    Ms. Bauer. Yes. I just wanted to follow up on that.
    The government is involved at every level of these 
applications. I have no doubt that there is a lot of paperwork 
involved in the application process, and we, too, support the 
reforms of ag jobs, but as a practical matter the government 
involvement ceases the minute the worker shows up in the United 
States.
    Agency after agency is involved in processing the paperwork 
to get the worker here, but once the worker is here, and he is 
abused on the job, there is very little government involvement.
    We saw 89 inspections of H-2A employment places in the last 
year for which there were statistics at a time where there were 
thousands of H-2A employers. There is no statistics available 
on H-2B workplaces. What we see in practice then, particularly 
in the H-2B context, that wage violations are the norm. We are 
involved in four class action lawsuits against just the 
forestry industry now. I can say I have spoken to thousands of 
forestry workers. I have never seen a forestry worker paid his 
complete legal wages. We don't see the Department of Labor--we 
don't see them enforcing those rights.
    Mr. Boustany. Thank you.
    Chairman Miller. Mr. Velasquez.
    Mr. Velasquez. In going back to some of the previous 
questions as well, I don't know how people think. I don't come 
to Washington very often, but you were talking about some of 
the philosophical questions around these issues. I think that 
what we failed to do is two things. One is give the worker an 
ability to create the necessary tensions in the workplace with 
the employer so that there can be a give and take back and 
forth. The other thing is we have not taken into account how we 
bring these issues onto ourselves in our trade agreements, like 
our North American Free Trade Agreement with Mexico. We can't 
have our cake and eat it. We cannot go around thinking that the 
principle of reaping and sowing doesn't apply to us.
    If we have an agreement that pits, for instance, Northern 
American corn farmers with Mexican corn farmers, there is no 
contest. The Mexican farmers are not going to compete with the 
high subsidies that we give our farmers in this country. So you 
displace 4 million people, and now you whine about anywhere 
they go to make a living here in the United States.
    So I think a couple of things that would be important is 
that we figure out a way to allow this international workforce, 
treat it like a commodity in terms of its relation to human 
rights and worker rights, and give the workers the necessary 
leverages for tensions, allowing them to have unions, allowing 
them to form unions so they can create their own deals.
    The ag jobs legislation is, in effect, a reflection of 
that, where we allow workers and employers to have a negotiated 
agreement or adverse effect wage rate and other matters that 
would supersede any imposition by the Federal Government, and 
then workers would have an ability to police their own 
agreements with their employers.
    We have got to give the workers the ability to have those 
tensions with the employers and so that everybody can win.
    Chairman Miller. Ms. Sanchez.
    Ms. Sanchez. Thank you, Mr. Chairman.
    Ms. Bauer, I understand that H-2B visa workers can't 
generally avail themselves of help from the Legal Services 
Corporation, and I am a civil rights and labor attorney by 
trade, and I find this interesting. I am wondering if you could 
flesh that out a little bit. Why can't LSC attorneys help H-2B 
visa holders?
    Ms. Bauer. The statute that imposes restrictions against 
Legal-Services-funded entities lists categories of aliens who 
are eligible for Legal Services, and H-2B workers simply aren't 
on that list. So that may be some historical explanation for 
that, but it seems to us there is no sort of ongoing 
justification for that position. H-2A workers are eligible for 
those services. They are routinely represented by LSC-funded 
organizations. There are only a handful the organizations like 
mine in the country that represent H-2B workers regularly and 
were basically being called upon to enforce or play the role 
that government should be playing with DOL, and to play the 
role that the Legal Services lawyer should be involved in.
    Ms. Sanchez. Do you think this restriction against not 
allowing H-2B visa holders to access Legal Services, do you 
think that just harms the H-2B visa holders, or does it also 
impact the broader workforce.
    Ms. Bauer. It absolutely harms people other than the H-2B 
worker. Even if we said we don't care about those foreign 
workers--I don't suggest that we should say that, but if we did 
say that, there is no doubt that having a class of workers that 
can be abused with impunity hurts U.S. Workers. It hurts 
anybody who would want a job in that industry.
    And what we see, because there is no enforcement of rights 
in the H-2B system, is that wages in some of these industries 
have fallen, not just adjusted for inflation, but in real 
terms, and in some of these industries people are as a norm 
earning less than minimum wage, and that is because of that.
    Ms. Sanchez. I also serve on the Immigration Subcommittee, 
and we had a similar panel where I asked everybody on the 
panel, do you think that our enforcement of labor laws in the 
United States is adequate, and all the witnesses agreed, no.
    I asked them the next follow-up question: Do you believe 
that with more enforcement of our labor laws in this country, 
that we might be able to raise wages and working conditions in 
many of the industries where they say American workers don't 
want to work? And all of them agreed that that was the case.
    And I find it very interesting, because I think at the 
heart of this tension is the imbalance of power between 
employer and worker. And so I would like to ask Mr. Marshall, 
if new workers in any proposed temporary worker program are 
reliant on their employers for their immigration status and 
their work authorization, how are those workers going to be 
expected to enjoy the same enforceable rights as other workers 
if they are dependent upon their employers to their----
    Mr. Marshall. It would be very hard has been my experience. 
Our laws depend very heavily--our labor laws depend very 
heavily on complaints by the affected workers. If they are 
afraid to complain, then you can't enforce the law very well 
with that strategy.
    That said, we had a program called the Employers of 
Undocumented Workers program, and what we did was vigorously 
enforce all the labor laws, not the immigration law, wherever 
we knew or had reason to believe that there were--had heavy 
employment of undocumented workers. We collected millions of 
dollars from violation of hour laws for example. We almost 
never found that anybody in those circumstances were--any of 
the employers involved in those cases were observing the law 
and were involved in various kinds of ways to game the system.
    So what I believe is that two things: One, we need to be 
more imaginative about law enforcement, and by that I mean we 
need to induce as much self-regulation as we can and that can--
as in the case of the ag workers bill, which would say that if 
you have got--workers have their own organization, that you 
don't have to watch them as carefully as you would people who 
didn't.
    I believe we ought to have labor manage the committees in 
workplaces on safety and health, for example, because we are 
never going to protect the safety and health of American 
workers through regulations and inspections. We are never going 
to have that many. But we can get the people at the workplace, 
and then you could use your regulatory resources to go after 
the worst offenders. You ought not to spread those resources 
evenly; you ought to go after--that strategy will then cause to 
you have few bad offenders, because a law, to be transparent, 
it ought to be fair, and it ought to be enforceable. And if you 
can do those things, then I think we can solve some of these 
problems, but if you don't do that, if they know you are never 
going to enforce a wage and hour law, people will abuse it.
    Chairman Miller. Gentlemen, the time is almost expired.
    Ms. Shea-Porter.
    Ms. Shea-Porter. Secretary Marshall, could you tell me, are 
things better or worse for farmers and also for the guest 
workers over the past 10 years or so; have we seen an 
improvement or a decline in protection for both groups?
    Mr. Marshall. Let me say that I have not studied farm 
workers. Are you saying foreign or farm.
    Ms. Shea-Porter. Farm workers for the H-2A and B.
    Mr. Marshall. What I would say about that, and one of the 
reasons I recommend that we have a special entity that focuses 
on these matters is because we really don't know enough to 
answer that question. It is not an answer--Dr. Holt said, for 
example, that most farm workers don't make more than minimum 
wage, so that doesn't prove that they are not being suppressed. 
You have to look at the characteristics of those workers. Maybe 
they should be making $12 an hour if you look at their 
characteristics. It doesn't help to you compare them with 
production workers, because production workers' wages have been 
declining in the United States since the 1970s.
    But to be able to really answer that question effectively, 
I think we need to have an organization that is credible, that 
focuses just on that issue. It is and will be a very important 
part of our workforce growth for at least the next 20 years. We 
ought to know more about it than we do. And my view is that we 
ought to be concerned about the conditions of the foreign 
workers as well as our own workers.
    I think the way is to protect our workers and foreign 
workers, and the best way to do that is the adverse--to do the 
labor and market tests, see if you have really got a shortage. 
If you have a shortage, then it helps to us have those workers; 
if they are complementary to our workers, it helps us to have 
them here.
    Ms. Shea-Porter. Ms. Bauer, would you like to take a shot 
at that? My own district in New Hampshire, people are very 
stirred up about it, even more so than last year. I wondered 
whether you thought from your experience whether it was better 
or worse?
    Ms. Bauer. I do think that is an interesting question, and 
I agree with Secretary Marshall that it would be useful to have 
a lot more data. And that is one of the sort of interesting 
things we found in writing our report, that the government 
didn't seem very interested in obtaining and keeping that data 
in a way that was useful. So when we tried to find out about H-
2B workers, for example, and inspections, there wasn't any 
system for maintaining information about H-2B employers.
    But I will say there has been a tremendous growth in the 
absolute number of guest workers, particularly through the H-2B 
program, over the last 10 years. And so in that sense, we have 
just seen a lot more workers, and so we have seen--in the work 
that I have done, we have simply received dramatically more 
complaints from workers. That may be relative to the number of 
workers who exist, but it also may be a reflection of 
increasingly bad conditions.
    Ms. Shea-Porter. Okay. Because the good people in my 
district obviously want people to be treated fairly. That leads 
to the next question I wanted to ask you. You were talking 
about the coyotes who were taking documents and charging more. 
What is the number one reason people overstay their visa?
    Ms. Bauer. I think there are several reasons for that, but 
we see a lot of workers who overstay in order to earn enough 
money to justify having come in the first place. That is what 
we see. We don't see people who largely come here because they 
have a dream of living in the United States.
    It is true some percentage of people do that, and I just 
want to respond to a previous point that Dr. Holt made about 
the abscond rate. I don't think we have any data like for H-2B 
workers, but I think the abscond rate, the numbers that he 
suggested may not fully describe the situation. What we see is 
that workers often work for employers other than the guest 
worker employer during the term of their visa and still return 
on time. And so they wouldn't be counted in that abscond rate, 
and yet they are forced to go work unlawfully to earn enough 
money to pay back the debt that they have. So I think that the 
situation is somewhat more complex.
    Ms. Shea-Porter. My time is running out, but I wanted to 
ask you, they overstayed to pay back because they were charged 
too much to come to this country. So the problem is sitting 
right there in Mexico, and the way that----
    Ms. Bauer. That is absolutely right. Workers now, almost no 
one is paying less than $1,000 to get these jobs, and 5- to 
$10,000 or more is not unheard of. Lots of the workers we see 
are paying in the neighborhood of 5,000 each to get these low-
wage jobs.
    Ms. Shea-Porter. So even though our farmers may not be 
doing anything wrong, the problem--they come with the problem 
to start with.
    Ms. Bauer. They absolutely come with the problem, and that 
changes their situation dramatically once they get to the U.S., 
because they are not at any point saying, this job stinks, I am 
walking away. They just can't; they will lose their home. They 
are in danger if they return without paying that debt, so they 
are stuck.
    Ms. Shea-Porter. Thank you.
    Chairman Miller. They are paying that amount of money in 
what cycle, yearly?
    Ms. Bauer. Each time they have to borrow that money, that 
is absolutely right. You can understand why a worker may choose 
not to go home.
    Chairman Miller. If they have a good employment record--now 
I am starting to draft immigration law, don't let me do this. 
If a worker comes and has a good employment record, what have 
you, why wouldn't we issue them a right to come back next 
season here where they don't have to pay? We have made it so 
hard to go home, you are more likely to stay, but why wouldn't 
we consider issuing them the right to--in the sense that if an 
employer wants them, they are in the pool without having to pay 
for this? We have tested them for a season; they performed 
adequately. This idea that you are borrowing somewhere between 
$1,000 and 10,000 every cycle to come here to work at $9 an 
hour, that is a loser.
    Ms. Bauer. I think that is an excellent suggestion and----
    Chairman Miller. Before 9/11, a huge number of agriculture 
workers in California came for a crop and went home. The border 
was easier to cross. They didn't have legal status, but they 
wanted to go home, their family was home. They made some money, 
they went home. Now we made it so difficult that you stay here 
and continue your illegal status, or you come back and find a 
coyote to get back in, or have to do all these things, whereas 
if you talk to California growers, they would say, we would 
like this guy to come back every season. He knows the crop, the 
personnel----
    Ms. Bauer. Yeah, outside of the FLOC context, every worker 
we talked to is paying a recruiter to get on the list and get 
hired.
    Chairman Miller. You are under assault because you are 
trying to break that link?
    Mr. Velasquez. Yes. As a matter of fact, the legitimate 
fees that were formerly charged to the H-3 workers ran around 
$346. That covers the consulate interview; that covers the 
visa, transportation from their home to North Carolina, which 
would reimburse them in the first week of employment, and some 
of the recruiting fees. We supported a legal case known as 
DeLuna and Garcia-Alvarez that a judge ruled to eliminate those 
charges, and that the employers had to pay those fees up front. 
Although the NCGA farmers were immediately compliant, that 
wasn't the case with all these other recruiters in Mexico.
    Chairman Miller. Yeah.
    Mr. Velasquez. And I think that those fees should be 
eliminated to avoid the invitation for abuse anytime money 
changes hands in Mexico.
    Chairman Miller. Ms. Clarke.
    Ms. Clarke. Thank you very much, Mr. Chairman.
    I really believe that resolving this very complex issue in 
a humane and dignified way with one eye on the present and one 
eye to the future of our Nation, its growth, its development 
and preeminence in the worked is really critical.
    The Federal H-2 guest workers programs, also known as the 
temporary workers program, have brought roughly 121,000 workers 
into the United States based on 2005 data.
    While much of the focus has been on increasing the numbers 
of H-1B workers, other temporary workers have been ignored, 
specifically H-2A and H-2B workers who have been largely 
forgotten. Often these workers are legally or practically 
unable to change their terms of employment or to switch 
employers and have hence, in effect, become captive workers.
    Although there are differences in the H-2A and H-2B 
programs, there are two significant similarities I would like 
to point out. First, the workers are bound to the employers who 
petition the Department of Labor for their services. Even if 
the work situation is abusive, these workers are not permitted 
to leave their job. Secondly, though there are labor 
protections on the books, these protections exist only on 
paper.
    In 2004, the Department of Labor conducted only 89 
investigations into complaints filed against H-2A employers. 
There is no available data on how many investigations the 
Department of Labor conducted on H-2B employers. Even when the 
Department of Labor finds an employer in violation of various 
labor regulations, the Department has historically not 
prevented the employer from participating in the visa programs.
    Before any decisions are made regarding the expanding 
number of temporary workers allowed in the country, I believe 
we first have to ensure that temporary workers are extended 
fair and enforceable labor protections.
    I would like to extend a question to the panel. There are 
grave inequities between H-1B and H-2B programs. H-1B workers 
are generally protected by our labor laws. These workers can 
apply for permanent residence, and their families can accompany 
them to the United States. However, the H-2 workers cannot 
apply for permanent residence, nor can their families accompany 
them to the United States. H-2 workers generally do not have 
the basic protections of our labor laws. Essentially H-2 
workers are second-class or indentured workers.
    This two-tiered system is reminiscent of the way minorities 
were treated during segregation. Why is there such disparity 
between the treatment of H-1B and H-2 workers?
    Ms. Bauer. If I may respond to that. I think that your 
point is absolutely correct, that H-2 workers are treated as 
second-class citizens. I am not an expert on the H-1 program, 
so I wouldn't want to comment on how that works in practice, 
because I know people have concerns about that program.
    I would say that it is not appropriate for us to judge 
whether this program works by judging whether workers are 
willing to accept the system, because we could have a system 
that offered these positions to people and said, we are going 
to pay $1 an hour, and you have to live in cages, and there 
would be a certain number of workers in other countries who 
would take that.
    The question really is are these conditions conditions that 
we consider fair and acceptable for workers to experience here 
in the United States? And I think if we look at the H-2 
program, and we look closely at how it operates in practice, 
not on paper, I think we would have to conclude that these are 
not acceptable conditions.
    Dr. Holt. I would like to offer a different perspective, 
and, first of all, I would like to suggest that I think the 
premise of your question is not accurate. First of all, as 
earlier testimony and questions have pointed out, there is a 
huge difference between H-2A and H-2B on the H-2 side. With 
respect to H-1B--and I am not as--I don't works as much in that 
area, but I have practiced in that area--frankly, there isn't a 
lot of--to characterize that as heavily enforced, I think, is 
simply wrong. In fact, I think if you lined up these three visa 
categories and said where is the most enforcement, it would be 
in H-2A. Where is the least enforcement? It with probably be in 
H-2B.
    Enforcement is important, there is no question about that. 
The number of investigations is not a good measure of how much 
enforcement is concerned, because an investigation is only 
initiated if a workplace audit by a compliance office suggests 
that there is a problem that needs to be investigated. So that 
the reality is that in the H-2A arena, for example, one of the 
concerns that employers have, and one of the reasons why, 
frankly, the 1 percent of job opportunities in this country 
that are in the H-2A program, it is very much self-selected in 
terms of employers who are willing and, in fact, in many cases 
already in compliance with the programs and are willing to 
undergo the kinds of enforcement scrutiny that that program 
entails.
    The other 99 percent is where we ought to be focusing our 
attention. When we talked, for example, earlier, in the earlier 
questions, about coyotes and so forth, we are talking about the 
persons who are bringing these people into the country 
illegally. It is not a question of do they hold visas and so 
forth; there aren't any visas. These are people who are paying 
to come into the country, are being smuggled into the country 
illegally, and often under conditions physically--we have 
hundreds of deaths, and I am sure you are all familiar with.
    So I think the predicate of the question really needs to be 
reexamined.
    Chairman Miller. Thank you.
    Ms. Woolsey.
    Ms. Woolsey. Thank you, Mr. Chairman, and thank you for 
this hearing, and thank you for your legislation to clean up 
and clamp down on recruiters. We have a lot of work to do. I am 
sorry I have missed the witnesses' testimonies, but I certainly 
enjoy listening to the responses to my colleagues.
    I have a question for you, Mr. Velasquez. If the unions and 
the H-2A companies and employers in North Carolina have been 
able to get together to improve the treatment of workers, what 
can Congress do--using that experience as a model, what can we 
do to promote the same kind of collaboration? And would AGJOBS 
do something to help make that possible?
    Mr. Velasquez. Well, AGJOBS definitely gives us an 
opportunity to create what I called earlier the necessary 
tensions within the industry for self-regulation where workers 
and employers can cut out their own deals an set the standard 
instead of having Congress or the Department of Labor impose 
the standards on them.
    I think the other thing, and I don't know if it is a bad 
word around this place, but the whole issue of the right to 
work laws in the South, how in the world can you organize these 
kinds of tensions when you have that kind of obstacle in front 
of you? We are constantly harassed by the Right to Work 
Foundation. They got their printout resignation forms with all 
kinds of legal citations circulated all over the place. These 
are the kinds of obstacles that we have to put up with in 
trying to get people organized so that there can be the 
negotiated tensions with the employers. So, I mean, that is one 
thing we can look at.
    The other thing is Congressman Miller's initiative on 
overseeing these recruiters, because the corruption in Mexico, 
let me tell you, it is not just a one-shot deal that these 
corrupt elements are involved in; they are involved in 
everything they can get their hands on. One day they may be a 
coyote smuggling people illegally. On the other hand, next day 
they may be working as runners between recruiters and workers, 
trying to hook people into the system for whatever fees they 
can bribe or extort or blackmail them out of.
    I think that initiative is going to have to be very 
important to give us an ability to defend people. And if we 
don't have a leverage in order to utilize and fight back these 
kinds of elements, while we are stuck in the dark and fighting 
the way we do now, we have to pay a heavy price for it.
    Ms. Woolsey. Well, thank you for that.
    I have a general statement question that probably won't 
take long answers from any of you. We have all been following 
the immigration debate, and one of the requirements will be 
from any of the--either side of the debate would be that the 
Federal Government provide employers with the information they 
need in a system, a data system, that they can go to to find 
out a person's status, a worker's status, H-2 workers, any 
immigrant workers.
    Well, I have to tell you my experience, the experience of 
my offices in California where we have a full-time person plus 
just working on immigration today, because that department is 
so bad. I cannot imagine turning our workers lives over to that 
system. They can't even now figure out if two people in one 
family should be here. So would somebody like to tell me what 
you think--how long you think it will take before something 
like that could actually work for the worker?
    You want to start, Secretary Marshall?
    Mr. Marshall. I don't know how long it will take, but I 
agree with your characterization of the present system----
    Ms. Woolsey. Gentle, aren't I?
    Mr. Marshall [continuing]. Is simply not adequate, and that 
is part of the reason I recommend that we come up with a 
different system that will give us one to provide the kind of 
data that we have some confidence in, and I think that can be 
done.
    I actually--when I was working on immigration in the Carter 
administration, we proposed a system that I think would have 
gotten us much farther than we are now. An integral part of 
immigration reform, it was a simpler system, and that was the 
workers would not have to have any kind of card, but they would 
have to get--people who changed jobs and new workers, they 
would get a work authorization number, and they would get that 
from the employment service or somebody else. And the 
employer's sole obligation would be to check that number, like 
do you with a credit card.
    Now, the credit card people told my staff that the problem 
we were thinking about was immigration control, was simple 
compared to the ones they deal with every day. Now, what we did 
was created the problem. There were two things. One, we found 
the Social Security data system was in such a mess that we 
didn't think we could rely on that. And the other thing that we 
did was put the employer in charge of checking these 
credentials and at the same time create an invitation to fraud 
in the credentials. Well, the employer has neither the ability 
nor the will to check those numbers, so we needed to have a 
system that would generate the kind of data we needed. OMB told 
me at the time it cost a billion dollars to do that. My view is 
that in retrospect it would have been cheap if we had done 
that.
    Chairman Miller. Thank you.
    Mrs. Davis.
    Mrs. Davis of California. Thank you. I am afraid I might 
ask you the same question that you have been asked, so quickly 
break me off.
    Just to go back, Secretary Marshall, I appreciated your 
comments. You spoke about recruiting, and perhaps others have 
asked about that. I was interested because as I have spoken to 
a number of employers in the San Diego area, for example, and 
we have talked about ways that you could incentivize people, or 
students particularly, to work in agriculture, certainly for 
summers, but even extended beyond that. You felt that the 
recruitment you had done was successful, and that doesn't seem 
to be the story that I hear. I am just interested what you were 
successful as doing, whether it was sustainable, whether people 
stayed on the job for long periods of time at least, during a 
harvest at least, and what we should learn from that, and what 
do you think is not being addressed in that area?
    Mr. Marshall. My view is the primary recreating ought to be 
done by the employer. An employer ought to make a good-faith 
effort to find people. If an employer does not make a good-
faith effort to find people, then I think one way to test the 
market is to have an outreach program. In fact, I think the 
outreach efforts, one of the most important inventions of the 
1960s, we broke down a lot of discrimination in this country 
through outreach programs, going out finding people that 
employers told us they couldn't find. They said they didn't 
hire any women or minorities because they couldn't find them. 
Well, we found them. We had a program to do that. In fact, one 
of my programs was run by Alexis Herman.
    Mrs. Davis of California. And did they stick with it?
    Mr. Marshall. They stuck with it.
    Now, I think it is important to make a distinction between 
what is a temporary job. I don't think you should have a 
temporary worker program for permanent jobs, that doesn't make 
any sense to me. If it is a permanent program and a permanent 
job, you ought to recruit people through green cards. That is 
better than a guest worker, in my view.
    The common characteristic of H-1B and the H-2 programs is 
dependent on a particular employer. If the employer feels he 
gains some control over the educated worker under H-1B, then 
they won't sponsor them for green cards, they would keep them 
in the H-1B status, because this gives them more power over 
them.
    But I think the idea of just assuming--I think it is 
because of a lot of myths. The mythology is these workers only 
take jobs that American workers won't take. There is no such 
job. It might be one in a particular place, but there are no 
broad categories that if you made a good-faith effort to find 
people----
    Mrs. Davis of California. I appreciate that, and I think we 
do need to look at it more. I think a lot of employers would 
challenge that today because they feel the folks aren't there, 
at least in what I say, a sustainable way beyond 2 weeks or 
long enough to really have been certainly working there for a 
period of time because the work is just too tough.
    Mr. Marshall. It is, but American workers do tough work. 
And I think it would be an insult to American workers to say 
they won't do tough work.
    You know, I have watched the work the American workers do 
and they do very tough work and are willing to do that, but if 
they have options, they won't take a job that is less than the 
option available to them, and I think that is the real problem.
    Now, one of the difficulties of testing any of these things 
is that if the employer prefers the foreign worker, you are 
going to have a hard time testing the proposition, that there 
are no domestic workers prepared to take that job, and your 
statistics won't show that. The statistics will confirm that 
there are not many domestic workers in that job, and you 
shouldn't be surprised by that.
    Mrs. Davis of California. May I ask--Dr. Holt?
    Dr. Holt. Yes. We are sort of engaging in an Alice in 
Wonderland discussion here. We know there are not enough U.S. 
Workers to fill these jobs, and we know that because we look at 
the statistics on the native-born population, and we are not 
producing them. It is not--you know, they can shift around. 
Secretary Marshall is quite right, workers have options, but if 
there are fewer workers than there are jobs--and in our current 
economy there are at least 12 million more jobs than there are 
native-born workers to fill them, and it may well be a good 
deal higher than that.
    The bottom line is the jobs are not going to get filled by 
native workers, and there are is only one other place they can 
be filled. That is through immigration, or we dispense with the 
jobs. So the notion that we recruit our way through this need 
for foreign workers is simply--like I say, it is an Alice in 
Wonderland proposition, we can't do that because the bodies are 
not there.
    Mr. Marshall. It is also false dichotomy. The only option 
is not guest work, the immigrants are not guest work. The other 
option would be to bring in green cards.
    Dr. Holt. Well, I would agree with that. I should have said 
foreign workers if I said guest work. The option is guest 
workers or foreign-born workers, and we are talking here about 
the mechanisms, I think, for how that happens. I would agree 
with that, Secretary.
    Mrs. Davis of California [presiding]. Do you have a 
question?
    Mr. Platts. Thank you, Madame Chair.
    I appreciate the Chairman of the committee holding the 
hearing. I apologize. Being on seven subcommittees and having 
three of them at one time has been a little challenging, so I 
apologize.
    Dr. Holt, I want to ask you specifically, I believe you 
worked with some businesses in my district in the process of 
certification of foreign workers going through the process, if 
I understand correctly, in trying to work through the 
Department of Labor----
    Dr. Holt. I am sorry, Congressman, what is your district.
    Mr. Platts. Central Pennsylvania, York, Gettysburg. I am 
sorry, I should have helped you out there.
    What I want to ask specifically is the--one of the things 
that has come back to us this year--and in your experience is 
this an accurate assessment--that it seems that year to year 
the expectations of what is required for the expectations for 
employment of foreign workers kind of ebbs and flows, there is 
no consistency, so that an employer does the exact same thing 
this year as they did last year, and nothing else has changed, 
but they are told, no, this year you are denied because you 
didn't do this or have this paperwork.
    Is that an experience you have found in this process?
    Dr. Holt. Well, that has very much a problem. The H-2A 
regulations have not changed since they were first issued as 
interim final regulations in June of 1987. But the program and 
the requirements for the program has changed, what is required 
and considered adequate in an application, what is considered 
compliant with regard to enforcement. They have changed 
radically; sometimes they change within the same season. We had 
the experience this year of all of a sudden in March an 
application that was filed in February and was acceptable and 
certified was inadequately documented in March so that it is 
very much a moving target.
    Mr. Platts. When that happened, is there any feedback given 
of why the change? Are you able to get any substantive 
explanations from anyone within the Department.
    Dr. Holt. Well, one of the clients that I work closely with 
is the National Council of Agricultural Employers that 
represents users around the country, and we have tried over and 
over again to raise these issues with the Department of Labor. 
And I want to say, I am sorry to have to say this, but the most 
substantive comment that we have had from--and this was from 
the Chief of the Division of Foreign Labor Certification in the 
Department of Labor in a meeting we had on just one of these 
issues this spring, because this year has been a very difficult 
year in that regard, if growers don't like the way that we 
administer this program, then they ought to not use it.
    That doesn't get you very far.
    Mr. Platts. Not real helpful.
    Ms. Bauer. If I could follow up, I think we would be remiss 
if we left the committee with the impression that the 
Department of Labor was denying H-2A cases left and right. It 
may be there is paperwork involved and they request follow-up, 
but the vast, vast majority of these applications are getting 
approved.
    Mr. Platts. They are getting approved, but in a very 
lengthy--and much lengthier than what we would like or is 
supposed to occur. The process or delays in processing has been 
significant in recent years?
    Ms. Bauer. We have all, I think, agreed that we accept the 
proposals to streamline the H-2A application through the ag 
jobs bill, and we all sort of bought into that, but honestly, 
an H-2B application, for example, involves a few pieces of 
paper that have to be filled out and an ad that has to go into 
the local newspaper for 3 days. It is simply not an onerous 
process. And one can ask why that is, but we should not leave 
the committee with the impression that this is so difficult 
that no one is able to successfully maneuver it, because the 
truth is that people are able to successfully maneuver it, and 
the Department of Labor rarely turns down these applications, 
even when the employer has a woeful history of labor 
violations.
    Dr. Holt. Congressman, I would like to point out that there 
is again a vast difference between the H-2B program and the H-
2A program. An H-2B application is a few pages. An H-2A 
application is typically a half-inch of paper. The provisions 
for governing the H-2B program in the Code of Federal 
Regulations cover less than a page. The provisions for H-2A 
applications in the Code of Federal Regulations cover about 30 
pages. We are talking apples and oranges here.
    The requirements and the constantly changing interpretation 
of what these requirements really, in fact, require, that is 
the problem in the H-2A program, and what we have tried to do 
in ag jobs is put a wall around this and fix it and say, okay, 
here is what the requirements are. They aren't whatever you 
decide they should be when you get out of bed in the morning, 
they are going to be this, and so that everybody knows what the 
rules of the games are and they stay that way.
    Mrs. Davis of California. Ms. Bauer, do you want to comment 
quickly on this? And then we will quickly turn to our last 
questioner.
    Ms. Bauer. Yes. I just wanted to say that I think by 
focusing so much on the inadequacies of the protections for H-
2B workers, I don't want to leave anyone with the impression 
that the H-2A program is paradise on Earth for workers. Many of 
the cases we refer to in our report are about about H-2A 
workers who are abused on the job and who also don't receive in 
practice the protections that are written into the law.
    Mr. Platts. Thank you.
    Mrs. Davis of California. Thank you, Mr. Platts.
    My sense of that is that there is a big discrepancy, too, 
in terms of what it actually costs people to obtain those. Was 
that in your testimony or----
    Ms. Bauer. I think the practice--the distinction we often 
see is based largely on the countries that workers are coming 
from. That Mexican workers tend to pay 1- to $5,000, and 
workers--as you get further away from Guatemala, you don't see 
workers paying less than $2,500 and as much as $7,500. And 
Asian workers are paying at least 10,000 to get these jobs. I 
think that has where we see the divisions.
    Mrs. Davis of California. Thank you.
    Ms. Shea-Porter? Final question.
    Ms. Shea-Porter. I want to qualify something. I had asked 
if the coyotes were involved in the application process. I 
believe, Dr. Holt, that you said they were not, they only 
worked with the illegals, but I thought I heard Mr. Velasquez 
say they are involved in all aspects, even the ones who are 
actually getting visas; is that so?
    Mr. Velasquez. That has what I said, and I can probably 
provide names of some of those people.
    Ms. Shea-Porter. Okay. I wanted to make sure.
    Dr. Holt. Well, we may be talking about terminology. The 
term ``coyote'' is usually used to refer to someone who 
specifically smuggles a person across the border illegally.
    One of my admonitions to my clients who use the H-2A 
program is that you want to be careful not to be substituting a 
legal coyote, i.e., a facilitator through the H-2A program, for 
the illegal coyote that smuggled this person across legally.
    My perspective is while I wouldn't sit here and say that 
there are not abuses, occasionally abuses, in the recruitment 
of H-2A workers, that through the legal program that they are, 
frankly, not frequent, they are pretty rare, and they pale to 
the point of disappearance compared with what occurs with 
respect to illegal--the admission--the entry of the illegal 
workers.
    Ms. Shea-Porter. Mr. Velasquez, you say it is a significant 
problem for those actually following the process to get the 
visas, but they are still being exploited?
    Mr. Velasquez. I believe it is. In our experience the 
people we have run into in those villages, those remote areas, 
as to what happens, I just did an educational tour in four 
towns in northern Mexico, Ciudad Taumalipas, Ciudad del Maiz, 
Tamazunchale and Tompamolon, and everywhere I went, people said 
to me, I was ripped off by this runner promising me I was going 
to be taken by a recruiter.
    It is not the recruiters, it is those criminal elements who 
work independently or on nobody's payroll, and those are the 
same types of people that the next day they may be an actual 
coyote smuggling people across the border.
    Mrs. Davis of California. Thank you very much. Thank you 
all for the hearing. We appreciate your being here and staying 
on. And Members, as previously ordered, you will have 14 days 
to submit additional materials for the hearing record.
    [The information follows:]

Prepared Statement of Hon. Jason Altmire, a Representative in Congress 
                     From the State of Pennsylvania

    Thank you, Mr. Chairman, for holding this hearing about current and 
proposed guest worker programs, and their impact on American workers.
    Currently, there are 120,000 guest workers in this country on H-2A 
and H-2B visas. The H-2A program is designed to allow the temporary 
admission of foreign workers into the United States for seasonal 
agricultural work. Similar to the H-2A program, the H-2B program allows 
temporary admission for non-agricultural work, such as landscapers, 
maids, and construction workers.
    As the Committee is aware, the Senate is actively debating the 
Kennedy-Kyl bill, which introduces a new Y visa category for temporary 
guest workers and reforms the H-2A program. The House immigration bill, 
as embodied in the STRIVE Act, creates an H-2C visa with a cap of 
400,000.
    I have some serious concerns about both the Senate and House 
immigration proposals. Both substantially increase the number of guest 
worker visas available. Is there a clear demand for this increase in 
the number of visas? Are hard-working Americans available to fill these 
jobs? How will these proposals impact employment levels and the average 
citizen's wages?
    As we move forward in the immigration reform debate, I hope we will 
take the time to thoroughly examine these issues and how changes to the 
guest worker programs will impact the average, hard-working American 
citizen.
    I yield back the balance of my time.
                                 ______
                                 
    [The prepared statement of the AFL-CIO follows:]

  Prepared Statement of Jonathan P. Hiatt, General Counsel, American 
 Federation of Labor and Congress of Industrial Organizations (AFL-CIO)

    Chairman Miller, Members of the Committee, thank you for allowing 
the AFL-CIO to contribute to the important discussion before the 
Education and Labor Committee regarding the recruitment and employment 
of temporary foreign labor.
    My name is Jonathan Hiatt, and I am General Counsel to the American 
Federation of Labor and Congress of Industrial Organizations (AFL-CIO), 
which is a voluntary federation of 55 national and international labor 
unions. Members of unions affiliated with the AFL-CIO are construction 
workers, teachers and truck drivers, musicians and miners, firefighters 
and farm workers, bakers and bottlers, engineers and editors, pilots 
and public employees, doctors and nurses, painters and laborers--and 
more. The AFL-CIO was created in 1955 by the merger of the American 
Federation of Labor and the Congress of Industrial Organizations. Since 
its founding, the AFL-CIO and its affiliate unions have been the single 
most effective force in America for enabling working people to build 
better lives and futures for their families.
    The AFL-CIO has been involved in the struggle on behalf of 
immigrant workers' rights for decades. In 2000, the AFL-CIO Executive 
Council adopted an historic resolution that, for the first time, called 
for legalization of the undocumented population and welcomed 
immigrants, regardless of immigration status, into the labor movement.
    Since then, we have continually supported comprehensive immigration 
reform, which is now long overdue. The current system is a blueprint 
for exploitation of workers, both foreign-born and native, and is 
feeding a multimillion-dollar criminal enterprise at the United States-
Mexico border.
    Our failed immigration system has created a two-tiered society. 
Today, there are approximately 12 million undocumented immigrants in 
the United States, with a net annual increase in the 1990s of 
approximately 500,000 persons.\1\ It is estimated that 80 percent of 
those persons are working.\2\ Undocumented workers have no social 
safety net (other than emergency medical services), and do not have the 
protections of U.S. labor and employment laws. Protections against 
discrimination, for example, are not available at all to undocumented 
workers in parts of the United States.\3\ The result of our failed 
immigration system is that there are two classes of workers, only one 
of which can exercise workplace rights. As long as this two-tiered 
system exists, all workers will suffer because employers will have 
available a ready pool of labor they can exploit to drive down wages, 
benefits, health and safety protections and other workplace standards.
    The AFL-CIO's answer to the ``immigration crisis'' is to reform 
immigration law in a way that places workers' rights at the forefront, 
and ensures that we will be able to take control of our borders by 
removing the economic incentives to exploit immigrant workers that are 
currently driving illegal migration.
    Our approach has three core principles: (1) the law must provide a 
real mechanism by which all undocumented workers can regularize their 
status; (2) foreign workers must hereafter come into the United States 
with full and equal access to workplace protections, which means that 
future flow needs should not be met by temporary worker programs; 
instead, Congress should reform the employment-based permanent visa 
system to tie the number of visas available to real economic 
indicators; and (3) enforcement of labor laws must go hand-in-hand with 
enforcement of immigration laws.
The Law Must Provide a Clear Path to Legalization
    First, the law must provide a real mechanism so that all 
undocumented workers can regularize their status. Undocumented workers 
face serious obstacles in enforcing their labor rights. In addition to 
language and cultural barriers, workers' lack of formal status forces 
many of them to work in substandard conditions, because they fear that 
if they report violations, they will face deportation. Unfortunately, 
that fear is all too real.
    In a well-publicized case in Minneapolis in 1999, workers at the 
Holiday Inn Express voted in favor of union representation in a 
National Labor Relations Board (NLRB) election. Days later, the manager 
called eight of the workers, all Mexicans, into the office, where the 
workers were met by immigration authorities, who asked them whether 
they had ``papers.'' When the workers admitted that they did not, they 
were handcuffed and taken to an INS detention facility.\4\
    That scenario is not uncommon. ``Undocumented'' status has given 
employers, and their counsel, a powerful tool to use in their attempts 
to repress worker rights. A recent report by Human Rights Watch that 
focused on the meatpacking industry, which is known to employ 
undocumented workers, found that many employers take advantage of 
workers' fear of drawing attention to their undocumented status ``to 
keep workers in abusive conditions that violate basic human rights and 
labor rights.'' \5\
    That tool was made even more powerful by the Supreme Court, in 
Hoffman Plastic Compounds v. NLRB,\6\ when it held that undocumented 
workers are not entitled to backpay, the National Labor Relations 
Board's traditional remedy. This holding has, in practice, made it much 
more difficult, and in some cases impossible, for an entire class of 
workers to exercise the right to join a union and bargain collectively.
    A group of Spanish-speaking mineworkers in Utah learned that lesson 
first-hand, when they attempted to organize the Kingston Co-Op Mine in 
2003. Workers at that mine earned $5.25-$8.00 per hour, with virtually 
no health care or other benefits, substantially less than the 
approximately $20 per hour that unionized mine workers earn.\7\ Many of 
the workers had worked for the Company for many years, and some had 
returned to Mexico annually. There is evidence that Company 
representatives had assisted some of the workers to come into the 
United States to work, and turned a blind eye to the workers' lack of 
work authorization, until the workers began to organize.
    As is common in organizing campaigns, just prior to the union 
election, the employer sent a letter to most of the workers who would 
be voting, requiring the workers to provide proof of work 
authorization. The employer then fired some of the workers, ostensibly 
for their failure to provide adequate proof of work authorization.
    The union filed charges with the NLRB alleging that the employer 
had fired the workers in retaliation for their attempt to join a union. 
Even though the Board found merit to the charges, it refused to seek 
reinstatement or back pay for the great majority of the workers because 
the Board determined that the workers lacked work authorization.\8\
    Undocumented status has also resulted in denial of protections 
afforded to workers under state laws, further exacerbating the creation 
of a two-tiered workforce. Following the Hoffman decision, several 
states have limited or eliminated such basic workplace protections as 
compensation for workplace injuries and freedom from workplace 
discrimination.\9\ These rights and remedies are in some instances the 
only protections available to workers.\10\
    In fact, some state laws now essentially reward employers for 
suddenly ``discovering'' that a worker is unauthorized, thus releasing 
the employer or workers' compensation insurance carrier from any back 
pay or front pay obligation. In Michigan, for example, workers who are 
injured on the job and who used false documents to secure employment 
are not entitled to wage loss benefits. Employers are free to 
``discover'' the workers' use of false documents after the worker is 
injured, which has encouraged employers to investigate the workers' 
documentation only after an injury occurs.\11\
    Workers' rights are being chilled in other equally troubling ways. 
For example, an Assistant United States Attorney in Kansas has been 
encouraging employers, insurance companies and others to verify injured 
workers' immigration status after workers file a workers' compensation 
claim, and refer those cases to his office for prosecution for document 
fraud. That has resulted in the injured workers being deported and thus 
unable to pursue workers' compensation claims.\12\
    Workers who try to vindicate their rights through private labor and 
employment law enforcement, that is, by filing lawsuits, are facing 
similar obstacles. Employers and their counsel often seek discovery of 
the immigrant-plaintiffs' immigration status,\13\ an action that serves 
to chill immigrants' willingness to pursue their workplace rights.\14\
    In one outrageous but not uncommon case, forestry workers in 
Virginia brought an action alleging violations of minimum wage and 
overtime laws, as well as state claims related to their housing 
conditions: they were forced to live in a warehouse surrounded by 
barbed wire, were locked into the warehouse at night, and had a 
substantial portion of their pay check deducted to cover their 
substandard housing. During the plaintiffs' deposition, which was 
conducted at the employer's office, the employer's counsel asked the 
plaintiffs whether they had a valid work permit. When counsel for the 
plaintiffs objected, the employer asked for a break. A short time 
later, the local police arrived, and asked the workers whether they 
were illegal aliens. When the workers refused to answer--per the 
instructions of counsel--the police together with the employer called 
the Department of Homeland Security (DHS), whose agents arrived at the 
facility about two hours later. Thanks to the intervention of lawyers 
from around the country, the plaintiffs were able to convince DHS that 
this was a labor dispute in which it should not be involved, and the 
agents left.\15\ However, the chilling effect of the employers' actions 
was felt by the remaining plaintiffs.
    Under current law, the exploitation of undocumented workers is 
economically attractive. The law has strengthened the perverse economic 
incentive that employers have to violate immigration laws. As long as 
employers have access to a class of workers that they can prevent from 
exercising labor rights by merely asking a simple question: do you have 
papers?, the incentive to exploit will continue.
    One key to removing that incentive is to regularize the status of 
the undocumented population. In order to be effective, a legalization 
program must be inclusive, practical and swift.\16\ Any program that 
denies a substantial number of workers the ability to adjust their 
status, either by including burdensome requirements or fees and fines 
that are outside the reach of the undocumented workers, will exclude 
millions of workers. A program must also be practical in order to 
encourage people to come out of the shadows, and it must be implemented 
quickly. A program that does not meet these criteria will perpetuate a 
two-tiered system that operates to the detriment of all workers in the 
U.S., because having a large secondary class of workers who cannot 
exercise workplace rights enables employers to drive down wages, 
benefits, health and safety protections and other workplace standards 
across the board.
    Unfortunately, the current legislative proposals do not satisfy 
this first principle. The Security Through Regularized Immigration and 
Vibrant Economy Act of 2007, the ``STRIVE'' Act, contains a ``touch 
back'' provision that would require workers to leave the United States 
before they qualify for permanent status. That provision discourages 
workers from applying for legalization for several reasons. Many 
workers fear that they would not be able to return if they were 
required to leave the country, and would opt to remain in undocumented 
status. Others will likely lose their jobs, given that it is unlikely 
that employers will hold open jobs for those who are ``touching back.''
    We understand that politics are pushing legislators to take a 
punitive approach to legalization. The ``touch back'' provision is one 
example. We urge Congress to rethink that approach, because it is not 
only punishing the undocumented, but also creating obstacles to having 
one class of workers in the country, with equal rights for all.
Future Foreign Workers Must Come into the U.S. with Full Rights
    A second guiding principle in AFL-CIO's immigration policy is that 
workers who come to the United States in the future to fill actual 
labor shortages should enter with full rights. Current legislation 
addresses the influx of future workers through guest worker programs 
or, as they are now sometimes called, ``worker visa programs.'' That is 
a framework driven entirely by the desire of some in the business 
community to have a constant and exploitable pool of workers.
    Proponents of these temporary worker programs claim that they need 
guest workers to do the jobs that Americans will not do. However, the 
reality is that there are no jobs that Americans will not perform if 
wages and other working conditions are adequate. There is no industry 
in the United States today that relies entirely on foreign workers, and 
of 473 occupational titles, only four are even majority foreign-born--
stucco masons, tailors, produce sorters and beauty salon workers.\17\ 
The industries in which the undocumented predominately work--
hospitality and janitorial, services, construction, landscaping, 
meatpacking and poultry, for example--are all staffed by a great 
majority of U.S. workers.\18\ More than 80% of workers in construction 
and in the janitorial industries are U.S. citizens or lawful permanent 
residents.\19\ The truth is that the business community wants guest 
workers to fill these jobs because that will allow it to fill 
permanent, year-round jobs with exploitable temporary workers. The 
result will be an even further depression in wages, particularly in the 
low-wage labor market.
    A recent report by the non-partisan Congressional Research Service 
concluded that a guest worker program such as the one approved by the 
Senate in the 109th Congress (S. 2611) ``could be expected to lower the 
relative wages of competing [U.S.] workers,'' and would have the 
greatest impact on young native-born minority men and on foreign-born 
minority men in their early working years.\20\ Notably, the size of 
that guest worker program (capped at 200,000 visas annually) is less 
than half the size of current proposed programs.\21\ Logic dictates 
that the impact on those workers would be even more profound if a 
larger program were implemented.
    In order to mitigate the negative labor market impact of guest 
worker programs, longstanding United States guest worker policy 
requires that temporary workers should be used only to satisfy short-
term or seasonal labor needs. The H2-A agricultural guest worker 
program, the best known of these programs, is designed to satisfy 
seasonal needs, requiring large numbers of workers during the growing 
season, which may be as short as 6 weeks. Similarly, the H2-B program 
allows non-agricultural employers in industries such as landscaping, 
hospitality and crabbing, to hire non-U.S. workers on a temporary basis 
to fill their seasonal needs.
    The United States has been experimenting with temporary worker 
programs for almost a century, without a single success.\22\ The most 
famous of those experiments, the Bracero program, began in 1942 as an 
agreement between the United States and Mexico to address the labor 
shortages in agriculture and in the railroad industry. More than four 
and a half million Mexican workers toiled in the United States under 
the program between 1942 and 1964. Once the contract period ended, 
however, they were required to turn in their labor permits and leave 
the United States with no right to long-term or permanent residence.
    The failure of guest worker programs has been recognized by every 
single Congressional Committee that has studied them. For example, in 
1977, the Carter Administration included a recommendation in its 
immigration reform package that a temporary worker program should be 
given a comprehensive review. The Carter Administration distanced 
itself from the failed Bracero program--much like all the proponents of 
current guest worker proposals are doing in the current legislative 
cycle--but implied that a new framework for a temporary worker program 
might meet the needs of business while not causing a detrimental impact 
on wages and working conditions for workers already in the U.S.\23\ The 
Commission for Manpower Policy, responding to President Carter's 
charge, disagreed, and concluded after a detailed study that it was 
``strongly opposed'' to any expanded temporary worker program because 
such programs depress wages and increase the population of undocumented 
workers.\24\
    Similarly, the ``Jordan Commission,'' which was created by the 1986 
Immigration Reform and Control Act to study the nation's immigration 
system squarely rejected the notion that guest worker programs should 
be expanded. In its 1997 final report, that Commission specifically 
warned that such an expansion would be a ``grievous mistake,'' because 
such programs have depressed wages, because the guest workers ``often 
are more exploitable than a lawful U.S. worker, particularly when an 
employer threatens deportation if workers complain about wages or 
working conditions,'' and because ``guest worker programs also fail to 
reduce unauthorized migration'' [in that] ``they tend to encourage and 
exacerbate illegal movements that persist long after the guest worker 
programs end.'' 25 In fact, there is not one publicly funded, 
nonpartisan study that has found any merit in guest worker 
programs.\26\
    Proponents of the latest breed of guest worker programs have 
distanced themselves from the discredited Bracero and other past 
programs by labeling the new proposals as ``break-the-mold'' programs. 
Yet, the new proposed programs offer even fewer protections to workers 
than those provided in the Bracero program. Braceros, for example, were 
entitled to free housing, medical treatment, transportation, and pre-
set wages that were at least equal to those of U.S. citizen farm 
workers, and a contract in Spanish. Despite these protections, Braceros 
experienced numerous abuses, including racial oppression, economic 
hardship, and mistreatment by employers, and the program also had a 
well-documented downward effect on the wages of U.S. citizen farm 
workers.\27\ The new guest workers, who would not even have the promise 
of such protections, can fare no better.
    The H1-B program, which Congress created in 1990 to ease the 
claimed temporary shortage of skilled workers in the high technology 
field, also shows why this new approach is flawed. In 1998, as a 
temporary remedy for a claimed desperate labor shortage in the high 
technology field, Congress nearly doubled the number of H1B visas 
available for the following three years, and imposed a fee on employers 
that was meant to fund training programs to improve the skills of U.S. 
workers. More than fifteen years after the inception of the H1-B 
program, employers continue to call for more H1B visas, while little 
effective training of U.S. workers has been accomplished, and wages and 
other conditions in the industry have deteriorated.\28\
    One of the fundamental flaws in the H1-B program is that it does 
not test the U.S. labor market. As the DOL acknowledges on its own 
website, ``H1-B workers may be hired even when a qualified United 
States worker wants the job, and a United States worker can be 
displaced from the job in favor of the foreign worker.'' \29\ Employers 
are simply required to file an attestation of the wages and working 
conditions offered to the H1-B workers with the Department of Labor's 
Employment and Training Administration. The Department of Labor has no 
authority to verify the authenticity or truthfulness of the 
information; the Department can only review the application for 
omissions and obvious inaccuracies.\30\
    The United States Government Accountability Office (GAO) concluded 
last year that the DOL was failing even in that minimal task.\31\ For 
example, from January 2002 through September 2005, DOL electronically 
reviewed more than 960,000 applications and certified almost all of 
them.\32\ Moreover, GAO found over 3,000 applications that were 
certified even though the prevailing wage rate for the application was 
lower than what is required by statute, in some cases, more than 
$20,000 lower than what is required by law.\33\
    The H1-B program was enacted to fill a spot labor shortage, while 
workers in the U.S. obtained adequate training and education in high 
tech and professional jobs. In reality, the poor design of the H1-B 
program has failed to meet the training objectives, and instead has 
facilitated and accelerated the outsourcing and offshoring of jobs. The 
largest users of the H1-B program are outsourcing firms, whose business 
is to move jobs overseas.\34\ These firms import H1-B workers, train 
them in U.S. companies, and then send the workers back home, taking 
with them the jobs that they were previously doing in the United 
States.\35\ In fact, in many instances, U.S. workers were forced to 
train their H1-B replacements.\36\
    The nation's experience with the H2-B program, aimed at low-wage 
seasonal jobs, is also instructive, particularly because the new 
proposed guest worker programs are aimed at much the same population of 
workers, and in fact, are modeled on the H2-B program. In practice, the 
H2-B program is rife with abuses. Workers on H2-B visas are 
particularly vulnerable because they tend to be isolated, transient, 
non-English-speakers unfamiliar with U.S. laws. Like the workers who 
would come into the United States under the proposed new programs, H2-B 
workers have little access to legal services because the Legal Services 
Corporation (LSC)-funded attorneys are generally not permitted to 
represent H2-B workers, and very few states have unrestricted legal 
services offices that represent H2-B workers.\37\
    A recent report by the Southern Poverty Law Center exposes the 
substantial current exploitation of workers in temporary worker 
programs.\38\ For workers who toil in those programs, that exploitation 
begins at home, where workers are usually recruited by labor 
contractors who require that workers pay a sizeable fee for the 
opportunity to work in the programs. Guatemalan workers, for example, 
are charged as much as $5,000 by the recruiters, and it is not uncommon 
for workers in Asia to pay as much as $20,000 for their guest worker 
visas. Workers who are recruited into these programs are often poor, 
and are forced to turn to loan sharks in order to finance the 
recruiters' fees. Workers are also often required to leave behind with 
an agent of the employer or recruiter collateral, such as a deed to a 
home or a car, to ensure that workers will comply with the terms of 
their contracts. The result is that workers arrive in the United States 
so heavily indebted that they can not leave their jobs, even if the law 
allowed them to do so.
    Once in the United States, guest workers have few labor 
protections. A major flaw in current guest worker programs is that 
there is no effective means to enforce the requirements of the program. 
Even though the current H2-B program requires that employers pay the 
``prevailing wage,'' that requirement is often ignored, with 
impunity.\39\ The DOL has determined that it has no authority to 
enforce the conditions in the employer's applications for guest 
workers, nor the ability to enforce the terms of workers' 
contracts.\40\ Therefore, workers who are not being paid, or are being 
paid below the prevailing wage, have no way to enforce those provisions 
other than through private law suits, which are expensive.
    Guest worker programs also allow employers to evade U.S. anti-
discrimination laws altogether. Current law allows recruiters and labor 
contractors to discriminate based on gender, age, and presumably any 
other category protected under U.S. laws, as long as that conduct takes 
place outside the United States.\41\ If an applicant in the United 
States is denied a job on the basis that he or she is over 40 years 
old, and the application was made within the United States, the 
employer would be violating the Age Discrimination in Employment Act 
(ADEA) \42\ and the worker could sue to recover damages and to enjoin 
the employer's practice. However, if the employer is applying that 
practice just across the border in Mexico, and hiring workers who will 
be entering the United States through a guest worker program, then U.S. 
laws do not stop that employer from freely discriminating because 
courts have concluded that our employment laws do not cover conduct 
outside the United States.
    Before Congress expands or creates yet another guest worker 
program, it must address the flaws in the current programs.
    First, Congress must build protections into the infrastructure of 
the programs that protect against worker abuse. At a minimum, for-
profit labor contractors should not be permitted to participate in any 
temporary worker programs. Only the end-use employer should be able to 
petition for workers, and employers should be banned from using for-
profit foreign labor contractors in the process.
    Another fundamental protection that any temporary worker program 
must provide is an effective mechanism to test the U.S. labor market 
through a rigorous labor certification process before allowing 
employers to bring in foreign workers. Attestation programs, which 
essentially allow employers to monitor themselves, do not protect 
workers.
    We believe that there should be a ``two-test'' principle for labor 
certification: a finding that there are no U.S. workers available to 
fill the position and another that granting certification will not 
depress the standards of, or otherwise cause harm to U.S. workers. This 
principle applies to all guest worker programs, whether high skill or 
low-wage.
    A rigorous labor certification process must accurately determine 
labor shortages, include adequate wage protections, guard against the 
displacement of U.S. workers, and provide an adequate system for 
advertising jobs beyond the local labor market. We believe that state 
Employment Security Agencies must be an integral part of the process, 
given that they are best positioned to analyze employers' need for 
foreign workers, provide assistance to employers regarding the 
recruitment of U.S. workers, and determine the prevailing wages.
    The trigger for any temporary worker program visas should be based 
on a thorough and adequately funded labor certification process that 
includes mandatory public posting of the jobs with the state Employment 
Service, so that the state agencies can review job postings against the 
visa applications received. Because state Employment Security Agencies 
are uniquely linked, workers in Kansas can learn that there are 
openings in landscaping jobs in Iowa, for example, and should be able 
to apply for those jobs before employers are allowed to import workers.
    One of the fundamental flaws of temporary worker programs is that 
they give employers tremendous control over workers because if a 
temporary worker loses his or her job, he or she is faced with the 
choice of leaving the United States or becoming undocumented. Workers 
do not want to face that choice, and therefore, they do not complain 
about workplace violations. Two fundamental changes to current programs 
must be enacted to mitigate this chilling effect: (1) Congress should 
provide meaningful whistleblower protections, so that workers who 
expose workplace violations and as a result are fired, do not have to 
face immediate removal; and (2) workers should have the ability to 
leave unsatisfactory jobs without having to face the choice of 
departing the United States or becoming undocumented.
    Such appropriate ``portability'', however, should not allow a 
subsequent employer to avoid the requisite labor market testing and 
certification, since otherwise the essential fundamental labor 
protections will be undermined. Workers in any non-immigrant category 
(that is, temporary), and especially those in the low-wage labor 
market, will always face pressure to find a new job quickly, because by 
definition, they are not entitled to unemployment insurance or any 
other safety net benefits. If subsequent employers do not have to test 
the labor market and therefore are not subject to prevailing wage 
standards, those employers will be able to employ the temporary foreign 
workers at substandard wages and working conditions. Therefore, 
portability must come with a requirement that every subsequent employer 
undergo the same U.S. labor market testing and certification process 
before hiring a foreign temporary worker. The H1-B program currently 
includes this framework or portability, but given that H1-B employers 
are not required to test the U.S. labor market to begin with, the H1-B 
program does not serve as the model of portability.
    As discussed above, another flaw of guest worker programs is that 
they allow U.S. employers to discriminate based on race, gender, age, 
and national origin, which is outlawed in the U.S.\43\ Discrimination 
in relation to jobs that are performed in the United States should not 
be tolerated no matter where it occurs. Congress must specify that 
Title VII, Section 1981, the ADEA, and all other U.S. employment and 
labor laws govern the conduct of any employer or other labor recruiter 
who participates in any temporary worker program, even if the conduct 
occurs outside the United States.
    Congress should also specify that workers who labor in temporary 
worker programs are entitled to workers' compensation coverage and full 
remedies, even if they leave the U.S. after they are injured on the 
job. Current law makes it practically impossible for guest workers who 
are injured on the job to exercise their rights under workers' 
compensation laws because injured workers are forced to leave the 
program and return to their home country, or become undocumented.
    Statutory labor protections are only as good as their enforcement 
mechanism. Guest workers face particular difficulties in enforcing 
their labor rights. Workers often have little education, do not 
understand the U.S. legal system, have no access to legal aid lawyers, 
and have great difficulty in finding private lawyers to represent them. 
Requiring that employers post a bond that is at least sufficient in 
value to cover the temporary workers' legal wages, and crafting a 
system to allow workers to make claims against the bonds would make it 
easier for workers to collect the money they are owed.
    Further, a robust remedial scheme is key to discouraging illegal 
conduct by employers. Penalties for violations of the terms and 
conditions of temporary worker programs should be strengthened and must 
include remedies that are real deterrents, including employer 
debarment. Enhanced monetary penalties such as punitive damages and 
compensatory damages should also be provided. All of these remedies 
must be available to workers and their representatives through private 
rights of action, as well as through strengthened and adequately funded 
government enforcement programs.
    Finally, guest workers must be able to adjust their status if they 
wish to do so. This ``path to permanency'' is important, but it does 
not solve the problems that workers face while they are laboring in the 
guest worker programs. In other words, if the H2-B program were to 
continue with all its current flaws, and Congress simply added a 
provision that would allow H2-B workers to adjust their status after 
laboring in H2-B status for a certain number of years, that ``path to 
permanency'' would do nothing to fix the problems with recruiters, non-
payment of wages, or the inability of H2-B workers to exercise labor 
rights. All that such a ``path to permanency'' would do is limit the 
number of years that the particular workers in question are exploited. 
It would not remove in any way the attraction for employers to use an 
ever-changing source of foreign workers to depress wages and other 
labor standards.
    The STRIVE Act, unfortunately, provides virtually none of the guest 
worker program protection recommended above. It greatly expands the 
number of guest workers that employers are allowed to import every 
year, and is modeled on the failed and flawed H2-B program. The STRIVE 
Act is not limited to seasonal jobs, which means that it is expanding 
significantly the types of jobs that employers would be able to fill 
with easily exploitable temporary foreign workers, and for the first 
time opening up permanent jobs to temporary guestworkers. Under the 
STRIVE Act, employers would be able to import foreign temporary workers 
to perform all kinds of permanent jobs that don't require a college 
degree, such as grocery store clerks, a host of construction jobs, 
janitors, poultry workers, and truck drivers, just to name a few.
    The huge expansion of guest worker programs contemplated by current 
legislation will not only harm United States workers, but also 
represents a radical and dark departure from our long-held vision of a 
democratic United States society. We are not a nation of ``guests,'' 
who, by definition, have only short-term and short-lived interests, but 
a nation of people who believe in investing in our communities, in our 
future, and in our democracy.
    In the AFL-CIO's view, there is no good reason why any immigrant 
who comes to this country prepared to work, to pay taxes, and to abide 
by our laws and rules should be denied what has been offered to 
immigrants throughout our country's history: a path to legal 
citizenship. To embrace instead the creation of a permanent two-tier 
workforce, with non-U.S. workers relegated to second-class ``guest 
worker'' status, would be repugnant to our traditions and our ideals 
and disastrous for the living standards of working families.
    Instead we should revise the current immigration law in a way that 
guarantees full labor rights for future workers and reflects real labor 
market conditions by restructuring the current permanent employment 
visa category. Under current law, Congress has set an arbitrary cap of 
140,000 permanent visas (green cards). We propose that the number be 
adjusted to reflect real employer needs for long-term labor shortages. 
Employers should be required to test the labor market by first offering 
jobs to workers who are already in the United States at wages that are 
attractive to U.S. workers. If there are no workers inside the United 
States available to fill the job, then the employer should be able to 
hire a foreign worker and sponsor him or her for a green card. The 
number of such visas should be tied to real economic indicators that 
reflect true labor shortages.
    The proponents of guest worker programs offer no valid explanation 
as to why, as a matter of public policy, the permanent system we 
advocate is not the preferred model. The most common argument they make 
is that there are new circular migration patterns and workers who come 
here may not want to stay forever. There is nothing in our proposal, or 
in current law, that requires that workers who come to United States 
must stay here. The difference between the AFL-CIO framework and the 
guest worker framework is that under our model, the workers who don't 
want to stay here forever have full worker rights while they work here. 
Subjecting workers to diminished labor rights and protections simply 
because they will suffer those conditions only temporarily is not sound 
public policy. Nor is it just.
Immigration Laws Should be Enforced in Tandem with Labor Laws
    The third guiding principle in the AFL-CIO's approach to reform is 
that enforcement of labor laws must go hand-in-hand with enforcement of 
immigration laws. Enforcement of immigration laws alone has failed to 
stem the tide of illegal immigration. The current mechanism for 
enforcement of those laws in the workplace--the ``employer sanctions'' 
provisions included in the Immigration Reform and Control Act of 1986 
(IRCA) \44\--completely ignores enforcement of labor and employment 
protections. Instead, the IRCA adopted the very same focus that the 
current legislative proposals have taken on: punishment (fines) for 
employers who knowingly hire and continue to employ undocumented 
workers. Such sanctions have failed to curtail illegal immigration. In 
fact, they may well have accomplished the opposite, given that 
sanctions have become one of the most powerful tools that employers 
have to defeat workers' attempts to organize or to otherwise enforce 
their labor rights.
    In adopting the IRCA, Congress acted to cut off the ``job magnet'' 
that was causing illegal immigration by requiring, for the first time, 
all workers in the United States to have permission to work in the 
country and obligating employers to verify that status. Even though 
that law was designed to hold employers accountable for the hiring of 
undocumented workers and to stop the exploitation of workers, the 
result has been quite the contrary: the IRCA essentially privatized 
immigration policy by deputizing employers to be agents of the 
immigration service. Employers have repeatedly used the power the IRCA 
granted them to defeat collective action and to retaliate against 
workers who attempt to enforce their labor and employment rights.
    The principal study conducted on the relationship between workplace 
immigration enforcement and labor disputes reveals a deep entanglement 
between workplace immigration enforcement and workers' exercise of 
labor rights.\45\ Government data on workplaces raided in New York, one 
of the largest DHS districts, reveals that 55% of the workplaces raided 
by INS were the subject of at least one formal labor complaint--that 
is, a charge had been filed with a federal or state employment or labor 
agency. That figure likely underestimates the actual number of 
workplaces in the midst of a labor dispute at the time of the 
immigration tip or raid because it does not include informal complaints 
to employers, much less litigation or union grievances.\46\
    Workplace enforcement of immigration laws without regard to 
workers' rights--as Immigration and Customs Enforcement (ICE) currently 
operates--lowers standards for all workers because workers are deterred 
from reporting violations. ICE's blatant disregard of workplace 
standards was exposed clearly in 2005 when a group of construction 
workers in North Carolina received a flyer at work, instructing them to 
attend a mandatory health and safety meeting. The flyer was printed on 
letterhead of the Occupational Safety and Health Administration (OSHA). 
However, when the workers arrived at the meeting, no OSHA officials 
were present. Rather, ICE officials were waiting, arrested more than 20 
workers and placed them into deportation proceedings.\47\
    Effective enforcement of health and safety laws depends on workers 
to report hazardous conditions. Genuine health and safety meetings, 
unlike the sham one that ICE used to trap the workers, are key to that 
process because they enable workers to learn to identify hazards, and 
to protect themselves. The chilling effect on worker rights from these 
types of actions is clear.
    The data on workplace enforcement of immigration laws also make 
clear that the benefit to an employer from exploiting workers is far 
greater than his cost of violating the immigration law. In fact, the 
immigration law actually gives employers a powerful weapon to use 
against workers. In many instances, employers have actually called for 
raids at their own workplaces, and have been able to effectively 
intimidate workers in the exercise of workplace rights--from joining a 
union to filing health and safety claims--without employers having to 
pay any meaningful penalty for their violations of workplace or 
immigration laws.\48\ As long as unscrupulous employers continue 
exploiting immigrant workers while facing no real chance of being 
prosecuted for providing unsafe working conditions, or for other 
violations of labor laws, the rights of all workers will be seriously 
undermined and illegal immigration will continue.
    Moreover, enforcement of U.S. labor and employment laws has been 
particularly dismal under the Bush administration, which has had an 
extremely negative impact on low-wage immigrants and U.S. workers. The 
Department of Labor's (DOL) own studies conducted in 2000 (the last 
year such were conducted) found that 100 percent of poultry employers 
were out of compliance with the minimum wage and overtime protections 
of the Fair Labor Standards Act (FLSA), and as many as 50 to one 100 
percent of garment and nursing home employers were in violation of 
those same protections. And these are industries in which immigrant 
workers are overrepresented. Yet in the face of these wholesale 
violations, the Department of Labor's resources dedicated to 
enforcement have been falling for many years. For example, from 1975--
2004, the budget for the DOL's Wage and Hour Division investigators, 
responsible for investigating and enforcing the minimum wage laws, 
decreased by 14% (to a total of 788 individuals nationwide) and 
enforcement actions decreased by 36%, while the number of workers 
covered by statutes enforced by the Wage and Hour Division grew by 
55%.\49\ Today, there is approximately one federal Wage and Hour 
investigator for every 110,000 workers covered by FLSA.\50\ By 2007, 
the DOL's budget dedicated to enforcing wage and hour laws will be 6.1 
percent less than before President Bush took office.\51\
    Congress should opt for a far more potent ``employer sanction,'' 
one that will remove the perverse economic incentive that is driving 
employers to recruit and employ undocumented workers, and will 
therefore stem the tide of illegal immigration. That ``sanction'' 
involves the vigorous and adequately funded enforcement of existing 
labor and employment laws.
Conclusion
    Immigration reform is an emotionally and politically charged issue 
that affects the supply of labor, wage levels and working conditions 
for all workers, both immigrant and U.S.-born, in the United States. 
Any significant changes in United States immigration policy would 
deeply affect the personal and workplace lives of tens of millions of 
workers and their families, whether they are citizens, legal residents 
or undocumented persons. The current system does not serve us well, and 
the time is right to enact comprehensive immigration reform. For such 
reform to be meaningful and fair, it must be framed around workers' 
rights because that is the socially, economically, and morally right 
thing to do.
    Thank you again for the opportunity to submit testimony.
                                endnotes
    \1\ Jeffrey S. Passel, Size and Characteristics of the Unauthorized 
Migrant Population in the U.S., (Pew Hispanic Trust: 2005), at 1, 10. 
In the decade 1995-2004, 700-750,000 persons entered the U.S. 
unlawfully or overstayed a visa, id. at 6, but approximately 200,000 
died, departed, or regularized their status each year, yielding a net 
increase in the undocumented population of approximately one-half 
million persons annually. Jennifer Van Hook, et al., Unauthorized 
Migrants Living in the U.S.: A Mid-Decade Portrait (MPI: 2005), at 2 
(estimating that in 1995-2004, 200,000-300,000 undocumented immigrants 
``leave the United States, die, or become legal immigrants '')
    \2\ Id.
    \3\ In the Fourth Circuit, which covers Maryland, Virginia, West 
Virginia, North Carolina and South Carolina, undocumented workers have 
no standing to bring complaints under Title VII. See Egbuna v. Time-
Life Libraries, Inc., 153 F.3d 184 (4th Cir. 1998).
    \4\ Illegal Immigrants Help Unionize a Hotel but Face Deportation, 
NY Times, Jan. 12, 2001, A24 col. 1.
    \5\ Lance Compa, Blood, Sweat and Fear: Workers' Rights in U.S. 
Meat and Poultry Plants, (Human Rights Watch: Jan. 2005), available at 
http://www.hrw.org/reports/2005/usa0105/.
    \6\ 535 U.S. 137 (2002)
    \7\ Effective January 1, 2006, hourly wages for underground 
bituminous coal miners as set forth in the National Bituminous Coal 
Wage Agreement ranged from $19.35-$20.42.
    \8\ C. W. Mining Co. a/k/a Co-Op Mine, NLRB Case Nos. 27-CA-18764-
1; 27-CA-19399; 27-CA-19453-1; 27-RC-8326; 27-CA-19481-1; 27-CA-19529.
    \9\ See, Crespo v. Evergo Corp., 366 N.J. Super. 391 (App. Div. 
2004), cert. denied, Crespo v. Evergo Corp., 180 N.J. 151 (2004) 
(holding that an undocumented worker suing for discriminatory 
termination could not recover either economic or non-economic damages 
absent egregious circumstances such as extreme sexual harassment); The 
Reinforced Earth Co. v. Workers' Compensation Appeal Board, 810 A.2d 99 
(PA 2002) (holding that injured worker is entitled to medical benefits, 
but illegal immigration status might justify terminating benefits for 
temporary total disability); Sanchez v. Eagle Alloy, 254 Mich. App. 651 
(2003)(Undocumented workers are covered by the state's workers 
compensation system, but time loss benefits are suspended from time 
that unlawful status is discovered); Tarango v. State Industrial 
Insurance System, 25 P.3d. 175 (NV 2001) (workers' compensation laws 
apply to all workers regardless of immigration status, but undocumented 
worker not entitled to rehabilitation benefits); Cherokee Industries, 
Inc. v. Alvarez, 84 P.3d 798 (OK 2003)(same).
    \10\ Workers often have no choice but to turn to state law for 
protection. For example, federal anti-discrimination laws only protect 
employees working for employers who employ at least 15 employees. 42 
U.S.C. Sec.  2000e(b). State discrimination laws often protect 
employees working for employers with fewer employees. See, Cal. Gov 
Code Sec.  12900 (2007)(any employer five or more employees subject to 
provisions); ORS Sec.  659.001 (2005)(employer with one or more 
employees subject to provisons); Rev. Code Wash. (ARCW) Sec.  49.60.040 
(2007)(eight employees).
    \11\ Sanchez, 254 Mich. App. at 671-672.
    \12\ See Brent I. Anderson, The Perils of United States Employment 
for Falsely Documented Workers (and whatever you do, don't file a work 
comp claim), paper submitted to American Bar Association, Labor and 
Employment Law Workers' Compensation Committee Midwinter Meeting 
(March, 2006).
    \13\ See e.g. Morejon v. Terry Hinge and Hardware, 2003 WL 22482036 
(Cal. App. 2 Dist., 2003); de Jesus Uribe v. Aviles, 2004 WL 2385135 
(Cal. App. 2 Dist. 2004); Veliz v. Rental Service Corporation USA, 
Inc., 313 F.Supp.2d 1317 (2003); Hernandez-Cortez v. Hern ndez, 2003 WL 
22519678 (D. Kan. 2003).
    \14\ See Rivera v. NIBCO, Inc., 364 F3d 1057 (9th Cir. 2004), cert. 
denied, NIBCO, Inc. v. Rivera, 544 U.S. 905 (2005) (declining to order 
disclosure of immigration status and noting chilling effect).
    \15\ Ana Avendano and Marielena Hincapie, The Rollback of Immigrant 
Workers' Civil Rights, Awakening from the Dream (Carolina Academic 
Press: 2005).
    \16\ See Ray Marshall, Getting Immigration Reform Right, (Economic 
Policy Institute: 2007), at 6.
    \17\ Id at p 3.
    \18\ Passel, supra, fn. 1 .
    \19\ http://www.bls.gov.
    \20\ Gerald Mayer, CRS Report RL33772, The Comprehensive 
Immigration Reform Act of 2006 (S. 2611): Potential Labor Market 
Effects of the Guestworker Program, December 18, 2006.
    \21\ The STIVE ACT provides for 400,000 visas in the first year, 
increasing based on employer demands to 600,000.
    \22\ The Immigration Act of 1917 (one of the most restrictive 
pieces of immigration legislation in U.S. history) included a temporary 
farm worker program, which lasted until 1922. The program allowed 
employers to import almost 77,000 workers into the US, fewer than half 
of whom returned to Mexico once the program was suspended. Vernon M. 
Briggs, Jr., Non-Immigrant Labor Policy in the United States, Journal 
of Economic Issues, Vol. XVII, No. 3, Sept. 1983.
    \23\ Briggs at 621.
    \24\ Id.
    \25\ See United States Commission on Immigration Reform, Becoming 
an American: Immigration and Immigration Policy, United States 
Commission on Immigration Reform, 1997. An earlier well-known 
Commission--the Select Commission on Immigration and Refugee Policy 
(SCIRP)--chaired by Rev. Theodore Hesburgh had reached the same 
conclusions. See, National Commission on Immigration and Refugee 
Policy, United States Immigration Policy and the National Interest: 
Final Report. National Commission on Immigration and Refugee Policy, 
1981.
    \26\ By contrast, business groups and political right-wing groups 
have found common ground. See Tamar Jacoby and Grover Norquist, Hard 
Lines Don't Speak for GOP, Miami Herald, December 19, 2005.
    \27\ See Ernesto Galarza, Merchants of Labor: The Mexican Bracero 
Story (Rosicrucian Press 1964).
    \28\ See ``H1-B Foreign Workers, Better Controls Needed to Help 
Employers and Protect Workers,'' HEHS-00-157 (September 2000); ``High 
Skill Training Grants from H1B Visa Fees Meet Specific Workforce Needs, 
but at Varying Degrees,'' GAO-02-881 (September 2002); ``The State of 
Asian Pacific America,'' Paul Ong (ed.), LEAP Asian Pacific American 
Public Policy Institute and UCLA Asian American Studies Center, 1994, 
pp. 179-180.
    \29\ http://www.dol.gov/--sec/stratplan/strat--plan--2006-2011.htm; 
See also, Ron Hira, Outsourcing America's Technology and Knowledge Jobs 
(EPI Briefing Paper: 2007), p. 2.
    \30\ 8 U.S.C. Sec.  1182(n)(1)(G)(ii).
    \31\ H1-B Visa Program: Labor Could Improve Its Oversight and 
Increase Information Sharing with Homeland Security GAO-06-720 
Washington, DC: June 22, 2006.
    \32\ Id.
    \33\ Id. at 14.
    \34\ Ron Hira, Outsourcing America's Technology and Knowledge Jobs, 
supra n. 31.
    \35\ Id.
    \36\ See, Too Many Visas for Techies? U.S. workers gripe that lax 
rules may cost them their jobs, Business Week, August 25, 2003.
    \37\ See 45 C.F.R. Sec.  1626.1 et seq.
    \38\ Mary Bauer, Close to Slavery, Guestworker Programs in the 
United States, Southern Poverty Law Center, 2007, available at 
www.splcenter.org.
    \39\ Id.
    \40\ See, DOL General Administrative Letter No. 1-95.
    \41\ See, Reyes-Gaona v. NC Growers' Ass'n, 250 F.3d 861 (4th Cir. 
2001)
    \42\ The ADEA makes it unlawful ``for an employer'' to ``fail or 
refuse to hire'' or ``otherwise discriminate against any individual 
with respect to his compensation, terms, conditions, or privileges of 
employment, because of such individual's age.'' 29 U.S.C. Sec.  
623(a)(1).
    \43\ See Reyes-Gaona v. NC Growers' Ass'n, 250 F.3d 861 at 865.
    \44\ 8 U.S.C. Sec.  1105 et seq. (1986).
    \45\ Michael J. Wishnie, Current Issues in Immigration Law, 28 
N.Y.U. Rev. L. & Soc. Change 389 (2004).
    \46\ Id.
    \47\ Steven Greenhouse, U.S. Officials Defend Ploys to Catch 
Immigrants, NY Times, Feb. 11, 2006, A8, col.
    \48\ See In re Herrera-Priego (Lamb, I.J.) (NY July 10, 2003) 
(where employer called INS raid on itself, during union organizing 
campaign).
    \49\ Annette Bernhardt & Siobhan McGrath, Trends in Wage and Hour 
Enforcement by the U.S. Department of Labor, 1975-2004, Economic Policy 
Brief No. 3 (New York: Brennan Center for Justice at NYU School of Law, 
September 2003).
    \50\ Id., at 2. There are nearly 88 million people covered by FLSA.
    \51\ Judd Legum, Faiz Shakir, Nico Pitney, Amanda Terkel, and 
Payson Schwin et.al., Labor-Bush Priorities Hurt Workers, Help 
Employers (Under the Radar), The Progress Report, June 14, 2006.
                                 ______
                                 
    [Question for the record posed to Mr. Marshall follows:]
                  Committee on Education and Labor,
                             U.S. House of Representatives,
                                     Washington, DC, June 11, 2007.
Prof. Ray Marshall,
University of Texas at Austin, LBJ School Dean, Austin, Texas.
    Dear Secretary Marshall: Thank you again for taking the time to 
participate in the House Education and Labor's hearing titled 
``Protecting U.S. and Guest Workers: the Recruitment and Employment of 
Temporary Foreign Labor.'' Your participation and testimony provided 
the Committee with important information and insight on this issue. As 
discussed during the hearing, the Committee would appreciate your 
assistance in providing written responses to the enclosed question to 
ensure that the Committee's hearing record is complete.
    During your testimony you discuss how important immigration is to 
the vitality of our economy. In my district, on Eastern Long Island, 
many of the businesses, for years have relied on H2B visas to fulfill 
their seasonal work demands. However, this year businesses is my 
district were faced with numerous obstacles in obtaining the visas. Do 
you have any thoughts of how the visa application processes can be 
streamlined?
    We would appreciate your responses no later than June 20, 2007. If 
you have any questions, please do not hesitate to contact Jody 
Calemine, policy advisor/counsel, or Tylease Fitzgerald-Alli, hearing 
clerk, at (202) 225-3725.
            Sincerely,
                                             George Miller,
                                                          Chairman.
                                 ______
                                 
    [Response to question posed to Mr. Marshall follows:]

        Lyndon B. Johnson School of Public Affairs,
                         The University of Texas at Austin,
                                     Austin, TX, November 16, 2007.
Hon. George Miller, Chairman,
Committee on Education and Labor, U.S. House of Representatives, 
        Washington, DC.
    Dear Congressman Miller: This is in response to the question posed 
in Congressman Bishop's letter of June 11 concerning expedited 
procedures for H2B visas. I am sorry for this late response, but the 
letter just reached me this week.
    I believe the H2B visa process should be streamlined, but without 
further information about how the process operates now, I do not have 
specific recommendations. I would, however, ask employees, labor 
organizations, and DOL staff for recommendations before making specific 
changes. I would also examine how other countries handle this issue. 
Promising processes include an examination of alternative domestic 
sources of labor, having DOL staff undertake continuing labor market 
tests for the availability of labor, domestic workers, pre-clearing 
employers or employer organizations that have good records for 
procedures that protect American and foreign workers' wages and working 
conditions, expediting the applications of employers who have 
agreements with legitimate workers' organizations representing foreign 
and domestic workers, and modernizing the process with the latest 
information technology. The guiding principle for all visa processes 
should be to meet the legitimate needs of all interests as efficiently 
as possible. What we should not do is allow employers to bypass labor 
protection processes and avoid genuine efforts to reduce their 
dependence on foreign workers.
    I hope these thoughts are useful to you.
            Sincerely,
                                              Ray Marshall,
 Audre & Bernard Rapoport Centennial Chair in Economics and Public 
                                                           Affairs.
                                 ______
                                 
    [Additional material submitted by Mr. Marshall follows:]

                    Getting Immigration Reform Right

                            By Ray Marshall*

    Congress' difficulty in passing immigration reform legislation 
comes as no surprise to those who have followed this issue over the 
years, especially the debates that led to the seriously flawed 
Immigration Reform and Control Act (IRCA) of 1986. Many of the factors 
that caused IRCA to fail are as prevalent now as they were in 1986. 
Diverse economic interests, personal biases, and political ideologies 
make it hard to build consensus for effective immigration policies. 
These complications are exacerbated by the absence of reliable 
information about the magnitude of illegal immigration and its impact 
on the American economy and society. Unlike many other policy issues, 
there are no clear political alignments on immigration, making it 
difficult to build the coalitions needed to align the complex 
components of a successful immigration policy.
---------------------------------------------------------------------------
    *Ray Marshall was Secretary of Labor in the Carter administration. 
Holds the Audre and Bernard Rapoport Centennial Chair in Economics and 
Public Affairs at the LBJ School of Public Affairs at the University of 
Texas.
---------------------------------------------------------------------------
    By the time the reform bill was amended enough to pass the 
Congress, it became very clear to immigration experts that, instead of 
restricting their entry, IRCA would accelerate the flow of illegals 
into the United States, which is exactly what happened. Common 
estimates of the number of undocumented immigrants in 1986 were between 
3 and 6 million; today, estimates range from 10 to 20 million. The 
illegal networks that give employers a dependable supply of immigrant 
labor are much more institutionalized and difficult to control. If the 
United States does not get policy right this time, 20 years from now 
the number of illegal immigrants probably will have at least doubled 
and be even more difficult--if not impossible--to control.
    That said, however, immigration is not the problem: the United 
States is and will remain a nation of immigrants, who have contributed 
greatly to the vitality, diversity, and creativity of American life. 
Immigrants are particularly important to the U.S. economy, accounting 
for over half of the workforce growth during the 1990s and 86% of the 
increase in employment between 2000 and 2005. Because there will be no 
net increase in the number of prime-working-age natives (aged 25 to 54) 
for the next 20 years, the strength of the American economy could 
depend heavily on how the nation relates immigration to economic and 
social policy.
    Illegal immigration, on the other hand, subjects migrants to grave 
dangers and exploitation, suppresses domestic workers' wages and 
working conditions, makes it difficult to adjust immigration to labor 
market needs, perpetuates marginal low-wage industries addicted to a 
steady flow of illegals, is unfair to people waiting to enter the 
United States legally, and undermines the rule of law. The issue is not 
immigrants, but their legal status, characteristics, and integration 
into American life.
    Because of its importance to America's diverse and rapidly growing 
Hispanic population, immigration also has significant political 
implications. Hispanics' political power is enhanced by their 
geographic concentration in areas where Democrats and Republicans must 
contend for national dominance, especially in the Southwest and Rocky 
Mountain West. This reality was an important component of the political 
strategy fashioned by George W. Bush and Karl Rove. During his first 
term, President Bush courted Latinos with a strategy that included 
speaking Spanish, Hispanic appointments to prominent positions in his 
administration, and an immigration policy that included a guest worker 
program championed by Mexican president Vicente Fox. The Bush-Rove 
strategy was derailed by nativist Congressional Republicans, who 
adamantly opposed comprehensive immigration reform in favor of 
exclusive reliance on border security. As Bush and Rove feared, 
nativist elements in their party provided strong Hispanic support for 
Democrats in the 2006 elections, as they did in California under 
Republican governor Pete Wilson during the 1990s. Indeed, resentment 
toward the nativist pronouncements of anti-immigrant groups is one of 
the few unifying issues for America's diverse Latino population.
    Because of deep international economic and demographic integration, 
immigration has important foreign policy implications, especially for 
U.S. relations with Mexico, the source of most illegal migrants to the 
United States. In fact, for many years, Mexican policy has been based 
on the expectation of heavy migration to the United States. In the 
1970s, for example, Mexican foreign minister Jorge Castaneda (the 
father of former President Vicente Fox's first foreign minister) told 
us that, whatever we did, the United States would absorb a large part 
of Mexico's population growth. Those of us who were attempting to 
formulate policy for the United States did not want to believe that we 
would have so little control of immigration, but he was right.
    Migration clearly is very important to Mexico: it provides a safety 
valve to compensate for that country's failure to provide adequate 
domestic jobs for most of its workforce growth, and remittances from 
the 20 to 25 million Mexicans living in the United States have become 
second only to oil exports as a source of Mexican foreign exchange. 
Remittances also are the lifeblood of many rural communities and 
supplement that country's weak social safety nets. Given Mexico's slow 
growth and serious structural problems (poverty and inequality; 
corruption; low tax collections; poor education system; ineffective 
political checks and balances; inadequate infrastructure development; 
restrictive business regulations; rigid, antiquated, and inefficient 
labor market policies and institutions; and the limited capacities of 
governments at every level), it is unlikely that its citizens will have 
adequate job opportunities at home anytime soon. What the United States 
does about immigration therefore has important implications for Mexican 
economic and political developments, with significant positive or 
negative spillover effects for us.
    Since past mistakes can provide lessons for more effective future 
policies, this paper will first explore the reasons for IRCA's failure, 
including some common myths about illegal immigration. This paper 
concludes with an analysis of a comprehensive mix of policies that 
could serve the best interests of the United States and other 
countries, especially Mexico.
IRCA's defects
    IRCA's main technical defect was that it did not include a secure 
worker identity or work authorization system, without which all other 
control measures were less effective and often counterproductive. This 
reality was well known to participants in the immigration policy 
debates--both those who wanted tighter controls, who lost the 
legislative contest, and those who favored relatively open migration, 
who won. In connection with their work for the 1979-81 Select 
Commission on Immigration and Refugee Policies (SCIRP), Labor 
Department experts developed a work authorization process for new hires 
and job changers that would have made a federal agency, not employers, 
responsible for verification; the employer's only obligation would have 
been to verify an identification number the applicant obtained from the 
federal work authorization agency. Because of opposition from an 
alliance of open immigration advocates and civil libertarians worried 
about a national identity card, IRCA opted for an array of easily 
counterfeited identifiers, permitting a fair amount of fraud, 
especially in the Act's employment and adjustment-of-status programs, 
thus accelerating the flow of unauthorized immigrants. IRCA also gave 
employers responsibility for verifying work authorization documents, a 
task they had neither the ability nor the will to perform.
    To understand why employers lacked the will to screen unauthorized 
applicants, it is necessary to examine the magnetic relationships 
between them and undocumented immigrants. For hard-to-fill jobs, 
employers often prefer unauthorized immigrants to legal residents. This 
preference is due not only to immigrants' willingness to accept lower 
wages, but also because they are a more dependable supply of labor for 
these jobs and, because of their limited options, are less likely 
either to leave or complain to government officials about abuses. Very 
effective informal immigrant information and support networks give 
employers a dependable supply of labor. Since 1986, these networks have 
been strengthened by the spread of relatively inexpensive information 
technology, especially cell phones and radios.
    On the workers' side of the employment relationship, jobs which are 
unattractive to natives not only are much better than those available 
in their home countries, but also provide a measure of security for 
immigrants and their families, despite their illegal status.
    These networks are strengthened and perpetuated by community 
support groups, home country officials, and employers' investment 
decisions. Once institutionalized, these bonds are very hard to break 
and tend to exclude natives from the process.
Myths strengthen the networks
    These tight employer-immigrant relationships are reinforced by 
public attitudes and myths, the most prominent of which is that 
immigrants only fill jobs Americans won't take, an attitude encouraged 
by employers, immigrants, and their foreign and domestic supporters to 
justify illegal immigration. The truth is that there are no such 
occupations: according to the Center for Immigration Studies (CIS), of 
473 occupational titles, only four (stucco masons, tailors, produce 
sorters, and beauty salon workers) have immigrant (legal and illegal) 
majorities, and natives hold over 40% of the jobs in these occupations. 
Like most enduring myths, this one has an element of truth and there 
may be few available legal residents in the areas where the jobs are 
located. But, as noted, once the strong employer-immigrant bonds are 
established, it is hard for even willing natives to compete for these 
jobs, thus appearing to confirm the myth.
    Those who perpetuate this myth ignore other options that can, and 
have, been used as an alternative to the employment of illegals, 
including actively recruiting legal residents; improving management 
(which often is very bad in low-wage occupations, where the costs of 
inefficiency are transferred to workers through such practices as piece 
rates); introducing technology to improve productivity, as was done in 
California agriculture after the end of the bracero program in 1964; 
or, obviously, improving wages, benefits, and working conditions.
    Another popular misconception is that illegal immigration is really 
not so bad because its negative impacts on legal residents are small 
and it improves the competitiveness of the American economy. Again, 
there is enough truth to this argument to give it superficial 
plausibility. There are, however, several problems with equating the 
economic effects of illegal and legal immigration, as some analysts do. 
For example, studies of the impact of refugees--who are legal 
residents, usually with more human and financial capital--have been 
cited as evidence of the beneficial effects of illegal immigration. 
Similarly, legal immigrants, who tend to have both lower and higher 
levels of schooling than natives, cannot be equated to illegal 
immigrants with little or no formal education. It is significant that, 
controlling for other things, legalization improves immigrants' wages.
    Economists disagree about the impact of illegal immigration on 
American workers. Some find little or no negative impact,1 while others 
report large and significant effects. For example, one widely cited 
study found that for the nation as a whole, between 1980 and 2000 
immigrants (legal and illegal) reduced the wages of high school 
graduates by over 8%, college graduates by almost 4%, and all workers 
by over 3%.\2\ Similarly, George Borjas, Richard Freeman, and Lawrence 
Katz found that in the decade before 1991, immigration contributed 15% 
to the decline in the relative earnings of high school dropouts.\3\
    A resolution of this controversy is beyond the scope of this paper, 
but my experience, as well as my studies of the impact of immigration 
on labor markets, lead me to several conclusions: \4\
    1. Much of the controversy among economists is over data and 
methods. Although there have been improvements, there are no accurate 
data on illegal immigration. There are, in particular, no longitudinal 
data that follow the same workers through time. Analysts therefore make 
mistakes when they attempt to reach longitudinal inferences from cross-
sectional data. For example, data comparing the impact of immigrants on 
native employment and wages in metropolitan areas at different dates 
must account for inter-area migration. This is so because competing 
low-wage legal residents tend to avoid areas with heavy influxes of 
illegal immigration, while non-competing higher wage legal residents 
tend to move into those areas. Any inter-city study that did not 
account for these migrations could conclude, erroneously, that illegal 
immigrants had no negative--or even positive--effects on native 
workers.
    2. Labor market conditions clearly make a difference. The negative 
immigration effects for natives will be greater if there is widespread 
joblessness among native workers who, for reasons noted earlier, could 
not compete with the illegals even if they wanted to. The magnetic 
relations between employers and illegal immigrants are not likely to be 
detected by quantitative analyses.
    3. Whatever the limitations of empirical research, economic theory 
predicts that natives whose work is complementary to that of immigrants 
(e.g., managers or skilled workers) will benefit from immigration, but 
that the wages of those workers who compete directly with immigrants 
will be reduced. Because of their bimodal education distribution, 
immigrants compete most directly with natives in high- and low-wage 
occupations. Immigration policy should therefore minimize wage 
competition and maximize complementarity.
    4. Although the magnitude can be debated, there is little question 
that illegal immigration reduces the wages and dilutes the quality of 
jobs for low-wage domestic workers. It is true, of course, that 
immigration is not the only factor depressing these wages, but it is a 
significant one, especially for high school dropouts, whose real wages 
have fallen by over 18% since 1979 because of immigration, 
globalization, technological changes, the decline of private-sector 
collective bargaining, and weaker worker protections.\5\ Public policy 
makers therefore should develop immigration, social, and high-value-
added economic policies to enable these workers to maintain and improve 
their conditions.
    5. Because many legal immigrants have higher levels of education 
than natives, they could displace and reduce the earnings of highly 
educated workers.\6\ The impact on knowledge workers is intensified by 
low-cost information and communication technology, which greatly 
facilitates the outsourcing of this work. It is therefore not 
surprising that the real wage growth of college-educated workers has 
stagnated since 2000.
    Since workers tend to be segmented into non-competing groups, it is 
useful to examine the impact of immigrants on young and minority 
workers who compete most directly with them. In a careful assessment of 
these effects, three Northeastern University labor market researchers 
found that immigrants who arrived in the United States between 2000 and 
2005 (over half [56%] of whom were illegal) accounted for an 
unprecedented 86% of the net increase in the number of employed 
persons, displaced native-born workers, and weakened the structure of 
labor markets.\7\ The impact was particularly large for young native-
born males (16 to 34), whose employment fell by 1.7 million between 
2000 and 2005, while the number of young immigrant males increased by 
1.9 million. The negative impact was greater for young blacks and 
Hispanics. These researchers also found that the employment of 
immigrants was accompanied by a shift in the structure of private labor 
markets toward more informal employment not covered by unemployment 
insurance, health benefits, and worker protections.\8\
    The argument that immigration strengthens the competitiveness of 
the American economy depends on how competitiveness is defined. What 
many economists mean is that lower wages improve competitiveness 
because they reduce the price of American products. But, while this is 
an easy option for employers, wage competition is a losing strategy for 
workers, communities, and nations: there are always countries with 
lower wages. For example, the United States is losing jobs to Mexico, 
which, in turn, is losing jobs to China and other countries, where 
wages are much lower than Mexico's. Moreover, in a high-wage country, 
wage competition implies lower and more unequal wages, which is exactly 
what has been happening in the United States since the 1970s. There can 
be little doubt that growing inequality will weaken democratic 
institutions, economic performance, and national unity.
    It is true, of course, that in a competitive global economy, 
earnings for similar workers tend to converge. The policy issue, 
however, is whether convergence takes the form of more rapidly rising 
wages in developing countries, which would be better for people 
everywhere, or lower wages in high-wage countries, which will increase 
inequality and reduce wages for many workers, as well as aggravate 
national and international tensions.
    A better alternative, suggested by the experiences of some East 
Asian countries, would be for all nations to adopt value-added 
strategies to compete by improving productivity, quality, flexibility, 
and innovation. Given this definition, immigration that reduces 
American wages and perpetuates marginal, low-wage industries does not 
improve the kind of competitiveness we should encourage.
    Immigration policy, therefore, should be designed to give greater 
attention to increasing the flow of workers whose skills and education 
are in short supply in the United States. This will not be done by 
illegal immigrants, who are predominantly workers with little formal 
education and limited English language skills. For example, according 
to The Instituto Tecnol"gico de Mexico, between 1992 and 2002 over 
three-fourths of illegal Mexican immigrants had less than eight years 
of formal education; 11% had no formal education at all, and one-third 
had less than four years.\9\
    Because of education quality differences, for labor market 
performance data from the National Adult Literacy Survey (NALS) and the 
International Adult Literacy Survey (IALS) are more important than 
years of schooling. The latest of these surveys found that a majority 
of America's 16-to-65-year-old foreign-born residents performed at the 
lowest level on each of these surveys, while fewer than 11% performed 
at levels 4 or 5, the highest two literacy levels. Moreover, ``The 
average literacy proficiency of the nation's immigrant population is 
considerably below that of their native born peers in the U.S. and 
their foreign born counterparts in most other high-income countries 
that participated in the IALS assessment.'' \10\ These are significant 
findings because immigration will account for most of our future labor 
force growth and literacy is very important for personal and national 
success. Indeed, Andrew Sum and his colleagues found that ``the 
literacy proficiency of the nation's immigrant population is strongly 
associated with their labor market behaviors and outcomes.'' \11\ It 
will require considerable upgrading of immigrants' literacy skills to 
enable them to earn family-supporting incomes in the American economy 
and to enable the American economy to compete by raising value added 
instead of cutting wages and costs.
    During the 1970s it was often argued that illegal immigrants had 
positive fiscal impacts because they paid more taxes than the cost of 
public services they used. This might have been true when most 
immigrants were mainly young adults without families, but that is no 
longer the case as immigrants settle into the United States and form or 
unite families. Since most illegal immigrants have low incomes, it is 
not surprising that the taxes they pay do not cover the cost of the 
public services they receive. In a 2004 study, Gordon Hanson reported 
that 25% of illegals from Mexico, and 15% of natives, received some 
kind of welfare.\12\
    In studies of New Jersey and California--two states with large 
immigrant populations--the National Research Council (NRC) found, on 
the basis of 1989-90 data, that the average immigrant household in New 
Jersey received a net fiscal transfer of $1,500 from natives, or 3% of 
average immigrant household income; in 1994-95, the average fiscal 
transfer from native to immigrant households in California was $3,500, 
9% of average immigrant household income. For the United States, 
however, the NRC estimated that the short-run immigrant fiscal burden 
on native households was $200 or 0.2% of GDP.\13\ Thus, while the 
fiscal immigration burden for the whole country is relatively small, it 
is larger in states with relatively generous welfare benefits and 
higher percentages of immigrants with low incomes and more children.
What should we do?
    The foundation for an effective immigration policy is to recognize 
the power of the forces perpetuating illegal immigration and find ways 
to legalize the flows and make immigration an integral component of 
economic and social policies to promote broadly shared prosperity in 
the United States, Mexico, and other countries.
    Effective immigration policy must contain a comprehensive mix of 
measures, including stronger border controls and internal enforcement 
processes; a secure work authorization system with strong penalties 
against employer and immigrant violators; a means to adjust the status 
of people who have lived and worked satisfactorily in the United States 
for some time, accompanied by a credible signal that there are unlikely 
to be future status adjustments; an immigration standard that gives 
greater weight to the country's labor requirements; and cooperation 
with Mexico and other countries to encourage economic development in 
immigrant-exporting areas through cooperative investment, trade, and 
aid measures; and strengthening NAFTA's labor agreements to limit wage-
suppressing competition and give workers stronger voices in the work 
place and in national policy decisions. Following are seven specific 
proposals for immigration reform.
    (1) Secure identifiers. The first priority should be to devise a 
secure work authorization system along the lines of the one we 
developed for SCIRP. Heightened concern about national security and 
advances in identification technology probably make a secure identifier 
more acceptable today than it was in the 1970s and 1980s.
    (2) Strong border controls and visa enforcement. The United States 
needs strong border and internal enforcement systems to prevent 
unauthorized immigrants from entering the United States or remaining 
after visas expire. Border security is clearly very important, but by 
itself will not be adequate since over one-third of illegals have 
overstayed visas. Visa violations will undoubtedly increase with 
tighter border controls.
    (3) Adjustment of status. The adjustment of status is one of the 
trickiest and most controversial immigration proposals. If it is not 
done right, immigrants will not come out of the shadows to legalize 
their status. Legalization also could accelerate the future flow of 
illegals, as IRCA did. And unless a credible enforcement strategy is 
implemented, these provisions are not likely to be very effective. 
Immigrants know that their chances of being apprehended and removed are 
smaller than the probability that they can either remain in the United 
States and work or ultimately acquire lawful status through various 
legal means. During the 1990s, for example, about 1.5 million illegals 
gained legal status and only about 412,000 were removed. This was in 
addition to IRCA's amnesty provision, which legalized the status of 2.7 
million immigrants--2 million of them from Mexico. But legalization did 
not slow the influx of illegals, partly because the seriously flawed 
identification system invited fraud and partly because those whose 
status was legalized were not allowed to bring their families.
    The most common objection to allowing long-time unauthorized 
immigrants to become legal residents and earn citizenship is that it 
rewards illegal behavior. It is true, of course, that the immigrants' 
behavior was illegal, but the law was so poorly constructed and 
haphazardly enforced that unauthorized immigrants have many co-
conspirators. These include Congress, which passed a seriously flawed 
law and failed to adequately fund an effective enforcement strategy; 
businesses that hired workers with clearly fraudulent documents and, 
along with members of Congress, pressured officials not to enforce 
immigration laws; banks that issued credit cards to illegals; the IRS, 
which gave them taxpayer ID numbers; the public, which sympathized with 
hardworking immigrants who seemingly did little, if any, harm and 
purportedly only took jobs natives wouldn't take; various sympathetic 
support groups, who thought immigrants deserved the right to seek the 
American dream; labor unions--formerly among the staunchest opponents 
of immigrant worker programs--who now actively organize and protect 
undocumented workers; and public officials in Mexico, who emphasize 
both the immigrants' constitutional right to migrate and America's 
dependence on illegal immigrants and have adopted measures, like photo 
ID cards, that facilitate illegal immigrants' ability to work and live 
in the United States. Given numerous co-conspirators, it would be hard 
to assign culpability only to immigrants, who could be excused for 
believing that their transgressions were not considered to be very 
serious. We would be more justified in condemning illegal immigration 
if we had a law that, instead of being a confusing fiction, met the 
standards of a good law, i.e., was fair, transparent, and enforceable.
    Of course, another reason to adjust the status of these immigrants 
is that the alternative of a massive roundup, modeled after the 1950s' 
Operation Wetback, is unthinkable.
    (4) Foreign worker adjustment entity. The composition and size of 
economic immigration should be calculated by an independent foreign 
worker adjustment body. And labor market needs should become a more 
important component of immigration policy, as they are in countries 
like Canada and Australia.
    An adequately staffed independent agency could make technical 
projections of labor market needs and balance the interests of 
employers, workers, and the public. Immigration is too technical and 
political to be left entirely to Congress, especially where there is a 
need for flexibility and employers have inordinate power to import 
labor surpluses to keep wages down. In their immigration reform 
lobbying, for example, business groups make it clear that any outcome 
that gives them fewer foreign workers (legal and illegal) is 
unacceptable. Lindsey Lowell, of the Institute for the Study of 
Immigration at Georgetown University, has estimated that the allowable 
number of foreign computer and engineering workers admitted under the 
Senate's immigration proposals would increase by a factor of five by 
2017 and would cause foreign workers to be about 19% more than BLS's 
total projected employment in these occupations.\14\
    An independent foreign worker adjustment board could be part of the 
Department of Labor (DOL) and modeled after the Bureau of Labor 
Statistics (BLS), which has a reputation for integrity and whose 
commissioner is appointed for a five-year term, not at the will of the 
president. The advantage of lodging the foreign labor adjustment 
function in the DOL would be to use the expertise of the BLS and the 
department's foreign labor experts. In addition, DOL's rulemaking 
processes could be used to elicit public comment before rules are 
finalized. The DOL also is the only department of government with the 
explicit mandate to protect and promote the interests of American 
workers, whose welfare currently is not adequately protected in 
immigration or most other federal policies.
    (5) Improve temporary worker programs. The United States should 
improve the administration of existing temporary worker programs, but 
should not adopt a large new guest worker initiative.\15\ Experience in 
the United States and Europe shows that the short-run economic benefits 
of guest worker programs are more than offset by long-run social, 
political, and economic problems. It is not good policy for a democracy 
to admit large numbers of workers with limited civil and employment 
rights. Because their frame of reference is conditions in their home 
countries, guest workers are willing to accept second-class status, at 
least for a while, but their children compare their conditions with 
those of natives and are likely to resent their inferior status. 
Indeed, much civil unrest in Europe has originated from the children of 
guest workers, who are disadvantaged because of their parents' 
conditions, even, as in the United States, where the children 
themselves are citizens.
    In the late 1970s, an informal poll of a group of my fellow OECD 
labor ministers found that none of them would adopt a guest worker 
program if they had it to do over again. Moreover, all of them found 
that it was difficult to terminate these programs once they became 
institutionalized. Immigration experts have uniformly found that 
nothing is more permanent than a temporary guest worker program. For 
these reasons, while every major U.S. immigration study commission, 
including SCIRP and the 1995 U.S. Commission on Immigration Reform, 
started with the idea that a large new guest worker initiative might be 
desirable, after careful examination rejected such a program as bad 
policy.
    Guest worker advocates usually contend that these programs will 
stem the flow of illegal immigration, citing the 1942-64 U.S.-Mexico 
bracero experience to justify this conclusion. It is true that in the 
1950s, when the bracero program--ostensibly a temporary wartime 
agricultural worker initiative--more than doubled, peaking at over 
450,000 workers, border apprehensions declined. However, the number of 
illegal immigrants probably remained much higher than the number of 
braceros. Between 1942 and 1946, about 4.6 million braceros were 
admitted and 5.2 million illegals were apprehended. Reliance on 
outmigration also caused the Mexican government to divert development 
resources from the migrant exporting regions to industries along the 
U.S.-Mexican border that mainly employed young women. Men who 
congregated at the border to enhance their chances of becoming braceros 
entered the United States illegally both before and after the bracero 
program ended. The number of illegals is estimated to be three times 
the number of apprehensions.
    Advocates cite the 1980 Congressional Research Service (CRS) study 
prepared for SCIRP to justify these programs, although they rarely give 
the full quote, which is: \16\
    * * * the bracero program by itself did not prove to be a solution 
to the problem of large-scale illegal entry from Mexico. On the 
contrary, as it was administered during the early stages * * * the 
existence of the bracero program appeared to make the problem worse. It 
was not until sharply increased enforcement measures were combined with 
greatly expanded programs that it was possible to divert most of the 
illegal flow into legal channels. However * * * both these measures 
were effected at a considerable price, in terms of the apparent adverse 
effect on domestic agricultural workers * * * and the ill will created, 
particularly in the Mexican-American community by Operation Wetback.
    It is significant that California tomato producers replaced 45,000 
braceros with 10,000 local women, and with the termination of the 
bracero program, the United Farm Workers negotiated a 40% wage 
increase.\17\ However, employers soon learned that the end of the 
bracero program did not stop the flow of workers from Mexico. The 
bracero program resulted in strong immigrant-employer bonds, which 
remained and spread to other industries and geographic areas on an 
illegal basis after the program ended. The bracero program thus sowed 
the seeds of increased illegal immigration. It is therefore a real 
stretch to argue that this experience supports the need to revive a 
large-scale guest worker program as an immigration control measure.
    New guest worker programs not only are unwise, but unnecessary as 
well. If an independent entity concludes that more foreign workers are 
needed, they should be admitted as immigrants with full legal rights, 
including the right to earn citizenship. And, if qualified illegal 
immigrants' status is legalized and they unite their immediate 
families, there will automatically be a continuing flow of workers from 
Mexico and other source countries.
    If it is concluded that more truly temporary foreign workers are 
needed, this should be achieved by improving the administration and 
strengthening the foreign and domestic worker protections of current 
programs. Employers and their supporters complain that these programs 
are too cumbersome and litigious, at least partly because they do not 
like the provisions protecting the interests of foreign and domestic 
workers. Employers have been able to ``game'' the system to get the 
foreign workers they prefer and want the recruiting standard to be 
predicated on finding U.S. workers who are as good as the highly 
screened foreign workers, not the proper legal requirement that we 
recruit domestic workers who meet reasonable minimum standards.
    It is particularly important to strengthen the worker protections 
in present temporary worker programs. There is abundant evidence that 
desperate foreign workers are subjected to appalling abuses in the 
United States and their home countries; these include fraudulent claims 
by recruiters and contractors about the quality and amount of work in 
the United States, deplorable living and working conditions, and 
failing to pay for work done. The practice of seizing foreign workers' 
passports and other documents and their heavy dependence on particular 
employers often subject these workers to near-peonage conditions.\18\ 
My experience suggests that employers' desire for low-wage compliant 
labor and guest workers' limited options make it difficult--but not 
impossible--to protect these workers. However, these protections must 
be included in a comprehensive immigration reform program.
    The adverse effects on American workers by current temporary worker 
programs are not restricted to low-wage workers. Ron Hira has 
documented the failure of the H-1B and L-1 programs to protect American 
workers' jobs and wages.\19\ Hira attributes these shortcomings to the 
absence of labor market tests to prevent adverse effects on American 
workers, allowing employers to pay wages far below prevailing rates, 
and deficient government oversight of these programs. According to 
Hira, ``The poor design of the H-1B and L-1 program has led to outcomes 
directly contradicting the intent of the programs. H-1B and L-1 visas 
facilitate the outsourcing of U.S. jobs, rather than keeping them 
here.'' \20\ Moreover, ``While the regulations governing the prevailing 
wage appear to be reasonable on paper * * * [t]the implementation of 
the prevailing wage regulations is riddled with loopholes, enabling 
firms to pay below-market wages.'' \21\ This conclusion is admitted by 
employers and documented by the Government Accountability Office. 
Because Congress has granted the DOL limited oversight authority, the 
department's Office of Inspector General has described the labor 
certification process as ``simply a 'rubber stamp' of the employer's 
application.'' \22\ If guest workers depress science and engineering 
earnings, fewer Americans will enter these fields.
    Specific suggestions for improving existing guest worker programs 
include:
    1. Require realistic labor market tests before foreign workers are 
admitted. These tests should include outreach efforts by labor market 
intermediaries to recruit American workers who meet acceptable minimum 
qualifications. Employers should be required to pay prevailing wages 
for the positions they seek to fill with guest workers. Allowing 
employers to select more highly qualified foreign workers and pay them 
prevailing entry-level wages is tantamount to paying below-market 
rates. Guest workers should receive all of the labor protections of 
American workers, including a federal cause of action to enforce their 
contracts.
    2. Give the Department of Labor adequate resources and authority to 
monitor guest worker programs, including holding employers responsible 
for their contracts with guest workers. Employers and labor brokers 
should not be allowed to seize guest workers' passports or other travel 
documents. Guest workers should be allowed to organize and file 
complaints with administrative agencies against employers who violate 
their contractual or employment rights. There should be meaningful 
penalties against employers who retaliate against complaining guest 
workers.
    3. Only bona fide employers--not labor contractors or recruiters--
should be allowed to sponsor guest workers. American consular officials 
should not issue visas to workers who do not have firm contracts with 
employers.
    4. Congress should support efforts to streamline the administration 
of guest worker programs.
    Thus, before deciding on how many new foreign workers to admit, 
Congress should first review the impact of comprehensive immigration 
reform and strengthen existing temporary worker programs, several of 
which have no quantitative limitations, including the H-2A foreign farm 
workers program, the L visas for workers transferred within 
multinational corporations; guest workers engaged in art, culture and 
religious work; and workers from Canada and Mexico with at least four-
year college degrees who have job offers from American companies. 
Students with F-1 visas and visitors with J-1 visas are allowed to work 
under certain circumstances.\23\ After these reviews if an independent 
entity determines that additional workers are needed, these should be 
admitted with full employment rights and on terms that do not attach 
them to particular employers or permit them to displace or reduce the 
wages and working conditions of American workers.
    (6) Protective labor legislation. The rigorous enforcement of 
protective labor legislation, especially a higher minimum wage, also 
would protect foreign and domestic workers and make many jobs held by 
illegals more attractive to domestic workers. Some experts believe that 
a higher minimum wage would be sufficient to stem illegal 
immigration.\24\ While a higher minimum wage and strengthened 
enforcement of protective labor laws are desirable, they would not be 
adequate immigration control measures. Many employers would prefer 
illegals to natives even at the minimum wage, many illegals are in 
informal and exempt sectors of labor markets not affected by the 
minimum wage, and a higher minimum wage would attract more illegal 
immigrants. The tight bond between immigrants and employers is not 
likely to be altered very much by minimum wage enforcement alone.
    (7) Trade, investment, and aid programs. The ultimate solution to 
the illegal immigrant problem will be sufficient growth in Mexico and 
other source countries to provide suitable employment for their 
citizens. Unfortunately, Mexico's growth is unlikely to provide 
acceptable jobs for most of its new workers anytime soon. Mexicans 
migrate because of the low quality of jobs, not just the number; about 
90% of all migrant workers have jobs when they migrate. Mexico's daily 
minimum wage is less than the U.S. hourly wage, the average Mexican 
wage is 10 to 20% of the U.S. wage, about half of its population lives 
below poverty levels, and half of its economically active population is 
in the informal sector. Although Mexico's official labor standards are 
high, and opportunities have improved for some workers, actual 
conditions for most workers are very poor and independent labor unions 
have great difficulty operating because they are subordinated to 
undemocratic, often corrupt government-controlled organizations. Hence, 
it is not surprising that polls show almost half (49%) of Mexico's 
adults say they would like to move to the United States.
    Although there have been important improvements in political 
institutions and macroeconomic performance, Mexico's low-wage 
development policies are unlikely to stem the flow of illegal 
migration. As noted, Mexico is losing jobs to other countries, 
especially China, where average wages are less than half of Mexico's.
    It is doubtful that the US will get much help from Mexico 
controlling illegal immigration. Mexico is unlikely to prevent its 
citizens from exercising their constitutional right to migrate, just as 
the United States is unlikely to surrender its sovereign right to 
control immigration. Mexico believes its citizens should have the right 
to migrate to the United States, and have echoed the common myth that 
immigrants only take jobs US citizens will not fill. Before September 
11, Mexican officials thought US employers' dependence on migrants was 
sufficiently strong and US immigration controls were sufficiently weak 
that the United States was unlikely to do much to stem the flow of 
unauthorized immigrants.
    And the Bush administration initially supported President Vicente 
Fox's proposal for a bilateral guest worker initiative, modeled after 
the bracero program, as a way to control illegal immigration. However, 
this proposal was derailed by the terrorist attack of September 11 and 
has not gotten back on track. For reasons presented earlier, a large 
new guest worker program is not a good idea and would not do much to 
reduce the flow of illegal immigration.
    The United States should, however, help Mexico promote job growth 
in its primary migrant-exporting areas. Desirable activities include 
trade and investment policies focused on those areas, infrastructure 
development, and strengthening NAFTA's weak labor side agreement, 
especially to give workers greater control of their own unions, thus 
strengthening their voice at work and in national policy making. The 
United States should make a major effort to help Mexico improve basic 
education, especially for low-income students and girls. There is 
considerable evidence that the education of girls is a very significant 
way to break intergenerational poverty cycles.\25\
    The United States also should consider Mexico's proposal to create 
a joint Canadian-Mexican-U.S. development fund modeled after the very 
successful European Union experience, which did much to improve 
conditions in poorer European countries and stem the flow of migrants 
to the richer countries expected with economic integration. Of course, 
the rich-poor gaps in Europe were much smaller than in North America. 
Trade, investment, and aid programs should be used to leverage the 
structural reforms necessary for faster economic growth in Mexico.
Conclusion
    By the spring of 2007, the future of immigration reform was highly 
uncertain. Comprehensive legislation crafted by a bipartisan group of 
senators and the Bush administration evoked stiff opposition from 
Democrats and Republicans. This bill would:
    (A) strengthen border security, stiffen the penalties for hiring 
unauthorized workers, and require employers to verify the legal status 
of all employees.
    (B) grant permanent residence (green cards) to most undocumented 
immigrants who were in the United States before January 1, 2007, pay 
fines and fees of up to $10,000, speak English, wait 8 years until the 
backlog of legal green card applications has been cleared (at the rate 
of 450,000 a year), and return home to file permanent residence 
applications. In the years before they can apply for green cards, the 
former undocumented immigrants would receive special Z visas, which 
could be renewed every four years for a fee of $1,500. The Z visa 
application process would be triggered by the completion of the border 
and internal security provisions discussed above, which the Department 
of Homeland Security estimates could take 18 months. These immigrants' 
immediate families already in the United States could qualify for Z 
visas, but they could not bring in any other family members.
    (C) Create a vastly expanded new temporary worker program of 
400,000 to 600,000 visas a year. However, this number was later reduced 
to 200,000. An earlier attempt to terminate the program after five 
years failed by one vote when Senator Ted Kennedy, the bill's 
Democratic manager, asked Senator Daniel Akaka to change his vote. This 
program would be created after the security triggers take effect and 
would be available only for jobs that employers show could not be 
filled domestically at prevailing wages. These temporary workers would 
have to buy health insurance for their families and could only change 
jobs among certified employers. These visas would be good for three 
two-year terms and their holders would have to return home for a year 
after their second and fourth years.
    (D) Develop a point system for the admission of future immigrants. 
Points would be awarded for education, job skills, English proficiency, 
and work history. Until the backlog of applications is cleared, up to 
80% of admissions would be based on family ties; thereafter, merit-
based immigration would become more important.
    Labor unions and some Congressional Democrats opposed the new 
temporary worker program, as well as the shift toward a more merit-
based system, while some Republicans strongly opposed the legalization 
program, which, they said, would reward illegal behavior. And employers 
argued that the bill would neither admit enough workers nor allow 
companies to select the immigrants they wanted.
    In my view, the most problematic provisions of the Senate bill are 
the temporary worker program, the requirement that the Z visa holders 
return home in order to apply for green cards, and the requirement that 
employers verify the legal status of all workers; it would be more 
workable to phase in the verification of new hires and job changers. 
For reasons discussed above, the new temporary worker program is not a 
good idea and the requirement that these workers return home every 
third year is problematic. Although family unification must remain an 
important part of our immigration policy, it makes sense to shift more 
toward a merit-based system.
                                endnotes
    \1\ David Card, Is the new immigration really so bad? National 
Bureau of Economic Research, August 2005.
    \2\ George B. Borjas and Lawrence F. Katz, ``The evolution of the 
Mexican-born workforce in the United States.'' National Bureau of 
Economic Research, April 2005.
    \3\ Richard Freeman, America Works (New York: Russell Sage 
Foundation), p. 51.
    \4\ Ray Marshall, ``Immigration and human capital,'' in David 
Hornbeck and Lester M. Salamon (eds.), An Economic Strategy for the 
Nineties (Baltimore, Md.: Johns Hopkins Press, 1991); and 
``Immigration: An international economic perspective.'' International 
Migration Review 18, Fall 1984.
    \5\ Lawrence Mishel, Jared Bernstein, and Sylvia Allegretto, The 
State of Working America, 2006-07 (WDC: Economic Policy Institute, 
2007), p. 150.
    \6\ Ron Hira, ``Outsourcing America's Technology and Knowledge 
Jobs,'' EPI Briefing Paper, March 15, 2007.
    \7\ Andrew Sum, Paul Harrington and Ishwar Khatiwada, ``The Impact 
of New Immigrants on Young Native-Born Workers, 2000-05,'' Center for 
Immigration Studies, September 2006.
    \8\ Ibid.
    \9\ William P. Kocewicz, ``What ails Mexico's economy,'' NRO 
Financial, May 3, 2006.
    \10\ Andrew Sum, Irwin Kirsch, and Kintaro Yamamoto, A Human 
Capital Concern: The Literacy Proficiency of US Immigrants, ETS, March 
2004, p. 1.
    \11\ Ibid.
    \12\ Gordon H. Hanson, Immigration Policy, National Bureau of 
Economic Research, July 2004.
    \13\ James P. Smith and Barry Edmonson (eds.), The New Americans: 
Economic, Demographic and Fiscal Effects of Immigration. Washington, 
D.C.: Academy Press, 1997.
    \14\ B. Lindsey Lowell, Projected Numbers of Foreign Computer and 
Engineering Workers Under the Senate's Comprehensive Immigrants Reform 
Act (S.2611), Institute for the Study of International Migration, 
Georgetown University, August 2006.
    \15\ The Citizenship and Immigration Service issues 70 different 
types of visas that increase the number of foreign workers. In 2005, 
the types and numbers of non-immigrant admissions were:
    Type of visa Number F-1 (student) 621,178 H-1B (high-skilled 
workers and fashion models sponsored by employers) 407,418 H-2B 
(seasonal nonagricultural workers) 122,316 L-1 (executives of foreign 
companies with U.S. offices) 312,144 B-1 (temporary visitors for 
business) 2,432,587 H-2A (temporary agricultural workers) 7,011* P-1 
(internationally recognized athletes or entertainers) 43,766 Source: 
Elizabeth M. Grieco, ``Temporary admissions of nonimmigrants to the 
United States,'' Annual Flow Report, July 2006, p. 3. Individuals 
admitted temporarily for specific purposes are expected to leave after 
six years (H-1B visas) and students are supposed to leave after 
completing their studies. However, Lindsey Lowell estimates that most 
``temporary'' visa holders become permanent residents, including two-
thirds of students and half of workers. *The 7,011 statistic for 2005 
evidently is incorrect. There are three separate guest worker concepts: 
certifications, visas issued, and admissions. In FY05, 6,602 employers 
were certified by DOL to hire H-2A workers to fill 48,366 farm jobs. 
The DHS initially reported 7,011 H-2A workers because some of these 
workers were classified as H-2Bs. H-2A admissions for FY05 are likely 
to be closer to the 22,141 for FY04 than the 7,011 number reported for 
FY05 (See ``H-2A, H-2B Programs,'' Rural Migration News, vol. 14, no. 
1, January 2007).
    \16\ The Congressional Research Service, Temporary Worker Programs: 
Background and Issues, A report for the use of the SCIRP, 90th Cong., 
2nd Session, February 1980, p. 22.
    \17\ Philip Martin, ``Guest Workers for America,'' The Milken 
Institute Review, First Quarter 2007.
    \18\ See Steven Greenhouse, ``Low pay and broken promises great 
guest workers.'' The New York Times, February 28, 2007; Southern 
Poverty Law Center, Close to Slavery, Montgomery, AL, 2007.
    \19\ Ron Hira, op cit.
    \20\ Ibid, p. 5.
    \21\ Ibid, p. 3.
    \22\ Ibid, p. 4.
    \23\ Philip Martin, op cit.
    \24\ See Michael S. Dukakis and J.B. Mitchell, ``Raise wages, not 
walls,'' The New York Times, July 25, 2006, p. A23.
    \25\ Nancy Birdsall, Education: The People's Asset, CSED Worker 
Paper No. 5, September 1999; Nancy Birdsall, David Russ and Richard 
Sabot, ``Inequality and growth reconsidered: Lessons form East Asia,'' 
Economic Review, Vol. 8, No. 3, 1995.
                                 ______
                                 
    [Copies of the report, ``Close to Slavery,'' submitted by 
Ms. Bauer, may be obtained by contacting the Southern Poverty 
Law Center at the following address: Southern Poverty Law 
Center, 400 Washington Ave., Montgomery, AL 36104, or, by 
Internet access at: www.splcenter.org.]
                                ------                                

    [Statement of Michael Dale and Laura K. Abel follows:]
    
    
    
    
    
    
    
    
    
    
    
    
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    Mrs. Davis of California. Without objection, the hearing is 
adjourned.
    [Whereupon, at 1:05 p.m., the committee was adjourned.]

                                 
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