Some Questions about the Labor-Chamber of Commerce Accord on Immigrant Labor

Over the last few days, Big Labor and Big Business have reached a working agreement on one the last (apparently) sticking points in the immigration reform idea being worked by the Immigration Gang of Eight in the Senate.  This agreement, which centers on low-skill “guest workers,” has the following outlines.  These guest workers

  • would be paid the higher of the prevailing industry wage as determined by the Labor Department or the actual employer wage
  • would be allowed to pursue a path to citizenship and to change jobs after they arrived in the United States

Moreover, the visas

  • would be issued under a W Visa program that would start at 20,000 visas, rise to 35,000 visas in the second year, 55,000 in the third, and 75,000 in the fourth.  In the fifth year, the program would expand or shrink based on the unemployment rate, the ratio of job openings to unemployed workers and various other factors.  A maximum of 200,000 guest visas would be granted each year after the fourth, with a maximum of 15,000 visas per year for some construction occupations
  • although low-skilled construction workers would be included, trades like crane operators and electricians would be explicitly excluded
  • one third of all visas available in any given year would go to businesses with fewer than 25 employees

Richard Trumka, President of the AFL-CIO, says of this agreement

We have created a new model, a modern visa system that includes both a bureau to collect and analyze labor market data, as well as significant worker protections.

I have a number of questions about this.

  • Why do we need another government bureaucracy to assess this program and to determine the allowed limits—and wages—to the expanding and contracting visa program?  Why not let the free market determine the demand for labor?
  • Why do we need a minimum wage—which suppresses hiring?  Why not let the market for those low skills determine the wages paid?
  • Why does this guest worker program need a special path to citizenship?  If the immigrants are here legally, and if they’re allowed to stay and to change jobs, they already have the existing citizenship path that any other legal immigrant has.
  • Why do we need a quota on visas?  If the end game is to let the program expand or shrink based all those government-assessed factors, why not, instead, let it expand or shrink more responsively and efficiently based on market factors: demand for labor as driven by demand from consumers and businesses for the product on which that labor will work?

To abuse an old sitcom’s tag line: hold it.  I don’t think you’ll like this picture.

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