The Business-Labor Immigration Deal

Moneybox
A blog about business and economics.
April 1 2013 9:12 AM

What's in the Business-Labor Deal on Immigration?

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Photo by John Moore/Getty Images

The most politically juicy aspect of immigration reform has to do with the people who are already here. Those who either sneaked across the border or overstayed visas and have been living and working in the United States for some time. But even if consensus is reached on this issue, there's still the important question of future immigration. The Gang of Eight Senators working on reform took the interesting tack of directly asking the Chamber of Commerce and the AFL-CIO to negotiate on this question interest group to interest group, and over the weekend those business and labor groups reached a deal on how to allow nonseasonal low-skilled migrant workers into the country in the future.

Specifically, a new class of visas—W visas—will be created. These are being described by many in the press as visas for guest workers, but labor sources don't like that characterization and would say instead that W visas are an alternative to guest workers. The key bullets about W visas are as follows:

  • Recipients would be allowed to petition for permanent status after completing their term.
  • Recipients are allowed to switch jobs while in the United States.
  • There will be at most 20,000 W visas in the first year, 35,000 in the second year, 55,000 in the third, and 75,000 in the fourth.
  • Starting in the fifth year, the number of W visas will be capped at 200,000, but the actual number will be determined by a new Bureau of Immigration and Labor Market Conditions based on labor market conditions.
  • In terms of allocating the visas, priority will be given to occupations experiencing certified shortages as per the BILMC.
  • If labor market conditions are weak, there could be as few as 20,000 W visas in any given year.
  • Importantly permissible wages for W visa holders will be set to try to ensure no negative impact on U.S.-born workers in the same occupational category, which is a fairly tight constraint. Wages will be the greater of the actual wage level paid by the employer to individuals with similar levels of experience or the "prevailing wage" for the occupational category in question.
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All things considered, I would broadly classify this as a case of labor getting what it wants. The conceptual underpinnings of the system are very similar to what Ray Marshall has outlined at the union-friendly Economic Policy Institute over the years, and reading between the lines a bit, a key bottom line is that businesses can't use W visas to undercut building trades union wage levels. The Chamber of Commerce is, I think, willing to be happy with this largely because they're only compromising relative to some fantasy plan. A path to citizenship for the existing stock of unauthorized migrants is good for business, allowing more high-skilled immigrants is good for business, and creating this new category of nonseasonal work visas is also good for business even if it's restricted in some ways. My main concern with the plan is that if we're putting our faith in this Bureau of Immigration and Labor Market Conditions, then I don't understand why we're not allowing them to decide that 250,000 or 350,000 or 450,000 W visas is the right number if the circumstances warrant it.

The main question that's not answered by the information currently available is what does this petitioning for permanent status process look like. Petition whom? With the decision made on what basis?

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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