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Policy: Labor

Immigration reform shouldn't mandate union wages

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Diana Furchtgott Roth,Op-Eds,Labor unions,Immigration,Labor,Analysis

Immigration reform as approved by the Senate provides a path to legal status and eventual citizenship for the 11 million undocumented workers in America, adds biometric verification for visitors entering and leaving the country, and expands visas for skilled and unskilled workers, all worthy goals.

But the bill's bureaucratic wage provisions encourage illegal immigration by setting wages for immigrants above their true wage. This must be fixed in the House. If employers are required to pay immigrants inflated wages, firms will be tempted to hire off the books, or not at all.

Let employers decide what wages to pay and give immigrants the freedom to change jobs if they think they're underpaid. That will prevent employers from using immigrants to undercut Americans' wages.

The immigration bill states that "the Secretary of Labor shall make available to employers a governmental survey to determine the prevailing wage." But the Labor Department has no reliable way of determining prevailing wages.

In the Occupational Employment Statistics survey published by the Bureau of Labor Statistics discussed here, employers classify their workers into 12 wage categories, but they do not report the skills that go into each category. Further, wages do not include bonuses, overtime, or benefits.

That makes it difficult to assign the right value to a particular individual, such as a recent college graduate with a computer science degree, with a prevailing wage.

Under the provisions of the bill, the Labor Secretary is supposed to provide employers with averages of wages surveyed — the average of all wages, the average of the lower two-thirds, and the average of the upper two-thirds.

Employers must pay potential immigrants either one of the averages calculated by the Labor Secretary, or the actual wages paid to other workers with similar characteristics, whichever is higher.

Since the prevailing wage is an average of all workers' wages, it will be higher than entry-level workers and lower than senior workers.

So under the wage system in the Senate bill, an entry-level immigrant will be required to be overpaid because employers have to pay them the average. If the law were followed, employers will be limited to hiring more senior and experienced foreign workers.

Younger immigrants will simply not be hired at a prevailing wage that is the average of all wages surveyed, or the average of the lowest two-thirds of wages surveyed. And America needs young, bright immigrants.

The bill requires employers to pay some individuals performing exactly the same work entirely different wages because the Labor Secretary must set the wages for young immigrants higher.

Different wages for identical work will be certain for younger, less-experienced workers. Such a scheme would be patently illegal under federal labor law today. This provision of the Senate bill is not a step forward but a leap backwards.

Adding to the bureaucracy, the bill establishes a "Bureau of Immigration and Labor Market Research" to study and designate shortage occupations. It notes that "Such methodology must designated [sic] Alaskan seafood processing in zones 1, 2, and 3 as shortage occupations."

Governments that have tried to set wages invariably fail. The biggest loser is not the government, but the workers who are deprived of jobs and are left with no legitimate means to support themselves.

Provisions of the Senate bill that propose government wage setting will only encourage employers to break the law, leaving America with renewed problems of illegal immigrants.

People seek to come to America because America, with all of its weaknesses, still has much to offer. That is why it is important that we get our laws right, especially our immigration laws.

DIANA FURCHTGOTT-ROTH, a Washington Examiner columnist (dfr@manhattan-institute.org) and former chief economist at the U.S. Department of Labor, is a senior fellow at the Manhattan Institute for Policy Research.

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