Skip to main content

For some employers, 'immigration reform' means cheap labor

By David Frum, CNN Contributor
updated 10:35 AM EDT, Mon March 11, 2013
 President Obama's push to overhaul immigration could mean profits for employers, David Frum says.
President Obama's push to overhaul immigration could mean profits for employers, David Frum says.
STORY HIGHLIGHTS
  • David Frum: Immigration "reform" is a deliberately ambiguous phrase
  • For some employers, immigrants represent a source of cheap labor, he says
  • Frum: Big wave of immigration coincides with decline in labor's share of economy
  • America doesn't have a labor shortage, but wages may be too low, he says

Editor's note: David Frum, a CNN contributor, is a contributing editor at Newsweek and The Daily Beast. He is the author of eight books, including a new novel, "Patriots," and a post-election e-book, "Why Romney Lost." Frum was a special assistant to President George W. Bush from 2001 to 2002.

Washington (CNN) -- "When Dr. Johnson defined patriotism as the last refuge of a scoundrel, he was unconscious of the then undeveloped capabilities of the word 'reform.'"

So quipped U.S. Sen. Roscoe Conkling of New York 130 years ago. The particular reform that irked Conkling was the then-novel proposal to eliminate patronage in federal civil service hiring.

David Frum
David Frum

Conkling lost his argument and lost his battle, but his quip endures -- and applies much more aptly to today's most discussed "reform": immigration reform.

"Immigration reform" is a deliberately ambiguous phrase, a phrase used equally by opposite sides in the immigration debate. Those who want amnesty for illegal immigrants call themselves "reformers." So do those who want stricter enforcement of the laws against illegal immigration.

But there's a third group to be heard, and these are the people who validate Conkling's cynical remark: the group of "reformers" who want to expand and enlarge guest worker programs.

The United States is entering its sixth year of extraordinarily high unemployment. Twelve million Americans who want work cannot find it. Millions more have quit searching. Slack labor markets have depressed wages throughout the economy.

Labor\'s declining share of total income (Sources: Bureau of Labor Statistics, calculations by Margaret Jacobson and Filippo Occhino
Labor's declining share of total income (Sources: Bureau of Labor Statistics, calculations by Margaret Jacobson and Filippo Occhino

Here's the picture that's worth a thousand words, from an economic commentary by Margaret Jacobson and Filippo Occhino for the Federal Reserve Bank of Cleveland.

Whichever of the two competing data series you use, wages account for a substantially lower share of national income today than at any point since World War II, when record-keeping began.

Yet even these dismal findings understate the problem. Remember, "labor income" includes all salary income, including the salaries of the most highly paid, the famous 1%, who have enjoyed the benefit of almost all productivity gains since the 1990s. The wage situation of the typical worker looks even worse than the chart implies.

Rep. Burgess: Citizenship path not easy
Bush pushes for immigration reform

Whatever else you say about the U.S. economy of the 21st century, it cannot be described as suffering from labor shortages.

Yet however little workers earn, there is always somebody who wishes they earned even less. And for those somebodies, the solution is: Import more cheap labor. But not just any cheap labor -- cheap labor that cannot quit, that cannot accept a better offer, that cannot complain.

Bonded labor is the oldest idea in American labor markets. In the 17th and 18th centuries, about half the British migrants to the United States arrived as indentured servants, people who agreed to work for a term of years in exchange for food, lodging, and the cost of their passage. Perhaps you assumed that such arrangements had expired centuries ago? Think again.

The March 8 Wall Street Journal tells the story of 14 foreign students who entered the United States on "J" class visas, which allow three months of work to support student study and travel.

"'Since I got to the States, I have been working just to pay to live in a basement,' says Mr. Rios, who arrived in mid-December and shares the one-room space with five other foreigners who work at the same outlet. He said he worked about 25 hours a week earning $7.25 an hour and Mr. Cheung, his boss, deducted weekly rent of $75 from his pay. ... Kah Inn Lee, a 23-year-old student from Malaysia, said a curtain separated the men's and women's beds in the tiny basement she shared with seven other students in a house owned by Mr. Cheung's son. Earning about $250 a week, she calculates she is in the red after paying for housing and food. To travel after completing her assignment at McDonald's, which ends this weekend, she has asked relatives to wire her money."

Stories like this are often told about the J-1 visa program, which brought about 109,000 students to the United States in 2011.

The Associated Press reported on the program last year: "In August 2011, dozens of workers protested conditions at a candy factory that contracts to pack Hershey chocolates in Hershey, Pa., complaining of hard physical labor and pay deductions for rent that often left them with little money. Then in December, a federal indictment accused the mafia of using the cultural exchange program to bring Eastern European women to work in New York strip clubs."

J-1 visa workers have told investigators that deductions for rent and food reduce their earnings to zero. They have described sexual abuse and exploitation. The State Department has proposed some changes to the program, but -- well, let Alaska's KTVA Channel 11 tell the rest of the story.

Become a fan of CNNOpinion
Stay up to date on the latest opinion, analysis and conversations through social media. Join us at Facebook/CNNOpinion and follow us @CNNOpinion on Twitter. We welcome your ideas and comments.



"Many seafood processors in Alaska rely on foreign students to fill their seasonal employment needs. Now there is uncertainty in the industry because of proposed changes to the foreign worker visa program. These changes could take effect as soon as this spring.

"The federal government wants to remove some jobs offered to foreign students who want to work in the U.S. on a J-1 visa. They include jobs in factories and manufacturing, a potential change that could hit Alaska's seafood processors hard.

"In a letter Senator Mark Begich wrote to Secretary of State Hillary Clinton last month, he says 'such an abrupt change in the available labor pool just before the start of the salmon season would have immediate negative consequences for the companies, and the fishermen and communities, which depend on their operations,'" KTVA reported.

You might wonder: Are there really no Americans who could do these jobs? The unemployment rate for Alaskans 16-24 years old was over 15% in 2011. Mightn't they want the work? Yes, they might. But the wage for lawful American labor in the seafood-processing industry averages over $10 an hour. Employers can cut their wage costs by almost 25% by using J-1 labor instead, according to one union-backed think tank.

And J-1 labor is not only cheaper, but also often more motivated.

"The J-1 student workers have been a godsend for Nancy Blakey, co-owner of Sno-Pac," reported PRI's "The World." "'They're educated, they're bright, and they're working really hard, long hours,' Blakey said. Alaska fish processors started hiring J-1 students in the 1990s when unemployment was low and they couldn't find American workers. The J-1′s are not just hard workers, Blakey said; they're also really interesting.

"'We had a young man come through who was studying nuclear physics. And we were talking, and he loved the beauty of nuclear physics. He was passionate and he was explaining it to me, in his limited English and doing very well. And he was going to be going out to gut fish. I think that's pretty fantastic!'"

The immigration debate is often premised on the assumption that high wages for American workers are a problem to be overcome. If you'll look again at the Cleveland Fed chart above, you'll notice that the collapse in labor's share of national income coincides with the start of the mass immigration influx after 1970. Since then 40 million people have migrated to the United States, most of them very low-skilled. About one-third that number arrived illegally.

Immigration advocates insist that this huge surge of cheap labor has nothing to do with the persistent decline in wages that began about the same time. If so, that's one hell of a coincidence. With President Obama proposing accelerated flows of immigration in future, American workers should ready themselves for more coincidences ahead.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of David Frum.

ADVERTISEMENT
Part of complete coverage on
updated 8:42 AM EDT, Mon August 18, 2014
The former U.K. prime minister and current U.N. envoy says there are 500 days left to fulfill the Millennium Goals' promise to children.
updated 9:10 AM EDT, Mon August 18, 2014
Julian Zelizer says the left mistrusts Clinton but there are ways she can win support from liberals in 2016
updated 7:49 AM EDT, Tue August 19, 2014
Peter Bergen says the terror group is a huge threat in Iraq but only a potential one in the U.S.
updated 1:34 PM EDT, Sat August 16, 2014
Mark O'Mara says the way cops, media, politicians and protesters have behaved since Michael Brown's shooting shows not all the right people have learned the right lessons
updated 11:23 AM EDT, Sun August 17, 2014
Retired Lt. Gen. Mark Hertling says the American military advisers in Iraq are sizing up what needs to be done and recommending accordingly
updated 3:41 PM EDT, Fri August 15, 2014
Marc Lamont Hill says the President's comments on the Michael Brown shooting ignored its racial implications
updated 5:46 PM EDT, Fri August 15, 2014
Joe Stork says the catastrophe in northern Iraq continues, even though many religious minorities have fled to safety: ISIS forces -- intent on purging them -- still control the area where they lived
updated 6:26 PM EDT, Thu August 14, 2014
Tim Lynch says Pentagon's policy of doling out military weapons to police forces is misguided and dangerous.
updated 9:15 AM EDT, Fri August 15, 2014
S.E. Cupp says millennials want big ideas and rapid change; she talks to one of their number who serves in Congress
updated 7:57 PM EDT, Thu August 14, 2014
Dorothy Brown says the power structure is dominated by whites in a town that is 68% black. Elected officials who sat by silently as chaos erupted after Michael Brown shooting should be voted out of office
updated 7:49 AM EDT, Thu August 14, 2014
Bill Schmitz says the media and other adults should never explain suicide as a means of escaping pain. Robin Williams' tragic death offers a chance to educate about prevention
updated 11:05 AM EDT, Fri August 15, 2014
Nafees Syed says President Obama should renew the quest to eliminate bias in the criminal justice system
updated 4:24 PM EDT, Thu August 14, 2014
Eric Liu says what's unfolded in the Missouri town is a shocking violation of American constitutional rights and should be a wake-up call to all
updated 3:22 PM EDT, Wed August 13, 2014
Neal Gabler says Lauren Bacall, a talent in her own right, will be defined by her marriage with the great actor Humphrey Bogart
updated 6:56 AM EDT, Fri August 15, 2014
Bob Butler says the arrest of two journalists covering the Ferguson story is alarming
updated 4:35 PM EDT, Wed August 13, 2014
Mark O'Mara says we all need to work together to make sure the tension between police and African-Americans doesn't result in more tragedies
updated 4:06 PM EDT, Mon August 18, 2014
Pepper Schwartz asks why young women are so entranced with Kardashian, who's putting together a 352-page book of selfies
updated 7:08 PM EDT, Wed August 13, 2014
Michael Friedman says depression does not discriminate, cannot be bargained with and shows no mercy.
updated 8:51 AM EDT, Tue August 12, 2014
Mary Allen says because of new research and her own therapy, she no longer carries around the fear of her mother, which had turned into a generalized fear of everything
updated 3:59 PM EDT, Tue August 12, 2014
Gilbert Gottfried says the comedian was most at home on the comedy club stage, where he was generous to his fellow stand-up performers
updated 4:54 PM EDT, Tue August 12, 2014
Iris Baez, whose son was killed by an illegal police chokehold, says there must be zero tolerance for police who fatally shoot or otherwise kill unarmed people such as Michael Brown
updated 8:46 AM EDT, Tue August 12, 2014
Maria Cardona says as he seeks a path to the presidency, the Kentucky Senator is running from his past stated positions. But voters are not stupid--and they know how to use the internet
updated 10:19 PM EDT, Tue August 12, 2014
Gene Seymour says the shock at the actor and comedian's death comes from its utter implausibility. For many of us over the last 40 years or so, Robin Williams was an irresistible force of nature that nothing could stop.
updated 3:51 PM EDT, Tue August 12, 2014
Soledad O'Brien says the story of two veterans told in a documentary airing on CNN shows the challenges resulting from post-traumatic stress
updated 11:25 AM EDT, Tue August 12, 2014
LZ Granderson says we must not surrender to apathy about the injustice faced by African Americans
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT