Wage Rules for Foreign Workers — A Followup

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Yesterday I wrote about a dispute over wage rules for foreign workers that’s delaying the Gang of 8 from producing a draft immigration bill. I’ve now learned a bit more about this, thanks to Daniel Costa of EPI, and wanted to pass along a few further details.

This wasn’t clear to me from the original LA Times article I read, but apparently this dispute is over an expansion of the current H-2B visa program for seasonal guest workers. These workers are already required to be paid the local prevailing wage, and one option for calculating this is a four-tier wage structure tied to skill levels. For example, here are the rates for landscapers in Baltimore:

  • Level 1 Wage: $9.01 hour
  • Level 2 Wage: $10.60 hour
  • Level 3 Wage: $12.20 hour
  • Level 4 Wage: $13.79 hour

The AFL-CIO has long wanted to ditch the four-tier structure and move to a single wage based on the local average. Employers have opposed this for just as long. A couple of years ago, in response to a court order, the Department of Labor issued a new rule that eliminated the four-tier structure and instead relied on a single mean wage (usually equivalent to the Level 3 wage), but Congress has blocked it from being implemented.

So the current dispute is really nothing new. Employers are eager for the H2-B program to be expanded to include nonseasonal jobs. However, there’s little evidence of a labor shortage in the occupations likely to be most affected, which means an influx of new workers would probably drive down wages. As its price for going along with this, the AFL-CIO wants to set the prevailing wage at the mean level once and for all. The Chamber of Commerce is opposed because most guest workers are currently certified at the Level 1 wage, so the new rule would mean they’d have to start paying higher wages.

When I wrote about this yesterday, I suggested that the AFL-CIO proposal represented a “complicated new set of wage rules for the private sector,” and obviously that’s not the case. It would actually be simpler than the current rule.

I also suggested that the politics of this was difficult because it requires all guest workers be paid the average prevailing wage. Since some American workers are obviously paid less than average, this would, in effect, mean mandating higher wages for foreign workers than for (some) U.S. citizens. This is still arguably the case, though the political dynamics are obviously a little complicated.

So that’s that. This isn’t a topic I’m likely to spend a ton of time on, but since I wrote about it yesterday I wanted to follow up today now that I know more about it.

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