International Economics, Development & Immigration

July 31, 2020 4:24PM

Problems and Insights within NBC’s Report on H-2A Abuses

The H-2A visa program exists to provide U.S. farmers with legal foreign workers when they cannot find U.S. workers as an alternative to illegal immigration and illegal employment. The government requires H-2A employers provide —among other benefits—high wages, free housing, free transportation, and three meals or a kitchen. Despite these requirements, a lengthy NBC News report released this week details a story of horrific abuse of a group of H-2A workers and concludes that “as the H-2A program has expanded, it has left more guest workers vulnerable to abuse.”

Unfortunately, while highlighting important issues and one person's dramatic criminal behavior, the report has several flaws and inaccuracies that incorrectly create the impression of widespread, systematic abuse of H-2A workers. In general, nearly all H-2A workers benefit greatly from working in the United States.

Problems with NBC’s reporting

This post will criticize the use of certain data in this reporting, but I want to be clear at the outset that the narrative component of the story has journalistic merit that does illustrate real issues that can arise with the H-2A program. However, the report grounds its narrative in a couple data points delivered at the top of the piece (along with the graphic) that are problematic:

Last year, the Labor Department closed 431 cases with confirmed H-2A violations — a 150 percent increase since 2014; the agency found about 12,000 violations under the program, with nearly 5,000 H-2A workers cheated out of their wages, according to federal data.

NBC Graphic
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July 30, 2020 11:55AM

Trump, Zoning, and Discrimination

There is perhaps no more archetypical example of the American suburban lifestyle than Levittown. The New York community was developed starting in 1947 as a new opportunity for Americans to own their own homes. The original 2,000 unit planned community sold out almost immediately and became nearly synonymous with the dream of single‐​family homes, white picket fences, and the growing American middle‐​class.

It also included in its lease documents a provision that property in the community could not “be used or occupied by any person other than members of the Caucasian race.”

Such racist practices were actively supported and encouraged by state, local, and federal governments. For example, the Home Owners’ Loan Corporation, a federal agency that provided low‐​interest mortgages to first time homebuyers, insisted that any property it covered must include a clause in the deed forbidding resale to non‐​whites.

Even after such explicit forms of discrimination were outlawed, many communities continued to fight efforts by low‐​income people and people of color to move to their neighborhoods, although their arguments have shifted to terms that do not explicitly mention race. One of the most important and effective tools for maintaining “the character of the community” has been zoning.

Zoning restrictions, including limiting construction to only single‐​family homes, as well as parking requirements, minimum lot sizes, yard/​setback requirements, lot coverage requirements, floor area ratios, and other landscaping requirements, deliberately prevented affordable housing from being built in those communities.

In this video for Cato’s Project on Poverty and Inequality in California, Ricardo Flores, Executive Director of the Local Initiative Support Corporation in San Diego explains how exclusionary zoning has long been used as a tool for discrimination:

Exclusionary zoning has all sorts of consequences that lock people out of the middle class. Educational opportunities, for instance, are too often distributed by zip code, especially in the absence of meaningful parental choice. Exclusionary zoning too often “ghettoizes” the poor and people of color, forcing them into neighborhoods with few jobs, high crime rates, and bad schools. And, by driving up housing prices, it contributes to the soaring epidemic of homelessness in many areas of the country.

Now, President Trump has thrown his support behind those who want to keep affordable housing out of the suburbs. This week he announced an executive order making changes to the Affirmatively Furthering Fair Housing rule (AFFH), an Obama‐​era requirement that localities take steps to combat housing discrimination in their communities. In isolation, it could be argued that the AFFH was unwieldy, unnecessarily intrusive, and in need of reform, but the administration’s actions appear to be part of a larger campaign by Trump and his supporters to block zoning reform that would make affordable housing more widely available in affluent communities. As Trump himself tweeted about his actions, “I am happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood.”

This follows in the wake of several tweets and other statements in which the president and his backers have accused those backing zoning reform of wanting to “destroy the beautiful suburbs,” saying they would, “eliminate single‐​family zoning, bringing who knows into your suburbs, so your communities will be unsafe and your housing values will go down.”

But efforts to eliminate exclusionary zoning are not about destroying the suburbs; it is about letting more Americans share in that “Suburban Lifestyle Dream.”

Project on Poverty and Inequality in California

Even before the economic disruptions caused by COVID-19, far too many Californians were living in poverty. Now, that dire situation can only be expected to grow worse. The Cato Project on Poverty and Inequality in California was launched in 2019 to study the root causes of poverty in California and recommend practical solutions designed to help all Californians prosper and rise as far as their individual talents and abilities will take them. The project draws on decades of Cato’s expertise across a variety of issues, as well as close collaboration with Californians on the front lines of fighting poverty, whether business leaders, elected officials, or local activists.

Find Solutions

Clearly, the president has realized that his support among suburban voters, particularly suburban women, has dropped precipitously. But this effort to play to racial and class prejudices calls back to a much darker era of American politics that many Americans would prefer to leave behind. No doubt we can now look forward to Republicans and conservatives defending government regulations that deliberately stifle free markets and prevent landowners from making their own choices about what to build on their property.

But make no mistake, Trump’s support for exclusionary zoning is not only a blatant appeal to our worst prejudices, it is bad public policy.

July 28, 2020 5:40PM

DHS’s Latest DACA Memo Doesn’t Make Sense

The Department of Homeland Security (DHS) released a new memo to curtail the Deferred Action for Childhood Arrivals (DACA) program. This program has allowed (previously) unauthorized immigrants who grew up in the United States since at least 2007 to stay and receive work authorization. The memo responds to the Supreme Court’s decision last month to block the government’s September 2017 attempt to wind down the program. Here are important facts to understand about this latest memo.

Same as 2017 rescission: As a practical matter, this memo accomplishes many of the same aspects of the September 2017 memo: stop new enrollees, stop travel authorization, and provide for a limited renewal. In September 2017, DACA enrollees had one month to apply to renew for up to 2 years (as has been the case throughout the program). This time, they may only apply for 1‐​year renewals, but there is no explicit cutoff for when the renewals will stop being considered. A cynic might expect a determination about November 4, 2020, which would mean that current participants would be granted a much shorter “wind‐​down” than the last time.

New messaging: While it’s functionally the same, the new DHS memo does not describe itself as a rescission. It says it’s enacting “changes to the DACA policy” while (possibly temporarily) suspending certain aspects of it (new enrollees/​travel authorization). During this time, the government states that it will consider whether to permanently end the program. Again, a reasonable person would expect that the government will conclude this new evaluation sometime in November 2020.

New justifications: The September 2017 memo focused entirely on legal concerns with the policy. The “concerns” raised in this new memo are entirely policy focused. In other words, it’s claiming that DACA might just be a bad idea, even if it’s not illegal. This is a profound shift from the original DACA memo.

New position toward DACA: The government is now unsure whether it wants to end DACA. The government states that “fully rescinding the policy would be a significant administration decision that warrants additional careful consideration.” This is surprising to say the least. Since September 2017, the government has argued that it desperately wanted to end DACA to abide by the law, avoid litigation, and (later on) to further certain policy goals. Will courts accept this sudden reversal or will they conclude that the government is again trying to hide its real reasons for changing DACA?

New treatment of pending new applicants: In the September 2017 memo, the government stated that it would process all pending initial DACA applications (meaning for people who have never had DACA before). In this latest memo, the government will deny all such applications. This is incredibly unfair, particularly since these applicants will mainly be from immigrants who came at the youngest ages (including as young as one‐​year‐​old) because applicants needed to be at least 15‐​years‐​old in order to apply, so only the youngest applicants had no chance to apply before September 2017.

Ignoring the Supreme Court: On June 18, the Supreme Court had explicitly affirmed lower court decisions that stated that the government had to accept new DACA enrollees and travel authorizations, which it hadn’t done since September 2017. A Maryland district court then issued a ruling on July 17 requiring the government to abide by the Supreme Court’s decision. Yet the memo admits, “Since the issuance of the Supreme Court’s decision, DHS has, on an interim basis, generally held properly submitted initial requests for DACA in anticipation of potential policy changes.”

The same Maryland district court recently found that in fact, DHS was denying properly submitted new applications and was asserting erroneously on its website that such applications could not be accepted. In other words, it refused to issue DACA to these applicants, despite the Supreme Court and the district court orders. It now says that it will deny all these initial applications, which it claims are based on “the fortuity of when DHS received the request within a short period of uncertainty” (i.e. after the Supreme Court ruled in favor of those applicants). Will courts accept this? We will find out soon.

Considering but not deciding the issue: The government says it is “considering anew the DACA policy” as suggested by the Supreme Court. Yet it hasn’t actually fully considered the question or come to any actual conclusions about it, yet it is still making decisions to curtail or wind down the program. Will courts accept changes where the agency itself is saying it hasn’t fully considered the questions at issue? We will find out.

Suspect concerns: The policy “concerns” for suspending DACA are suspect. To begin with, DHS claims that DACA could cause more illegal immigration, particularly by children. But it provides no evidence for that because there isn’t any evidence. Indeed, as I have written before, the theory that DACA spurred a rush migrants to the border fails to explain any of the facts. DACA applicants are mainly from Mexico. The children came from Central America. DACA started in June 2012. The rush of children started in January 2012.

The memo asserts that DACA “may tilt the scales in deciding which aliens should receive deferred action.” Yet DACA doesn’t discriminate against non‐​DACA applicants for deferred action. It doesn’t undermine their applications in any way. This explanation is basically like saying that DHS objects to the DACA policy because it doesn’t want Dreamers to receive deferred action. It’s incoherent. Will courts accept a memo based on an incoherent claim?

DHS asserts against all common sense that “rescinding DACA entirely may well create a more pressing need for Congress to decide whether it wants to address this issue.” Not only do we now have ample evidence that ending DACA won’t force Congress to act, DHS’s memo—by laying out policy, not legal arguments against DACA—makes it less likely that Congress will act. This is because DACA opponents in Congress will now have more ammunition to make their case against action.

July 24, 2020 12:39PM

CBP Internal Affairs Is Woefully Understaffed

In the last week, the public has learned that the Department of Homeland Security (DHS) has deployed 2,174 Customs and Border Protection (CBP) agents to Portland, Oregon and other American cities to help combat rioting there. While there are certainly major problems with public safety and property destruction in some of these cities, which should require a robust and legal law enforcement response, there are also many reasons to be worried about the deployment of CBP agents. One of them is that there is very little oversight of CBP law enforcement officers (LEOs) and a long history of disciplinary, performance, and corruption problems in their ranks.

CBP didn’t have an internal affairs department that could investigate criminal misconduct until 2014, 11 years after it was formed in 2003. The old internal affairs department that managed the Immigration and Naturalization Service was attached to Immigration and Customs Enforcement, another sub‐​agency under DHS, and another wasn’t created for CBP until 2014. Internal affairs officers, Office of Personnel Management occupation code 1811, weren’t hired in CBP until early in the fiscal year of 2015 according to OPM data. Still, they number very few on the ground. 

In 2019, CBP had 60,525 employees, 48,035 of whom were LEOs. In the same year, only 255 of them were internal affairs officers. That’s one internal affairs investigator for every 188 LEOs in CBP. By contrast, the New York Police Department (NYPD) has one internal affairs investigator for every 65 sworn officers, and the older internal affairs division at Customs before the 2003 creation of DHS had one internal affairs investigator for every 136 employees.

Since CBP is now enforcing laws against American citizens in the interior of the United States, it should at least have the same ratio of internal affairs officers to LEOs that the NYPD has. That would mean increasing the numbers of 1811 internal affairs agents to 739, a 2.9 fold increase over the current numbers. CBP should have to hire 484 internal affairs officers to investigate criminal complaints and hold CBP LEO’s accountable for their actions.

July 23, 2020 10:06AM

The Murky Origins of the H-2B Program’s Prevailing Wage Rule

The Department of Labor (DOL) requires that businesses that hire workers under the H-2B program—America’s temporary worker program for seasonal nonagricultural jobs—pay a minimum wage known as the “prevailing wage.” This requirement substantially reduces the number of requests for H-2B workers. Yet Congress has never explicitly required employers to pay the prevailing wage to temporary nonagricultural workers, and agencies who invented the rule did so initially without publicly explaining it, making its origins mysterious.

What history is known is lengthy, complex, and bizarre. Not only does the rule not exist in statute, DOL itself never shows up in the statute either. Stranger still, despite the H-2B program tracing its origins to a 1952 law, no “prevailing wage” requirement existed in any formal regulation from any government agency for more than half a century. In 1952, the government proposed a prevailing wage rule, but then dropped it from the final regulations. Two years later, it formally revoked DOL’s regulatory authority over the nonagricultural program, yet the agencies continued to act as if this authority still existed for nearly a decade before the regulation was restored.

For 56 years, DOL determined the H-2B prevailing wage entirely under informal guidance documents, many of which are not publicly available. Even when the documents were public, they often did not provide enough detail to understand how the wages were determined. In 1998, for example, it implemented a skills-based methodology for the prevailing wage it never explained publicly in any form for more than a decade. Amazingly, for several years in the 2010s, DOL issued prevailing wage determinations using this methodology in violation to court orders to stop.

Even now, DOL still calculates the prevailing wage under a methodology that directly contradicts the plain language of a 2004 law restricting the methodology that DOL can use for prevailing wage determinations for any visa program. Its justifications for using the prevailing wage are not obvious logical outgrowths from any part of the law and contradict congressional intent.

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July 21, 2020 12:48PM

Uyghur Genocide Shows Urgency of Combating Neo‐​Malthusianism

Mounting evidence shows that China has enacted wide‐​ranging human rights abuses, including coercive population control, on its Uyghur minority. An Associated Press investigation released in late June showed that while China’s rate of permanent sterilization procedures is falling nationally, the rate in Xinjiang, where many Uyghurs live, has skyrocketed. Many of those surgeries were involuntary. Many Uyghur women are forcibly sterilized after having two children, as third children are illegal in China. The two‐​child policy replaced China’s previous one‐​child policy in 2016.

The immense cruelty of what is happening to China’s Uyghur population demonstrates the inhumanity of China’s two‐​child policy and the urgency of combating the mindset that undergirds it. The way that the policy is enforced is influenced by prejudice against minorities, but authorities justify the policy with neo‐​Malthusianism, defined as the fear that a large population size could lead to a humanitarian and ecological disaster and that combating so‐​called overpopulation is thus an urgent problem. “The tensions between population and resources and environment will not fundamentally change,” noted China’s State Council in its national population development plan for 2016–2030, released in 2017. The plan specifies, according to state‐​run news agency Xinhua, that the government must continue to implement the “two‐​child policy to promote balanced population development.”

Sadly, the view that some groups are less worthy of having children than others has often gone hand in hand with neo‐​Malthusianism, both historically and today. China’s government subjects Uyghurs to strict enforcement of the country’s two‐​child limit, using overpopulation concerns about resource scarcity in part as a cover to make forcibly decreasing the population of a minority more palatable.

Related Event

Fewer, Richer, Greener: Prospects for Humanity in an Age of Abundance

The world is doomed, many people argue, citing poverty, dwindling natural resources, and an allegedly unsustainable rate of population growth. They say there are just too many problems to overcome. But is that really the case? Join the conversation and find out.

Join the Conversation

The neo‐​Malthusian mindset has caused many people outside of China to turn a blind eye to the coercive nature of the one‐​child (now two‐​child) policy. As recently as 2018, New York University law professor Dan Guttman told Harvard Political Review: “With the one‐​child policy, China put into effect the single most effective climate change rule in the world.”

In fact, Western development professionals originally encouraged China’s birth limits. In 1983, the United Nations Population Fund bestowed an award on Qian Xinzhong, head of China’s State Family Planning Commission and the man in charge of the country’s one‐​child policy, as well as Indira Gandhi, India’s prime minister who declared a national “Emergency” that suspended civil liberties and mandated sterilizations on a massive scale between 1975 and 1977.

Fears that without coercion, China would have seen an environmentally damaging “population explosion” are unfounded. China’s birth rate would have fallen without coercion, in the normal course of economic development. Today, even in Sub Saharan Africa, the world’s poorest region, birth rates are falling voluntarily. Projections of world population growth show that the total population of the planet will decline in the long run. Moreover, population growth can coincide with rising prosperity. China’s remarkable economic growth and poverty eradication over the last few decades have been the result of economic liberalization, not regulating women’s allowable number of births.

While many accounts of coerced sterilization and forced abortion have emerged from the Uyghur community, the Han ethnic majority is not exempt. Even as the Chinese national government now frets about falling birth rates’ impact on the country’s economy, many revenue‐​hungry local governments throughout China continue to fine couples for illegal births and enforce childbearing limits.

For example, last year, one couple in Shandong province, who could not afford a fine of $9,570 for violating family planning regulations had their life savings (around $3,000) seized. Also last year, a school teacher in Guangdong lost her job after giving birth to a third child in violation of the two‐​child policy. There are now many hopeful signs that the Chinese government may move toward ending childbearing limits, but that has not yet come to pass.

Today, neo‐​Malthusian thinking is seeing a resurgence. At the 2020 World Economic Forum in Switzerland, famed primatologist Jane Goodall opined, “All these [environmental] things we talk about wouldn’t be a problem if there was the size of population that there was 500 years ago.” The world population 500 years ago is estimated at 420–540 million people, or around 6.7 billion fewer people than today.

Goodall is far from alone in her belief that population growth is an urgent problem. Public figures, ranging from Prince Harry and Bill Nye “the Science Guy” to television host Bill Maher, have all recently expressed overpopulation fears. Last year, Rep. Alexandria Ocasio‐​Cortez (D-NY) famously questioned the morality of childbearing in the face of climate change, asking, “Is it OK to still have children?”

Countering neo‐​Malthusianism is especially critical now given the recent prominence of such thinking. To learn more about the history of coercive population control inspired by neo‐​Malthusianism, and the problematic policies that persist today—including the forced mass sterilization of Uyghur women—consider reading my new paper, Neo‐​Malthusianism and Coercive Population Control in China and India.

July 20, 2020 7:10PM

We’ll Do Anything for American Innovation, But We Won’t Do That

It seems that everywhere you turn these days you’ll find someone in Washington lamenting the collapse of American innovation and industrial output, and, naturally, proposing his own industrial policy to solve the alleged problems. This includes both President Trump and Democratic challenger Joe Biden, both of whom have promised all sorts of subsidies, protectionism and procurement mandates intended to reinvigorate the American industrial base and restore U.S. innovation supremacy. What these plans have mostly failed to emphasize, however, is how freer markets – especially the liberalization of U.S. trade and immigration restrictions – might help to achieve key industrial innovation objectives (without messy and costly central planning) or how they’ve been harmed by past U.S. government restrictions.

A new NBER Working Paper from Wharton’s Britta Glennon adds to a growing body of literature showing just how wrong‐​headed the candidates’ omission of these free market policies might very well be. In particular, Glennon shows that past U.S. restrictions on high‐​skilled immigration (implemented through caps on H1-B nonimmigrant visas) resulted not in an increase in hiring American workers but instead in a substantial offshoring of multinational corporation (MNC) jobs and R&D activities to these companies’ affiliates in more welcoming countries. Perhaps even more concerning, given recent events at home and abroad, Glennon shows that one of the biggest beneficiaries of these U.S. immigration restrictions was China, and that U.S. firms doing the most R&D offshored the most jobs.

Glennon’s conclusions are worth quoting at length (emphasis mine and citations omitted):

[F]oreign affiliate employment increased as a direct response to increasingly stringent restrictions on H-1B visas. This effect is driven on the extensive and intensive margins; firms were more likely to open foreign affiliates in new countries in response, and employment increased at existing foreign affiliates. The effect is strongest among R&D-intensive firms in industries where services could more easily be offshored. The effect was somewhat geographically concentrated: foreign affiliate employment increased both in countries like India and China with large quantities of high‐​skilled human capital and in countries like Canada with more relaxed high‐​skilled immigration policies and closer geographic proximity. These empirical results also are supported by interviews with US multinational firms and an immigration lawyer.

Despite the outsized role that multinational firms play in the economy – for example, US multinational firms are responsible for 80% of US R&D and employ about ¼ of US private employees – policy debates surrounding immigration have largely overlooked the fact that multinational companies faced with decreased access to visas for skilled workers have an offshoring option, namely, hiring the foreign labor they need at their foreign affiliates. This is the first paper to provide evidence that multinational firms do in fact utilize this option – both at the extensive and the intensive margin – and to examine the relationship between foreign affiliate employees and immigrants, in contrast to the relationship between immigrants and native‐​born workers.

The results have important implications for understanding how multinational firms respond to artificial constraints on resources and how they globally re‐​distribute those resources. The results also have important policy implications; the offshoring of jobs appears to be an unforeseen consequence of restricting skilled immigration flows. Even if H-1B immigrants displace some native workers, any policies that are motivated by concerns about the loss of native jobs should consider that policies aimed at reducing immigration have the unintended consequence of encouraging firms to offshore jobs abroad.

The finding that skilled foreign‐​born workers will be hired at foreign affiliates rather than in the US also has important implications for the innovative capacity of the US. Skilled immigrants have been shown to have outsized impacts on innovation in the host country through spillovers. The spatial diffusion of these spillovers disappears with distance since innovative spillovers are geographically localized. From a nationalistic perspective, this is problematic; if skilled foreign‐​born workers are at a US firm’s foreign affiliate instead of in the US, the innovative spillovers that they generate will go to another country instead. Furthermore, the finding that immigrants often are not equally innovative outside the United States has even wider welfare implications. In short, restrictive H-1B policies could not only be exporting more jobs and businesses to countries like Canada [me: and China], but they also could be causing the U.S.’s innovative capacity to fall behind….

Vice President Biden, to his credit, has elsewhere supported “expanding the number of high‐​skilled visas and eliminating the limits on employment‐​based visas by country” in order to boost “American innovation and competitiveness.” Hopefully the Team Biden folks writing the campaign’s immigration plans can talk some sense into their colleagues writing the industrial policy plans, and perhaps even explain how freer access to all global resources – whether high‐​skilled labor or essential goods like steel and machinery – can boost American companies’ innovation, output and global competitiveness while simultaneously denying potential adversaries those same advantages. As Glennon notes, multinational corporations that drive American R&D have other production options abroad, and they’ll use those options when misguided U.S. policies push them to do so.

Unfortunately, President Trump’s longstanding aversion to increased immigration or freer trade – and recent Trump administration efforts to restrict those things even further – provide little opportunity for similar liberalization hopes in the coming weeks or during any second Trump term. To paraphrase a great American poet, they’ll do anything to boost American innovation (or to counter China’s rise), but they won’t do that.