May 22, 2020 11:16AM

Private School COVID-19 Permanent Closure Tracker— May 22, 2020

33 private schools have announced that they are closing permanently at least in part due to the COVID-19 economic downturn. That is up from 26 on our special Monday, May 18 update.

We have adjusted how we collect enrollment data, using a combination of media reports, Private School Review, and direct contact with schools. 5,690 students attend the schools that are closing, up from 5,217 on Monday. Were all of these students to go to public schools, and had none been part of publicly connected school choice such as voucher programs or scholarship tax‐​credits, the new cost to the public purse would be roughly $88,000,000 ($15,424 per student multiplied by 5,690).

Private school permanent closure 5/22/20

As always, the list is expected to grow as schools learn more about the impact of the economic downturn on enrollment and income for the coming school year. We will ordinarily post an update on Cato’s blog every Friday, but if the list reaches 100 schools we may transition to an online, searchable format. You can contact CEF director Neal McCluskey if you need more current numbers, if you know of permanent closures not on the list, or if you believe schools have been listed by mistake. We also welcome suggestions for improving the list.

May 21, 2020 3:07PM

Why Ban Foreign Workers From H-2B Jobs U.S. Workers Rejected?

President Trump is reportedly considering a ban on H-2B temporary workers that a few Republican senators proposed this month. Companies hire H-2B workers in seasonal jobs outside of traditional farms, such as landscaping, meat packing, and seafood processing. The plan is supposed to “save” jobs for U.S. workers. Yet this justification holds no water: unemployed Americans already reject 100 percent of jobs for which H‐​2Bs are hired.

H-2B regulations require that employers recruit U.S. workers before they can hire any foreign workers. Employers must do the following:

  • Not lay off any qualified U.S. worker for 120 days before the job start date;
  • Post a notice of the job’s availability for all current U.S. employees;
  • Contact all its former U.S. workers in the prior year and solicit their return to the job;
  • Have the State Workforce Agency post the job on the state’s electronic job registry for unemployed U.S. workers for about 60 days; and
  • Recruit and accept all qualified U.S. workers interested in the position until three weeks prior to the job start date.

In other words, the H-2B program already has a built‐​in unemployment adjustment. When unemployment increases, H-2B approvals automatically fall, and not just because of a government mandate, but also because employers won’t hire anyone for jobs that aren’t in demand right now. There aren’t too many carnivals in operation right now, so that industry will not be requesting workers this year. Figure 1 shows how during the last spike in unemployment, the number of H-2B requests and approvals fell quite significantly.

But Figure 1 shows that unemployed Americans won’t accept certain H-2B positions even when unemployment is high. Landscaping, forestry, meat and poultry processing, and certain construction jobs are so physically demanding that Americans would simply prefer unemployment to taking them. In many cases—such as in forestry—the jobs require constant time apart from family and friends. It is not reasonable to expect that temporarily furloughed Americans will ditch inflated unemployment benefits for dangerous and physically taxing jobs away from their families.

These recruitment and acceptance requirements come on top of onerous wage and hour regulations that require employers to pay inflated wages and benefits to both the new hire and all existing similar employees. The H-2B minimum wage requirements exceeded every state’s minimum wage requirement by an average of 60 percent last year.

During the economic recovery, the goal should be to help businesses get back to the pre‐​pandemic status quo as quickly as possible. Forcibly keeping jobs open hinders that goal and will delay the recovery, hurting U.S. workers elsewhere in the economy. The government should stop trying to micromanage the labor force and focus on addressing the actual cause of the unemployment crisis: the COVID-19 outbreak.

May 20, 2020 5:26PM

Temperature Checks At Businesses: Sued If You Do, Sued If You Don’t

Last week in this space I noted that many businesses are faced with puzzling dilemmas as they try to reopen with social distancing without running afoul of the Americans with Disabilities Act. One issue I didn’t mention: if they require the wearing of face masks as a condition of entering the premises, they may run into some customers who claim to have non‐​obvious disabilities which entitle them, as an accommodation under the ADA, not to have to wear a mask. Even if they strongly suspect such a customer of pulling a fast one, it may seem the less risky legal course just to back off, given that the law confers on business no right to demand medical documentation.

One issue I did mention last week is that the ADA creates legal risks should a business screen those who enter the premises for fever using some method such as a contact‐​free temperature gun. (Amazon announced last month that it was checking more than 100,000 employees a day this way, and checks at store entrances are familiar in some Asian countries.) Two new articles make it clear that this is one of those situations where you can look forward to being sued if you do and sued if you don’t.

Consider first a Slate article arguing against legislation to protect businesses from lawsuits related to COVID-19. The gist of its argument is that we already have a litigation system under which “liability is not likely to present a huge problem” or pose “burdensome difficulties” for businesses that “take reasonable action to keep their customers safe.” Welcome news, and so simple too!

But now that you think of it, how do we identify in hindsight a business whose safety efforts have fallen short of what is reasonable? The Slate article has some ideas on that:

A business that might be considered to have properly reopened can still find itself liable to customers for failure at the level of implementation of whatever safety protocols are required. …. what if a reasonable business would do more, such as taking the temperature of each customer as they enter the business? (Even though that’s not being widely done in the United States right now, it’s an easy precaution to take — and can at least bring down the rate of transmission.)

In sum, then, if someone sues you claiming to have contracted the virus at your business establishment, and their lawyer’s main theory is that you should have been doing front‐​door temperature checks, Slate is going to nod and say the system is working as it should.

Meanwhile, the New York Times reports that the venerable American Civil Liberties Union has issued a new report that is strenuously critical of temperature‐​sensing technologies as a screen against contagion in public places, even when done by businesses on private property. (You may wonder how the ACLU came to see pushing back against private business practices as part of its mission — especially when it lets slide so much rights‐​mangling activity by governments — but that’s another, and sadder, story.)

The ACLU report makes much of various facts that hardly anyone disputes — temperature sensors are far from ideally accurate, some people return “hot” results who do not have COVID-19 while others who do have it are not running a fever, and so forth. The argument for sensors has never been that they are perfect, but that by detecting at least some potentially contagious arrivals, they shift the odds and thus reduce overall spread of the disease in conjunction with de‐​crowding, mask use, and other measures. The report concludes that temperature sensing should go forward only if public health authorities affirmatively call for its use, and it flags possible theories, from data privacy to disparate racial impact, by which lawyers might trip up unwary businesses that go forward with it absent such a mandate.

In its wisdom, the American legal system does not give you a way to avoid legal exposure, with all its costs and miseries — but at least it gives you some choice as to which set of lawyers you will have to face off against.

May 20, 2020 3:26PM

The Facts about Optional Practical Training (OPT) for Foreign Students

The Trump administration reportedly is considering a plan this week to restrict or ban foreign students from working after graduation from U.S. universities. Under Optional Practical Training (OPT), foreign students can study for at least one year after receiving their degrees. Foreign students in Science, Technology, Engineering, or Math fields can extend OPT for another two years.

The plan is supposedly to benefit unemployed Americans—almost none of whom work in the relevant fields—after states reopen for business. The program is the main on‐​ramp for American companies to recruit and retain foreign talent in the United States. Gutting it would harm U.S. workers by undermining the very companies that would employ them.

What is the OPT?

The U.S. government created the Optional Practical Training (OPT) in 1947 to allow foreign student to seek jobs “where employment for practical training is required or recommended by the school” for “a six‐​month period subject to extension for not over two additional six‐​month periods.” In 1991, it split OPT into pre‐​completion and post‐​completion authorization and permitted only a single year of post‐​completion OPT “directly related to his or her area of studies.”

What is STEM OPT?

In 2008, the Department of Homeland Security (DHS) permitted extensions of OPT for Science, Technology, Engineering, or Math (STEM) graduates of U.S. universities for up to 17 months because the “ability of U.S. high‐​tech employers to retain skilled technical workers, rather than losing such workers to foreign business, is an important economic interest for the United States.” In 2016, DHS extended the period to 24 months, allowing for a 3‐​year period of total post‐​graduation employment. The 2016 rule requires employers hiring a worker on a STEM OPT extension to attest that the worker is not replacing a U.S. worker and will receive similar pay to the employer’s similarly situated U.S. workers. DHS can conduct an on‐​site audit to review employer records to confirm the accuracy of these attestations.

How many foreign students apply for OPT?

In fiscal year 2019, U.S. Citizenship and Immigration Services (USCIS) approved 223,284 requests for Employment Authorization Documents (EADs) for all types of OPT—the highest number ever. Nearly all approvals were for post‐​graduate OPT—either regular OPT (152,029) or STEM (69,353). Figure 1 shows that the numbers of approved EADs has nearly tripled from less than 80,000 in 2003 to more than 223,000 in 2019—nearly all of this growth occurred during the Obama administration from FY 2009 to partway through FY 2017. STEM OPT accounts for almost half the growth.

How many OPT recipients are employed?

Not all OPT recipients find jobs, but a much greater share are finding them than in the recent past. Unfortunately, an exact comparison between the share with and without jobs is not available, but Figure 2 compares OPT approvals to OPT participants with jobs. In 2007, there were more than 3 approvals for each participant with a job. By 2018, the ratio was nearly 1:1. Overall, 200,162 OPT participants had jobs in 2018.

What companies employ OPT participants?

Table 1 displays the top 100 companies for OPT hires in 2018 and 2017 as well as the entire period from 2003 to 2018. The largest OPT employer with 2,911 OPT employees was Amazon, which makes most of its hires under the STEM OPT program. Other technology companies—Integra, Intel, Google, and Microsoft—fill out the top 5 with more than 1,000 employees each. The Top 100 companies make 18 percent of OPT hires. Under the H-1B program, the Top 100 employers make 35 percent of H-1B hires. This disparity is compatible with previous research concluding that OPT is more common among startups than the more expensive, complex, and bureaucratic H-1B program.

What countries do OPT participants come from?

In 2018, two thirds of OPT participants came from India and China, according to the Institute of International Education (IIE). IIE—with the sponsorship of the U.S. Department of State—conducts a survey of international students including those with OPT. It shows that an astounding 42 percent of Indian international students are currently enrolled in OPT. That share is well over double the rest of the world. The difference can be partly attributed to the difficulties that Indians have obtaining employment‐​based green cards compared to the rest of the world. They end up using OPT to maintain status in the United States, while other nationalities can simply adjust to permanent residence.

IIE doesn’t report data specifically on STEM OPT, but Immigration and Customs Enforcement data show that again, India represents 59 percent of all STEM OPT participants, and 40 percent of Indian STEM students are involved in OPT—by far the highest share of any nationality with more than 2 participants. It also shows that the United States risks losing nearly half a million STEM students if the government rescinded OPT.

How has COVID-19 affected OPT occupations?

OPT participants can work in any field directly related to their major, but as the list of employers makes clear, they overwhelmingly work in technology and computer professions. As Stuart Anderson first noticed, computer occupations have almost entirely remained unscathed by the recent economic downturn. As of mid‐​April, the unemployment rate had actually declined slightly since January. Anderson comments that this positive employment situation “makes citing unemployment in these occupations as a reason for new restrictions on H-1B visas and international students on OPT more dubious.”

What does research say about OPT?

Business Roundtable and the Interindustry Forecasting Project at the University of Maryland found that “scaling back OPT would cause the unemployment rate to rise 0.15 percentage points by 2028.” In 2019, economist Madeline Zavodny found that “A larger number of foreign students approved for OPT, relative to the number of U.S. workers, is associated with a lower unemployment rate among those U.S. workers.” In March 2019, Jeremy Neufeld used OPT data to conclude that “higher levels of OPT participants in a region lead to increased innovation in that region, as measured by the number of patents, higher average earnings among the college educated. In addition, it finds no evidence of adverse effects on average earnings, unemployment, or labor force participation.”

Stuart Anderson has also found that 39 percent of Nobel Prizes in chemistry, medicine, and physics since 2000 have been immigrants to the United States. International students dominate the STEM majors. NFAP has also found that in 2015, more than three quarters of the graduate students in electrical engineering, petroleum engineering, computer science, and industrial engineering were international students. A majority of the graduate students in pharmaceutical sciences and chemical engineering—two majors of particular interest today—were also foreign‐​born. In 2018, NFAP found that nearly a quarter of American startups valued at $1 billion or more had a founder who entered the Untied States as an international student, which had created 1,200 jobs per company. Michelle Zatlyn, co‐​founder of Cloudflare, and Ashifi Gogo, founder of Sproxil, both used OPT to launch their businesses.

In 2008, the Department of Homeland Security (DHS) when it launched STEM OPT concluded that the expansion was a national security necessity. “With their large and growing populations of STEM‐​graduate scientists, high‐​tech industries in [Russia, China, and India] and others in the OECD now compete much more effectively against the U.S. high technology industry.” It notes that China and India had 31 percent of global R&D staff up from 3.2 percent in 1990. It would be strange for the department to reverse itself completely a decade later, even as the underlying trends continue.

May 20, 2020 12:37PM

The COVID-19 Pandemic Makes California’s Housing Crisis Even More Urgent

By Michael D. Tanner and David Hervey

For Californians who have long opposed building more housing in their communities, COVID-19 has provided a new and seemingly convincing argument: density is dangerous. Some have even suggested that the pandemic vindicates proponents of “single‐​family sprawl” or justifies a moratorium on new housing legislation, which are views these observers would likely hold regardless of the current crisis.

At first glance, the argument against density seems correct, but evidence suggests there are other factors at play. A virus that transmits person to person is much more likely to spread in areas where large numbers of people congregate. That’s one reason why urban centers like New York City, Chicago, Detroit, and Los Angeles have been hit hard. And, it is the logic behind social distancing. But, as with so many anti‐​housing arguments, there is less here than meets the eye.

Simply look at those Asian countries that have done a far better job of containing the virus than we have, despite extreme density. For example, Seoul, South Korea is about 50 percent denser than NYC but has had less than one percent as many cases per capita. Likewise, extremely dense Singapore, Hong Kong, and Taipei have held their infection rates to much lower levels than cities in this country. Undoubtedly, previous experience with infectious diseases like SARS improved not only governments’ responses to the current crisis but also individuals’ responses, vastly outweighing any effect density may have had.

Turning to Europe, we also find the link between density and infections to be weaker than expected. Berlin, for instance, is about four times as dense as France’s Ile‐​de‐​France region (which includes Paris) and only slightly less dense than London but has only about half as many COVID-19 cases as either, on a per capita basis. Density clearly wasn’t the central determinant here: other factors had a much bigger impact.

Even looking at New York City and its surrounding environs shows a muddled picture, with less dense Westchester and Suffolk counties showing higher infection rates than extremely dense Manhattan. And, in California, San Francisco has a lower infection rate than Los Angeles, despite being about six times denser. Perhaps even more surprisingly, San Francisco’s infection rate is about the same as Kansas’ (2.24 cases per thousand San Franciscans versus 2.54 cases per thousand Kansans).

In addition, we should remember that California’s lack of affordable housing creates its own kind of density, one that is even more conducive to the virus’s spread. There is a big difference between people in their own apartments in a dense multi‐​family structure and several roommates jammed together in a tiny space because it is all that is available or affordable.

A study of COVID-19 cases in New York showed that crowding (generally defined as more than one resident per bedroom) contributed to higher rates of COVID-19, while density, in general, did not. The data from California also indicates this: San Diego County, with about 7% of households living in crowded homes, has a lower rate of coronavirus infections than either Los Angeles or San Francisco counties, which have higher rates of crowding. Conversely, Los Angeles County, with a higher rate of crowding (about 11%) has the highest infection rate of the three counties. San Francisco’s crowding rate is only slightly higher than San Diego’s. at 7.1%, and this helps explain its similarly‐​low infection rate.

California’s lack of affordable housing also contributes to the state’s growing homelessness crisis. Yet, the homeless are both extremely vulnerable to infection and a potential source of spread to the population at large. In addition to makeshift efforts to get the homeless off the streets by housing them in hotels or other temporary fixes, California would be well‐​served by ensuring a bigger supply of affordable housing.

Moreover, the economic toll from the pandemic and “shelter in place” orders will fall most heavily on California’s poorest citizens, many of whom are already one missed paycheck away from homelessness. Rent and eviction freezes can create more problems than they solve and can’t last forever. Failing to build more housing will ultimately make the pandemic’s toll worse.

In turns out that the evidence of the impact of California’s excessive housing regulations is far stronger and more convincing than arguments about density and coronavirus. We know that strict zoning and density regulations prevent the construction of affordable housing in America’s urban areas. We also know that many of these laws are part of America’s history of institutional racism and segregation. The COVID-19 crisis does not change these facts.

Perceptions and expectations, whether they are accurate or not, have a way of shaping future behavior and policymaking. Housing affordability will remain a problem for America’s cities long after the current crisis subsides. We can’t afford to let misinterpretations of the pandemic’s causes get in the way of long‐​term efforts to relax the outdated restrictions that prevent affordable housing in so many of California’s cities.

May 19, 2020 10:31AM

What COVID-19 Tells Us About AI Inventors

By Rachel Chiu

Covid-19 Microscopic Image

Scholars have associated artificial intelligence (“AI”) with many words over the years: overhyped, underdeveloped, and even science fiction. But COVID-19 demonstrates that despite the skepticism and hysteria there is a place for AI in society, even if that space is still legally undefined. Since AI inventorship is not suitably addressed in U.S. patent law, the advancement of AI presents practical and conceptual challenges for the aging patent system.

AI refers to the simulation of human intelligence performed on machines that can imitate cognition and evaluate autonomously. Expertise in pattern recognition has rendered AI incredibly useful, proving to be a more‐​than‐​competent companion in the study of COVID-19 diagnosis, treatment, and projections. Last month, the startup BenevolentAI made headlines when its AI system identified the rheumatoid arthritis medication, baricitinib, as a potential COVID-19 treatment. Baricitinib is currently in COVID-19 clinical testing.

The application of burgeoning AI technology in unprecedented times shows us how valuable it is. Yet as we reap greater benefits from AI during the COVID-19 pandemic, the persistent quandary over definitions, rights, and protections remains. Upon reaching the other side of this health crisis, we will know that AI had a role in getting us there— but lawmakers and regulators will still not know how to effectively protect and incentivize AI innovations.

Read the rest of this post »
May 18, 2020 1:52PM

Private School COVID-19 Permanent Closure Tracker, Enrollment Data Added: May 18, 2020

Last week’s Private School COVID-19 Permanent Closure Tracker prompted several people to send reports of closing schools that we had not previously captured, and one additional closure was announced after we published. We have also added enrollment numbers to our list so that we can track the number of students who are being displaced. Given the influx of schools and new enrollment column, we are publishing a special Monday update.

The list now has 26 schools with a total enrollment of 5,217. Were all of these students to go to public schools, and had none been part of publicly connected school choice such as voucher programs or scholarship tax‐​credits, the new cost to the public purse would be approximately $80,000,000 ($15,424 per student multiplied by 5,217). This is a rough estimate – some of these students may have attended their current school using a choice program such as a voucher; different kids have different needs and hence require different levels of resources; etc.

Private school permanent closure 5/18/20

Enrollment data come from Niche​.com and may be revised as better data come available. As always, the list is expected to grow as schools learn more about the impact of the economic downturn on enrollment and income for the coming school year. We will ordinarily post an update on Cato’s blog every Friday, but if the list reaches 100 schools we may transition to an online, searchable format. You can contact CEF director Neal McCluskey if you need more current numbers, if you know of permanent closures not on the list, or if you believe schools have been listed by mistake. We also welcome suggestions for improving the list.