The Substantial Pitfalls of Guest-worker Programs: Who Wins and Who Pays?

Mike Scruggs

 In 1997, after several years of thorough study, the Commission on Immigration Reform, headed by the late Congresswoman Barbara Jordan adamantly rejected guest-worker programs as a solution to illegal immigration. Past guest-worker programs exacerbated rather than relieved immigration problems. The Commission specifically stated that a guest-worker program would be “a grievous mistake” and gave powerful reasons for rejecting such programs.

• Guest-worker programs have depressed the wages of American workers.
• Those most adversely affected were the unskilled and thus poorest segment of the American labor force.
• Foreign guest workers are often more exploitable than U.S. workers.  They are less likely to complain of exploitive pay practices or unsafe working conditions.
• The presence of large numbers of guest workers in particular localities presents substantial costs in housing, healthcare, social services, education, and basic infrastructure that are borne by the broader community and even the federal government rather than by the employers who benefit from cheap labor.
• Guest-worker programs also fail to reduce illegal immigration.  In fact, they tend to encourage more illegal immigration. Guest workers often violate their work visa by going illegal and jumping to a better job. They then remain in the country permanently in violation of the conditions of their admission. They also have many birthright citizen babies at public expense.

In the joint hearings before the U.S. Senate and House committees on immigration, a distinguished member of the Commission, Rev. Theodore Hesburgh, President Emeritus of the University of Notre Dame, carefully explained that:

“The idea of a large, temporary work program is tremendously attractive.  Perhaps a better word though, would be ‘seductive.’ There is a superficial plausibility to this argument, and the Commission gave it serious consideration for more than a year and a half…. In the end, we were persuaded after much study, that it would be a mistake to launch such a program.”

He went on to point out some serious questions about effective control of temporary worker programs and enumerated some important failings of past temporary worker programs.

• Temporary worker programs need some limits, which would require serious attention to effective enforcement.
• It is difficult to turn off such programs once started.
• A large program would build a dependency on foreign labor in certain sectors of the economy.
• Without strict enforcement of employer sanctions against hiring other illegal immigrants, a temporary worker program would stimulate new migration pressures in the long run, exacerbating rather than curtailing illegal immigration
• “Certain jobs would be identified with foreigners,” which would effectively stigmatize such jobs.

 Sociological Tipping of a Workforce

(Related to Rev. Hesburgh’s last point on stigmatizing jobs, my own observations indicate, for example, that construction, landscaping, and hospital cleaning maintenance crews tend to “tip,” going quickly from just a few immigrant workers to nearly all immigrant workers in a local economy once local employers begin the trend of hiring cheap foreign labor. American workers are displaced in these jobs both by lower immigrant wages and this sociological “tipping” phenomenon. This also makes price competition difficult for employers that obey U.S. immigration laws.)

Rev. Hesburgh summarized his remarks to the joint committees with this conclusion:

“We do not think it wise to propose a program with potentially harmful consequences to the United States as a whole.”

It is fairly obvious that the pressure for guest-worker programs is coming from those employers, who are now breaking U.S. immigration laws and from other businesses that benefit from this situation.  Hence we have the U.S. Chamber of Commerce and other business associations advocating a policy advantageous in the short term to their constituent members, but damaging to the common good and prosperity of the American people. Ironically, the Chamber is advocating a policy that would damage the U.S. economy and its own constituent members in the longer term by importing a new electorate proven to be more interested in big government social-welfare programs than free enterprise. 

Studies over the last ten years by Edwin S. Rubenstein Economic Consultants indicate that both excess legal and illegal foreign labor not only drive down American wages but also displace American workers. The politics of guest-worker programs strongly suggest that transforming illegal immigrant workers into guest-workers would continue to displace American workers. This alone ought to be enough to forcefully reject such programs.

In addition, business addiction to cheap foreign labor discourages the innovation necessary for longer-term success in global competition. As it drives wages down for working Americans, it will also adversely impact consumer demand. As noted above in relation to the U.S Chamber’s shortsighted economic folly, importation of cheap foreign labor is also changing the electorate enough to alter the political environment of the U.S., resulting in a government much less favorable to free enterprise and market economics. This would severely damage the economic future of the nation. In that event, we can kiss both economic freedom and prosperity goodbye. . 

Guest-worker programs generally help businesses that have the political clout to demand them. These demands frequently occur even when declining wages indicate there is no labor shortage. Guest-worker programs have so far not been good for American workers, taxpayers, and the country in general.  President Reagan once suggested that any guest-worker program should be first tested by a small pilot program. But so far, special interest politics have trumped such good sense. Cheap labor users usually press for immediate relief, hoping to dump their labor problem on governments and taxpayers on an urgent timeframe rather than taking some responsibility to find and invest in a solution themselves. Guest-worker programs are essentially public subsidies for the politically powerful, and their side effects can endanger a nation’s foundations.