Guestworker Diplomacy: J Visas Receive Minimal Oversight Despite Significant Implications for the U.S. Labor Market

EPI Briefing Paper No. 317

47 Pages Posted: 18 Sep 2011

Date Written: July 14, 2011

Abstract

What originally began as a State Department program to facilitate exchanges of scientific and cultural knowledge has deviated far from its original intent. While some aspects of the J-1 exchange Visitor Program are unquestionably valuable - for example, allowing exceptionally talented non-U.S. citizens to study, research, and teach in the United States as Fulbright Scholars - most exchanges under the program are primarily employment-related. In fact, the J-1 Exchange Visitor Program is now the largest U.S. guestworker program in terms of annual admissions.

Of the 350,000 exchange visitors and their spouses and dependents who entered the country in 2010, nearly 300,000 were employed in full- or part-time jobs during their stay. Exchange visitors from China, Russia, Brazil, and other countries all over the world are working in the United States as au pairs, ride operators at amusement parks, hotel maids, laborers on dairy farms, and other semi- or unskilled workers as well as in professional occupations such as teachers and physicians.

This report is the product of an extensive six-month review of the J-1 Exchange Visitor Program. The analyses, described in the body of the report, led to a number of key findings, which are summarized below:

The program displaces U.S. workers by providing significant direct and indirect financial incentives for individuals, companies and organizations that recruit exchange visitors as workers, “sponsor” exchange visitors, and hire them as lower-cost labor alternatives to U.S. workers or foreign guestworkers in other nonimmigrant visa classifications that provide greater protections for U.S. workers.

Employers can legally discriminate against U.S. workers in favor of J-1 exchange visitors because they are not required to advertise their available jobs or seek available U.S. workers. This is true even in areas with persistently high unemployment, where many able and available U.S. workers may be willing to take even temporary jobs. Lax oversight and inadequate regulations allow employers to simply coordinate with sponsors to obtain foreign workers or sponsor those workers themselves, entirely bypassing the U.S. workforce.

U.S. workers that are displaced by J-1 workers have no protections or enforcement tools under the State Department regulations. For example, employers are not required to pay exchange visitor workers a prevailing wage, the lack of which exerts downward pressure on the wages of U.S. workers.

The State Department has outsourced the monitoring of compliance with program rules and oversight of program performance to the program sponsors and employers, who have a vested interest in optimizing their returns from the program. Sponsors and employers cannot be expected to report violations, which would jeopardize their financial gains. This amounts to an obvious conflict of interest.

Because participants incur significant debt to participate in the Exchange Visitor Program and to travel to the United States, and because they are unable to easily switch between employers, they arrive virtually indentured to their employer.

Outsourcing oversight of the program to sponsors and employers leaves the J-1 worker without adequate protection- and some have suffered exploitation as a result. Some program participants have been found living in overcrowded conditions, others begging, and in the most extreme cases forced to work in the sex trade.

Housing what is essentially a labor program (and advertised as such on recruitment websites) in an agency concerned with foreign affairs doesn’t make sense. In addition to a lack of expertise in policing the labor market, the State Department currently has only 13 compliance officers overseeing a program with more than 350,000 participants; thus their ability and resources to investigate complaints or violations by employers and sponsors are extremely limited.

Over the past 21 years, government auditors, including the State Department’s own Inspector General, have published three reports with scathing criticisms of the lack of oversight, the lack of data to make meaningful labor market assessments, and many other failings in the program. Nevertheless, while the size of the program has increased by 96% in those 21 years, no significant steps have been taken to address the concerns outlined in the reports.

The four major flaws in the program that are most critical to address include: the lack of protection for U.S. workers; the State Department’s overbroad authority to create new guestworker programs; the significant and inappropriate financial incentives for J visa sponsors and their partners; and the program’s flawed system of management, data collection, oversight, compliance, and enforcement.

Keywords: immigration, labor, labor market, labor migration, cultural exchange, J-1, visa, foreign policy, summer work travel, intern, trainee

Suggested Citation

Costa, Daniel, Guestworker Diplomacy: J Visas Receive Minimal Oversight Despite Significant Implications for the U.S. Labor Market (July 14, 2011). EPI Briefing Paper No. 317. Available at SSRN: https://ssrn.com/abstract=1929572 or http://dx.doi.org/10.2139/ssrn.1929572

Daniel Costa (Contact Author)

Economic Policy Institute ( email )

Washington, DC
United States

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