The president could create 100,000 jobs for young Americans by ending J-1 Summer Work Travel

As part of his fiscal year 2017 budget, President Obama has proposed to spend “nearly $6 billion in new funding to help more than 1 million young people gain the work experience, skills, and networks that come from having a first job.” There’s no question that this is a good idea and Congress should fund it. The New York Times editorial board said essentially the same, calling on the Republicans in Congress who oppose it to “consider the desperation that young unemployed people are facing in this country and the civic costs of standing idly by and doing nothing to help them.” If you’re feeling déjà vu, it’s because last year President Obama also asked Congress for appropriations to fund youth employment programs, to the tune of $3 billion. But Congress didn’t fund the president’s proposal last year, and they’re unlikely to fund it this year either. In consideration of this political reality, President Obama should do what he can through executive action. To start with, he could open up 100,000 jobs for young Americans today for free by simply eliminating the State Department’s J-1 visa Summer Work Travel (SWT) program.

SWT is one of many “cultural exchange” programs in State’s larger overall J-1 visa Exchange Visitor Program, which brings over 300,000 foreign researchers, students, and workers into the country every year through a variety of programs, along with 30,000 to 40,000 of their spouses and children who can come with J-2 visas. In the J-1 SWT program alone, approximately 100,000 foreign college students from around the world come to the United States to work for four months in hotels, beach resorts, restaurants, ice cream shops, and various other seasonal businesses, in a variety of low-paying, lesser-skill jobs. Reports like EPI’s Guestworker Diplomacy and the Southern Poverty Law Center’s Culture Shock have explained in detail how SWT is a temporary foreign worker program disguised as an exchange program, and is administered by an agency with zero expertise in enforcing labor and employment laws. Numerous worker abuses and even human trafficking have been facilitated by this temporary work visa program, and the basic structure of the program, which allows such abuses to occur, has not changed.

The legal authority for SWT originally came from the Fulbright-Hays Act of 1961, which created the overarching Exchange Visitor Program to facilitate educational and cultural exchanges with persons from abroad by allowing them to visit the United States temporarily. But most of the individual programs were created entirely by the executive branch, and their regulatory frameworks are outlined mainly in State Department regulations. This is in fact the case with SWT, which operated for decades without any specific congressional authorization, despite the fact that it arguably contains no educational or cultural component. In 1998, Congress did weigh in on SWT, by including one sentence in an omnibus appropriations bill that authorizes the State Department to “administer summer travel and work programs without regard to preplacement requirements.” This authorizing language, however, does not require the State Department to continue to run the SWT program, it simply permits it.

It must be said that the J-1 visa program is not all bad. A number of the other exchange programs under its auspices help bring talented foreign students and researchers, such as Fulbright Scholars, to the United States, and those deserve support. But SWT is clearly not one of those programs; it’s simply a barely-regulated low-wage work program. Employers have figured this out (including presidential candidate Donald Trump), and they are using it to their advantage to save money on their wage and tax bills. SWT has no enforceable prevailing wage rule that would require that J-1 SWT workers be paid the local average wage for a job (as other low-wage guestworker programs managed by the Labor Department mandate) and employers are exempt from paying Social Security, Medicare, and unemployment taxes on their J-1 SWT workers, making much them cheaper than (and therefore, preferable to) American workers.

J-1 SWT workers are also indentured to their employers. They’re afraid to complain if they aren’t paid fairly or are forced to work in an unsafe workplace, because if they get fired, they become instantly deportable. By the time they get to the United States, most have already paid thousands of dollars in fees to labor recruiters and the labor brokers (technically called “sponsors”) who connect them to the temporary low-wage jobs they end up in for four months. The J-1 workers are expecting to earn back what they invested, so they don’t complain for fear of retaliation, and they also can’t switch jobs without authorization from the labor brokers they paid for the job, which makes them more likely to suffer through an abusive situation. The labor brokers are actually supposed to protect the J-1 workers—the State Department has outsourced management and oversight of the program to the brokers/sponsors—but brokers have little incentive to protect the workers, for two reasons. One is that brokers have a financial incentive to keep employers in the program so that they have more J-1 jobs to offer and therefore more J-1 visas to sell. The second is that even if the employer behaves illegally or unethically towards J-1 workers, the broker is the one who is punished (never the employer). That’s a strong incentive for J-1 job brokers to sweep a partner employer’s illegal acts under the rug—an obvious conflict of interest vis-à-vis the brokers’ responsibility to protect J-1 workers.

President Obama recently discussed how his first job was scooping ice cream at Baskin Robbins and that it “taught [him] some valuable lessons” like “responsibility” and “hard work.” I couldn’t agree more. My first job was working for minimum wage in a hardware store as a teenager. I couldn’t buy much with my paycheck, but I made important connections and learned how to be punctual, what it’s like to have others depend on you, how to talk to customers, and what PVC pipe and Allen wrenches are. But many jobs like that just aren’t available to young people anymore, especially since the Great Recession, because employers have access to a large labor pool of older, experienced workers to choose from. And around 100,000 of the jobs that are available for young people, like working in ice cream shops, are filled by J-1 guestworkers. Take for example, The Ice Cream Store in Rehoboth Beach, Delaware: Last year interviewed the shop’s manager—a former J-1 worker herself—who estimated that “around 70 percent of the summer workers at The Ice Cream Store are there on J-1 visas.” In addition to the aforementioned advantages employers get from hiring J-1 workers instead of American workers, The Ice Cream Store owners are pocketing even more money from their J-1 workers by charging them $100 per week for housing.

From talking to staffers on Capitol Hill, I know that American ice cream shop owners like staffing their shops with J-1 SWT workers so much that they lobby their members of Congress to ensure that much-needed reforms to the J-1 SWT program are never made. Especially reforms like a prohibition on J-1 workers paying recruitment fees to the labor brokers who connect them to the shops, fees that leave them indentured to their ice cream shop boss and landlord. Yes, I realize it sounds crazy that there’s an ice cream shop lobby, but it’s true. Would Obama have ever gotten hired by Baskin Robbins if he had to compete with underpaid indentured guestworkers?

To add insult to injury, some of the employers who have summer jobs available for young people don’t even pretend to offer them to local kids. Last month major U.S. employers hosted a job fair in Dublin seeking J-1 SWT workers for the summer, which was attended by the American ambassador:

Some of the biggest employers in the United States met with Irish students hoping to take part in the J-1 visa adventure this summer. The hiring fair in Dublin, attended by the US Ambassador to Ireland Kevin O’Malley, was organized to enable students to meet the new stipulation for J-1 visas that they must find a job before they arrive in the US.

Fourteen employers set up stalls at the Dublin Convention Centre with 280 positions to be filled for summer 2016. Among the US companies were Wonderworks from Myrtle Beach, SC; Blazing Saddles Bike Rentals and Tours from New York and San Francisco; Hyatt Regency Mission Bay Spa & Marina from San Diego; Wequassett Resort & Golf Club from Cape Cod and many more.

You read that correctly: employers are flying to Ireland to find young workers for summer jobs, instead of searching in Baltimore, Detroit, or Fresno. Considering the fact that the national youth unemployment rate in 2015 for workers ages 16-24 was 19.2 percent for African-Americans and 12.4 percent for Latinos, I’m quite sure they could find plenty of willing, qualified, and available workers already in the United States—especially if they offered to pay for travel and housing. Instead, it’s cheaper and less complicated for employers to hire indentured J-1 workers from abroad who have to pay for their own travel, housing, and health insurance.

I’ve argued before that the State Department should set up a national J-1 job database, and require employers to recruit nationwide for 30 days, and hire any equally or better qualified U.S. worker who applies before they are allowed to hire a J-1 worker. But State won’t do it, and there’s no evidence that they care what happens to unemployed young Americans. Some employers of J-1 SWT workers already submit job openings to an online database, so they have experience with such a system. However, the jobs they advertise are only available to foreign student workers. You can peruse the vacancies at this Russian website, Employers who use can even look at photos and videos of job applicants before they hire them, which allows employers to choose their workers by race and gender, and even looks. And yes, in practice that means that if an employer doesn’t want to hire a person of color, he doesn’t have to.

Despite scandals involving the J-1 SWT program and heavy criticisms of President Obama’s State Department for its mismanagement of the J-1 SWT program, State has failed to make meaningful reforms. SWT is a perfect candidate for termination, especially considering that Congress won’t fund Obama’s youth jobs program before the end of his administration. Luckily, the president has all the legal authority he needs to end J-1 SWT; it’s a program created by regulations, and a program that could disappear if those regulations were rescinded. Sure, it won’t open up one million jobs, but its termination would benefit 100,000 young people every year. And those like me who believe cultural and educational exchanges benefit Americans and enrich America should not fear: Even if Obama were to completely eliminate the SWT program, there would still be 200,000 to 250,000 J-1 visitors engaging in various cultural exchange activities every year through the Exchange Visitor Program, which would remain one of the country’s largest temporary migration programs.