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News from EPI State Department right to ban Alaskan fish processing jobs from J-1 visa Summer Work Travel program





For Immediate Release: Monday, March 19, 2012
Phoebe Silag or Karen Conner, 202-775-8810


From Working Economics, the EPI blog:

State Department right to ban Alaskan fish processing jobs from J-1 visa Summer Work Travel program

by EPI Immigration Policy Analyst Daniel Costa

Representatives of fish processing companies in Alaska are complaining about the possibility that they might lose access to 4,000 to 5,000 temporary guest workers they hire each year through the State Department’s “Summer Work Travel” (SWT) program, a part of the J-1 visa Exchange Visitor Program originally designed to facilitate a cultural exchange between Americans and citizens of other countries. The companies worry that they won’t be able to find enough workers this summer and that the whole industry will be negatively impacted as a result. The fundamental problem is that the industry has come to depend on an exploitable foreign workforce instead of hiring U.S. workers.

The J-1 SWT program was not designed to be a temporary foreign worker program. Its purpose is to facilitate a cultural exchange between foreign college students and American residents. If fish processors need a workforce, they should look to unemployed Alaskans and other Americans first, and if they still can’t find enough workers, there are other work visa programs that are more appropriate (for example, the H-2B program). Secretary of State Hillary Clinton and the State Department should not be persuaded by the fish processors or the two U.S. Senators from Alaska, who have urged the secretary to spare the industry from a ban on using J-1 SWT student workers.

The concern of the fish processors likely stems from an Associated Press story about a leaked memo outlining a number of changes to the SWT program the State Department might implement this year. This includes prohibiting the employment of SWT student workers in seafood processing plants and other potentially dangerous workplaces.

The following is an excerpt from the statement of purpose in the Fulbright-Hays Act, the legislation that created the J-1 Exchange Visitor Program which includes SWT. It clearly states what the program is designed to do:

The purpose of this chapter is to enable the Government of the United States to increase mutual understanding between the people of the United States and the people of other countries by means of educational and cultural exchange; to strengthen the ties which unite us with other nations by demonstrating the educational and cultural interests, developments, and achievements of the people of the United States and other nations, and … thus to assist in the development of friendly, sympathetic, and peaceful relations between the United States and the other countries of the world.

Even if you read the entire Fulbright-Hays Act, you won’t find anything that suggests a congressional intent to provide employers with a temporary workforce or to help them fill labor shortages. It’s clear the SWT program is not primarily a guest worker program; it is intended to facilitate a cultural exchange. The State Department’s new Guidance Directive outlines this clearly. The work component of this cultural exchange is designed to allow the SWT student worker to interact with Americans and to allow him or her to earn enough money to travel to and within the United States. This allows foreign students from lower-income backgrounds to visit the United States when they otherwise might not be able to afford it. From that perspective, it’s a good thing, but it’s impossible to argue with a straight face that J-1 student workers in Alaskan fish processing plants are experiencing the cultural exchange envisioned in the Fulbright-Hays Act.

A recent investigation revealed an example of what SWT recruiters for fish processing jobs tell potential participants about the cultural exchange program they offer:

“We’re looking for hard workers who are not afraid to work every single day, up to 16 hours a day,’’ said Sarah Russell of Leader Creek Fishing in the village of Nakenak [sic]. “You will make a lot of money in a very short period of time and you won’t spend it anywhere because there’s really nothing to do in Nakenak, other than work.”

That says it all.

Russell admits the J-1 SWT student workers will work long hours – double all-day shifts to be exact. If you work 16 hours a day, when will you have time to interact with other Americans? Perhaps in the workplace? Probably not, since the plant is likely to be staffed with many other SWT workers from around the world. Russell also notes that the job is located in an isolated location with nowhere to shop and nothing to do. I assume that also means there are no cultural or educational activities available locally. How are SWT student workers supposed to interact with Americans and learn about American culture if they live far from them and are working for two-thirds of the day? (Presumably they sleep during the eight hours they have all to themselves.) Quite simply, they can’t, and that’s why it doesn’t make sense to allow fish processing jobs in the SWT program.

But there are other reasons, too.

Youth unemployment is through the roof. Last year, the unemployment rate in Alaska for 16-24 year olds averaged 15.3 percent. The rate for the entire country was two percentage points higher, at 17.3 percent. Fish processors need to increase their efforts to recruit young Alaskans. Although Sen. Mark Begich (D) is now urging the State Department and the Office of Management and Budget to allow fish processors to participate in the SWT program, and claims he can make a “great case of why J-1s work for Alaska,” he previously made it clear that the program was not working for Alaskan workers, who aren’t working enough hours to be able to provide for their families. A representative from the Alaska Department of Labor publicly expressed a similar opinion.

But instead of hiring Alaskans, labor recruiters are going to Russia, Poland, Turkey, Ukraine, China, Mongolia, Slovakia, and Kazakhstan on behalf of fish processors to find SWT student workers. If recruiters truly can’t find workers within the state, why don’t they take similar recruiting trips to Seattle, Fresno, or Baltimore? It’s ludicrous to suggest that you won’t find unemployed workers and students there willing to earn a few thousand dollars over the summer to help pay for tuition or buy a used car. If the companies offered free round-trip travel to Alaska and free room and board, they’d be flooded with applicants. In addition, if the Alaskan companies would let them work eight-hour shifts (an average workday), they could hire twice as many workers.

The fish processors won’t do this because it’s cheaper to hire SWT student workers from abroad. Under the rules of the program, the SWT workers are required to pay for their own travel and health care insurance, and often have room and board costs deducted from their paycheck. Fish processors also save big on their wage bill. It’s been reported that SWT workers earn the minimum wage for fish processing, $7.75 an hour in Alaska, which is much lower than the average wage earned by fish processing workers in the state. The statewide average, or prevailing wage, for fish cutters and trimmers in Alaska is $10.20 per hour, which is similar to the local average hourly wage in the greater Anchorage area ($10.07) and in Bristol Bay ($10.06). Processors save at least $2.31 per hour, per worker by hiring an SWT student worker instead of someone earning the average wage. Those savings are significant when you consider the SWT student worker is usually on the job for six days a week, 16 hours a day, for three or four months. And what are the chances that they’ve been paying overtime premiums for work beyond 40 hours a week? A class action lawsuit for back wages might be a healthy development if they haven’t.

The companies also save thousands because they’re exempt from paying Social Security, Medicare, and state and federal unemployment taxes on SWT workers. The SWT workers who overwhelmingly come from poorer, developing countries are also required to pay thousands of dollars in program fees just to participate in the program, which means millions of dollars go to the labor recruiters that find (and exploit) them. This puts SWT workers in debt bondage to their employer and recruiter: The SWT worker hopes to earn back in wages what they invested to partake in the program, but employers hold an unreasonable amount of power over them, because if a worker complains about wages or unsafe working conditions, the fish processor can fire them, leaving them instantly deportable and thousands of dollars in debt. That’s a strong incentive to keep your mouth shut and get back to work.

It is important to point out the impact on the local labor market and competing fish processors. The companies that hire SWT workers have exploitable, less expensive workers, which puts downward pressure on wages (which are already low) for Alaskans and undercuts competitors who pay their workers the prevailing wage of $10 an hour.

The SWT program should not be used as a temporary labor program, and a State Department ban on fish processing jobs for SWT workers will make the program more consistent with the original goals of the Fulbright-Hays Act. If Alaskan fish processors have nothing to offer in the way of cultural exchange and honestly can’t find U.S. workers after conducting extensive nationwide recruitment efforts, then they are welcome to use the H-2B guest worker program. H-2B was designed for employers that need temporary non-agricultural labor. I am critical of the H-2B program, but at least the program requires employers to pay a legally defined “prevailing” wage (although program rules set wages much lower than the true average wage paid to U.S. workers) and to recruit unemployed U.S. workers (the current requirements for this also fall short, although they’re set to improve next month). The J-1 visa Summer Work Travel program requires neither of these minimal protections for U.S. workers, another reason fish processing companies in Alaska prefer SWT workers.



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