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Informing The Discussion: Businesses in some large cities won’t be allowed to hire new ‘W’ guest workers

Thursday, May 16, 2013
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Rudolf Balasko, iStock

Businesses in 103 Metropolitan Statistical Areas (MSAs) representing 20% of the total civilian labor force would be ineligible to hire new ‘W’ guest workers if the Senate Gang of Eight’s immigration bill (S.744) were passed today. Regulations in the bill prevent businesses from hiring guest workers if the unemployment rate in their MSA is higher than 8.5%, absent special consideration by the commissioner of the soon-to-be-created Bureau of Immigration and Labor Market Research. MSAs with higher than 8.5% unemployment include Los Angeles, Chicago, Detroit, Sacramento, and Las Vegas. Businesses in areas of high unemployment looking to hire guest workers would be out of luck unless they followed government-specified recruiting activities, or if the commissioner declared a shortage in the occupation of interest or chose to make additional positions available.

Nine MSAs with census populations of more than one million people had unemployment rates higher than 8.5% in March 2013. (All unemployment rates displayed are seasonally adjusted.)

Table 1 - MSA

Fourteen MSAs in March 2013 with civilian labor forces containing over 200,000 people would need their unemployment rates to drop by more than one percentage point before they would be eligible to hire ‘W’ guest workers. Even if the economy recovers quicker than expected, those fourteen MSAs – representing 12.7 million civilian workers – would have a much longer wait than the rest of the country before they could hire guest workers.

Table 2 - MSA

California would be especially hard hit by the restriction. It had eighteen MSAs with unemployment rates above 8.5% in March 2013. Those eighteen MSAs represent a combined civilian labor force of 12.2 million, out of California’s 18.6 million total labor force. In other words, businesses in areas covering 66% of California’s working population would be ineligible to hire guest workers under the new immigration law absent special consideration by the new commissioner.

By including the restriction on MSAs with greater than 8.5% unemployment, the Senate bill would create a brand new interest group that would spend time and resources lobbying the Commissioner of the Bureau of Immigration and Labor Market Research to raise the cap on ‘W’ guest worker visas. Those MSAs ineligible for hiring guest workers represent 31.2 million civilian workers – more than 20% of the total labor force. Restricting the ability of businesses to hire workers who they’ll probably obtain visas for anyway is unnecessary and will add to rent seeking in Washington D.C. And since the evidence that immigrants negatively affect wages of native-born workers is mixed, the arbitrary 8.5% limit seems like more of a burden than a useful measure. Eliminating the 8.5% unemployment rate condition would allow the labor market to function much more efficiently.

 

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