There's an interesting situation developing in Huntsville, Alabama involving immigration and wages that illustrates just how complex and multifaceted the immigration issue is. Cinram is a Canadian company that makes DVDs and distributes them from a plant in Huntsville. Due to an apparent shortage of local workers willing to work long hours for low wages, the company is importing 1350 workers from Jamaica, Nepal, Ukraine and Bolivia. The particular immigration facet involved is the H-2B guest worker program (for seasonal or temporary nonagricultural workers) which is perfectly legal, but still rubs many Huntsvillians the wrong way.
Cross posted from Left in Alabama, where Fake Consultant suggested the original title -- only a small exaggeration -- that said "criminals" instead of "fat cats." I changed it here so the discussion doesn't get hijacked into what is and is not criminal.
Hiring problems
Cinram says they have advertised, but can't find enough willing local workers to fill those jobs. I was reminded of BobOak's How Not To Hire An American - MUST SEE VIDEO from a few months back which showed that sometimes companies seek to eliminate American job applicants so they can get permission to hire foreign workers. Be that as it may, it isn't hard to believe Cinram is having hiring problems. The work doesn't require any specialized skills, but the company operates an unusual rotation of 12 hour shifts with employees working in a standing position -- that's a long time to stand. A local TV crew interviewed some ex-Cinram employees who claimed there was an atmosphere of fear at Cinram, supervisor treatment of workers was "harsh" and that they had observed underage workers at the plant.
To sum it up, these are not very desirable jobs, the pay is low, the work is uninteresting and the atmosphere is not great. Cinram needs more workers and they can't hire them locally at $8/hour, so they turn to the H-2B guest worker program that lets them bring in foreign workers for "seasonal work." You didn't know the DVD business was "seasonal?" Apparently it's holiday driven like so much of the retail industry.
Special tax treatment
Cinram enjoys a tax break for locating their plant in Alabama. They pay about $500,000 annually in taxes but are exempt from another $330,000 or so. The Cinram distribution plant is on a recently widened road and enjoys an interstate spur about a mile from the plant making transportation convenient. The local infrastructure is generally very good, so moving the entire plant to Bolivia or Nepal probably isn't as attractive as you might think.
County Commissioner Mo Brooks introduced a resolution this week to revoke the tax breaks for companies who hire foreign workers. Brooks also wanted those companies to cover the health care costs of foreign employees and guarantee to fully compensate the victims of any traffic accidents of criminal activity of the workers. The traffic accident part of his resolution is obviously red meat for the knee jerk xenophobes because these workers aren't going to be able to afford cars.
Wage suppression
Although some local Democrats have expressed concern about Cinram's H-2B workers, Brooks' resolution won't be going anywhere soon. It failed to get a second from any other commissioner, even though four of the others are nominally Democrats. Here's the really unusual part of this story:
Brooks, a Republican from southeast Huntsville, said unskilled foreign laborers hold wages down, which hurts blue-collar American workers.
"We should not distort the laws of supply and demand by importing foreign workers who will assist in the continued suppression of incomes for the least wealthy among us," Brooks said Thursday. "What Cinram and other employers like it are doing is wrong."
And here's what Mo Brooks said after his resolution failed:
"Someone has to stand up for the average Alabamian, the blue collar worker whose wages are being suppressed, who's facing record high bankruptcy rates because of the artificial impact of low-wage foreign workers on their ability to get wage increases," Brooks says.
He says it's discrimination, and he'll continue trying to get a resolution passed against it.
"As for me, it does not deter me one iota," says Brooks.
We have here a very conservative (I wrote him off as a wingnut some time back) Republican defending the right of blue collar American workers to demand a higher wage when the labor market is tight and proposing to yank the tax breaks of any company that imports cheap foreign laborers. Granted, Mo wrapped some "they'll use our hospitals for free" and "they'll run over you and not pay" language up in his resolution, but the part he was repeatedly quoted on was the depressing effect importation of cheap labor has on wages. This populist tone appeals to our sense of basic fairness.
Charlie Wrangel called it "the closest thing I've ever seen to slavery"
The H-2B workers at Cinram are living in multi-person apartments and paying an exorbitant amount for a rent/transportation package. The apartments are no better than expected. A local reporter found some female Cinram workers from Jamaica living in a place with a non-working heater, a tub that won't drain, closet doors on the floor and drafty windows. One of the women said, "I have a pet goat and I would never let her stay here." They were paying a total of $1280 per month for that, a ride to work and twice a week rides to Wal-Mart.
The same reporter quizzed the women on earnings and expenses and calculated that if they only spend $10/day for food and necessities, they can save about $2000 each during their 8 month stay. Good, huh? Not really, because they had to pay $1400 in fees to an agency to get the job, $500 for airfare to get here and $100 for a visa application and background checks. So they spent $2000 to get the job and they will have $2000 left after working 8 months. Even, Steven. So much for "helping poor people get ahead."
So far the Cinram employees seem to be doing at least a slightly better than H-2B workers at a Mississippi shipyard:
...a longstanding immigration problem – the vulnerability of guest workers who travel to the United States on H-2B visas, and their exploitation at the hands of so-called "recruiters" and the companies they work for.
Overseas recruiters lure guest workers to the U.S. with lavish promises of permanent residency, high-paying jobs and better living conditions, charging thousands of dollars in "processing fees." Guest workers are usually deeply in debt by the time they arrive in the U.S., where the companies that hire them often charge additional fees for boarding, food and expenses.
Those companies have an incentive to charge by the day, because they save money on taxes when they deduct living expenses from an employee’s wages instead of paying an equivalent sum to the employees and letting them secure their own housing and food. Signal charges residents $35 a day for living expenses.
...or these hotel workers in New Orleans:
The lawsuit also alleges that the workers' high level of personal debt stemming from their entry to the U.S. has left them in "virtual debt peonage," since they can neither make enough money to pay off their debt by working for the hotel chain nor, under the provisions of their visas, can they work for any other employer to earn additional money. The suit also states that "in recent weeks their predicament has been complicated ... by failure to offer them 40 hours of work each week."
... but the workers haven't been in town very long and the media has just started paying attention to the Huntsville story. We'll see how these workers are being treated in a few months.
Who benefits?
Cinram was given some tax relief as an inducement to move here and employ people, and the unspoken part of that bargain was that the workers would live in the local community -- permanently. Instead of raising wages or improving conditions to attract more locals as the job market tightened, Cinram went overseas to recruit. Adding insult to injury, foreign workers appear to be getting the shaft from someone, maybe even several someones. In short, none of the rank and file workers, domestic or foreign, benefit from this policy.
Do we already have a world labor market where workers can be moved around like a commodity? Will we all be forced to compete on price with workers from third world countries -- even if our jobs stay in America? Congress is considering an expansion of the H-2B program, allowing more than the 66,000 new guest workers per year now permitted. No surprise, business groups are pushing hard for this expansion. I think Sen. Barbara Mikulski, a major proponent of the expansion, and every other Senator and Congressperson should have a copy of the Southern Poverty Law Center's report on guest workers, Close to Slavery. Hopefully it won't be just Republicans like Mo Brooks talking about the basic unfairness of the H-2B program as it stands now.