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Immigration Reform: Reconciling Business and Labor

Immigration Reform: Reconciling the Views of Business and Labor

by Research Fellow Robert Valencia

In May 2008, a massive immigration raid took place on the Postville, Iowa-based kosher slaughterhouse Agriprocessors, Inc. The result of the raid was the apprehension of nearly 400 people, most of whom originally hailed from a small town in Guatemala called San José Calderas. One of the largest such roundups in the history of U.S. immigration enforcement, the Postville raid led to the shutdown of the facility and the imprisonment of some of the plant’s senior management, constituting a large economic blow to the entire community. Two years later, the repercussions from the raid are still visible in the Iowa community. Postville Mayor Leigh Rekow acknowledged that the city “is still dealing with some of the negative issues in the past.” In April 2010, Postville’s infamous slaughterhouse took on a new persona; reopening under Canadian ownership, the rebranded “Agri Star” plant now employs 560 people.

Such incidents have raised questions concerning the impact of immigration on the U.S. economy and how the issue is treated by business and labor across the economic spectrum. For instance, the Center for Immigration Studies (CIS), a right-wing think tank, cited a 2010 Zogby poll of senior executives, business owners, and members of union households who believe that the best way to handle illegal immigration is by way of law enforcement that ultimately aims to repatriate undocumented immigrants. The poll surveyed 7,046 members of union households, 2,490 executives—including CEOs, CFOs, vice presidents and department heads—as well as 9,990 small business owners. The majority of those surveyed in the Zogby poll oppose the stand taken by the U.S. Chamber of Commerce, which, according to its official statement, endorses not increased law enforcement, but rather immigration reform that “is comprehensive, addressing both future economic needs for workers and the status of undocumented workers already in the United States.”

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An analysis of the survey results, however, must take into consideration the fact that the corporate perspective on immigration may be too diverse to generalize. Certainly, not all of the executives at the helm of the largest U.S. corporations seem to sing from the same hymnbook when it comes to the divisive immigration issue. In fact, chief executives from such influential corporations as Hewlett-Packard, Boeing, Disney, and News Corp joined New York Mayor Michael Bloomberg last June to create an alliance called the Partnership for a New American Economy. The Partnership is described as a coalition of businesses seeking to repair and stimulate the U.S. economy in part through comprehensive immigration reform.3 Rupert Murdoch, CEO and chairman of News Corp., also joined this campaign that has brought together the left and the right in an unlikely coalition. Indeed, Murdoch insists that U.S. business—and the entire nation—ultimately depends on immigrants.

The immigration debate has been raging for decades., ever-present in the public consciousness. The last piece of overarching legislation, the Immigration Reform and Control Act (IRCA), enacted in 1986, has proved contentious to this day, and several of its provisions continue to remain under-enforced. According to Ray Marshall from the Economic Policy Institute, “diverse economic interests, personal biases, and political ideologies” are all responsible for the United States’ persistent failure to build an effective and enforceable immigration system. Today, these differences continue to be major obstacles. It is of the utmost importance that lawmakers work together to forge a more bipartisan approach to immigration reform, as the issue remains riddled with controversy.

So where do business and labor really stand on immigration reform? It appears that both sides understand the need to level the playing field with respect to the labor market, as Marshall explains. Unauthorized and unorganized immigrants are subject to exploitation, sub-standard wages and unacceptable working conditions at the local level, “mak[ing] it difficult to adjust immigration to labor market needs.” According to Marshall Fitz, director of Immigration Policy at the Center for American Progress, the contention between the two parties lies in the size, the mechanisms, and the conditions for a future worker program. Nonetheless, there is a distinct lack of current channels for legal immigration, especially for unskilled workers. Many U.S. businesses are in favor of a temporary worker program that remains flexible enough to allow them to access workers when they need them. Conversely, a number of labor unions object to the concept of a temporary worker program, arguing that it enables employers to depress wages and working conditions for similarly situated U.S. workers. In fact, according to Fitz, labor groups would generally prefer that any new workers entering the country come as legal permanent residents.

Most certainly, some crucial questions in the immigration debate remain unresolved: Is there a way to design a system that somehow harmonizes such incompatible philosophical standpoints? And, how can such a system be both flexible enough to allow employers to meet their labor needs and fair enough to ensure that said employers are not simply deleveraging U.S. workers and taking advantage of immigrants?

Despite the current broken immigration system and the discordant strategies for dealing with the problem of currently undocumented immigrants, Fitz sees a silver lining in the current wave of immigration. In his report entitled “Prosperous Immigrants, Prosperous Americans,”4 he claims that among the immigrants currently in the U.S., we can find and train a highly skilled labor force. Given the current restrictions on hiring such personnel, companies are not able to tap “the full potential of this talent pool, while inadequate safeguards fail to prevent…wage depression and worker mistreatment.” In effect, Marshall agrees that while the brunt of the burden in solving this issue does not fall on the immigrants themselves, a solution ultimately depends on their “legal status, characteristics, and integration into American life.”

A recent addition to the debate has been the notion of provisional visas. According to Fitz while an employee might not have a permanent residency, he or she may obtain all of the same benefits a legal worker has in terms of “job portability.” He suggests that this will meet labor’s concerns regarding the possibility of a single employer wielding an inordinate amount of power over its employees. It is argued that “these conditions would be largely acceptable to both sides.” All that would remain would be “to determine who and how many workers are eligible to enter.”

A comprehensive reform of the U.S. immigration system would have to involve a solution to the current dispute between business and labor regarding undocumented workers. For his part, Marshall proposes a two-pronged approach. Firstly, a secure work authorization system with stricter penalties for employer and immigrant violators and secondly, enhanced cooperation with Mexico and other affected countries to bolster economic development through increased investment. However the implementation of these policies is complicated by the fact that Hispanics have become a significant political force with many of them basing their vote on how contending politicians approach immigration.

Another point of contention in the discussion of legalization is the “E-verify” system designed to help employers avoid unwittingly hiring undocumented workers. This approach is based on the notion that businesses want to employ a legal workforce; “E-verify” is an electronic list that provides information on employment eligibility. Though it has the support of the majority of the U.S.-born labor force, critics point to recurrent and systemic problems relating to the list’s accuracy. Scholars like Marshall call for a pathway to citizenship for immigrants who have lived in the U.S. for at least five years, whereas those who have been in the country for two to five years would only be able to claim guest worker status. Those who have been less than two years in the country would be repatriated.

Despite the fact that immigrants are integral of the U.S. economy today, Congress has not had the political will to discuss their status. Other national concerns such as the current economic downturn and distant wars clearly have been given higher priority. The recent midterm elections gave the GOP the opportunity to seize the House majority and make inroads in the Senate. Given the complex nature of the immigration debate, it is more imperative than ever that both parties roll up their sleeves and come up with a comprehensive immigration reform in order to bring socioeconomic stability to a vital sector of the nation’s economy. The government must implement a lasting solution to a persistent social malady that is too big a problem to continue to dodge.


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