Saturday, October 22, 2011

Stimulus Money Used to Employ Foreign Guest Workers


Congressman Peter DeFazio smelled a rat and boy did he find one. A host of Oregon forest thinning and clearing jobs, created by the American Recovery Act and funded by taxpayer dollars, went to foreigners, brought over on H-2B guest worker visas, instead of unemployed Americans. DeFazio fought and obtained funding for those forest projects and jobs in the 2009 Stimulus bill. DeFazio assumed with so many unemployed and desperate U.S. Citizens in his state, of course those jobs would go to them. He was wrong.
A local newspaper in Bend Oregon, actually did their job and started investigating how forest thinning work was going to foreigners instead of unemployed loggers in the area. Defazio read the newspaper.

In 2010, the Forest Service awarded Stimulus Recovery Act contracts to four employers totaling$7,140,782 for forestry work in Oregon. These four employers in turn hired 254 foreign guest workers. This is when unemployment in Oregon was hitting 15% in rural areas and loggers were hard hit.
Believe this or not, even with taxpayer dollars, supposedly to create jobs, employers are not required to recruit U.S. workers. That's right, you can be unemployed, pay taxes which in turn import foreign workers and deny Americans employment. Below is a local KATU news segment where one logger tells KATU the real unemployment rate in forestry work was over 40%.

This is a real blood boiler.

15 comments:

beowulf said...

Homeland Security regulations require that, except for Guam, the petitioning employer first apply for a temporary labor certification from the Secretary of Labor indicating that: (1) there are not sufficient U.S. workers who are capable of performing the temporary services or labor at the time of filing the petition for H-2B classification and at the place where the foreign worker is to perform the work...
http://www.foreignlaborcert.doleta.gov/h-2b.cfm

Wow, the balls on those contractors! Its par for the course to lie on a DOL certification, but to doublecross the congressman who worked to get the funding earmark through, that's just cold.

Its odd that tree farming is considered non-agriculture (H-2B visa) instead of agriculture (H-2A visas). I'm sure there's some unsavory reason why that is.

Ryan said...

At 8.54 an hour, the prevailing wage set by the regulators at DOL, few US workers could afford to drive to the remote locations of the logging then work all day for $8.50x8hrs=$68.00. They probably did NOT get any takers from the US. The gas to get to work would cost $20-30/day. A citizen would be better off working at the nearest McDonalds or Gas Station where they would also make $8.50 or more. Once again, this is a problem with the regulators: The prevailing wage rate for the loggers is set far, far below the poverty line. The H1B visa regulations are ineffective. The Davis-Bacon laws benefit the departments that collect enormous fines for typographical errors but do nothing for workers. The chief regulator, DeFazio, is once again acting indignant and as a victim because the laws he created didn't work out so well for his voters. Poor guy. To illustrate the point that the government simply wasn't paying enough in the first place: If the entire contract was paid to 254 workers for one year: the $7,140,782 in the contract divided by 254 workers = $28,113 worker/year. With weather in the Northwest and holidays, the workers should be able to work at least 200 days, so the ENTIRE contract paid $140/day per worker per day assuming they didn't get paid for holidays or bad weather. Of course there is equipment, insurance, fuel, accountants, lawyers, profit that will reduce the amount going to workers. Clearly the government knew when they issued the contract that all the workers would be paid unlivable wages. The better question is why does the government need contract administrators, accountants, lawyers and all the other wasted human endeavors that hire the contractors. Wouldn't it be better to get rid of all the service workers in government and in the company and just hire the laborers directly and pay the money to the workers instead of the white collar services that really add nothing to the process? The companies obviously didn't have enough money to pay expenses, take a small profit AND pay a livable wage. It is easy to do a "Bill Black" and blame evil greedy companies but once again when you dig deeper and do an “Edward Harrison”, the government is the problem. I don't know why the government acts this way, I don't think there is a moral deficiency in the way Bill Black does of companies. Clearly without moral judgement, just based on the accounting, the government places no value on the labor. The government sets the rules,sets the wages and enforces them.

Tom Hickey said...

Ryan, the focus the OWS movement is collusion between business and government, called "corporatism" aka "the corporate state,' and "crony capitalism." It's about corruption, often legalized and other wise overlooked. If anyone is caught out, they get a slap in the wrist.

It's not business OR government but business AND government. One need look no further than the revolving door, for example, lobbies writing legislation, and secret policy meetings like VP Cheney held with the energy industry.

Ryan said...

I generally agree with the OWS on the problem of collusion between business and government. But ultimately government is superior and has the responsibility to regulate business not the other way around. Voters have the responsibility to regulate government. Because De Fazio is a democrat, he spins the issue as one of greedy business. It is disingenuous at best. If he were on the other side of the aisle and got caught in this corruption, he would have claimed the problem was unions or something. Both sides of the congress are broken and blaming either side or business or unions or some trophy prosecution doesn't really help the regulators clean their filthy house.

Clonal said...

The issue raised by Ryan is very relevant, and is a major concern of mine, when MMT folk talk of a Job Guarantee programs at minimum wage. The JG CANNOT be at a minimum wage -- it has to be at the median wage.

To avoid competing with private busines that pay below median wage, the way out is to limit the hours on the JG program to 15-20 hrs/wk and to allow the people on the JG program to look for work in the private sector for the remaining time.

As the economy improves, employers will offer full time work at higher wages. This will get people to leave the JG program.

Tom Hickey said...

Think of the JG wage/benefits as the real numeraire of the unit of account in a fiat system, which is the nominal nuneraire. This is what the JG wage is as the price anchor wrt inflation.

I don't think that a number can be picked out of thin air. This requires some rationale that is rule-based rather than an arbitrary political decision of what sounds good.

Matt Franko said...

Clonal/Tom, $8.00/hr for the JG is NOT enough (else equal) agree.... the economy is just so screwed up. resp,

Anonymous said...

Would there be a limit on the number of hours you can work while employed by a JG?

Blame goes to the businesses who benefited from the scheme; to the government for failing to regulate and/or properly design the program; and to the electorate for failing to hold their representatives to account. Have I missed anyone?

sforst said...

How is this any different than importing goods? Isn't one of the tenants of MMT that imports are good? (or is this only a Mosler thing?).

Tom Hickey said...

sforst, imports are a benefit in real terms of trade. However, unless the government fiscal balance offsets the saving of non-government, then the capital account surplus (ROW saving in USD) represents vicarious immigration, i.e., exporting jobs.

Remember Ross Perot and that "giant sucking sound" of jobs leaving for Mexico due to NAFTA?

However, if the government fiscal balance offset the demand leakage to experts then the real terms of trade are a benefit.

Otherwise, it is a trade off of jobs for stuff.

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Calgacus said...

Laura: Would there be a limit on the number of hours you can work while employed by a JG? 168 per week is the absolute limit. :-) Seriously, I don't think there is any good argument for a limit other than common sense ones allowing for health & non-work activities. In other words, somewhat less hours than the traditional number of hours worked by interns in the US young-doctor-hazing / patient-sacrificing ritual to enter club MD.

Clonal: The JG CANNOT be at a minimum wage -- it has to be at the median wage. This is wrong. The JG wage must be at the minimum wage. It CANNOT be at the median wage, unless 50%+ of the workforce is working at minimum/JG wage. This is pretty much an obvious truth of logic. What you are proposing is not exactly a JG, and would not have all the macro-economic properties of the JG. Competing with private businesses that pay sub-JG wages is part of the point of the JG & minimum wage laws.

Of course everything depends on what the JG wage is. You can think of the current horror of a system as a JG wage of zero. And $8 is way too low. To be blunt, such lowball proposals/proposers are living or thinking in the past. A bit more than the inflation-adjusted historical peak minimum wage would be around twice that, IIRC, and that would be my arbitrary minimum sound-good proposal. Otherwise we are satisfying ourself with making things only "not much worse than the late 60s" rather than "definitely better" which should be the natural & just consequence of decades of technological progress without enormous catastrophes.

Anonymous said...

RYAN- How did you get that the job paid $8.54 hour? Does that include fringe benefits amount added? Can you provide the wage determination?

Ryan said...

I got the 8.50 from the article linked the blog post, it said specifically,

"Quoted prevailing wages are also misreported and abused. It appears these foreigner guest workers were paid $8.41 to primarily $9.57 an hour."

Ryan said...

I took the 8.54, because that is the general labor hourly rate in my area for prevailing wage jobs.