The 7 Percent Solution

The University of Florida (UFL) is posting an online guide for employers who hire foreign guest workers even as American college students face the toughest job market in decades. Specifically, they show that guest workers are exempt from social security taxes.

The federal government government, for its part, shows that imported employees in amusement parks, where yours truly spent a quarter of his college employment, fall into this category as well. Call it the 7 percent solution for such employers, already facing declining profits and exorbitant overhead during troubled times and anxious to cut costs wherever possible.

What it portends for the native-born labor force at the entry-level, whom institutions such as UFL claim to care about deeply, is another story.  By law, employers have to go to the extra expense of paying the social security taxes of entry-level employees born in the USA. (By the way, this is about the largest tax paid by and for the poor.)

“More than 900,000 H-2B guest worker visas for season­al non-agricultural work were issued between 1994 and 2009,” Steven A. Camerota and Karen Jensenius write in a backgrounder from the Center for Immigration Studies (CIS). “Created in 1990, the annual number of H-2B visas rose from 10,400 in 1994 to a peak of 129,547 in 2007.”

“In addition, nearly four million J visas (excluding family members) were issued to exchange visitors between 1994 and 2009 in 12 different programs,” they report. “About two-thirds of all exchange visitors in the United States are working, rather than studying or doing research.”

“While many J visa workers are likely not in competition with teenagers, between 2001-2007 1.19 million exchange workers were issued for Au Pair, Camp Counselor, Intern, Summer Work/Travel, and J-1 Trainees. Many of these individu­als work in occupations that often employ large num­bers of teenagers.”

“There is also the Q-1 visa, sometimes referred to as the “Disney visa.” Created in 1990 at the request of the owners of large theme parks, from 1994 to 2009 24,789 Q-1 visas were issued.” Moreover, they note, “the immigrants are overwhelmingly adults over age 20.”

The employment picture such jobs are a part of is a bleak one, Camerota and

Jensenius show. “The summer of 2009 was the worst summer ever experienced by U.S.-born teenagers (16-19) since citizen­ship data was first collected in 1994,” they write. “Just 45 percent were in the labor force, which means they worked or were looking for work.”

“Only one-third actually held a job.” Yet and still, for those who would seek out the usual suspect, these trends played out similarly across not only racial but also economic lines.

“The severity of the decline is similar for U.S.-born black, Hispanic, and white teens,” Camerota and Jensenius discovered. “Between 1994 and 2007 the summer labor force participation of black teens declined from 50 to 35 percent; for Hispanic teens from 52 to 37 percent; and for whites it declined 69 to 55 percent.”

“The fall-off is also similar for U.S.-born teenagers from both high- and low-income households.” That the decline which cannot be hidden is tied to immigration is something that Camerota and Jensenius demonstrate, perhaps more persuasively than any social scientists who have attempted to find such a link ever have.

“Comparisons across states in 2007 show that in the 10 states where immigrants are the largest share of work­ers, just 45 percent of U.S.-born teens were in the summer labor force, compared to 58 percent in the 10 states where immigrants are the smallest share of workers,” Camerota and Jensenius reveal. “Looking at change over time shows that in the 10 states where immigrants increased the most as a share of workers, labor force participation of U.S.-born teenagers declined 17 percentage points.”

“In the 10 states where immigrants increased the least, teen labor force participation declined 9 percent.”

“Teens work a lot more in Pennsylvania than in California,” Camerota said at a press conference on May 12, 2010 when CIS released the study.

Malcolm A. Kline is the Executive Director of Accuracy in Academia.