Business, Labor Cut Deal for Immigrant Prevailing Wage

Business, Labor Cut Deal for Immigrant Prevailing Wage

A sticking point in negotiations over an immigration reform deal has been the business community’s desire to have a consistent, reliable visa process for guest workers and unions’ fear that such a system would depress wages. On Saturday, negotiators for the two sides announced they had reached a deal. Under terms of the deal, the US would provide up to 200k visas a year for low-skilled workers and the law would require that these workers would be guaranteed to earn either an amount equal to US citizens’ wages or the “prevailing wage”, whichever is higher. If enacted, the deal would represent an unprecedented intrusion into the labor market. 

Under current law, firms bidding for government contracts are required to pay their employees a “prevailing wage,” set by the Labor Department based on regional economic data. The law is generally a boon to labor unions, preventing them from being under-bid by non-union firms. A non-union firm is essentially required to pay the same wages and benefits they would if their workforce was unionized. 

Currently, “prevailing wage” laws are only enforced for government-contract work. The deal announced by business and labor, however, would extend the practice into many aspects of the private economy. The biggest impact would likely be in residential construction, which would see a dramatic increase in labor costs. 

In exchange for the wage mandate, business groups would win their goal of creating 200k yearly visas for low-skilled guest workers. Under terms of the deal, these guest workers would be on a “path to citizenship” and could change jobs once inside the country. Business groups had been seeking 400k yearly guest worker visas. 

With this deal, Senate negotiators are expected to move quickly in seeking approval for an immigration reform deal. Action is expected mid-April, after Congress returns from its 2-week Easter recess.

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