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Immigration of Foreign Workers: Labor Market Tests and Protections

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Many business people have expressed concern that a scarcity of labor in certain sectors may curtail the pace of economic growth. A leading legislative response to skills mismatches and labor shortages has been to increase the supply of foreign workers. While the demand for more skilled and highly-trained foreign workers has garnered much of the attention in recent years, there has also been pressure to increase unskilled temporary foreign workers, commonly referred to as guest workers.

Those opposing increases in foreign workers assert that there is no compelling evidence of labor shortages. Opponents maintain that salaries and compensation would be rising if there is a labor shortage and if employers wanted to attract qualified U.S. workers. Some allege that employers prefer guest workers because they are less demanding in terms of wages and working conditions, and that expanding guest worker visas would have a deleterious effect on U.S. workers.

The number of foreign workers entering the United States legally has notably increased over the past decade. The number of employment-based legal permanent residents (LPRs) has grown from under 100,000 in FY1994 to over 250,000 in FY2005. The number of visas for employment-based temporary nonimmigrants rose from just under 600,000 in FY1994 to approximately 1.2 million in FY2005. In particular, "H" visas for temporary workers tripled from 98,030 in FY1994 to 321,336 in FY2005.

The Immigration and Nationality Act (INA) bars the admission of any alien who seeks to enter the U.S. to perform skilled or unskilled labor, unless it is determined that (1) there are not sufficient U.S. workers who are able, willing, qualified, and available; and (2) the employment of the alien will not adversely affect the wages and working conditions of similarly employed workers in the United States. The foreign labor certification program in the U.S. Department of Labor (DOL) is responsible for ensuring that foreign workers do not displace or adversely affect working conditions of U.S. workers.

President George W. Bush has stated that comprehensive immigration reform is a top priority of his second term. His principles of reform include a major overhaul of temporary worker visas, expansion of permanent legal immigration and revisions to the process of determining whether foreign workers are needed. These issues were addressed in legislation (S. 2611) passed by the Senate in the 109th Congress and are emerging again in the 110th Congress. The challenge inherent in this policy debate is balancing employers' hopes to increase the supply of legally present foreign workers without displacing or adversely affecting the working conditions of U.S. workers.

This report does not track legislation and will be updated if policies are revised.