by Howard Stephenson


Throughout this series we have described the utter failure of the federal government to provide a means for American employers to have sufficient numbers of legal guest workers to sustain the U.S. economy.  We demonstrated that currently, this supply of workers is being provided through network of illegal immigration which has had the tacit support of Congress and the White House.

In this week’s column we will outline a proposal for ending illegal immigration by utilizing the free enterprise system in the enforcement of more than 10 million new legal guest worker visas.

Illegal Immigration:  Why they’re leaving home

The primary reasons we have more than 11 million illegal immigrants in this country are twofold:   First, Latin American economies don’t provide the kind of pay workers can get for even entry-level jobs in the United States primarily because of their countries’ failures to enforce rule of law.  Capital – which would increase pay and productivity of workers – does not flow to these countries because there are countries in the world in which capital is safer.  Corruption among regulators, law enforcement and the judiciary is rampant and represents an unwritten set of rules which supersede formal law.

Second, and most important, the United States government has conflicting immigration laws and economic policies. Congress and the Executive Branch have put the economic policies calling for cheap immigrant labor ahead of the enforcement of immigration laws.  They have ensured that the Immigration and Customs Enforcement (ICE) look the other way while our porous borders allow the virtual free flow of illegals into the United States.

The presence of 11 million illegal immigrants is not by accident.  They have not forced themselves upon our country without our permission.  The United States government has allowed and in some ways encouraged their entry into our country.

Window dressing border patrol efforts – – – – –

A nation which cannot control its borders cannot prevent terrorism

While the U.S. economy receives the benefits of cheap labor through lower agricultural and construction prices and less expensive restaurant meals and hotel stays, the trafficking of illegal workers poses serious threats to national security.  If we cannot control workers crossing the border, how can we ensure that some who cross the border are not terrorists?

Congress simply must enforce worker visa requirements to ensure that any immigrant workers who are in this country are here legally.  To do anything less is to violate our own rule of law standards and place our national security at risk.

Congress should use the free market to enforce worker visas

It is unreasonable to expect the ICE to monitor and control 11 million legal migrant workers and ensure they are complying with the terms of their visas without the assistance of the free enterprise system.   The ICE budget simply could not be large enough to do the job without an undue burden on the U.S. Taxpayer.  The costs of this monitoring and enforcement should be borne by the immigrant workers and their employers rather than being shifted to the American taxpayer.

This monitoring can be accomplished by requiring each worker to post a bond prior to receiving a visa.  The bond would require a cash deposit.  Instead of the current practice of paying $3,000 in cash to a “coyote” who assists workers in getting across the border illegally, this money would be used as a down payment on the bond which would also require withholding a percentage of wages in a trust account held by a third party trust.  This trust account would belong to the worker if he complied with the terms of his visa and would be given to him when he returned to his country and presented himself to the American Consulate.  It would effectively become a “golden handcuff” which would be a tremendous incentive for good behavior and compliance with U.S. laws.  However, if he violated the terms of his visa or engaged in criminal activity while in the United States, his trust account would be forfeited and if it was not sufficient to pay the total face value of the bond, the remainder would be taken from the pooled trust of other workers, ensuring that all visa holders are interested in their co-workers compliance with the law and the terms of their visas.

By employing U.S. bonding companies, there would also be private sector bounty hunters to monitor the workers, look out for their interests, and when violations of the visas occur, hunt them down.  ICE employees have no real economic interest in finding illegals.  Bonding companies and their bounty hunters are directly affected in their own pocketbooks when they fail to supervise and monitor those workers for whom they have issued bonds.

Congress should set a date certain when employers will be prosecuted for hiring illegal workers.

Sufficient time should be allowed for employers to ensure that their workers have bonded visas with a time certain set – say, July 1, 2007 – after which employers will be prosecuted for hiring illegal workers.  This enforcement with employers will help to dry up the incentive for illegal entry into this country.  Instead of illegal workers coming across the border in the dark of night, legal workers would come across the border on buses with worker visas in their hands for jobs already determined.

Strict enforcement requires that employers have birth certificate and social security authentication available to ensure that foreign workers are not producing false documents.

This solution engages the natural incentive of a cash award (an employee receiving the money in his trust account) when the worker complies with the terms of the visa.

It’s time Congress begins enforcing the laws of our country instead of looking the other way

We don’t pretend to assume these ideas are an easy sell:  The guest workers and their employers will no longer be able to cost-shift many of their expenses to the general public and the relative difference between the cost of a citizen worker and a guest worker will be narrowed.  But free market solutions for handling legal guest workers are the only ones that will work on a sustained basis without massive increases in government expenses and employees.

We repeat our call for an Immigration Summit to include top state officials, legislators, and Utah’s entire congressional delegation.  Only when we get all of the players around the same table hearing the same set of facts can we expect any movement in Congress.

Utah’s congressional delegation can and should be leaders in Washington on this issue.  Let’s all invite them to step up.
Guest workers are critical to Utah’s hospitality industry
The statistics relating to the growth in both the United States’ and Utah’s restaurant industries are phenomenal.  For instance, according to the National Restaurant Association (NRA), the restaurant industry has grown from an industry producing $42.8 billion dollars a year nationwide in 1970, to one that boasts a projected $536.9 billion in sales in 2007.  That amount represents more than $1.5 billion in sales a day!   Remarkably, the NRA reported that, “Including the impact restaurants have on sales in related industries, the industry’s overall impact on the U.S. economy is $1.3 trillion a year.”  Moreover, according to Melva Sine, President of the Utah Restaurant Association, Americans now spend approximately 52% of their household food budget eating out.  That number has doubled since ten years ago when the figure was between 24% and 26%.  Obviously, Americans enjoy dining out.
Utah’s restaurant industry numbers are also fascinating, because according to Mrs. Sine, while the average American eats out seven times a week, Utahns dine out only four times a week.  Nonetheless, the Utah restaurant industry job growth rate, consistent with the rest of our state’s job growth rate, outpaces the restaurant industry’s rate nationwide:  the growth rate is 1.9% in the U.S. versus 2.8% here in Utah.  Thus, while we in Utah on average do not go out to eat as often as the rest of America, we dine out often enough to keep the restaurant industry growing quickly in our state.
The increasing growth has a huge impact on restaurant employers.  The U.S. restaurant industry currently employs over 12 million people nationwide, a number that is expected to increase to 14.8 million in ten years.  Currently in Utah there is an estimated 98,000 restaurant and food service employees working in any of the over 4,000 eating and drinking establishments in our state.  Based on research from the NRA, the people employed in the restaurant and foodservice industry make up 8% of the total employment in Utah.  Significantly, the 98,000 figure is estimated to increase an enormous 23.1% by 2017, when an estimated 121,600 people are predicted to work in the industry.
It is apparent from all of these figures that numerous employees are needed, and will continue to be needed, by restaurant employers to keep food production and supply on par with the high demand.  Notably, the restaurant industry is extremely labor intensive with about 40% of the work labeled unskilled labor.  Furthermore, there is roughly a 70% turnover in the industry, so restaurants are frequently seeking new employees.
As a result of the huge demand for employees, the high turnover rate and the unskilled nature of some of the work, the restaurant industry has become a well-suited trade for many immigrant guest workers to find employment.  For example, Mrs. Sine stated that the percentage of Hispanic workers in the restaurant industry has grown from 11% or 12% three of four years ago to 23% today.  However, as is the case with agri-business, the construction industry and the various other sectors in the economy that we have described in this series, literally countless numbers of the immigrants currently employed in the restaurant industry are not legally authorized to work in the United States.  And while much of the condemnation for the restaurant industry’s reliance on illegal immigrants is aimed at the restaurant industry itself, much of the evidence shows that the true blame for this dilemma lies with the federal government because of their continued failure to fix our nation’s broken guest worker policy.
Restaurants cannot verify legal status of workers without federal cooperation
For instance, in a stunning observation, Mrs. Sine noted that the fraudulent documents brought in by “undocumented workers” are so well forged that it is terribly difficult to decipher what is real and what is not.  Furthermore, illegal immigrants employed in the restaurant industry are fully aware that they have between six and nine months to work at a particular restaurant before officials report back to the restaurant employer about their false documentation.  Thus, by the time the federal bureaucrats with the Social Security Administration inform a certain restaurant that they must release an employee because their documentation failed, that unauthorized employee had already left that establishment months ago and is most likely working elsewhere.   Mrs. Sine persisted in her critique of the current immigration system by asking: “that Social Security Number [the stolen number that the administration took over six months to report] is bound to pop up somewhere else again soon, why not follow up right then?  Why is it our fault that the government takes so long to let us [the restaurant employers] know that our employee’s documentation is fraudulent?”
A second place that the federal government has failed is by forcing restaurant employers in to a no-win situation when it comes to hiring practices.  Restaurant employers want to follow the law in their hiring practices for one major reason:  most eating establishments do not have the money to pay the fines that accompany knowingly hiring individuals unauthorized to work in this country.  The dilemma that arises, however, is that no restaurant employers have the time or the right to test every questionable applicant that submits an application.  As explained several times in this series, the threat of discrimination charges are a very real concern for Utah employers, including those in the restaurant industry.  Moreover, restaurant owners just do not have the time –among their various other responsibilities- to wait weeks for a confirmation of an applicant’s documentation when there is a need for that employee at that very moment.  As avowed by Mrs. Sine, “We hang up the ‘now hiring signs’ and hire the individual willing to take the job.  That is our responsibility.  But it is the federal government’s responsibility to enable us to verify a person’s legal status.  We cannot accomplish this alone.  We are not miracle workers.”
The American restaurant industry has become a critical part of our nation’s economy due to its sheer size and the large numbers of people in employs.  As such, the industry needs legal immigrant employees, and yet, as has repeatedly been the case with other industries, the federal government balks at its responsibility to equip this important industry with an acceptable guest worker policy that is so desperately essential.  We again call for support in demanding that the federal government fulfill its responsibility in repairing the current guest worker program so that American employers – such as those in the restaurant industry – can find the workers they need in sufficient numbers, and in a way that is humane and legal.