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Guest-worker program faces challenges, despite labor shortage
By JUNE KRONHOLZ, The Wall Street Journal

WASHINGTON -- In 1942, with American farms short of labor, Congress created a guest-worker program to match low-skilled foreign laborers with U.S. jobs. It collapsed 22 years later amid allegations that the foreigners were being exploited.

Now, U.S. service industries face a labor shortage and Washington is considering another guest-worker program. But this time the complaints are likely to come from many politicians and their increasingly immigration-wary constituents.

That helps explain why a new guest-worker program will be so difficult to achieve. President Bush and congressional Republicans, eager for domestic accomplishment amid political woes, see immigration as an issue with significant voter appeal. But it splits Republicans eager to help business from those concerned about border security, job losses and the nation's identity.

Immigration divides Democrats as well, which is one reason the subject has languished in Congress for several years. Recent television images of violence in France by young men, many of North African descent, illustrate how difficult the issue is to resolve.

When Congress overhauled immigration laws in 1986, it provided almost no way for low-skilled workers to legally fill jobs being added by a growing economy. The result has been a flood of illegal immigrants. By most estimates, there are at least 11 million of them, and that is increasing by about 400,000 a year.

"The economy needs them," says John Gay, co-chairman of the Essential Worker Immigration Coalition, an alliance of service-industry employers. The number of American-born, low-skilled workers fell by 1.8 million between 1996 and 2000, meaning there is a dwindling supply to staff the booming construction, health-care and hospitality industries.

But the intersection of labor demand and supply hasn't been matched by a new legal framework. Because illegal workers use fake identity cards -- or offer no documentation at all -- there's no way to track who or where they are, and whether they have criminal records. Those paid under the table can't be taxed. Moreover, a brutal smuggling trade has developed to help job-seeking illegals evade border patrols.

Two years ago, Mr. Bush suggested a guest-worker program to tackle those problems, and some leading Democrats and Republicans quickly signed on. A bill sponsored by Arizona Republican John McCain and Massachusetts Democrat Edward Kennedy currently has the most support among several proposed in the Senate. It would give renewable three-year work visas to 400,000 people a year who could show they had a job waiting in the U.S. and passed background and medical checks.

But the temporary-worker idea has plenty of detractors. Because visas would be awarded on a first-come basis rather than by nationality or occupation, the AFL-CIO raises the specter of labor contractors recruiting cheap workers in Asia, crowding out Mexicans who then would continue coming illegally.

"Thai workers are a particular favorite right now," says Ana Avendano, director of the labor federation's immigrant-worker program.

Immigration-restriction groups, including the Center for Immigration Studies, argue that employers should be investing in technology to perform low-skilled tasks instead of relying on foreigners. The center's director, Mark Krikorian, raises other practical considerations, such as how the Department of Homeland Security, which handles immigration, could track a large temporary work force.

Some House Republicans, moreover, say they won't consider new avenues to U.S. entry until enforcement of current immigration laws is toughened. The leading opponent of increased immigration, Colorado Republican Tom Tancredo, has proposed a guest-worker plan that would let in as many skilled and unskilled workers as employers say they need. But it would begin only after stepped-up enforcement had largely stopped illegal immigration and hiring.

The most emotional fight over a guest-worker program, though, concerns what happens when work permits expire. The McCain-Kennedy bill, and an alternative proposal by Republican Sen. Chuck Hagel of Nebraska, would allow guest workers to become citizens. Business and immigrant groups have signed on to the idea, arguing that a path to citizenship would help stop the stream of illegals.

But the Bush administration hasn't agreed. In Senate testimony last month, Labor Secretary Elaine Chao said that the president's plan "would not have a legal pathway to citizenship." Workers could come for three years, renew their visas for another three, but then would have to leave, she said.

Guest-worker legislation offered by Republican Sens. Jon Kyl of Arizona and John Cornyn of Texas is even stricter: Immigrants could receive three two-year visas, but would have to return home for a year between visas. To prevent temporary workers from putting down roots, the bill would allow family members to visit only 30 days a year.

Employers argue that they would face labor force disruption if workers had to leave after a few months or years. Mr. Gay, of the essential-workers alliance, adds that employers would be less willing to train temporary workers or launch them on a supervisory track. "We'd like to treat all our workers the same," he says.

The prospect of creating a worker caste, whose members would pay U.S. taxes but would have no social mobility, also offends many. "This is not the way the U.S. acts," says Ms. Avendano of the AFL-CIO, which opposes any form of a guest-worker plan. The U.S. would feel no obligation to send temporary workers to school or help them save money or buy houses, "all the core concepts of the American dream," she adds.

To sweeten the McCain-Kennedy bill's appeal, supporters suggest adding economic incentives for temporary workers who voluntarily leave the U.S. They suggest, for example, returning Social Security payments to departing workers.

But achieving compromise among competing ideas for a guest-worker program represents an uphill fight. The prospect of permanent residency would make the program "an illegal-alien magnet," Mr. Tancredo says. Yet without it, Mr. Gay responds, workers would have little incentive to apply for a visa since "you take away the key reason why it would work."