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♪ ♪ JOHN KATKO: Welcome, America, to "Balancing Act", the show that aims to tame the political circus of two-party politics.

I'm John Katko.

This week, we're taking a closer look at the guest worker program and how it can be reformed to meet industry needs here in America.

In the center ring, we'll speak with Daniel Costa, then David Fisher and Alexis Guild will join us to balance the interests of U.S.

industry with worker protections.

Then I'll give you my take, and we'll catch up with Bloomberg's Peggy Collins for what's happening next week in Washington.

But first, let's walk the tightrope.

♪ The United States guest worker program is just one component of our overall immigration system.

It allows U.S.

employers to bring in foreign labor on temporary visas when employers certify they are unable to hire enough qualified American workers.

The practice is hardly new.

During World War II, for example, the Bracero Program brought millions of Mexican workers north to keep farms and railroads running while American soldiers were overseas fighting the war.

That program ended in the 1960s, but America's reliance on guest workers never disappeared.

Today, hundreds of thousands of guest workers arrive each year.

They prune orchards in the spring, harvest produce in the summer, and keep hotels and resorts running in peak season, and even fill specialized roles in industries like technology when the domestic workforce falls short, Supporters argue these workers are essential.

Employers who use the program are required to demonstrate they make good faith efforts to hire Americans first.

But for industries like agriculture, hospitality and construction, guest workers create a legal and reliable pipeline of labor to address domestic shortages.

Business groups insist it's the only way to keep certain industries afloat, but critics point to vulnerabilities.

Because visas are tied to a single employer, workers can become trapped in unsafe or exploitative jobs.

Labor unions warn that these programs displace Americans and suppress wages in already low-wage industries.

And immigration officials caution that weak oversight can lead to visa overstays, further straining an already stressed and controversial immigration system.

So how can America reform the guest worker program to balance industry needs with worker protections?

Let's ask our first guest as we step into the center ring.

♪ ♪ Joining me now is director of immigration law and policy research at the Economic Policy Institute, Daniel Costa.

Daniel, thanks for coming in.

I want to jump right into it.

Let's talk about the guest worker program.

First of all, why was it created?

DANIEL COSTA: Sure.

The first one that most people know about is the - it was called the Bracero Program.

And there was a version of it around World War I. And then there was another version around World War II that's more well known.

And it was really for farm labor for farmers in the United States who said they couldn't get enough workers, in part because so many young men had gone off to war.

And that's really the first version.

Then there's other programs from around the 1952 Immigration Act.

There really are dozens of programs; it's not just one.

Each of them have their own different rules and reasons for existing, as well as different lobbies that care about them.

KATKO: So, the Bracero Program was supposed to be a temporary measure, ended up being a long-term measure.

And others have sprung up.

And tell us about a little bit more about the need for these programs.

COSTA: Sure.

There are dozens of programs, each with their own rules.

But the main rationale for these programs is to fill labor shortages.

There's other programs that are for cultural exchange for foreign students so that they can work longer or work after they graduate in the U.S., as well as for multinational companies to move workers around, investors to bring over employees.

There's just numbers of these programs, but the main rationale is to fill labor shortages when U.S.

workers are not available to fill certain jobs.

KATKO: So when you talk about labor shortages, do we have any hard data that kind of illustrates the problem?

COSTA: That's really murky.

You know, the reality is that what is a labor shortage?

That question - there's no defined, agreed upon answer.

And the other issue is that in these programs, there's very few of them where you actually have to demonstrate that there's a labor shortage, meaning that an employer has to go out and test the labor market to see if there's a U.S.

worker available.

Out of the dozens of programs, there's only two programs that require that.

And even then, the rules are very easy to game the system.

And so we don't have real information about how real the labor shortage needs are.

And there's no methodologies that say the Labor Department are using to determine if there are labor shortages.

So there are questions that sometimes, whether or not employers actually prefer to bring in workers rather than hire U.S.

workers.

There's been investigative news reports as well as legal cases about employers preferring to use those workers, and the reason why they would do that is because they can often underpay these workers compared to what a U.S.

worker would get.

And they have a lot of control over the workers.

So the employers own and control the visa status of the workers.

Meaning if they get fired, they become deportable.

And there's a lot of issues related to that.

KATKO: So you mentioned a couple of programs that may have the priority of checking, trying to hire Americans first and showing that.

What are those programs?

COSTA: Those are the programs for low-wage work.

The two main low-wage work programs: the H-2A program, which is for farm labor.

It's sort of the descendant of the Bracero Program.

And then you have H-2B, which is its sister program for jobs outside of agriculture.

So think construction, landscaping, working in restaurants, seafood processing, those types of jobs.

KATKO: So how do we ensure that these guest worker programs aren't taking jobs away from Americans?

How do we make sure that that's not happening?

COSTA: The best way would be to have a robust system for ensuring that U.S.

workers have a fair and first shot at the employment opportunities in their country.

The way it works now, it's only two programs, as I mentioned, that have any rules around that.

And there's so many cases out there - you can just Google and news cases will come up or EEOC cases will come up - where employers give workers the runaround because U.S.

workers can apply to these jobs.

But then whether or not the employer actually looks at the resume and hires them is a whole other issue.

The only way that they can get discovered if they're not doing that is if there's an investigation by the Labor Department, and that's something that's rare.

And there probably has to be some sort of complaint.

So you need a more centralized system where every worker gets considered, and is hired if they apply for these jobs.

But there's just so many cases where U.S.

workers send in their resumes and then the job just never materializes.

KATKO: So let's take a step back, for a moment, if I can.

If you could briefly explain the process by which someone in a foreign country applies to get into the United States, and what do they have to do?

COSTA: Well, usually it's the employer recruiting them.

So in these two programs I just mentioned, H-2A and H-2B, there is a whole network of recruiters that work for employers that go to the country of origin, in many cases in these two programs, it's usually Mexico.

And those recruiters look for people and say they have X number of jobs with an employer doing whether it's farm work or landscaping.

And in many cases, the problem with the system is that those recruiters usually almost always charge illegal fees to the workers.

So workers have to pay for their jobs, and that's not lawful.

They're not supposed to do that, but it's sort of the way the system works.

And there are surveys of workers that show that almost all workers pay thousands of dollars in these fees.

And then they get brought over to the U.S.

Often on the employer side, they go and they file what's called a labor certification with the Labor Department first, to prove that they need these workers.

And then after that gets approved, they go to USCIS, which is in the Department of Homeland Security, to get a petition approved.

And then the worker goes to their consulate in their home country at the State Department and goes through an interview, and then they get a visa, and then they can come to the United States.

So that's the nutshell version of how the program works.

KATKO: Now, you mentioned a bit of how sometimes they're exploited, these workers.

How are they protected once they get to the United States, or are they?

COSTA: Well, there's only three programs that have actual wage rules that are intended to protect wages and working conditions for U.S.

workers.

And so, in many cases, those wage rules can be easily gamed by employers.

And also the regulations are just insufficient to really ensure that workers are getting the right wages.

You know, workers in theory should get whatever the local average wage is for the job that they're doing.

That's the best way to protect U.S.

workers, to ensure wage standards aren't depressed.

As I mentioned, most programs don't have these wage rules.

Then the few that do, they don't work very well in practice.

But that's probably the main protection.

The other protection is the rules in those two programs to recruit and hire U.S.

workers first.

And then, you know, in the H-2A and H-2B programs - two main low-wage work programs - there are other worker protections, but they're not that great.

And the Labor Department has been understaffed and underfunded for so many years that they aren't able to investigate many of these cases.

KATKO: We've got about a minute left, and if you could just summarize for us, even a list if you'd like, some of the major failings in the current system.

COSTA: Major failings are, not enough recruitment for U.S.

workers.

The wages are not set at a level that they should to protect local standards.

The workers who come temporarily, often for many years at a time, have no path to permanent residence.

They can't get a green card and stay permanently.

There's no way to earn one.

And that keeps them in this kind of quasi-indentured status where employers control their visa, control their ability to stay in the United States and control where they can work, leaving them with very little bargaining power.

So all of those things can be fixed.

There's been policy proposals that have been out there for a long time.

Protections against retaliation are also needed.

Some sort of regulation of the recruitment, of recruiters that bring workers over.

Those are kind of the main fixes that are needed, but there hasn't been enough political will to make those changes.

KATKO: Daniel Costa, great discussion.

We appreciate it very much, and thank you so much.

COSTA: Thanks for having me on.

KATKO: Let's continue the discussion now on the trapeze.

♪ ♪ KATKO: How can the guest worker program be reformed to meet both industry needs and protect workers?

With us now on the trapeze are President of the New York Farm Bureau, David Fisher, and Vice President of Strategy and Programs for Farmworker Justice, Alexis Guild.

Thank you both for coming.

Let's just jump right into it.

David, what are some of the major problems you see with the current guest worker program?

DAVID FISHER: The current H-2A guest worker program doesn't address the needs of a lot of our industry for year-round work, especially in dairy, but also in some of our greenhouses that operate year-round at this point with different crops and different seasons.

And then it's become a little bit cumbersome, and there's just quite a few other things.

The wage rate is escalating very rapidly, which is putting our farmers at a competitive disadvantage.

KATKO: So what about the bureaucratic processes you have to go through?

What are some of the problems with that?

Give us some examples.

FISHER: When you want some workers the 1st of April, typically you would start probably in December with an application.

Run it through, goes through federal DOL, state DOL, housing inspections and other processes.

And then once you get it set up, you have to get appointments for the workers at the consulate to get their paperwork.

Sometimes that can cause large delays.

And so if it is late, then you want to plant on April 1st and you don't have workers, it kind of puts the farm right behind the eight ball right out of the gate in the spring of the season.

KATKO: Alexis, what's your take on some of the problems with the current guest worker program?

ALEXIS GUILD: First of all, thank you so much for having me on today, and I certainly appreciate the opportunity to talk more about the need for strong protections for all farm workers, including H-2A workers.

Really, I think the challenge with the H-2A program is we understand that there are labor needs that need to be met, but the H-2A program was really created as a last-resort measure.

So it was never intended to be a primary source of employment for agriculture.

Now, when H-2A workers come to the United States, they are brought by their employers or an association or a farm labor contractor, and their visa is tied to the employer.

And so that creates a relationship where the worker is completely dependent on the employer who brought them here.

So that creates opportunities for wage theft, exploitation.

And yes, there are protections, but they need to be stronger.

KATKO: So, David, why do we need a guest worker program?

Why don't you just hire Americans to run your farms?

FISHER: Just not enough workers in this country.

If you look at the demographics, there's not enough people to do the jobs we have.

That's part of the challenge.

If you talk to farmers who use the H-2A program, we always have to advertise, and most of them will tell you they get none or very few American applicants for those jobs, and a lot of them are seasonal, Some, even the year-round ones, you don't get applications.

You wouldn't get people that want to do those jobs.

KATKO: Alexis, what's your take on that?

GUILD: So the H-2A program currently only makes up about 15% of the current agricultural workforce, and the program has certainly grown by quite a bit.

It's basically doubled in the last decade.

But there are U.S.

workers who are doing the work and want to continue to work in agriculture.

If you talk to workers, they will tell you that they're proud of their contributions, that they have a lot of dignity in their work.

They're very proud of their work.

Unfortunately, oftentimes many workers are not treated with the dignity that they deserve.

Approximately 20% of farm workers live below the federal poverty level.

So I think we can both agree that they need to be strong protections for workers generally, and we both want a way to ensure a stable farm labor workforce.

KATKO: I just want to make sure I'm clear.

Alexis, are there enough American workers to fill all of these jobs, in your opinion?

GUILD: You know, it's hard to say exactly.

I think in some instances, there are U.S.

workers who are available who may not be getting the jobs.

I think in other areas, there are shortages.

Again, we certainly understand that there are labor shortages that do need to be filled by the H-2A program.

But the H-2A program is not a solution to ensure a stable farm labor workforce.

It was never meant to be the permanent and sole source of employment in agriculture.

KATKO: David, do you and the farming industry in general try to hire Americans first?

FISHER: Yes, we do.

KATKO: Tell us what your efforts are in that regard.

I think you touched on that But tell me more.

FISHER: It's a challenge.

If you look at the H-2A advertisements, there's very few Americans applying for those jobs.

If you look at, I think it's over 30% of the workers in agriculture are Hispanic and a lot of them don't have proper documentation, let's just be honest.

So it's a problem.

So with a secure border, we need reform in some of these things, H-2A and other options to keep our food supply in a good place.

KATKO: Okay, so let's wrap up.

We've got a couple of minutes left.

I'll give you an opportunity to give me a little capsule summary of what you think the reform should look like.

David, you go first.

FISHER: It needs to be flexible and needs to meet the needs.

Start dates need to be timely, but also flexible.

Some of the disaggregation guidance from the last administration needs to be fixed.

It makes it really hard for small farms to compete when they have to do separate job orders for several different job categories, or pay the higher rate all the time.

So they just aren't doing some of those things.

There's an asylum fee that was added.

That really doesn't have any purpose in the H-2A process.

And housing is expensive.

These people get free housing.

So we would like to see something around that.

And then we need some year-round opportunities, and then some fixes to the formulas for the AEWR that keep American farmers competitive.

Because we pay a lot more than other countries, and our food imports are going up because of the cost.

Dr.

Brown at North Carolina just did a research paper that shows that lower wage rates probably would make rural economies more healthy.

And so as we look at food imports going up drastically - 2014 to 2024 went up 6% annually - and that lines up with the number of farms that are going out of business.

So we need to decide as a country: do we want to import our food or do we want to import some workers?

KATKO: Perfect.

Alexis, tell us your thoughts on some of the reforms you'd like to see.

GUILD: Certainly.

So I think first and foremost, we need to protect and strengthen the U.S.

workforce.

That includes a pathway to legal status for undocumented workers and their families, livable wages that allow workers to provide for themselves and their families, and full inclusion of farm workers under protections afforded to U.S.

workers.

When we think about the H-2A program, we certainly need strong protections - strong protections for H-2A workers, strong protections for U.S.

workers.

That's really the whole point of the program: to protect U.S.

workers.

Protections include ensuring that workers are able to move to another job if being exploited, if there are violations, if they feel in danger, allowing that flexibility.

Ensuring that workers have strong wage protections, protections around termination, around many of the protections included in the 2024 rule that was finalized under the previous administration.

If there aren't strong protections for H-2A workers, the challenge is that we're opening the door for unscrupulous employers to use the program as a means for cheap, exploitable labor.

We want employers who need the program, who are using the program in the way it's intended, to be able to use the program, but that can't be at the expense of protections for H-2A workers and U.S.

workers.

KATKO: Thank you both for a great spirited discussion.

And now it's time for my take.

♪ ♪ KATKO: The guest worker program is crucial for America in order to fulfill job shortages in agriculture, tourism, construction, and technology among others.

However, reform is absolutely critical - not only to alleviate both persistent job shortages but also visa overstays which turn legal guest workers into law breakers.

Plus, how do we avoid the exploitation of these vulnerable guest workers, who are often victims of deceptive recruitment, wage theft and poor living conditions?

Here are some possible solutions: 1.

Require guest workers to submit biometric data, such as facial recognition software we have on our phones before they enter the country, ensuring there is no fraud in their paperwork and a smoother ID process.

2.

At the end of the season, issue a return visa for the following year to avoid overstays 3.

Create an elastic program giving priority to U.S.

citizens always who may want these jobs during economic downturns.

With only 1% of Americans working in agriculture these days, the guest worker program is essential.

So let's reform it.

That's my take.

♪ ♪ KATKO: Joining me now from our nation's capital is Washington Bureau Chief at Bloomberg News, Peggy Collins, to fill us in on what's happening next week in Washington.

Welcome, Peggy.

It is always an adventure in Washington, so what's up next week?

PEGGY COLLINS: That's right, John.

Thanks so much for having me.

We're expecting another big week in Washington next week, coming off the heels of this week where we had quite a lot of economic news.

We'll be rounding the bend on the end of the third quarter next week and will be looking out for economic data reports to come in at the end of that quarter, particularly around personal income and spending and consumer sentiment.

We've gotten a lot of data over the course of the month that shows the economy may be showing signs of some strains, but unemployment is still particularly low at about 4.3%.

So we're really looking to see if consumers are starting to close up their pocketbooks because of the continuation of rising prices in some areas, like gasoline and electricity.

That will be one area that we're really looking at next week KATKO: So, Peggy, I noticed that on the inflation front, the numbers ticked up a little bit.

How is that impacting things?

COLLINS: That's right.

So I think it's one thing that the administration and economic officials across the country are watching closely.

We did see on several fronts - household goods, and prices like electricity, gasoline, some of the things Americans deal with every single day -- did tick up in August That's a sign that potentially it could make it harder for Americans to balance the economic needs that they have with rising prices.

It's also been one of the key things that the White House has been trying to combat.

Another thing to keep on the lookout for next week is we had a Fed decision in Washington this week, and the Fed is really responsible for trying to manage inflation and unemployment.

One of the things we'll be looking for next week is Fed officials to come out and speak about their decision on interest rates this week in Washington.

A key person that we'll be looking out for is Steven Myron.

Steven Myron joined the Fed board for the first time this week after being confirmed by the Senate, and he will be hopefully sharing his views about what he decided on the Fed decision day and what he thinks about the economy as a new member of the Fed board.

KATKO: So lastly, speaking of economics, what's going to be the impact, if any, on the economy if we have another shutdown or another continuing resolution up in Congress?

COLLINS: Well, certainly, John, we've been through this a number of times where Congress brings us up to the deadline on something like a shutdown, and then they get it resolved.

I do think we're at a moment in the economy here, as we've been reporting at Bloomberg, where things are starting to show some signs of strain, although the economy is holding up on the jobs front relatively well.

We will be looking for any signs that shutdown -- if it does happen -- hits in terms of an impact on jobs or people's income That will be really where the rubber will hit the road.

KATKO: Thanks so much for your insight, and we'll see you next time.

COLLINS: Thanks so much for having me.

KATKO: That's all for this week, folks.

To send in your comments for the show or see "Balancing Act" extras and exclusives, follow us on social media or balancingactwithjohnkatko.com.

Thank you for joining us.

And remember, in a circus that is politics, there's always a "Balancing Act".

I'm John Katko.

We'll see you next time, America.