July 12 (Bloomberg) -- To Maria Bolesova and 73,000 other foreign students, a 50-year-old State Department cultural-exchange program provides a welcome path to work and travel in the U.S. during the summer school break.
To detractors, it takes jobs from Americans and has generated complaints of substandard pay and working conditions. The number of participants has dropped by half since 2008 as the U.S. has tightened rules in response to complaints.
Yet even with fewer summer workers being admitted under the special visas, the program became a target for criticism last month during the Senate debate over revamping U.S. immigration law.
“In street corners all over this country, there are kids who have nothing to do,” Senator Bernie Sanders, an independent from Vermont, said on the Senate floor on June 18. “Many of the jobs that used to be done by young Americans are now being performed by foreign college students.”
Summer Work Travel, which the State Department calls its largest cultural exchange program, is open to students enrolled full-time in a college or university outside the U.S. Students get visas via sponsors and can’t stay more than four months.
Sponsors, which include more than three dozen companies and organizations from Walt Disney Co.’s Walt Disney World to the Council on International Educational Exchange, can team up with recruiters in foreign countries to advertise the jobs and screen candidates.
Students must cover travel costs, insurance, housing and fees for U.S. sponsors and contractors within their home countries. They rely on the sponsors and U.S. employers to get jobs, help with affordable housing and the cultural program, such as attending baseball games or sightseeing tours.
Business owners say one main advantage of hiring foreign students is that they are available for the entire season from June until September. American students often have to return to school by mid-August, said Christopher Darr, personnel manager at Seaside Amusements Inc.’s amusement park Funland in Rehoboth Beach, Delaware.
He hires about 30 foreign students to fill in the part of the season when American workers are not available. “It’s not that we are taking jobs from the Americans,” said Darr, whose park employs 100 to 110 people.
Rules have been tightening since the State Department began a review of the program in 2010 in response to what it said in a 2011 Federal Register notice were rising reports of job placements that were canceled, fraudulent or involved inappropriate work hours. The number of J-1 visas for student summer workers has been capped at the 2011 level of 109,000, down from a peak of 153,700 issued in 2008. Only about 73,000 were filled under the program this year and 91,800 last year.
Unemployment for those ages 16 to 24 was 16.3 percent in June, more than double the overall rate of 7.6 percent, yet down from a peak of 19.6 in April 2010, according to the Labor Department.
The immigration legislation passed by the Senate June 27 includes a $100 fee on each summer worker which will most likely be paid by sponsors. It also prohibits retaliation against student participants who complain about employer conditions, seek legal counsel or talk with worker organizations about potential program violations.
Republicans in the House of Representatives have said they won’t take up the Senate’s bill and instead will craft their own legislation.
While the fee technically could be passed along to participants or employers, it would be cost-prohibitive for both students and the many small businesses that support the program, Elizabeth O’Neill, executive vice president of international exchange programs at Portland, Maine-based Council on International Educational Exchange, said in an e-mail.
“We are very concerned that this fee would significantly curtail our ability to run the program effectively, in particular where we already have sharply rising costs due to regulatory requirements,” said O’Neill.
Bolesova, a 24-year-old student from Chmelnica, Slovakia, is spending her second summer overseeing carousel and bumper car rides at Funland. The experience enhances her ability to teach English in Slovakia and fulfills her desire to travel, she said.
She said she paid 1,500 euros ($1,964) to cover her travel costs to the U.S. and return trip and fees to her sponsor. “It is a lot of money to spend but I really wanted to go back, especially to Funland because I really love the employers,” said Bolesova, who studies English and literature at Slovakia’s University of Presov. “I love working with kids and with people.”
Other students haven’t had such a positive experience. National Guestworker Alliance, a New Orleans-based labor organization of foreign workers, has assisted students in filing complaints with the State and Labor Departments over working conditions and pay practices.
In August 2011, the organization said some students employed by a chocolate-distribution center in Palmyra, Pennsylvania, complained they had to move 50-pound boxes every 5 seconds at a Hershey Co. contractor. The complaint said their salaries minus required deductions for rent left them “little to no chance” to earn back the $3,000 to $6,000 they paid to join the program.
Exel Inc., which operated the center for Hershey, said the workers were provided by a temporary employment agency. Lynn Anderson, a spokeswoman for Westerville, Ohio-based Exel, said students had known how much the job paid and that it required moving boxes of a certain weight before they signed the work agreements.
After receiving complaints from “a small number,” of the “several hundred” student workers at the facility, Exel partnered with the staffing supplier and sponsor “to ensure the issues and concerns raised by the students were being addressed,” Anderson said in an e-mail.
Exel also directed the staffing company to stop using student workers and no longer uses that agency, Anderson said. Hershey spokesman Jeff Beckman said in an e-mail that while the company didn’t employ the students, it worked with contractors to provide “a cultural and educational experience” for the students.
In March, National Guestworker Alliance filed complaints on behalf of students from Argentina, Chile, Peru, Paraguay, Brazil, and Malaysia who worked for a McDonald’s Corp. franchisee in the Harrisburg, Pennsylvania area. It said they received fewer than promised working hours, some worked shifts “up to 25 hours straight” and lived in substandard, basement apartments owned by Andy Cheung, who was operating the franchises. Cheung didn’t respond to repeated phone messages requesting comment.
The Labor Department’s Wage and Hour Division in Wilkes-Barre, Pennsylvania, is investigating the case, said Leni Fortson, a spokeswoman in the regional public affairs office in Philadelphia. The department can’t comment on whether Cheung has filed a response or on the investigation, she said.
“We take the well-being of the employees working in McDonald’s restaurants seriously,” McDonald’s spokeswoman Ofelia Casillas said in an e-mailed statement. “We began investigating the situation in Pennsylvania immediately upon learning of the issues involved. The franchisee has agreed to leave the McDonald’s system. We are also working on connecting with the guest workers on an individual basis to most effectively address this situation.”
Restrictions imposed on the program by the Obama administration over the past two years include requiring sponsors to vet employers and job offers and contact students monthly to monitor their welfare and location. Students, regardless of age, must be paid at least the state minimum wage if it is higher than the federal rate of $7.25 an hour. Sponsors also must ensure students don’t displace U.S. workers and aren’t hired by companies that have had layoffs over the previous 120 days.
The new rules are a step in the right direction, said Jennifer J. Rosenbaum, legal and policy director for the National Guestworker Alliance. The organization, founded 2006 as a project of the New Orleans Workers’ Center for Racial Justice, also advocates for more protection for whistle-blowers and workers organizing against violations, and so it supports the anti-retaliation safeguards in the Senate immigration bill, she said.
Even with changes, the program has other detractors. Steven Camarota, director of research for the Washington-based Center for Immigration Studies, which is critical of increased immigration, said foreign students sign up for summer jobs several months earlier than their American counterparts. They are also cheaper, he said, because employers don’t have to pay Social Security and Medicare taxes for them.
Employers dismiss the cost aspect, saying that’s not the reason they hire international workers. Hugh Fuller has hired foreign students at his Purple Parrot Grill restaurant in Rehoboth Beach for at least 15 years to supplement his 72-person seasonal staff.
They’ve won him over by their hard work and creativity, said Fuller. Some have sent resumes with YouTube videos to persuade him that, while they live overseas, they speak perfect English and can cook.
“I’m very proud of my international students,” he said, adding that for some positions, such as preparing food, he doesn’t get too many local applicants. “We have certain jobs that, you know, it comes down to, American people just won’t do.”
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