Part Four of Cheap Labor as Cultural Exchange: The $100 Million Summer Work Travel Industry
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Jerry Kammer is a Senior Research Fellow at the Center for Immigration Studies.
The lobbying organization for the sponsors of federal exchange programs is the Washington-based Alliance for International Educational and Cultural Exchange. Its executive director, Michael McCarry, said in a 2010 speech that his job is to “look for program regulations that are permissive and allow people to come to the United States in a responsible way, and for visa policy that supports these goals.”1
For decades, the federal government’s management of the Summer Work Travel program (SWT), first by the U.S. Information Agency and later by the State Department, has been criticized for permissiveness – in the form of lax regulation and minimal oversight – that has tolerated decades of abuses.
High-ranking employees at some of the sponsoring agencies that partner with the State Department in administering SWT point a finger at the man who was the program’s key regulator for many years until he was removed last June, Stanley S. Colvin.
Colvin’s involvement with exchange programs dates back to the early 1990s, when he worked at the USIA, where he became assistant general counsel. He moved to State when the two agencies merged in 1999, eventually rising to the rank of Deputy Assistant Secretary of State for Private Sector Exchange. In mid-2011, Colvin was removed from that position and given the title of “strategic adviser” to the Bureau of Educational and Cultural Affairs.2
Several critics of Colvin agreed to talk about him, but only on condition of confidentiality because they did not want to risk antagonizing the State Department.
“He had what I’d call a cavalier attitude,” said one, who was particularly disappointed at what he called Colvin’s tolerance of SWT sponsors that became “visa mills.” That phrase describes organizations that provided little oversight and guidance to the SWT participants from whom the sponsors collect fees. The State Department acknowledged the problem in the spring of 2011 when it said some sponsors were so detached from their young charges that they became “mere purveyors of J-visas.”3
Another critic said Colvin had a tendency to be “dismissive” of those who sought to engage him in dialogue about SWT. He drew this bottom line under Colvin’s stewardship: “There wasn’t the proper oversight.”
Responding to the criticism, Colvin said his record at the State Department, including several awards and a steady rise to the prestigious Senior Executive Service, showed otherwise. He said that in just the last five years of his 25-year career as a regulator of exchange programs, “I have drafted, reviewed, edited, or signed more than 25,000 administrative actions and had one-one-one contact with literally thousands of individuals. I answer my own phone and have an open door policy.”
The long record of criticism of the federal government’s management of SWT and other exchanges in the J visa category begins well before Colvin joined the USIA in 1990. After the General Accounting Office in 1988 and 1989 studied the USIA’s work, it reported that:
“USIA’s management oversight of the J-visa program has not been adequate to ensure the integrity of the program … . USIA lacks adequate information on participant activities, does not enforce requirements that program sponsors provide periodic information on participant activities, has no systematic process to monitor sponsors’ and participants’ activities, and does not adequately coordinate the program internally or with other agencies having visa responsibilities.”4
What is most striking is how consistent the criticisms have been for two decades and how little anyone at State has accomplished to reform the program, protect its young foreign participants, and safeguard the international image of the United States, which the program was established to enhance.
In 2000, a decade after the GAO report, the State Department’s own Office of the Inspector General issued a report titled “The Exchange Visitor Program Needs Improved Management and Oversight.” That report found that State was “unable to effectively administer and monitor the Exchange Visitor Program primarily because of inadequate resources. It found that lax monitoring had created an atmosphere in which program ‘‘regulations can easily be ignored and/or abused.”5
In 2002, the Baltimore Sun reported about dozens of Polish SWT students who “had been left stranded on the streets after the summer jobs they had been promised suddenly vanished.” The story quoted Les Kuczynski, the executive director of the Polish American Congress in Chicago who said the problem was widespread. “This is becoming a national scandal,” Kuczynski said. “You can’t have this going on unregulated.”6
There has been a string of other harsh assessments – in 2005 by the GAO,7 in 2010 by the Associated Press,8 and in 2011 by the Economic Policy Institute.9
Despite the repeated criticisms and calls for reform, problems steadily accumulated. In 2010, as the Associated Press pursued allegations of widespread abuses within the SWT program, a senior adviser to Assistant Secretary Ann Stock said the department was “deeply concerned” about such allegations. Nevertheless, a circle-the-wagons mentality prevailed at State, which turned down the AP’s request for an interview.
Among other abuses, the news agency reported that “strip clubs and adult entertainment companies openly solicit J-1 workers” despite State’s own regulations that prohibit jobs that could bring the program into disrepute. It quoted one company that boasted it was “affiliated with designated visa sponsors” that could help it place J-1 students at strip clubs.
The AP also quoted Terry Coonan, the executive director of Florida State University’s Center for the Advancement of Human Rights. Said Coonan, a former prosecutor, “There’s been a massive failure on the part of the United States to bring any accountability to the temporary work visa programs, and it’s especially true for the J-1.”10
Several months before that story appeared, the State Department initiated a review of the SWT program. That led to the new regulations that were issued in 2011 in an attempt to bring order to a program widely regarded as undisciplined and subject to exploitation by negligent sponsors and unscrupulous partner agencies in foreign countries.
The new regulations did little to quell the criticism. Daniel Costa of the Economic Policy Institute wrote that while they “may slightly improve the program’s operations in a few limited ways,” oversight would “continue to be woefully inadequate.”11 An AP critique said the regulations were “vague” and “have few teeth.”12
Preaching Transparency Abroad, Avoiding It at Home
One fundamental problem at State’s Exchange Visitor Program has been the opaqueness of its operations. Recent efforts by outsiders to examine the SWT program have been frustrated by a refusal to answer questions. Also problematic is State’s inability or unwillingness to disclose data that would help measure the performance of sponsors, the amount of fees they collect, the types of jobs students hold, the wages they receive, their effects on local labor markets, and the number of SWT participants who overstay their visas.
Such an attitude about public disclosure belies the 2009 declaration by Judith McHale, Under Secretary of State for Public Diplomacy and Public Affairs, that exchanges are “the single most important and valuable thing we do.”13 It has also helped cover up the State Department’s history.
Moreover, the absence of accountability contradicts the values of transparency that the State Department preaches around the world. Last July, for example, as Secretary of State Hillary Clinton joined Brazilian Foreign Minister Antonio Patriota in announcing a new “Open Government Partnership,” the State Department hailed it as an effort at “increasing government openness, strengthening accountability, and enhancing civic engagement.”14
Secretary Clinton added: “When a government hides its work from public view… . that government is failing its citizens. And it is failing to create an environment in which the best ideas are embraced and the most talented people have a chance to contribute.”
The administration of SWT has been infected by just the sort of dysfunction and failure that Secretary Clinton decries. But while State has failed to meet basic measures of transparency at home, it has sought to engage the interest of foreign news organizations and agencies in the expansion of the program around the world.
In May 2011, for example, when officials at the Bureau of Educational and Cultural Affairs conducted a web chat with foreign media to announce the rollout of a new J-1 website, one official said it was part of an effort “to be customer centric and user friendly.”15 This is consistent with State’s administration of SWT, which has demonstrated a preoccupation with foreign relations and an indifference to domestic concerns.
Now Stanley Colvin has been replaced by Rick Ruth. A former Foreign Service officer, Ruth has a reputation as a problem solver and a consensus builder.
But he appears to be operating in a culture of excessive rigidity and caution at the Bureau of Educational and Cultural Affairs. He finally agreed to an interview for this report only after repeated requests had been ignored and only on the condition that his comments not be published until they were reviewed and cleared at State. As a result, a significant Ruth comment about the effects of SWT was deleted from the record.
Nevertheless, as the accompanying transcript of the interview shows, Ruth made many substantive comments for the record. For instance, he said he is concerned about the program’s potential impacts on American workers. He said his challenge is to balance that concern with the value of having future leaders of foreign countries experience life in the United States. “How do we balance that?” he said. “That is one of the hard questions; I am telling you there is now a commitment to do that.”
Responding to the interviewer’s observation that Colvin was widely regarded as a laissez-faire manager, Ruth said flatly, “I am not a laissez-faire guy.”
In response to follow up questions submitted in writing, his office made these points:
“We are moving forward with a new rulemaking that will capture the 2012 summer season. As part of this new rulemaking, we will:
- Retain and expand the list of prohibited employment categories, including jobs that isolate Summer Work Travel participants from contact with Americans and work that is inappropriate for a cultural exchange.
- Strengthen the sponsors’ requirements for verifying job placements to ensure there are appropriate jobs for the students.
- Strengthen the cultural aspects of the program to ensure that the objective of the program – positive exposure to the United States – is accomplished.
- Require that an independent management audit be provided annually to the Department.”
Visa Diplomacy Trumps Concern for American Workers
In the 1980s, when the Summer Work Travel program was administered by the United States Information Agency, its regulations implicitly acknowledged that the infusion of young foreigners into local job markets could have an adverse effect on local job-seekers. The regulations required that as SWT sponsors prepared SWT participants to come to the U.S., the participants "should be fully briefed on the employment situation in the United States and advised not to seek employment in areas where a high unemployment situation exists."1
Daniel Costa of the Economic Policy Institute has called that regulation "toothless and unenforceable."2 Indeed, it was little more than a rule requiring a suggestion. That may explain why it no longer exists now that SWT is administered by the State Department.
And so, in recent years, SWT participants have taken jobs in areas notorious for high unemployment. For example, McDonald's restaurants in the Washington-Baltimore area have employed hundreds of SWT students, including at least two Russians who in the summer of 2010 worked at the McDonald's one block from the White House, on 17th Street.
The State Department, whose culture and worldview are shaped by a mission to win friends and influence people in foreign lands, has been oblivious to SWT's effects at home. Abroad, it has engaged in "visa diplomacy", touting the J-1 visa as a ticket for college students to work and travel in the U.S.
Even in 2009, when the recession caused State to request that sponsors scale down the numbers brought to the U.S., spokesman Andy Laine told the Baltimore Sun that the request was "a temporary measure… made out of concern for our potential exchange visitors, recognizing that they will face a difficult job market and high exchange rates."3 There was no mention of unemployed Americans.
The GAO's Failed Attempt to Limit SWT
The first attempt to constrain the Summer Work Travel program appears to have been made in 1990, as the General Accounting Office suggested limiting employers' access to the young participants. The GAO issued a report that criticized some job placements as inconsistent with the intentions of the 1961 Fulbright-Hays Act, which created SWT and other exchanges.
The purpose of the legislation was "to increase mutual understanding between the people of the United States and the people of other countries by means of educational and cultural exchange" and "to assist in the development of friendly, sympathetic, and peaceful relations between the United States and the other countries of the world."4
But the GAO said the employment of exchange visitors in such SWT job categories as waiters and cooks and amusement park workers did not serve "clearly educational and cultural purposes" and therefore "dilutes the integrity of the J visa and obscures the distinction between the J visa and the other visas granted for work purposes."5
The GAO suggested changes in the federal regulations governing exchange programs in order to make them consistent with the intent of Fulbright-Hays. That proposal presented a threat to many SWT sponsors and employers, raising the possibility that their access to foreign students would be reduced.
The USIA later noted that the report had put SWT "under a cloud of uncertainty" and that exchange sponsors "have sought to resolve the question of Agency authority."6 They got their wish. In 1998, Congress passed legislation that removed the cloud, allowing the USIA and later the State Department to continue to approve the job placements criticized by the GAO.
That point was driven home by Stanley Colvin, who at that time was director of State's Office of Exchange Coordination and Designation. In a Hartford Courant story about Polish SWT workers who were complaining about "draconian" working and living conditions at a Six Flags amusement park in Massachusetts, Colvin told the newspaper, "These programs do not operate under Fulbright-Hays authority – period, the end."7
The congressional move to remove the GAO's cloud was a big victory for laissez-faire at SWT. It surprised some observers. Said Andrew Schoenholtz, director of law and policy studies at a Georgetown University, "Rather than change their policy to conform to the legislative intent, they've changed the legislative intent."8
Sen. Udall Seeks "Proper Guidelines"
In 2011, Colorado Sen. Mark Udall, responding to a Denver Post article about the expansion of SWT at a time of high rates of youth unemployment, wrote a letter to Secretary of State Hillary Clinton expressing concern about the situation.
"I hope we can work together to maintain the true intent of the Exchange Visitor Program as an educational and cultural exchange that can serve as an important diplomatic tool while also protecting the interests of American workers," Udall said in the letter.9 Udall spokeswoman Tara Trujillo said the senator wanted "to ensure that the proper guidelines are being upheld for hiring through the J visa visitors program and that American workers are not inadvertently hurt."10
As this report has demonstrated, one of the most remarkable features of SWT is the absence of guidelines to protect American workers. The 1980s regulation for employers to attempt to steer SWT workers away from high unemployment zones was so meaningless that it has disappeared. Moreover, the State Department has promoted the recruitment of SWT participants around the world and their placement throughout the United State, without regard for, labor market conditions.
Nevertheless, when Joseph Macmanus, acting assistant secretary for legislative affairs wrote a response to Udall, he made this remarkable claim:
The Department strongly believes that no program under the Exchange Visitor Program should adversely affect American workers. We are sensitive to this in every aspect of the conduct of this program and continuously monitor the public and private entities we designate to administer the exchange visitor program to ensure that American jobs are protected."11
The State Department's 22 years of managing SWT contradict that statement.
But now the new man in charge of State's Office of Exchange Visitor Programs says he is serious about finding a middle ground between two competing concerns: American workers' need for work and the State Department's need to win friends for the United States by placing young foreigners in jobs that allow them to pay their own way.
"It is absolutely essential that we pay close attention to job opportunities for all Americans, particularly young Americans," said Rick Ruth, Acting Deputy Assistant Secretary for Private Sector Exchange. "At the same time, it is also very important that we are able to carry out a foreign affairs function that allows us to reach out to young people and make sure that they understand America. The hard part is finding the smart middle ground between those two competing goods."12
Ruth declined to comment on the position of Labor Department officials who, according to a 2005 Government Accountability Office report, stated "it is not likely that the exchange programs [including SWT] will have any effect on the U.S. labor market because of the small number of J-1 exchange visitors" (including 88,600 SWT workers in 2005).13
The GAO immediately added this observation: "The U.S government does not assess any potential effect of exchange programs on the U.S. labor market."
As other stories in this series have shown, SWT has negative effects on young Americans, especially in areas where the foreign workers are concentrated, and especially at a time of deep recession. The potential for worsening negative effects is great, especially if the program is allowed to resume the growth that it experienced in the first decade of the new millennium. There are strong economic and political interests who want that to happen.
1 22 CFR PART 62 - Exchange Visitor Program, Sec. 62.80 Summer Student Travel/Work Program.
2 Daniel Costa, Employment Policy Institute, "J visas: Minimal oversight despite significant implications for the U.S. labor market", http://www.epi.org/publication/j_visas_minimal_oversight_despite_signifi....
3 Scott Calvert, "Losing the Accent; Recession Means Fewer Jobs for Foreigners in Ocean City", Baltimore Sun, May 22, 2009.
5 GAO report: "U.S. Information Agency: Inappropriate Uses of Educational and Cultural Exchange Visas." http://archive.gao.gov/t2pbat12/140621.pdf.
7 Roselyn Tantraphol and Andre J. Bowser, "Polish Workers Criticize Six Flags", Hartford Courant, September 4, 2002.
9 Nancy Lofholm, "Udall flags J visas: The senator asks about steps to prevent the program from displacing U.S. workers", Denver Post, August 11, 2011.
11 Joseph E. Macmanus letter to Sen. Mark Udall, received from Udall's office.
12 Rick Ruth interview with author.
Interview with Rick Ruth, Acting Deputy Assistant Secretary for Private Sector Exchange, November 3, 2011
What do you see as the importance of the Summer Work and Travel program?
The State Department oversees these programs because they are deemed to have a foreign affairs function. It is very important to reach out to the successor generation around the world, to reach out in large numbers, if possible, to make sure they have an accurate and first-hand understanding of America and who we are. We know how much misunderstanding about the United States there is in the world.
Your predecessor was widely regarded as having a laissez-faire approach to regulation and to SWT effects on job opportunities for young Americans. Is that a concern?
You’re not talking to a laissez-faire guy. You’re talking to a guy who’s interested in striking a proper balance between a number of competing interests. It is absolutely essential that we pay close attention to job opportunities for all Americans, particularly young Americans. At the same time it is also very important that we are able to carry out the foreign affairs function that allows us to reach out to young people and make sure that they understand America. The hard part is finding the smart middle ground between those two competing goods.
Summer Work Travel is under the State Department because it is supposed to be a cultural, educational experience for the participants. Work is its middle name. Work allows the participants to defray the costs of travel. That has always been seen as a worthwhile tradeoff, partly because it allows for large numbers to come, partly because it allows us to address a demographic that would not otherwise have the financial means to come to the United States.
What do you hope to accomplish with SWT?
I want to be sure that Summer Work Travel looks to you and me and any outsider like a genuine cultural experience. And to the extent that there individuals who would seek to have it be something else or use it for another purpose, that is something I have to address through reforms, through rules, through clarifications of policy, to try to preserve the core intent of Summer Work Travel.
Are you seeing intent to use it for something else?
Yes. There’s no question that any time you deal with mortal men and women and you deal with young people and stakeholders who have a variety of conflicting and competing interests, you’re going to have people who try to exploit the system.
Do you have the resources to do the job you want to do?
We have to grow our office and I plan to do that. This office will grow in size.
You need funding for that to happen.
That funding is secured … . The department has determined that the Summer Work Travel program as it exists today doesn’t look like it’s true to its original intent. It does need significant reform and there will be significant reform. We are present at the creation right now. Things are just starting.
What reforms are you looking at?
We are looking at a fundamental reorganization of the work component. Right now what we have is a fairly short list of prohibited employments. And then arguably everything else is open, subject of course to our notoriety and disrepute clause. We’d like to turn that around so that it’s much more focused on the affirmative, so that we’re talking about the kinds of employment that seem to make sense and be appropriate, such as employment that brings the students on a regular basis into contact with Americans. I would argue that contact with Americans, interaction with American society, is the essence of any cultural, educational program. So a situation where there’s a concentration of Summer Work Travel participants where they are not interacting with Americans during the day doesn’t look to me that it might fit the bill as suitable employment for a J-1 program.
Fish-processing jobs in Alaska, where some plants employ many SWT participants and few Americans, don’t seem to fit that description. But that job is very attractive to many foreign students because they offer the chance to make a considerable amount of money.
It is very attractive. But just as the Summer Work Travel program was not created to provide cheap employment for American employers, it was also not created to be a get-rich program for foreign students.
What is your opinion of the websites in which sponsoring organizations and their partners point out that if employers hire SWT participants they will pay less in taxes than if they hire Americans?
I am angry when I see those things because that is not what the program is supposed to be. Part of my job is to get the program back to where it is supposed to be and that will require some changes, not only in the regulation of the program, but in people’s expectations of it.
But you can’t change the tax structure.
I cannot single-handedly change the tax structure, but I can look at questions like what kind of work is suitable. I can look at the number of hours that young people are allowed to work every week. I can collaborate with other parts of the interagency process at the government to look at increasingly the areas of employment that may be prohibited because they may be excessively hazardous. Consultation is important here. We’ll talk to all parties as we go forward. But the main thing is we need to impose some reforms and strike a proper balance between various interests and make sure Summer Work Travel or any other J visa program is true to why it was created.
Does the culture of State require such an outward vision that you are unaware of domestic effects of SWT?
The answer is no. Of course not. When I say strike the proper balance among competing and important interests, I mean domestic interests as well.
Isn’t it clear that employers are incentivized to hire SWT students and ignore American workers?
There are employers who dispute the idea that that is a significant factor. But I understand that incentives are there.
What have you done to understand SWT’s effects on American workers?
When I came here one of the first things I looked for was a study where a university or organization has done research on the impact of the J visa holders on the American workplace. I would like to see that. I’m not sure that has been done. We might actually have to make that happen ourselves. I would love to see rigorous, independent analysis of this issue.
What is your opinion on the decline in participants in the SWT program, from a high of about 150,000 in 2008 to 103,000 in 2011?
I am comfortable with that. There is a lot of pressure from various sources to have it go up. I’m not concerned with pressures to have it go up. I’m concerned with the integrity of the program.
Do you anticipate disciplinary action against sponsors who have been negligent in overseeing the SWT program?
I can tell you we are pursuing a number of investigations against various sponsors. I can’t give you details.
Do you need to define what cultural exchange means?
That’s part of what I mean when I say I want to reorient job descriptions to be in the affirmative (not just a proscribed list), we have to have a prohibitive list. I don’t want to have: “you can’t do this” and then there is everything else. I would like to positively define the nature of the employment. I would like to pay much more attention to the cultural component. And I would like to find ways to get at the issue of the impact on Americans.
Are you confident you have the authority to reform the program?
I am confident I have the authority to do it … . The secretary has made it clear, the department has made it clear that summer work travel has merit but only if it is reformed to get back to its true intent.
Do you have a timetable?
It will be a rolling timetable. Some things can be done quickly. Others will take more time and consultation is highly important. I’m not going to go off uneducated or half-cocked.
There are competing goods. It is very important for the United States not to be misunderstood or stereotyped or hated by a new generation of young people around the world. How do we balance that? That is one of the hard questions. I am telling you there is now a commitment to do that.
1 McCarry speech, May 23, 2008, at a symposium titled “Strategic Initiatives for University Internationalization”, at George Washington University, Washington, DC, http://www.jsps.go.jp/j-bilat/u-kokusen/seminar/pdf/h200522-sympo/p255-p....
2 Asked why he was no longer responsible for oversight of J-1 visa exchanges, Colvin replied on December 14, 2011: “Over the last three years the Bureau of Educational and Cultural Affairs has been headed by five assistant or acting assistant secretaries, who, in turn, have reported to three, and soon to be four, different undersecretaries for public diplomacy. The Bureau of Educational and Cultural Affairs has four employees who are members of the career Senior Executive Service. Assistant Secretary Ann Stock reassigned me and two of the other members of the Senior Executive Service. The fourth left the bureau. These reassignments were not related to poor job performance. One of these reassignments resulted in intervention by the Office of Personnel Management. The U.S. Office of Special Counsel is actively investigating this matter to determine whether Ms. Stock has engaged in statutorily prohibited personnel practices. The Department of State Office of Inspector General is also investigating whether Ms. Stock has engaged in other prohibited personnel practices unrelated to the reassignment of myself and the other career Senior Executive Service employees. “
3 Federal Register, Volume 76 Issue 80 (April 26, 2011), http://www.gpo.gov/fdsys/pkg/FR-2011-04-26/html/2011-10079.htm.
4 General Accounting Office, “U.S. Information Agency: Inappropriate Uses of Educational and Cultural Exchange Visas”, February 16, 1990, p. 3, http://archive.gao.gov/t2pbat12/140621.pdf.
5 Office of the Inspector General, “The Exchange Visitor Program Needs Improved Management and Oversight”, Audit Report 00-CI-028, September 2000, http://oig.state.gov/documents/organization/7782.pdf.
6 Walter F. Roche Jr., “Students left adrift in U.S., without jobs”, Baltimore Sun, August 10, 2002.
7 Government Accountability Office, “Stronger Action Needed to Improve Oversight and Assess Risks of the Summer Work Travel and Trainee Categories of the Exchange Visitor Program”, http://www.gao.gov/new.items/d06106.pdf.
8 Holbrook Mohr, Mitch Weiss, and Mike Baker: “AP IMPACT: U.S. fails to tackle student visa abuses,” Associated Press, December 6, 2010.
9 Daniel Costa, “Guestworker Diplomacy: J visas receive minimal oversight despite significant implications for the U.S. labor market”, http://www.epi.org/files/2011/BriefingPaper317.pdf.
10 Mohr, Weiss, Baker, op. cit.
11 Daniel Costa, comments on SWT regulations, June 27, 2011, www.epi.org/files/2011/SWT_EPIcomments_Final.pdf.
12 Holbrook Mohr and Mitch Weiss, “Student Visa Program: New Rules, Same Problems”, Associated Press, June 20, 2011.
13 McHale speech at the 2009 board and membership meeting of the Alliance for International Educational and Cultural Exchange, http://www.alliance-exchange.org/2009-board-and-membership-meeting.
15 “Rollout of New J-1 Visa Website”, http://fpc.state.gov/164684.htm, May 31, 2011.